Proposal for Manganese Mines in Chile 1

PRELIMINARY REPORT AND PURCHASE OPTION OF

MANGANES MINES, CHILE




















Proposal for Manganese Mines in Chile 2

Proposal for Manganese Mines
Location: Chile.







Proposal for Manganese Mines in Chile 3


Reserve: Eight Mines
Probable reserves are in total 25,300,000MT of Manganese between 33 - 45% Mn Grade

Area: Total eight mines

LOCATION AREA RESERVES
1 LLANERO1 300 4,3MILL T
2 LLANERO2 50 2,7MILL T
3 LLANERO3 200 2,2MILL T
4 LLANERO4 125 2,5MILL T
5 LLANERO5 200 3,5MILL T
6 LLANERO6 300 1,8MILL T
7 LLANERO7 300 6,1MILL T
8 LLANERO8 100 2,2MILL T
25,3MIL T


Option to Acquire Mines:
Purchase Price: US $ 5 million to $ 30 million depending upon size of the individual mine and
exploration

Payment condition to own the mine or mines:
Upfront payment: US$ 150.000.-(deducted of Down payment)
Down payment: 15 % of the total price of each mine or group of mines. Payable in cash after
due diligence is completed (60 days)
Mine owner will transfer mining right to the investor after paying the advance
Entire Payment: 80 % Payable in cash in two years.
1st Year: 40 % payment after the exploration is completed.
2st Year: reaming 45 % payment is done once investor started the mining.



License
Exploration and Drilling permit have been obtained or in final process
Mining permit has been obtained for limited production 5000.(per mine)
Land lease permit from Ministry of Natural Resource of Chile have been obtained
Environmental permits required to produce more that of the regarding artifacts/wild
life/endangered species have to be obtained.


Teaser
Chile is the fourth best country for mining investment. The country also ranked second in terms of
the regulatory atmosphere regarding the development of the sector. According to the latest policy
potential index (PPI)Survey of Mining Companies: 2009/2010issued by the Canadian Fraser
Institute, Chile is the fourth most attractive country for mining investment. In the 2009-2010
ranking established by this think tank, Chile came after Canada, Finland and the United States.



Proposal for Manganese Mines in Chile 4

A final aspect in which Chile stood out was the current regulatory atmosphere regarding
exploration. A favorable regulatory regime can either motivate or inhibit the exploration of mining
potential. The country ranked second after Nevada according to this criterion, followed by
Qubec, Burkina Faso and Mexico; all among the most attractive

Minable Condition
At present not single mines are active. However, a few mines were active in past and has
produced about 100,000MT manganese lumps. These lumps required cleaning and cursing in
order to sell them in markets. Manual operation is common in local small mines. The mines are
not equipped with drillers, loading machines and trucks.

Open Pit Mining: Mining operation of these mines could be started soon after the completion of
their exploration. Exploration is necessary for the mine planning.

Transportation
Mines are between 30 and 120 km away from the Chaaral port or Caldera port. And near
Copiap Caldera has an airport, Desierto de Atacama International Airport.-
Location and code of airport
Longitud: 70 32' 9'' W
Latitud: 27 25' 0'' S
Cdigo IATA: CPO
Cdigo ICAO: SCHA


Marketability

Potential Market: India , China and other.
Manganese ore is an important raw material in iron and steel production. It plays essential role in
the national economy. India's domestic steel consumption is set to continue growing this year,
underpinned by strong ongoing demand for cars and engineering services, according to Moody's
Investor Service. China is the largest market for manganese ore in the world and produced 570
million tons of crude steel in 2009. China imported 9.00 million tons of manganese ores in 2009,
having increased by 19% compared to that in 2008

Economic Model

Model -1:
Production: 60,000 MT/year(per Mine)
Production Schedule: 12 hour shifts and 7days per week (80% availability and 92% shift
efficiency)


Capital Cost for Model-1:
Items Descriptions Cost( USD)
Exploration Geological and Geophysical Survey
and mine Planning
$400,000
Mining Equipments $1,000,000
Facilities $ 200,000
Washing and re-dressing $ 400,000
Working Capital $ 600,000
Total cost $ 2.6 millions




Proposal for Manganese Mines in Chile 5





Ex Mines Production Cost per Ton for Model-1:
Item Cost ( USD)
Cost of production per Ton $45
Cost of Shipping to Port and Loading on Ship
per Ton
$40
Total Ex Mine Cost per Ton $85







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Proposal for Manganese Mines in Chile 7










Proposal for Manganese Mines in Chile 8






Proposal for Manganese Mines in Chile 9






Proposal for Manganese Mines in Chile 10