PANAMA TEAK PROJECT

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Emerald Investment
The following presentation includes various statistics pertaining to inflation, including selling price indices and current market values. Please be advised that past inflation and selling price trends are no guarantee of future performance. Individuals should consult their own professional advisors to determine their financial needs. No information provided or opinion expressed in this presentation constitutes an offer to buy or sell any security.

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Why teak wood?

The best option in the market. Teak is a close grained hardwood with high natural oil content. It is one of the hardest, strongest and most durable of all timbers, highly resistant to any rotting and almost impervious to the effects of hot sun, rain, frost or snow. These characteristics combine to make it the ideal timber for all outdoor and indoor applications. It has been the number one choice of boat builders and naval industry for centuries due to its excellent qualities.

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Why teak wood?

The best option in the market. Decreasing supply and increasing demand. Registered increase of an annual 8% of teak market price in the last 10 years. World population is more than double in last 5 decades causing an increase in timbers demand. Pressure from the United Nations and key governments forcing new legislation to prohibit the cutting of indigenous Teak trees, making the plantations teak wood more valuable. In the near future, only quality hardwoods from certified sustainable plantations will be allowed to be sold.

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Why teak wood?

The best option in the market.

Demand for Hardwood in millions of m3. Source: FAO Food and Agriculture Organization.

Source: International Tropic Timber Organization (ITTO). Myanmar teak timber price (in EURO), from natural forest in the last years.

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Where is Panama located?

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Where our project is located?

Our project is located only 30 miles north from the center of Panama City in a strategic location for logistic operation and ground transportation to the two main container ports of the Copyright Emerald

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Why choose Panama for your investment?

Panama Republic, the fastest growing market in central America. US Dollar based economy. Democratically elected government with no indigenous military in the area. One of the lowest crime rates in Central and South America. The most sophisticated and secure Banking center in the area. The Panama Canal with its 3rd lane expansion giving economic stability to the country.

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Why choose Panama for your investment?

Panama Republic, the fastest growing market in central America.
Reliable and low cost labor and technology are available. Modern communication system in place. A fully functional stock and debt market. An excellent retirement plan including discounts in hotels, restaurants, flying tickets, hospitals, private clinics and many more, as detailed in the law No. 6 of 16th of July of 1987. With $ 80,000.00 invested in a certified reforestation program the investor will be able to apply for an indefinitely visa residence, that give you all the benefits of a true Panamanian citizen.

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Why grow teak in panama is a winning choice?

Incentives to investors in reforestation:
Investment in reforestation and its industrialization are 100% deductible from taxable income in the Republic of Panama. Interest payments, dividend payments and capital gains, from reforestation related investments, are tax exempt in the Republic of Panama for 25 years since the beginning of the project. Any equipment used to develop a reforestation related project can be imported tax-free.

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Why grow teak in panama is a winning choice?

Climatic benefits of the Republic Of Panama:
Panama is one of the few countries in the world, which hold the optimal climatic balance and geological layout for growing teak trees. With his 2 separate season (dry season from January to April and wet season from mid April to December) Panama has the perfect balance of rain falls mm per year (1600mm to 2500mm) that is exactly what teak needs to grow. Also the temperature is optimally for teak development: between 23-27 Celsius (73-80 Fahrenheit) all over the year. Panama is the only region in Central America, which is not in hurricane territory.

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PROJECT DEVELOPMENT: Plantation Process:

I.

Preparation of land From seed to plant Planting process Management Thinning

II. III. IV.

V.

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PROJECT DEVELOPMENT: I. Preparation of land:

Emerald Investment only establishes plantations on fallow cropland or pasture land. A specific area establishment plan is produced and the soil is prepared for planting.

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PROJECT DEVELOPMENT: I. Preparation of land:

Soil chemical and compositions tests are done and the most appropriate locations are chosen to meet teak trees requirements. Our seedlings are selected from the best available sources in the market. Plantations grown from the highest quality seeds result in a much more uniform germination, growth and better performance at the end of the period.

Planting site is prepared before the plantation begin. Our staff eliminate all unwanted vegetation and cleans all the Area, modifies drainage patterns and reducing the risk for soil erosion.

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PROJECT DEVELOPMENT: II. From seed to plant:

Emerald Investment utilizes only the best seeds in the market, provided by Costa Rica's CATIE which developed an improved pretreated seed quality to low the risks related The seeds are cultivated in a to germination and growth of the protected environment (nursery) for tree. 6 to 8 weeks until they are ready to be transplanted in the pre-prepared soil.

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PROJECT DEVELOPMENT: III. Planting process:

Planting process is done in straight lines, referred to as square formation, with 3 meters (10 feet) between each plant. The distance is designed to give the plants the light they need for an optimal development and to allow effective Emerald investment selects better cultivating of the area with specimens and sows approximately machinery. Proper planting 1100 teak trees for one hectare techniques influence the growth of (2.47 acres or reduce mortality. the trees and 10,000 m3).

