Equity Investment Needed in Black Granite Mining with 50% ROI Yearly

Opportunity for 45 years of projected lifespan of a Black Granite mine with an average annual production of 3800 Cubic Meters per year.

The company based in Guntur, A.P. is holding quarry leases for Black Granite occurring at Sy.No. 160/2(p) of Gurijepall, Prakasam Dt, Andhrapradesh. The geological reserves have been estimated using cross sectional method. 62 meters depth is assigned for proved / measured category and depth of 20m below proved category is assigned for probable / indicated category.

The last category possible/inferred has also been assumed as having a further depth of 20m below the probable / indicated category. Cross sections have been drawn along the strike length at A.A’ (R.F. Plate Nos. 3&4). It is estimated from the past experience that only 20% of the rock excavated will result in marketable granite block. Therefore, the volume of rock is multiplied with a recovery factor of 20% to obtain Geological reserves, the balance 80% shall account for sub or marginal grade. This can be termed as intercalated waste and dumped in the yard allocated for this purpose. The details of calculations for dolerite (Black Granite) reserve has been given vide Annexure-1 and summarised as below.

Summary of Category-Wise Geological Reserves at the Gurijepalli Black Granite Quarry Lease:
• Proved / Measured: 242,400 cu. m
• Probable / Indicated: 80,400 cu. m
• Possible / Inferred: 80,400 cu. m
• TOTAL: 403,200 cu. m

Minable Reserves and Lifespan of the Mine:
The total quantities of mineable reserves are estimated leaving the safety slopes quantity blocks. In this way a total minable reserves of 172720M3 (Annexure II) is available at the Q.L. area. As the mine is proposed to produce 3876M3 (Annexure-III) in one year of operations, the life of the mine’s calculated as detailed below: Life of the Mine = Total Minable reserves / Actual anticipated annual production = 172720 m3 / 3876 m3 = 45.0 years

We require U.S $ 3,000,000 for parting away 50% stakes on permanent basis. Ownership will be given on the lands as a privately owned asset (does not belong to Government). Surface rights will stay with the owners of the company.

The opportunity is for 45 years of projected lifespan of the mine with an average annual production of 3800 Cubic Meters per year saleable at U.S $2000 per Cubic Meter yielding U.S $ 7,600,000 capable of accommodating production and sale expenses and ROI at U.S $2,000,000 per year on regular basis for 45 years to the prospective investor. The investor will enjoy equal rights as us as owners of the asset with all statutory permissions. The asset is a very high quality Jet Black Granite. Very limited number of such quarries may be available in the entire world and that too in peaceful working zones on the Globe. The product is in very high demand by the monuments industry where value is uncountable against sentiment and people are prepared to pay premium price if quality is good. The market feed back is even for 3 cubic meters and above it may fetch $2200 per Cubic Meter. Definitely on conservative basis we may consider $1600 per cubic meter.

Initial investment of $1M may be sufficient to further excavate from 12 meters depth up to which overburden already removed and if quarry falls in line no further investment may be needed and proportionately equity rights will be reduced to 10% to 20% as may be negotiated considering the promotional risk taken.

The enterprise has developed a very strong net-work of operating quarries and established wide contacts with marketing agency both in India and outside.

The Lessee is well equipped by efficient executives and technocrats with up to date knowledge on quarrying technology, advances in processing techniques, marketing strategies and financial management.

We have well-established contact with the buyers from Chennai, Bangalore, New Delhi, Hyderabad and Rajasthan.

Marketing Factors:
• In view of demand in the international / domestic market the block produced at 3876-00M3 / annum will not have any problem in marketing. Depending on the demand, the applicant can indigenously process in their own processing units.
• The lessee is well organised and well equipped earned the reputation for maintaining schedules of supply.

Organisation:
The subject lease will have the following manpower:
• Manager
• Supervisor/clerks
• Excavator Operators
• Helpers
• Compressor Operators
• Drillers
• Tipper Drivers
• Afforestation workers
• Watchmen

Site Services:

Regarding site services, a mine office has been established at the mine and other statutory constructions of rest shelter, drinking water supply, and first aid facilities have been provided. Routine maintenance and minor repairs shall be undertaken at the mine itself. The workers shall be communicating for work from the adjoining villages and, therefore, no colony shall be maintained.

Mining Program for the First Five Years:

The Scheme of development and production for the first five years has been planned taking into consideration the development of the quarry is confined between 100 to 80 RL’s Presently during 5 years of the workings are proposed by leaving the buffer enclosed five years working plan of this area is demarked (Refer plate No. 4)

Year-Wise Development:

As a first step towards regular production schedule. The weathered rock boulders will be scrapped and removed. In this manner the sheet rock is exposed. It is envisaged to produce 3876M3 of saleable granite each year and to raise. This volume of rock, 19380m3 of total rock mass has to be mined. Projections are made for a five-year period and the year wise figure and the quarry development schedule is detailed below. The year wise productions in shown in Annexure–III and development details are shown is plate No. 4.

• 1st year: The quarry face will extend to north side it falls under X-Y’ section, bench level 97-85M, sectional area 200sq.m, Sectional influence85. The bench will be developed as described earlier and the anticipated quantity 17000M3 of rock mass will be extracted, with 20% recovery 3400M3 of salable granite be recovered.

• 2nd year: The second year development will be between 91-80m bench level north side section X-Y sectional area 220, sectional influence 85 in by this way, a total of 18700M3 of rock mass will be extracted. In this manner 3740M3 of salable granite is expected to be won.

• 3rd year: The third year development will be between 93-80m bench level towards north, section X-Y Sectional area 230 sq.m sectional influence 85m, the total quantity of rock mass 19550M3 will be extracted 20% recovery 3910M3 of salable granite be recovered.

• 4th year: The fourth year development will be between 93-80m bench level towards north, comes under section X-Y, sectional area 240 sq.m, sectional influence 85 m during 4th year 20400M3 rock mass will be extracted, anticipated recovery 20% of 4080M3 saleable granite be recovered.

• 5th year: A bench will be formed between 100-80m bench level, section comes under X-Y’ its sectional influence 85m, sectional area 250sq.m.

Machinery to be deployed by purchasing on outright basis:
• Poclain Excavators: 2
• Tippers: 4
• Compressors: 2
• Jack-Hammers: 6
• Pump-Set: 1
• Generator: 2

Production of Commercial Blocks:
The main idea is to bring the block to proper dimension after chipping the rough corners. It is done manually using hand held wedges. Flaws like black lines, fractures and penetrative cracks are taken care of at this stage of forming commercially marketable blocks.

A stake of 50% in the ownership of the Quarry will be given to owners. The investment is made to generate at 50% ROI per year to the investor. The investment will be paid back back in 3 years. The investor will keep their permanent stake for 40 more years.