After two year detailed exploration of 130 hectares mining area rich in emeralds, a total of three
production wellheads are constructed - #1 & #2 are shafts, and #3 is open-pit.
The infrastructure has been completed, including construction of the mining area with access road &
bridge, offices, cafeterias, dorms, explosives warehouse, emerald rough selection & washing, cutting
& polishing process. The project is ready for operation and production.
Laranjeira Farm, Mirangaba City, Bahia State, Brazil
Project Brief financial analysis
The emerald mine held by the company is rich in reserves and the product quality is very good. It is a rare high-quality emerald mine in the world. For details, please see the exploration report. Since the current mine construction is basically completed, the infrastructure basically does not need to be reinvested, so the financial analysis only calculates the production cost, sales price and profit.
In addition, the sale of emeralds in US dollars is a world-recognized pricing method, so the depreciation of the Brazilian currency is a positive factor for the company. Calculated at normal production speed, the company has two shafts, which are expected to produce 10,000 carats of emeralds per year. The gemstones are cut and polished, and the products are emerald bare stones, which are directly sold to large jewelers.
Sales Revenue:
• Special grade: 10,000 carats x 10% x ($10,000/carat to $30,000/carat) = $10 million to $30
million
• First grade: 10,000 carats x 10% x ($7,000/carat to $10,000/carat) = $7 million to $10 million
• Second grade: 10,000 carats x 15% x ($5,000/carat to $7,000/carat) = $7.5 million to $10.5
million
• Third grade: 10,000 carats x 25% x ($3,000/carat to $5,000/carat) = $7.5 million to $12.5
million
• Fourth grade: 10,000 carats x 15% x ($1,500/carat to $3,000/carat) = $2.25 million to $4.5
million
• Fifth grade: 10,000 carats x 25% x ($500/carat to $1,500/carat) = $1.25 million to $3.75
million
• Total annual sales revenue: $35.5 million to $71.25 million
Cost of Production:
• Labor costs 700,000 US dollars / year + mine costs 300,000 US dollars / year = 1 million US
dollars / year
Sales Expense:
• Long-term and stable wholesale clients, no sales expenses
Management Costs:
• 500,000 USD / year
Unforeseen Expenses:
• 500,000 USD / year
Tax (export tax + certificate of origin): 2 million US dollars (production cost + sales expenses +
management fees + unforeseen expenses) x3% = 60,000 US dollars
Production cost + sales expense + management fee + unforeseen expenses + tax = $2.06 million
Annual Profit:
• $35.5 million - $2.06 million = $33.44 million
• $71.25 million - $2.06 million = $69.19 million
• Total annual profit: between $33.44 million and $69.19 million
Emerald prices have increased by 10%-15% per year in the past five years
Available upon Request