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PROJECT DEVELOPMENT: III. Planting process:

March 2005

February 2007

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PROJECT DEVELOPMENT: III. Planting process:

20 05

20 06

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PROJECT DEVELOPMENT: IV. Management:

An effective management policy increase incredibly your plantations results, in term of dimensions of the trees (total cubic meters/board feet Our personal constantly check the at the end of the period ) and their plantation and remove all competing quality. vegetation, control any pests and prune the trees to increase the Emerald Investment develops proportion of knot free wood. individually adapted plan for each parcel depending on singular lots needs to ensure the perfect growth of the teak during the rotation period.

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PROJECT DEVELOPMENT: V. Thinning:

Before the final harvest, two thinnings are done to allow the strongest trees to continue their growth. The thinning is used to reduce the density of the plantation This thinning balances the required to sustainable levels, by removing spacing andtrees. of the plantation, the poorest quality resulting in more wood of higher quality being grown. These thinnings are done after the eighth and fourteenth growing season of the trees. The final harvest of the trees is done in their twentieth year.

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WHAT ARE YOU PURCHASING ? :

Client purchases and retain 1 hectare (2.5 acres) of planted and fully managed Teak trees.

Each parcel purchased from client is planted with approximately 1,100 quality Teak seedlings obtained through a recognized international grower. Each seed is a guarantee of an excellent quality teak at final harvest. Complete land preparation, planting, care and maintenance of Teak trees purchased throughout the entire growth cycle (Twenty-years for new seedlings). Sale of marketable timber in the wholesale Teak market on behalf of the client, obtaining fair and available wholesale pricing (or preparation for delivery to the client upon request).

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WHAT ARE YOU PURCHASING ? :

Cutting and preparation services (conversion to marketable timber or logs) at final harvest.

The Purchase Price is the only out of pocket cost to the client The amount paid at the end of the period is net after deduction of felling & logistics costs and a 8% - 12% administrative charge to compensate the cutting, management and selling An insurance provided by EMERALD to protect your services provided by EMERALD during the complete investment : rotation period. A fire insurance to protect you and your money from accidentals fires. Another insurance provided internally from EMERALD: we replace without any additional costs for the client Page 22 Copyright Emerald

PURCHASING OPTIONS :
q

OPTION A: 20 year lease option. It includes: Purchase price: $ 30,000.00 Property of the land: NOT INCLUDED (only a lease for 20 years and a timber deed that guarantee Management fee: 8% of the gross income after you all the operation). each thinning or after the final harvest. OPTION B: Property of the land. It includes: Purchase price: $ 35,000.00 Property of the land: INCLUDED (we will give you the full property of the land). Management fee: 12% of the gross income after each thinning or after the final harvest.
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Purchasing prices, options & discounts:

OPTION A

No. of Price % Hectare for discou Hectare nt $ 30,000.0 0 2 $ 30,000.0 0 3 $29,400. 00 4 $29,400. Copyright Emerald 00 1 0%

Total

Saving Price Amount for tree

$30,000.0 0 $60,000.0 0

$27.00

0%

$27.00

2% 2%

$88,200.0 $1,800.0 $26.72 0 0 $117,600. $2,400.0 $26.72 Page 24 00 0

Purchasing prices, options & discounts:

OPTION B

No. of Hectare

Price % for discou Hectare nt 0% 0% 2% 2% 2%

Total

Saving Price Amount for tree

$35,000. 00 2 $35,000. 00 3 $34,300. 00 4 $34,300. 00 5 $34,300. Copyright Emerald

$35,000.0 0 0 $70,000.0 0 0 $102,900. $2,100.0 00 0 $137,200. $2,800.0 00 0 $171,500.$3,500.0

$31.81 $31.81 $31.18 $31.18

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$31.18

Hypothetical return: preliminary thoughts :

As we said at the beginning, the following presentation includes some variables that are hard to predict like inflation, future selling price and future market values. It is for this reason that our presentation uses only actual values directly obtained from our 10 years experience in wood market.worst scenario that can We will present you the occur with the actual lower market value and the real calculation of the cubic meter generated in the period. Even in this condition you will see that is still Please take note that for the in reforestation. price extremely convenient invert last 15 years the never register an increment lower than 8% per year. Copyright Emerald
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MAI: what is it?

MAI means Main Annual Increment. Simply speaking is how much your teak plantation grow each year in cubic meter/board feet. For example MAI=12 means that your several factors: 12 cubic MAI may depends on plantation grow the soil meter for year. composition, management, rainfall percentage, right thinning policy, etcfluctuate between a value of 12 MAI in Panama can

and 16. It means that at the end of rotation your plantation may generate the following numbers of cubic meter depending on MAI: MAI=12 12 x 20 years = 240 cubic meter for hectare MAI=14 14 x 20 years = 280 cubic meter for hectare MAI=16 Page 27 16 Copyright Emeraldx 20 years = 320 cubic meter for

MAI: difference in final harvest

In this graphic we can easily find out what is the difference in the total cubic meters at the end of the period depending which MAI category we are referring to. 12 1 m = 424 board feet

10 8 cubic meter 6 4 2 0 years

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What is the hypothetical return after 20 years?:

In the following charts the investor will see possible return divided in 3 macro categories: MAI=12, MAI=14, MAI=16. Each category will present you 2 options: purchasing price of $ 30,000.00 (without lands ownership) and purchasing price of $ 35,000.00 Please take note thatproperty). (which includes lands we are only using the current market price of the teak per cubic meter to calculate the return of the investment. More likely the market value of the Teak in the next future is going to be higher allowing a better positive interest.

