Executive Resumen Coal Mine In Guaduas

EXECUTIVE SUMMARY
By: Miguel Centanaro
INVESTMENT IN COAL PROJECT: US$ 208,470,000
COAL MINING, LAND TRANSPORTATION, MAGDALENA RIVER SHIPPING LINE, DOCKS, AND EXPORT HARBOR

GENERAL
Colombia is located in northern corner of South America with a population of 45 Million people. The principal products of exportation were coffee, flowers, textile, fashion, and emeralds; now exports alsoinclude, coal, oil, nickel, iron, gold, palm oil, fruits, tourism, and others. Exports are more than US$40 billion dollar per year and expected to double by 2020.

CONCEPT OF THE PROJECT
The concept was born 3 years ago when Mr. Alfonso Tamara signed the Contract No. FLG-101 with Ingeominas (Institute that controls mines in Colombia). This mine has more than 3800 hectares in Chucurí.

Othermines in Guaduas that conform this project were declared 15 years ago, when Mr. Erasmo Almanza makes a solicitation to Ingeominas, and 3 years ago was signed the Contract No. ILE-09551 between Mr. Almanza and Ingeominas for 57,7 hectares. Mr. Almanza has applied for two other mines with 1.500 ha, 2.500 ha. and 390 ha.
All these mines have more than 800 million tons of probable reserves and mayproduce initially 120,000 tons per month in order to supply a Contract of Sale of Coal to China, signed between Miguel Centanaro and JenChoice Intl Inc in ShengZhen (China), and may increase their production up to 360,000 mt per month.
To ship the coal from the mine to the Harbor, it is necessary to implement a small trucking company and a medium Shipping Line (multimodal transport), as well as aHarbor in La Dorada (departure fluvial port) and in Barranquilla (export maritime port).
1. COAL PROJECT
The principal Project is the Coal Exploitation of the mines at Chucuri in Santander, La Tabaquera, La Herradura, and other mines in Guaduas.
Market:
The coal produced in these mines will be sold to JenChoice International, Inc., a company established in ShengZhen (China) and other associatedcompanies in China and Japan. These companies are interested in buying 120.000 mt per month and more.
Other companies in the USA have shown an interest to buy up to 240,000 tons per month, contracts are pending. The FOB price for Thermal Coal is about US$85/mt. The price for Coking Coal is around US$180/mt and Anthracite coal is around US$240/mt.
Technical Aspects
Location of Chucuri Mine isnear Bucaramanga, just 25 km from Puerto Wilches on the Magdalena River, 600 km to Barranquilla harbor by river. The Guaduas Mines are 950 km to Barranquilla by river and just 100 km from Bogota (the capital of Colombia).
To exploit these mines, it is necessary to pay “surface rights” (taxes to the Colombian government) of the mines, produce a geological study of the mining zone (GS), elaboratethe PTO (Work Plan) and EIA (Environmental Impact Study) to present to Ingeominas and Ministry of Environmental respectively. These studies may take up to 6 month. Approval of license for exploitation may take 1 or 2 month more. PTO and EIA. Studies for the La Tabaquera mine in Guaduas (57 ha) are being done by a recognized company in Colombia since VSUS Technologies Inc. (VSUT), a publicallytraded US company, has acquired it.
After the exploitation license is approved by the Ministry, mining activities can begin. It is projected to begin mining 30,000 mt/mo. by Sept. to Dec. 2011, increasing production up to 120,000 mt/mo. by June 2012.
Land must be acquired in order not to pay 8% royalties to the owners of the land.
Exploitation needs machinery to work an open-pit; Excavators,Off-Highway Trucks, Loaders, Bulldozers, Generators and others. Some buildings are required as well as labor camps, collection and storage yards, and some specialized equipment like transport bands, loading platforms , humidifiers, classifiers, ovens for coke, etc.
Organization
Legal Structure of the mine now is a Concession Contract signed between the Owners and Ingeominas. This proposal includes...