Mining Company Funding. 2) Development Capital Funding Program.

Transcription

1 Mining Company Funding. 1) Seed Capital Funding Program. 2) Development Capital Funding Program. 1

2 List of Content. Page 1.0 Introduction How To Get Started? How Does It Work? Timescale Collateral - Guarantees Special Purpose Vehicle (SPV) Costs Estimated Costs Before Issuing Bonds Estimated Costs After Issuing Bonds Costs Explanation Main Benefits Documentation Required Costing Example Mandate Contract Note References 19 2

3 1.0 Introduction. The Uni-Control Mining Company Funding Program offers funding for: 1) Seed Capital Funding and for, 2) Development Capital Funding. These funding programs focus on funding for the development of in-the-ground mineral assets, primarily in the Americas and in Asia. Our funding program allows the mining company to continue being the owner of the mines and assets, without selling out equity or shares in the company. The Seed Capital Funding option is suited for Seed Funding where the mine project is in its very early stages. The Development Capital Funding option is suited for development funding of existing mining operations. Seed Capital Funding. The Seed Capital Funding Program will assist the miner in developing near Green Field mining assets for exploration, preparation and early mining stages. Uni-Control, LLC has established a Seed Capital Foundation of a max value of 100 million USD. The Seed Capital Foundation is owned by it self, managed by a legal firm in Switzerland and the day-to-day operation is managed by Uni-Control, LLC. The requirements for entering this program are the following: 1.1) The Miner must have a 100% clear title to the land or have a concession with the Land Owner. The Miner must be willing and able to deposit the land title with the Uni-Control Seed Capital Foundation in Switzerland, during the loan and development period. The land must have a recent value assessment, by an approved internationally recognized land appraisal firm. 1.2) The miner must have a 100% clear title to the mineral rights or have a concession with the land-owner and or authorities, for the rights to the minerals and must be willing and able to deposit the mineral rights with the Uni-Control Seed Capital Foundation in Switzerland, during the loan and development period. 1.3) The minerals in the mine must be feasible to mine and have a well defined marked, and the miner must be able to obtain all relevant government permissions and approvals to reach the marked following legally established rules, laws and regulations. 3

4 1.4) The miner must be willing and able to pay a non-refundable entry fee for due diligence, travel expenses, as an accounts set up fee of 100,000 USD. This is the maximum the miner will pay to get his asset developed and the miner will be guaranteed that funding will be available for exploration and preparation of the land. If condition 1.1, 1.2 and 1.3 are meet the land can be funded and there are little risks involved. IMPORTANT NOTE: Many land title-holders are leasing/selling (via a concession) the mineral rights to miners, allowing them to mine their land versus a royalty. However in order to participate in the seed capital funding program the concession holder should be able to pass the mineral rights and or concession rights, to the Uni-Control Seed Capital Foundation. The Uni-Control Seed Capital Foundation need to be able to sell the land title, should the mineral assets not be justified. As investors are taking a risk they need an exit strategy. It is therefore important that this issue is well managed before entering. The miner can either partner with the landowner and ask them to deposit the land with the Seed Capital Foundation, versus equity in the project or make other agreeable arrangements to secure the investors. Remember, at this early seed capital stage, we have little information about the actual size, value and quality of the mineral asset, so we need to collateralize the loan with the land title, so that in the worst case the land can be sold and the investors money can be recovered. The concession may not be worth anything if the minerals in side prove to be of no value or too expensive to recover. So we need to be able to determine a sellable value of the land, as a bottom line risk exit strategy. If this is not possible you will need to pay for the initial in-ground asset survey your self, to prove that there is beyond any doubt a minable mineral asset of value. After this we can take collateral in the mineral asset and the mining concession, excluding the land value. Once a Miner signs a mandate agreement to enter into the Uni-Control Seed Capital Funding program he will assign his assets (1.1) and minerals rights (1.2) to the Seed Capital Foundation and pay the set up fee (1.4). We manage several mining projects (titles of land 1.1 and minerals rights 1.2) in the Seed Capital Foundation, which reduces the risk for investors investing into the fund, as it is spread over many properties in different countries. Our investment bankers in Switzerland, will then sell equity shares in the asset (1.1, 1.2, 1.3) in order to raise funding for the Green Field Mining Development Project. Say we need 200,000 USD to make the initial magnetic studies and in-the-ground assets studies, the land value (excluded the minerals) must have a value of 5 times that or equal to 1 million USD. Once the initial studies have been completed we know the volume of the mineral asset and can increase the loan amount further. In this manner we can expand the loan exposure taking exclusive collateral in the title of the land and the in the ground mineral assets. The Seed Capital development is typically no longer than 2 years. 4

