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ABSTRACT

Dr. John Alie Kargbo is a “son of the


soil” and the grand child of the
landowner. ALGMP will at all-time
demonstrate its commitment to
sustainability, by actively
participating in our communities
and integrating sustainable business
practices wherever possible. We
will ensure that we hold ourselves
accountable to the highest
standards by meeting our corporate

Afriboom Laminaya social responsibility.

Prepared by: Abubakarr Sesay

Gold Mining Project


Ltd (ALGMP)
ALGMP Ltd. Business Plan:
01/05/2020
ALGMP Ltd. Business Plan: 01/05/2020

GENERAL

This analysis of financial position and results of operation is prepared as at 1st May 2020. It
should be read in conjunction with the Strategic Investment Report of 7th November 2019.
The business model have been prepared to cover 1,600 machine hours of 200 days at 8
hours per day in year one and then increase the machine hours by 25% to cover 2,000
machine hours in 250 days in year two. All amounts are prorated to the respective machine
hours unless otherwise indicated.

FORWARD LOOKING INFORMATION

The statements contained in this document that are not historical facts are regarded as
forward-looking statements. These statements may involve risk, uncertainties and other
factors that could cause actual results to differ materially from those expressed or implied
by such forward-looking statements. Factors that could cause such differences, without
being limited to the following, include: volatility and sensitivity to market gold prices; impact
of change in foreign currency exchange rates and interest rates; unexpected variations in
geological conditions of site property or erroneous geological data; environmental risks
including increased regulatory constraints; unexpected adverse mining conditions; adverse
political conditions and changes in government regulations policies. Although the Company
believes that the assumptions inherent in the forward-looking statements are reasonable,
undue reliance should not be places on these statements, which only apply as of the date of
this document. The Company disclaims any intention or obligation to update or revise any
forward-looking statement, whether or not it should be revised as a result of new
information, future events or otherwise.

NATURE OF THE BUSINESS

Afriboom Laminaya Gold Mining Project Ltd (ALGMP) is registered to operate on a small
scale mining license at Laminaya which is located on the Loko hill range under the Sula
Group. Part of the desk study done on the Loko hill geology under the Sula Group confirmed
the presence of Gold, Granite, Granodiorite, Schist and Quartzite. The future corporate
objective of ALGMP is to have the concession, exploration and mining at industrial level in
which all project expenditures are capitalized in gold mineral properties and upon
development of an industrial operating mine, these expenses can be recovered against
income from operations. Meanwhile, on this small-scale mining license, the licence costs
paid in connection with the right to mine are absorbed in the profit and loss account as part
of the set up cost. ALGMP will strategically start mining on just 15 hectares out of the
surveyed mapped 100 hectares lying on a 1,601,400 hectares gold field. African Mineral
Resources (AMR) who had been the owner of the exploration license for this place for a
period of about seven (7) years. They conducted an intensive alluvial exploration programs
starting from reconnaissance survey, soil sampling, surface mapping, test pitting, trenching,
bulk sampling and auger drilling.

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ALGMP Ltd. Business Plan: 01/05/2020

ALGMP is strategically choosing to start from the 15 Hectare in order to minimise the setting
up cost of the mining license fee and thus set up as a small scale mining company. However,
as the business grows, ALGMP is set to gradually expand on mining the first mapped out 100
hectare and subsequently invest in owning its own environmentally friendly gold mines
concession and do further exploration of the whole area of 1,601,400 hectares.

The demand for gold is not going to plummet at any time soon. Taking into consideration
that Dr. John Alie Kargbo is a “son of the soil” and the grand child of the landowner, the
company will at all-time demonstrate its commitment to sustainability, by actively
participating in our communities and integrating sustainable business practices wherever
possible. We will ensure that we hold ourselves accountable to the highest standards by
meeting our corporate social responsibility.

Our Product and Service Offerings

It is a fact that ALGMP Ltd. is established with the aim of maximizing profits in the gold
mining industry. However, we will work hard to ensure that we are accepted by the local
community and the chiefdom for our ethical approach to mining.

Our Vision Statement

Our vision as a small scale gold mining company is to progress and own our gold mines
concession at Laminiya and operate at industrial level on the whole 16,014 square kilometre
mining sites.

Our Mission Statement

Our mission is to establish a standard gold mining company. We want to build a gold mining
company that will be listed amongst the top 5 gold mining companies in Sierra Leone.

