8/12/2019 1869288

1/25

1

1869288

The Executive Summary

The licence for which this report is prepared (ACME Emeralds Limited) is

located at plot number 426 in Lufwanyama Emerald Restricted Mining Area.

The site is about 45km SW of Kitwe Town.

The project under consideration involves open pit mining of gemstones,

transportation of overburden material to the overburden dump, dewatering

the open pit, servicing of equipment, hand picking of gemstones if seen in the

pit and transportation of the gemstone ore to the washing/sorting plant.

Support facilities include a mine camp for 50 workers, security fence,

explosives magazine, settling pond for dewatering water, hired earth moving

machines, water bowser, fuel tank, service workshop, borehole and an

administration office.

8/12/2019 1869288

2/25

2

Contents

1.0 INTRODUCTION ................................................................................................................................. 3

2.0 LOCATION AND ACCESS .................................................................................................................... 3

3.0 REGIONAL GEOLOGICAL SETTING AND EMERALD MINERALISATION ............................................... 4

3.1 GEOLOGY OF PLOT 426 ..................................................................................................................... 6

3.2 EMERALD MINERALIZATION ............................................................................................................. 6

3.3 MINEABLE RESERVES ........................................................................................................................ 8

4.0 DESCRIPTION OF THE PROJECT ....................................................................................................... 12

4.1 OPEN PIT MINING PROCESS AND MINING MACHINERY ................................................................. 13

5.0 EMERALD EXTRACTION ................................................................................................................... 15

6.0 ECONOMIC EVALUATION............................................................................................................... 16

7.0 CAPITAL AND OPERATING COSTS.................................................................................................. 17

8.0 INVESTMENT WORTH..................................................................................................................... 17

8.2 COST BENEFIT RATIO ....................................................................................................................... 22

9.0 EMERALD PRICING ............................................................................. Error! Bookmark not defined.

10.0 PROPOSAL FOR EMPLOYMENT AND TRAINING OF CITIZENS OF ZAMBIA .................................... 23

11.0 PROPOSAL FOR PROMOTION OF LOCAL BUSINESS DEVELOPMENT............................................. 23

REFERENCES .......................................................................................................................................... 24

8/12/2019 1869288

3/25

3

1.0 INTRODUCTION

The purpose for this report is to outline a business plan for ACME Emeralds

Limited, P.O Box 36380, Lusaka, the holder of Gemstone Licence Number

............HQSGL.

2.0 LOCATION AND ACCESS

Plot 426, which lies within Chief Lumpumas domain is centredat 13005 20 S

and 27059 27 E coordinates, South-West of the Copper belt town of Kitwe

and north-west of Luanshya town within an area designated as the Ndola Rural

Emerald Area. The project area lies on the licensed area covering

approximately 100 hectares. The licence area is situated in Mitondo west in

the Plantation area.

Figure 1: Location map

8/12/2019 1869288

4/25

4

Figure 2: Provincial map showing Lufwanyama District were the licence is.

3.0 REGIONAL GEOLOGICAL SETTING AND EMERALD MINERALISATION

Stratigraphic setting

The Mitondo emerald fields occur in rocks belonging to the Muva super group.

The Muva super group comprises meta-sediments intercalated with ultra basic

rocks.

The Muva rocks overlie older granites and gneisses of the basement complex;

they are covered by younger meta-sediments of the Katanga super-group.

Rocks belonging to the Muva super-group are exposed in the central part of

the Mitondo area. This unit comprises quartzites and quartzose schists near

8/12/2019 1869288

5/25

5

the base and overlying quartz-mica schists intercalated with talc-chlorite

tremolite-magnetite schists. The quartzites are medium to coarse grained and

are composed almost entirely of quartz, with accessory iron oxides, Muscovite,

rutile and schorl. Banding of probable tectonic origin is seen, whilst in places

relicts of sedimentary structures (e.g. Cross-bedding) may be observed. Quartz-

mica schists are fine-grained rocks composed of quartz, muscovite and locally

sericite. Biotite, tourmaline, amphibole (tremolite) and magnetite occur as

accessories. Close to the contacts with talc-magnetite schists the rock carries

some talc, chlorite and a considerable amount of biotite.

Talc-chlorite-tremolite-magnetite schists seem to constitute a single horizon

placed relatively low in the Muva sequence, either immediately above or near

to the quartzites. The horizon is poorly exposed on the surface.

The main components of the ultra-mafic schist are talc, green or colourless

chlorite often forming felted intergrowths, and tremolite/ actinolite as

scattered needles. Magnetite forms about 5% of the rock, but locally reaches

15%. The magnetite contains chromium substituting for iron, while nickel is

accommodated in the sheet silicates. Locally the schist is transitional to

amphibolite schist containing inter-locking crystals of tremolite-actinolite, with

some talc and chlorite. In places talc and chlorite replace the amphiboles. The

schists are believed to have been derived from ultrabasic rocks in the form ofLava flows or sills and act as a host for emerald mineralization.

Younger Katangan supergroup rocks cover most of the area. They are

composed of argillites, quartzites, dolomites and carbonaceous shales. The

unit is intruded in places by gabbro and metagabbro intrusions consisting of

olivine, plagioclase and augite in unaltered rocks and of hornblende with

8/12/2019 1869288

6/25

6

scapolite in altered varieties. Pegmatites are widely spread within the Muva

rocks. See fig 2 geological map.

3.1 GEOLOGY OF PLOT 426The geology of the plot consists of Muva Super Group rocks. These comprise

quartzites and schists. The schists consist of mica schists and talc magnetite

schists.

Emerald mineralization is associated with talc magnetite schist, which is

intruded by pegmatite and quartz tourmaline veins.