5 Once we have completed the exploration and preparation phase, we need to raise additional capital for building jetties, cranes, conveyor systems, stock piles, barges, excavators, trucks, acquire land, take out existing equity partners, build train tracks, you name it. At this stage the Seed Capital Foundation will exit by passing the miner to the Development Funding Program, where a bond placement will be able to raise funds up to 1/3 of the total value of the in ground asset. The right timing for this can vary from project to project. Development Funding. The Development Funding Program, is for mining companies exiting the Seed Capital Funding Program or miners wanting Development Funding having existing mining operations. The bond loans are up to 10 years and the mine owner can have up to 2 years grace period before starting to pay interests on the bond loan. No payments is done of the principal loan amount during the loan period, the principal loan amount is paid when the loan expires in year 10. The actual design of the loan depends on the available data and the quality of the mining assets. Uni-Control work as a consulting partner with the mines to assist them throughout this process, to ensure the data is developed and produced to qualify for the loan. We can arrange any size loans using different designs and mechanics. Uni-Control, LLC is in partnership with Swiss Investment Bankers issuing a range of bonds certificates, which are primarily invested into by pension funds and other investors wanting a stable, reliable, and steady investment component in their investment composition. As an example, these investment bonds can have a face value of 5, USD to 10, USD each. So in order to raise 50,000,000 USD, we issue and sell 5,000 Bonds of 10, USD each. These are then sold to 5,000 different private investors or to one pension fund, making a 10,000 USD/Bond investment, in your mining land (coal asset). You as a mining company then promise to pay them back in 10 years and also promise to pay them an interest every year. This interest is determined based on the risk of your mining project. Uni-Control, LLC therefore works with the mining company to reduce the risk by providing technical and commercial support. We will assist in the design of the business plan and also will take care of all sales of the coal during the loan period. This partner ship allows for a strong rating of the bonds, making the investment attractive and easier to sell. This allows for you as the miner to concentrate on developing the mining assets while Uni- Control, LLC assist on getting you to marked selling at Index Prices. 5

6 When the loan expires in 7 to 10 years, the mining company / owner is free of any liens or profit participation by a traditional lender/investor. The interest on the loan is fixed for the length of the loan and no personal guarantees are required other than the mining land and coal asset. 2.0 How to get started? Seed Capital Program. We use the following simple approach: Step 1: Uni-Control, LLC and the mining company signs a mandate agreement for Uni-Control, LLC to represent the mining company in developing the funding they need for the Seed Capital Fund. The miner pay the retainer for Uni-Control, LLC to proceed. Step 2: Uni-Control, LLC visits the mining company to assess the available data and to visit the actual mining site. Step 3: Uni-Control, LLC provide to the miner a list of additional documentation necessary to comply with the Seed Capital Program, should the data collection process under step 2 not have been conclusive. Step 4: Uni-Control, LLC will on the basis of the data collection process, submit a detailed funding proposal to the client ready for execution. Step 5: Upon approval of the submitted funding proposal, the funding proposal is implemented. The client will hereafter deposit the land title and the mineral rights with the Uni-Control Seed Capital Fund In Switzerland. The maximum time frame for development of the property is 2 years, after which the property must exit to the Development Funding Program via a Bond placement covering all the costs involved. Uni-Control act as the main technical and development consultant of the mining company and will pay and approve all the development work carried out by external mining consultants. Development Funding Program. We use the following simple approach: Step 1: Uni-Control, LLC and the mining company signs a mandate agreement for Uni-Control, LLC to represent the mining company in developing the funding they need for the Development Funding Program. The mining company will at this point pay the initial retainer fee. If the mining company came from the Seed Capital Foundation the fee will be included in the Seed Capital expenses. 6