SWOT ANALYSIS

Due to our drive for excellence when it comes to running a standard gold mining company,
we were able to critically examine the prospect of the business and to assess ourselves to be
sure we have what it takes to run a standard gold mining business that can compete
favourably in the industry.

In view of that, we intend to start as a small scale mining company and we take stock of our
strengths, our weakness, our opportunities and also the threats that we are likely going to
be exposed to in the industry. Here is a preview of what we got from the critically
conducted SWOT Analysis;

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ALGMP Ltd. Business Plan: 01/05/2020

• Strength:

The Country Director of African Mineral Resources Company, Mr. Salim Sillah has been very
accommodative to us and he is willing not only to share relevant information, but also to
help in every way possible.

Our strength lies in the fact that we have efficient and fairly new machinery to take over
most of the manual labour of digging to access the gravel. We have mining equipment and a
vibrant mining staff team.

Another factor that counts to our advantage is that, Dr. John Alie Kargbo is a native of the
chiefdom and he is also the grandson of the landowner. He has a pretty good academic
qualification to manage most projects including managing ALGMP Ltd. We are not ignoring
the fact that our team of highly dedicated workers will also serve as strength for our project.

• Weakness:

We do not take for granted the facts that we have weaknesses. In fact, the reality that we
are setting up a gold mining company in Laminaya might pose a little challenge. In essence
our chosen location might be our weakness.

• Opportunities:

The opportunities available to us are unlimited. As stated by the locals of the community,
gold was discovered in this community since the 1930s, and much has not been done here
in terms of mining. No major mining has been done, except in 2018 when some Chinese
brought in 6 excavators for a period of 5 months targeting the base of the hill, but their
operation was ended as they were illegal miners. In the field, lots of manual and only three
mechanical old pits were seen. This is an indication of the fact that, the mining site remains
largely untapped.

• Threat:

The threat that is likely going to confront us is the fact that we are competing with already
established gold mining companies in Sierra Leone. Of course, they will compete with us in
winning over the available market. Another threat that we are likely going to face is
unexpected government policies, the COVID 19 world pandemic and the economic
downturn due to business inactivity.

MARKET ANALYSIS

• Market Trends

Gold mining is a lucrative business in Sierra Leone. It is common trend in the gold mining
line of business to find mining companies positioning their business in locations and
communities where they can easily have access to mines and of course cheap labour. If we
make the mistake of positioning our business in a location where we would have to travel a

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ALGMP Ltd. Business Plan: 01/05/2020

long distance before we can access the gold mines, our overhead and logistics will be highly
challenged. The proposed license area lies approximately 99km north of Makeni city. Access
to this location is on a good tar road which is 36km from Makeni to Gbendembu and 63km
from Gbendembu to Laminaya.

Our Target Market

The target market for products from gold mining companies is far reaching. In view of that,
we can supply raw gold to the following organizations.

• Individuals
• Jewellery production companies
• Gold merchant

SALES AND MARKETING STRATEGY

• Sources of Income - Gold

Sales Forecast

We are quite optimistic that we will meet our set target of generating enough profits from
the first 1,600 machine hours of operation and grow the business to meet our objectives.

We have been able to critically examine the artisanal miners and it is evident that, 8
machine hour’s output will produce an average minimum of 600 karat of gold which is
locally valued at $9.50 per karat ($5,700). This projections is based on information gathered
on the field and some assumptions that are peculiar to artisanal mining in the region.

Below are the sales projections for ALGMP Ltd.;

Output of 1,600 machine hours (200 days)= 600karat x 200 days x $9.5=$1,140,000 and
25% increase in year 2 is $1,425,000 (2,000 hours in 250 days)

N.B: This projection is based on what is obtainable in the artisanal mining of the area. This
should serve as a conservative estimate to which the machine application is likely to
produce more gold per machine hour. However, please also note that the above projection
might be lower even though it is highly likely that it will be higher due to the washing plant
advantage.