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Hypothetical return, MAI = 12:

Average actual market price

Purchase price

M3 at the end Total selling of period price

Management fee (8% 12%)

Annual gross interest

Global % return at the end of the cycle 400% 342.8%

$30,000.00 $35,000.00

240 240

$120,000.00 $120,000.00

$9,600.00 $14,400.00

13.40% 10.08%

Please take note that the second option of $35,000.00 include the property of the land which will increase value in the next 20 years.
v v 1 m = 424 board feet Copyright Emerald

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Hypothetical return, MAI = 14:

Average actual market price

Purchase price

M3 at the Total selling Management end of period price fee (8% 12%)

Annual gross interest

Global % return at the end of the cycle 466.6% 400%

$30,000.00 $35,000.00

280 280

$140,000.00 $140,000.00

$11,200.00 $16,800.00

16.46% 12.60%

Please take note that the second option of $35,000.00 include the property of the land which will increase value in the next 20 years.
v v 1 m = 424 board feet Copyright Emerald

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Hypothetical return, MAI = 16:

Average actual market price

Purchase price

M3 at the end Total selling of period price

Management fee (8% 12%)

Annual gross interest

Global % return at the end of the cycle 533.33% 457.14%

$30,000.00 $35,000.00

320 320

$160,000.00 $160,000.00

$12.80000 $19,200.00

19.53% 15.11%

Please take note that the second option of $35,000.00 include the property of the land which will increase value in the next 20 years.
v v 1 m = 424 board feet Copyright Emerald

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What risks are related to your investment ? :

FIRE: Fires are very rare in the Panamanian subtropical climate because dry periods only last for 3 months. After 4 years both leafs and the bark is very resilient against fire. However on the perimeter of the lot will be create a fire strip that will prevent eventual fire to penetrate the lot. Adding to this LIVE ANIMALS: A strong fence will be built around Emerald will have an insurance against potential fire the perimeter of the lot blocking animals to step in (more information will be disclosed upon request). the plantation area. INSECT ATTACK: Due to the special characteristics of teak trees there isnt any known insect threat which could harm a matured teak tree plantation in Panama. Young plants can be attacked by insects chewing away at the roots. To prevent this from happening the trees are treated with a special Page 33 Copyright Emerald pesticide.

What risks are related to your investment ? :

ILLNESS: Teak is extremely resilient towards diseases. However its recorded that sometimes the roots are viable to fungi attacks. New plants will be treated to counter this. When the tap root is matured the risks disappear. HURRICANES: In Panama there is no history of hurricanes and natural disasters. Even simple storms are very rare in Panama. The big weather systems, from the north and from the south, usually takes a total different trajectory, with no direct consequences for Panama.

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What risks are related to your investment ? :

PRICE REDUCTION: Nothing is pointing to a decrease in demand,

and the decreasing supply combined with the demands for certified plantations or forests will push prices up on hardwood. EMERALD cant imagine a course other than a stabile and positive one. Price fluctuations in wood are not influenced by the global economy as a whole. Tree investments will prove a viable addition to a healthy portfolio. Plantations supplies are less than 1 % of the total consumption, which means that 99% coming from illegal deforestations. It is hard to imagine there being enough plantations to meet the demands for certified wood. To ensure the quality of trees we have gathered a team of very experienced people and in conjunction with those we have made an agreement with external professionals to continuously make quality control of the work done by EMERALD.

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Why investing in teak and why now? :

profitable and secure investment. illegal

increasing of global demand due to deforestation. constant increase trend of global prices.

Increasing of global population connected to hardwood demand.

is

directly

helping mitigate global warming.

possibility to apply in the future for carbon credit program. Panama is one of the very few country in the world that has a perfect climate balance, optimally to develop a reforestation program. Page 36 Copyright Emerald

Contact information :
USA CONTACT: Davide Tomassoni 4199 Maya Cay Ln Jupiter, Florida, 33458 Tel: +1 561 317 8996 dt.emeraldinvestment@g mail.com PANAMA CONTACT: info.emeraldinvestment@ Matteo Masetti gmail.com Ave. Justo Arosemena, Edif. Winky, P.O.BOX 0816-07393 Cel.+507 67810882 Tel/fax. +507 2252006 US FOR ANY PLEASE CONTACT mat.emeraldinvestment@g FURTHER INFORMATION. mail.com Copyright Emerald

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