7 Step 2: Uni-Control, LLC visits the mining company to assess the available data and to visit the actual mining site. If the client already passed the Seed Capital Funding process we would have all the data on hand. Step 3: Uni-Control, LLC provide to the miner a list of additional documentation necessary to comply with the funding program, should the data collection process under step 2 not have been conclusive. Step 4: Uni-Control, LLC will on the basis of the data collection process, submit a detailed funding proposal to the client ready for execution. Step 5: Upon approval of the submitted funding proposal, the funding proposal is implemented. Typical fast track funding program is 3 months provided all data is available. The typical loan program has the duration of 7-10 years with a fixed annual interest rate, during which Uni- Control act as the main technical and commercial partner of the mining company. 3.0 How does it work? In essence, there are two stages of finance available; (a) (b) For those who require seed funding for Exploration, Preparation and Mining Commencement, and; For those who seek Development Capital. SEED CAPITAL. Our funding partners, based in Switzerland, shall raise a Capital Fund that will invest the required amount in; (i) Exploration (ii) Preparation (iii) Mining Initiation The Capital Fund will consist of several different seed capital investments, allowing us to spread the risk of the investment. The maximum Seed Capital fund will be 100 Million USD. This fund will be secured against imported collaterals invested by the financiers. Credit will be drawn against these collaterals to produce the initial capital requirement. Repayments of credit will be deferred and shall be repaid by the taking out of Development Capital via a Bond placement. Seed capital will be granted for up to 24 months, being repaid by the establishment of Development Capital via the Bond placement. 7

8 Seed Funding contracts will be issued calling for ; (a) a lien over the assets of the mine, and; (b) an equity participation At the repayment of the seed capital, the investment (plus any accrued interest) will be converted into bonds (in some cases stocks). DEVELOPMENT CAPITAL In order to rise say 10,000,000 USD, we issue and sell 1,000 Bonds of 10, USD each. These are then sold to 1,000 different private investors or pension funds, each taking a 10,000 USD Investment in your mining company asset. You as a mining company then promise to pay the investor back in 7 to 10 years, and also promise to pay them an interest every year. The interest rate is determined, based on the risk of your mining project. The typical bond placements are from $10 million USD using this type of funding vehicle; there is no maximum. However, typically we cannot extend the bonds to more then 1/3 of the value of the total value of the in-ground-asset. However we can design loan programs as low as a few million USD. So the options are endless. Loans can be issued in the following currencies US$,,, CHF. The term of the loan varies, but usually is for a period of 7 to 10 years maximum. 4.0 Timescale. The main time consuming activity is the due diligence process, provided the mining company has all the data available and that the data is ready for collection. Should the mining company not have the data available, Uni-Control, LLC can arrange detailed feasibility studies and mining plans, at a separate fee. In this case these studies can take up significant additional time and cost. In summary, Uni-Control needs to be satisfied on the following points: 1) Is the stated resource there and what is its value? 2) Can it be extracted successfully per the mine plan and/or feasibility study? 3) Is there a ready market for the mineral to be extracted? 4) Is the management team competent? 8