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ALGMP Ltd. Business Plan: 01/05/2020

Start up Expenditure (Budget)

From our online market search and regular local costings, we have been able to come up
with a detailed budget of how to achieve our aim of establishing a small scale and highly
competitive gold mining company in Laminaya. The key areas where we will spend our start
up capital is on;

I. The total fee for registering the business in Sierra Leone – $2,500. This will be a one
off payment for the business life as a small scale mining company.
II. Expenses for licenses and mining permits – $800/Hectare. ALGMP will apply for the
first mining license operations on just 15 hectare costing $12,000. The mapped out
area of 100 hectare is $ $80,000
III. The cost for payment of surface rent to the community – $10,000 (Per Annum). This
payment is negotiable, and it can increase above the said amount. However, this will
come about at future expansion stages subject to mutual agreement and common
understanding between the company and the community at Laminaya
IV. The cost for hiring mining gold consultant (geologist)– $2,500. This is a one-off
payment but future expenses will be incurred when the business continues to
expand.
V. Insurance coverage at a total premium – $5,000. This is general liability, workers’
compensation and casualty. The company’s health and safety measures will
minimise the risk.
VI. Director’s hospitality, phone utility and travel logistics -$3,000. The mining site is
literally a living site for the mining team. The director is expected to travel back and
forth from the mines to his family by no less than 20 times in 200 days. The director
will also incur hidden costs such as “consultation brown envelopes” to various
mining personnel and related costs.
VII. This business model is set at operating at 1,600 machine hours (200 days in year 1
and 2,000 in year two at 8 hours per day)

Daily fuel usage propositions at $0.75 per litter

100%-167 litres per 8 hours day on Excavator 1. Must be long reach boom because the
pits can be as deep as 14 meters
75% -125.25L on Loading Excavator 2 . Will facilitate simultaneous operation of
excavation and gold washing
50%- 83.5L on Washing plant. This is the only means by which this model can be justified
because it will take about 21 days manual washing on just 8 machine hours operations
3% -5L on Bailing machine

VIII. Daily wages of mining employees ( $5 x 10 miners). The wages payment practice is
on performance basis payable on a daily basis at the end of every shift. Due to our
profit sharing generosity, the daily wage is doubled for all miners in the second year
IX. Mining employees feeding ($1.50 x 10 miners). Breakfast, lunch and dinner is
provided for the miners on site
X. The cost for start-up Mining machinery and equipment;

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ALGMP Ltd. Business Plan: 01/05/2020

• Excavator1-$60,000
• Excavator 2- $40,000
• Washing plant- $35,000
• 2xBailing machine-$500
• Other related gold mining devices - $500 (shovel, pickaxe, head pans, etc)
XI. Other start-up expenses including used;
• Caravan-$5,000. The director and staff security will be living on site at all
times during mining operations.
• Used field truck- $20 ,000- The company will benefit from an operational
truck for transporting both staff and light material items.

XII. General expenses are set at 10% of variable cost


XIII. Repairs and Maintenance is set at 10% of variable cost
XIV. Depreciation is 5 years straight line method for all fixed assets

Note: Machine private hire is $1,000 for 8 hours/day operations. The expected output at
artisanal mining methods is 600 karat gold per 8 machine hours gravel. The gold is currently
selling at $9.50 per karat

Generating Start up Capital

We would need an estimate capital contribution of $198,000/$200,000 in order to


successfully set up this mining business.

No matter how fantastic our business idea might be, if we don’t have the required money to
finance the business, the business might not become a reality. Finance is a very important
factor when it comes to starting a gold mining business.

ALGMP will be operating as a limited liability company. We intend to welcome any external
business partner, which is why we decided to sourcing out the start up capital through 3
major sources.

1. Generate part of the start up capital by venturing into acquiring the mining site.
2. Source for investment partners who are willing to provide the required capital
3. Apply for loan from the Bank

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ALGMP Ltd. Business Plan: 01/05/2020

Check List

• Company Registration: Completed


• Opening of Corporate Bank Accounts: Completed
• Application for business license and permit to operate small scale goldmining: In
Progress
• Purchase of Insurance for the Business: In Progress
• Leasing of mining site: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital : In Progress
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: In Progress
• Recruitment of mining employees: In Progress
• Purchase of the needed gold mining machines and equipment: In progress
• Creating Awareness for the business around the community: In Progress
• Health and Safety Arrangement (License): In Progress
• Purchase of field vehicle and sleeping caravan: In Progress

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ALGMP Ltd. Business Plan: 01/05/2020

Appendix 1

Profit and Loss Statement


1,600 Machine 2,000 Machine
Hours Hours
Revenue $ $
Gold 1,140,000.00 1,425,000.00