9 Of course, the answers to these questions are largely in the hands of the mining company. Where the mining company has employed mining consultants and engineers like Uni-Control, LLC of international repute in the preparation of their submissions, the due diligence process is very fast. If smaller unknown engineering firms has been used the due diligence process may be more elaborate. Once the due diligence has been completed satisfactorily, the next stage is to engage the rating agency to obtain the rating of the property and mining asset. The timing here is dependent on the workload of the agencies, but, as a general rule, the process should take less than three months. Once the rating has been obtained the Bonds can be issued and sold within 3 weeks of completion of the due diligence. 5.0 Collateral - Guarantees. The rating agency will require that collateral is deposited into a special company in Switzerland set up to hold the assets of the mining company. This is called a Special Purpose Vehicle (SPV). The SPV may be funded with cash in a bank account, shares of the mining company or other instruments, including the project s assets such as the mining landowner ship certificates. So in general the better the value of the mining assets the better the rating and the lower is the interests to be paid on the loan shares. More collateral = better rating = lower interest payments. 6.0 Special Purpose Vehicle (SPV). The SPV is a bankruptcy remote special purpose vehicle set up exclusively to issue the loan shares concerned and to control the assets under full transparency. By that, it means that the Client is not required to provide personal guarantees. Its directors are nominees chosen by the local lawyers. It is vested in the trustee bank in Switzerland. It has no bank accounts except with the trustee bank, which will have a mandate covering all disbursements. The Client will approve of and countersign the mandate. The SPV will own, or have pledged, sufficient assets to collateralize the loan shares. The mining company owner will have an option to acquire the SPV for $1 once the loan expires after 7 to 10 years. The mining company owner can then transfer the assets or maintain the operation in Switzerland. 9

10 The trustee bank s duty is to be the bondholder. Therefore its first requirement is to have sufficient funds to service the bonds. This includes the annual interests and payments to the sinking fund. Often, where project cash flow will start some time after the bond sale, a repayment holiday can be arranged. It is not normal for such a holiday to be longer than two years. 7.0 Costs. For the Seed Capital Fund, a fixed fee of 100,000 USD is payable upon instruction, typically minimum 100,000 USD or equal to (2%) of the seed capital required. For Development Capital, there are five stages of fees or costs. Most costs are not due and payable until after the loan-shares payments have been received by the mining company and deposited in the SPV. The below fees are based on a 10,000,000 USD bond program. Cost may vary. 7.1 Estimated costs before issuing the Bonds for the Development Capital: Retainer for Data Collection, Mining Company Visit, and Initial Due Diligence: Lump Sum, Initial set up fee Monthly fee (3 months min) - 50, USD. - 10, USD. This will commence once we sign the initial mandate letter. During this first phase we will be collecting all relevant date and perform an initial due diligence on the available data Professional Due Diligence by 3rd. Party: Lump Sum Legal Fees - 114, USD - 60, USD This will commence as the first payments of phase 2, after the client has accepted the full funding proposal presented in Step 4 as part of the implementation Step SPV set up costs: Switzerland SA Company Paid Up Capital - 40, USD - 114, USD (Cash deposit) Loan Share Rating: S&P, Fitch or Moodys - 120, USD (Payment directly to ratings agency). 10

11 7.2 Estimated costs after issuing the Bonds: Placement Costs: Issuing Fee for Bonds % of Bonds Amount Bonds Fee: Sales and marketing fee % of Bonds Amount Uni-Control Fees for Exclusive Sales and Marketing 7 to 10 years: Negotiated Agreement - Index prices minus a negotiated discount. 8.0 Costs Explanation. 8.1 Retainer for Data Collection, Mining Company Visit, and Initial Due Diligence. Uni-Control, LLC charges a 50,000 USD initial accounts set up fee plus monthly retainers of 10,000 USD until completion of the Bond Issuing Process (minimum 3 months), from the date of signing mandate agreement to issuing of the Bonds. Should the due diligence reveal that a more detailed feasibility studies or mining plan is required, Uni-Control, LLC can quote such work programs and would suspend the monthly retainers until these studies have been completed. 8.2 Professional Due Diligence by 3rd. Party. This cost will be the initial cost of phase 2 once the miner has accepted the funding proposal presented under Step 4 and executed under Step 5. This costs is depending on the complexity, size and perhaps most importantly the quality of the mining company preparation and paperwork. If the mining company already has in place the current valuation reports issues by credible consultants and agencies, then the costs may be negligible and quite possibly zero. If the mining company does not have the necessary reports then he/she can either prepare these documents first or work in tandem with Uni-Control, LLC to complete them. In most cases if they do not have them available the company is recommended to enter the Seed Capital Fund. 11

12 Legal fees are an unknown. These are the costs for preparing the Offering Memorandum for the Bonds issue. Costs vary enormously. From experience Uni-Control, LLC advises the Client to put aside at least $60,000 for this. However, the costs will rise with the size of the face value of the bonds. The better the quality of the law firm employed, the more the rating agency will review positively. 8.3 SPV Set up Costs. In order to have a central located company to own the values, the bonds, and other values included in this transaction, an SPV is established in Switzerland to give 100% confidence to the investors and buyers of the bonds. 8.4 Bonds Rating. The Bonds price or value is totally dependent on the rating it gets from the rating agency; S&P, Fitch or Moodys. Their fees do have an element relating to the size of the bonds. It is a fixed sum of 120,000 USD or 6 basis points of face value, whichever is the greater. Option: As stated previously, all rated bonds sell, but a rating is a prerequisite for our underwriter's buyers of the bonds. However, some miners may be nervous about the rate-ability of their binds. Therefore, we have arranged a special concession to supply a 'shadow rating' for bonds preparatory to engaging Uni-Control, LLC in a full bond preparation. This involves an upfront cost of $10,000 payable directly to the rating agency. This takes about 10 days, as no due diligence is required, since due diligence statements are taken to be true. Receipt of this shadow rating enables the client to make an informed judgment whether or not to proceed. 8.5 Placement Costs. These should not exceed 1.35%. This fee can be paid after closing. This means you could potentially fund this part from the bonds. 8.6 Bonds Fee. In order to ensure a proper placement of the bonds in the market and getting them sold to individual investors, pension funds, banks and others, a sales and marketing fee is paid to the investment bankers. 12

13 We presently offer them 3.35% of the face value of the bonds. This fee can be paid after closing. This means you could potentially fund this part from the bonds. 8.7 Uni-Control Fees for Exclusive Sales and Marketing 7 to 10 years. After successfully securing the funding Uni-Control, LLC will take care of all sales and marketing of the coal assets. We would link the buying price to the Index Prices and buy at a prior agreed discount. This proposal will be part of the funding proposal submitted under Step Main Benefits. The main benefits of this program is: The project s ownership remains unchanged. No dilution of equity. The investors and buyers of the bonds take collaterals in the mining land and coal asset. 100% of project required capital can be financed. Speedy execution: in 30 to 60 days project can be fully financed. The interest payments are typically deducted from your tax returns. Dividends to equity shareholders are paid after tax. This makes it much more attractive to mine owners Documentation Required. A detailed executive summary. Geological studies (for mining projects, in compliance with Rule NI or similar). Certificate of Incorporation or Apostil. Statutory Documents / Memorandum & Articles. Directors Passports Copies. Shareholders Passport Copies or Certificate (if corporation). Financial Information: Last 3 years Audited Accounts, Current Management Accounts, 12 month Cash Flow Forecast, 36 month Cash Flow Forecast. Pro-forma future financials for 7 years of operations, showing that the Bond principal face value can be paid back by year 7 (or 10 at the latest), with interest payments at x% per annum. 13