Less Variable Cost 57,112.50 71,390.63

Total Variable Cost 57,112.50 71,390.63


Gross Profit 1,082,887.50 1,353,609.38
Expenditure
Employees' Wages & Salaries 13,000.00 26,000.00
Business set up fees 2,500.00 -
Mining Permit 12,000.00 -
Surface rent 10,000.00 10,000.00
Repairs & Maintenance 5,711.25 7,139.06
Insurances 5,000.00 5,000.00
Director's Travel, Tel, & Hospitality 3,000.00 3,000.00
Consultancy fees 2,500.00 -
Depreciation:
Plant, machinery & equipment 27,164.00 27,164.00
Field Vehicle and Caravane 5,000.00 5,000.00
Total Depreciation 32,164.00 32,164.00
General Expenditure 5,711.25 7,139.06
Total Expenditure 91,586.50 90,442.13
Operating Profit 991,301.00 1,263,167.25
Long-Term Loan Interest
Profit Before Tax 991,301.00 1,263,167.25
Tax
Profit After Tax 991,301.00 1,263,167.25

Accumulated Profit /Loss(-) 991,301.00 2,254,468.25

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ALGMP Ltd. Business Plan: 01/05/2020

Appendix 2

Cash Flow Forecast


Year 1 Year 2
Receipts $ $
Cash Sales 1,140,000.00 1,425,000
Capital Introduced 200,000.00
Total Receipts 1,340,000.00 1,425,000
Payments
Cash Purchases 57,112.50 71,390.63
Employees' Wages & Salaries 13,000.00 26,000.00
Business set up fees 2,500.00 0.00
Mining Permit 12,000.00 0.00
Surface rent 10,000.00 10,000.00
Repairs & Maintenance 5,711.25 7,139.06
Insurances 5,000.00 5,000.00
Director's Travel, Tel, & Hospitality 3,000.00 3,000.00
Consultancy fees 2,500.00 0.00
General Expenditure 5,711.25 7,139.06
Capital Purchases 161,000.00 0.00
Total Payments 277,535.00 129,668.75

Cashflow Surplus/Deficit (-) 1,062,465.00 1,295,331.25

Opening Bank Balance 0.00 1,062,465.00

Closing Bank Balance 1,062,465.00 2,357,796.25

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ALGMP Ltd. Business Plan: 01/05/2020

Appendix 3

Balance Sheet - Two Years of 200 &250 days


Year 1 Year 2

NET ASSETS EMPLOYED


$ $
Fixed Assets
136,000.00
Plant, machinery & equipment 136,000.00

136,000.00 136,000.00
Total Machinery, Plant & Equipment
25,000.00 25,000.00
Field Vehicle and Caravane
25,000.00 25,000.00
Total Field Vehicle and Caravane
161,000.00
Total Fixed Assets 161,000.00
64,328.00
Accumulated Depreciation 32,164.00
96,672.00
Net Book Value 128,836.00

Current Assets
1,062,465.00 2,357,796.25
Bank (Other)
2,357,796.25
Total Current Assets 1,062,465.00

Less Current Liabilities


2,357,796.25
Net Current Assets 1,062,465.00

1,191,301.00 2,454,468.25
Net Total Assets

FINANCED BY
200,000.00
Capital 200,000.00
2,254,468.25
Accumulated Profits/Deficit (-) 991,301.00
2,454,468.25
1,191,301.00

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ALGMP Ltd. Business Plan: 01/05/2020

Appendix 4

Make: Caterpillar
Model:323 D Long Reach
Year: 2007
Sellers Reference:2604
Vat Reclaimable: Yes
First Registration Year:2007
CE Marking: Yes
Hours Run: 10,945 h
Tradus ID: 5355718
Tradus Market Value: €46 000 - €56 400

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ALGMP Ltd. Business Plan: 01/05/2020

Make: Caterpillar
Model: 324D LN
Year: 2006
Sellers Reference: 178571
Vat Reclaimable: Yes
First Registration Year: 2006
Hours Run: 16,568 h
Tradus ID:5374659
Tradus Market Value: €38 000.

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ALGMP Ltd. Business Plan: 01/05/2020

Appendix 5

Gold Wash Plant by - SINOLINKING© Ad·www.sinolinking.com/gold_wash_plant

+86 186 7809 186

Features:
SLK-MGT20

-Capacity 20-30 tons per hour.


Designed specifically according to client's mining situation to ensure highest recovery rate
-Mobile type with wheels and towing mechanism
-Using sluice box with Mitsubishi carpet for gold recovery
-Low cost, easy to install, operate and maintain
-Long-term tech support

$35,000

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