14 Existing Loans & Credit Agreements. Leases on Properties and Leases on Equipment & Vehicles. Project Information; Business Plan, Project Evaluation, Real Estate / Business Valuation Reports. Development Projects; Architects Plans & Drawings, Survey & Valuation Reports, Government Permits & Permissions, Aerial Photographs / Site Photo s, Draw-down Charts & Financials. Contact Information; Attorneys / Solicitors, Principal Bank, Accountants / Auditors Costing Example. Seed Capital Funding Program. The only fee due for the Seed Capital Funding program will be 100,000 USD at instruction and signing of the mandate agreement. After that the Seed Capital Fund takes care of all other expenses. Development Funding Program. Many different funding vehicles could be considered, down to a few million USD up to any amount. The bond program typically handles investments from 10 million and up. A typical Bond program for 10,000,000 USD would look as follows: 11.1 Before Issuing Bonds Initial Set Up Fee 50, USD Retainer Month 1 10, USD Retainer Month 2 10, USD Retainer Month 3 10, USD A detailed proposal is submitted and if accepted the following charges will commence (this may look different based on the final funding proposal submitted): Professional DD 114, USD Legal Fees 60, USD Switzerland SA Company 40, USD (Paid Up Capital) S&P, Fitch or Moodys 120, USD Total Investment Cost: 414, USD 14

15 11.2 After Issuing Bonds (could be paid from the SPV). Issuing Fee for Bonds % of Bond Amount. Bond Placement of 10,000,000 USD x , USD Sales and marketing fee % of Bond Amount. Bond Placement of 10,000,000 USD x , USD 11.3 Annual Interest Payments. As an example lets say you are seeking funding for exploration and virgin mining land. After year 2 and finalization of the infrastructure development project the coal mining operations will begin. This will result in the revenue generation from coal sales on long-term contracts. Depending on the interest rates that the ratings agencies issues, the mining company will have to service the bonds by paying an interest rate every year to the investors that invested into its bonds. After year 10 the Investors will be paid back the bond. As an example the ratings agencies S&P, Fitch or Moodys would give a high rating, resulting in a 4% (example only) interest payment, the annual fee to be paid to the investors would be: Bond placement of 10,000,000 USD x , USD/Year. If the mining company can supply only 100,000 MT/Month x 12 months during this period, this would result in a cost of 0.33 USD/MT in Interest payment per Metric Ton coal sold. In order to be able to payback the investors in year 10, the mining company operating at a capacity of only 1,2 million ton per year, would need to retain additionally: Bond placement 10,000,000 / Production 1,200,000 MT x 10 Years = 0.84 USD/MT In order to be able to meet its commitments the mining company must be able to add 0.33 USD/MT plus 0.84 USD/MT equal to 1.16 USD/MT to meet its commitments. Conclusion: In todays mining company environment this is entirely realistic and possible. 15

16 11.4 Collateral. In order for the investors to take a guaranty in the coal inside the mining asset, the value of the coal inside the mining concession must be at least 3 x the value of the loan. In this case the value of the potential deposit should be at least 30,000,000 USD for the investors to issue bonds for 10,000,000 USD. The Minimum Coal deposit required would be: The present Index Prices for the GCV is at USD/MT (October 2011). This would result in a minimum deposit of 30,000,000 USD / USD/MT equal to 84,033 Metric Ton of coal. This is a simplified approach however provides an idea of how the mathematics are computed Mandate Contract. As stated under section "2.0 How to get Started?" Uni-Control, LLC would sign a "Mandate Contract" framing the over all agreement. The Mandate Contract would consist of 2 phases Seed Capital Funding Program - Phase 1. Step 1: Uni-Control, LLC and the mining company signs a mandate agreement for Uni-Control, LLC to represent the mining company in developing the funding they need for the Seed Capital Fund. The miner pay the retainer for Uni-Control, LLC to proceed. Step 2: Uni-Control, LLC visits the mining company to assess the available data and to visit the actual mining site. Step 3: Uni-Control, LLC provide to the miner a list of additional documentation necessary to comply with the Seed Capital Program, should the data collection process under step 2 not have been conclusive. Step 4: Uni-Control, LLC will on the basis of the data collection process, submit a detailed funding proposal to the client ready for execution. 16

17 12.2 Seed Capital Program - Phase 2. Step 5: Upon approval of the submitted funding proposal, the funding proposal is implemented. The client will hereafter deposit the land title and the mineral rights with the Uni-Control Seed Capital Fund In Switzerland. The maximum time frame for development of the property is 2 years, after which the property must exit to the Development Funding Program via a Bond placement covering all the costs involved. Uni-Control act as the main technical and development consultant of the mining company and will pay and approve all the development work carried out by external mining consultants Development Funding Program - Phase 1. Step 1: Uni-Control, LLC and the mining company signs a mandate agreement for Uni-Control, LLC to represent the mining company in developing the funding they need for the Development Funding Program. The mining company will at this point pay the initial retainer fee. If the mining company came from the Seed Capital Foundation the fee will be included in the Seed Capital expenses. Step 2: Uni-Control, LLC visits the mining company to assess the available data and to visit the actual mining site. If the client already passed the Seed Capital Funding process we would have all the data on hand. Step 3: Uni-Control, LLC provide to the miner a list of additional documentation necessary to comply with the funding program, should the data collection process under step 2 not have been conclusive. Step 4: Uni-Control, LLC will on the basis of the data collection process, submit a detailed funding proposal to the client ready for execution Development Funding Program - Phase 2. Step 5: Upon approval of the submitted funding proposal, the funding proposal is implemented. Typical fast track funding program is 3 months provided all data is available. The typical loan program has the duration of 7-10 years with a fixed annual interest rate, during which Uni- Control act as the main technical and commercial partner of the mining company Cost - Phase 1. Phase 1 - Seed Capital Funding Program. The initial instruction costs for Phase 1 is: 100, USD. 17

18 Phase 1 - Development Capital Funding Program. The initial cost involved in Phase 1 would be the costing mentioned as follows: Initial Set Up Fee 50, USD Retainer Month 1 10, USD Retainer Month 2 10, USD Retainer Month 3 10, USD Total: 80, USD 12.4 Cost - Phase 2. Phase 2 - Seed Capital Funding Program. All costs will be taken care off, by the Seed Capital Funding Program and will be converted to a bond placement when all costs have been accounted for in maximum 2 years. Phase 2 - Development Capital Funding Program. One we complete Phase 1 we will have analyzed in details the existing data available. We will then as a phase two submit a detailed funding proposal corresponding to the specific needs. Once the Purchase Order has been issued for this Phase Two development program the following costs can be expected based on a 10,000,000 USD bond placement Professional DD 114, USD Legal Fees 60, USD Switzerland SA Company 40, USD (+ Paid Up Capital) S&P, Fitch or Moodys 120, USD 12.5 After Issuing the bonds (could be paid from the SPV). Issuing Fee for Loan-Shares % of Loan Shares Amount. Loan 10,000,000 USD x , USD Sales and marketing fee % of Loan Shares Amount. Loan 10,000,000 USD x , USD Based on the above assumptions the following would be the total Phase 2 cost: Total Phase 2 Cost 460, USD 18

19 13.0 Note. This is not a quotation nor a contract nor any part thereof. The above fee figures are given for guidance. Variations can be occasioned by a number of factors including, but not limited to, complexity, size, jurisdiction, foreign exchange rates, underwriting and due diligence etc References. Our group of investment bankers has completed multiple funding projects around the world. Here is a brief list of some of the latest achievements. 1) 16 Million Euros - Bottling plant - Equity Loan - Czech Republic. 2) 37 Million USD - Oil Drilling Platform - Bond Issue - USA. 3) 6 Million USD - Paper Recycling Plant - Equity Loan - Czech Republic. 4) 90 Million Euros - Property Fund - Bond Issue - Spain & Switzerland. 5) 200 Million USD - Hotel Restructuring - Equity Loan - USA. 6) 300 Million Euros - Public Debt Finance - Bond Issue - Switzerland & Luxembourg. 7) 60 Million USD - Gold Mining - Mixed - USA. 8) 18 Million USD - Mining Lease - Mixed - US, South America, Africa. 19