3.2 EMERALD MINERALIZATION

The basic regional geological controls of emerald mineralization in the Mitondoarea have been established to be the presence of metamorphosed mafic

magmatic rock units and pegmatites, (Hickman, 1972), Sliwa and Nguluwe

1984). Emerald mineralization occurs in the contact zone between the meta-

basic units and the pegmatites. In these zones, hydrothermal alteration due to

pegmatite intrusion has produced biotite-phlogopite schists, which host

emerald-tourmaline mineralization. Mineralisation is however not only

confined to these alteration zones but may also occur both within the

pegmatites (Sliwa and Nguluwe, 1984) and in less altered mafic rocks. It is

apparent that not all alteration zones contain emerald mineralization. This is

mainly attributed to differences in compositions of the pegmatitic fluids (Sliwa

and Nguluwe, 1984). So far, no quantitative work has been done on the

compositions of these fluids and their temperatures.

Sliwa and Nguluwe (1984) recognized three phases of pegmatite injections.

The oldest phase comprises tourmaline bearing granitic pegmatites which

consist of feldspar + quartz + muscovite + tourmaline. The second phase

consists of quartz tourmalines, which will be texturally zoned being fine

grained at the margins and coarse-grained in the centre. The third and last

phase is a coarse-grained quartz tourmaline pegmatite. According to Sliwa and

Nguluwe (1984), the first two phases will be always discordant to the host

rocks whilst the third phase occurs as both concordant and discordant veins.

On this basis, the first two phases were considered to be feeders to the third

8/12/2019 1869288

7/25

7

phase. Emerald mineralization appears to be associated with this last phase of

pegmatite injection (Sliwa and Nguluwe, 1984).

All the pegmatites intrusions will be considered to be structurally controlled

although the nature and type of the structures will be not described (Sliwa andNguluwe). The talc-chlorite-amphibole magnetite schist, into which the

tourmaline pegmatites will be intrusive, occurs at various stratigraphic levels

inter-banded with quartzites and quartz muscovite-biotite schist (Hickman,

1972). Due to lack of more detailed geological work, it is however not known

whether the stratigraphic repetition is due to recumbent folding of one single

talc-chlorite magnetite schist unit or there exists more than one layer.

Hickman (1972) noted the local transition of schist into amphibolites andpartial transformation of amphibole to talc and chlorite. Although not

described in detail, the observations made by Hickman (1972) suggest a meta-

somatic alteration of amphibolite to talc-chlorite schist. Hickman (1972)

suggested that the schist was derived from an ultra-mafic rock.

Figure 3: Geological map

8/12/2019 1869288

8/25

8

3.3 MINEABLE RESERVES

It is estimated that the mineable reserves can last up to a period of twenty

years. Additional reserves may be established after further exploration to

increase the life span.

Legend

8/12/2019 1869288

9/25

9

4.0MARKET ANALYSIS

4.1 Product

Emerald is part of the beryl family being a silicate crystal composed primarily of

silicon and oxygen. It is a hexagonal crystal having a hardness of 72. The presence ofeither chromium or vanadium is responsible for the green color. Stones containing

vanadium have a bluish tint, those with chromium exhibit the "emerald green".

Zambian emerald coloration tends towards the deeper greens. The Geological

Report for Nachingwali shows that the mineralization on the site has high chromium

content. The few emeralds found in the core samples show very good color.

Colombian emeralds tend to have a clear core with the color concentrated along the

edges of the crystal. Zambian crystals have color running throughout the core.

The best-known source of emerald in the world for the past 400 years or so has been

Colombia. The same mines that drew the conquistadores into the jungles are stillproducing more emerald by value than anywhere else. The famous trio of Colombian

mines, Muzo, Coscuez, and Chivor, were joined in the late 1990s by La Pita. Supply

overall, however, has been gradually decreasing in quantity and quality due to the

depth of the mines; the best Colombian emeralds to be found today, as one dealer

joked, can be mined from the wrecks of the Spanish galleons in the Caribbean Sea.

Exploration, for other mining has been hampered by the unstable political and social

conditions in Colombia.

The world's other leading source of emerald is Brazil.

The discovery of high-quality emeralds in Itabira in thestate of Minas Gerais in the 1970s and the nearby Nova

Era in the 1980s boosted Brazil to the status of

international player in the emerald market. Today,

production of emerald from Brazil is steady as miners

gradually transition from the traditional garimpeiro(independent prospector) model

of mining to mechanized operations funded by private owners or long-term

investors.

A third major source of emerald is Zambia. Most Zambian emerald is bought by the

cutters of Israel, and the country continues to produce a steady supply, though not

as much as either Colombia or Brazil.

Another famous African deposit was discovered in Sandawana, Zimbabwe, in the

1950s. The mines were known for their deeply saturated emerald, which produced

beautiful colors even in small sizes. The deposit passed through a number of hands,

including mining conglomerate Rio Tinto; at last report, a local company had gotten

the mines up and running, although it contributes very little to the overall world

emerald market.

Colombian emerald, photo John Parrish.

8/12/2019 1869288

10/25

10

None of the other world sources of emerald produce large quantities, though there

is usually a limited amount coming out. Afghanistan is the source of some very

beautiful emerald, although supply is hampered by the political situation there and

the difficulty in traveling in and out of the country. The United States' military

overthrow of the Taliban, the fundamentalist Islamic government that took over the

country by force in 1996, has not improved the situation. The neighbouring countryPakistan occasionally produces emerald; while beautiful, the crystals tend to be

small.

Emerald has also been mined in Russia, India, the United States (North Carolina),

Australia, South Africa, Tanzania, Mozambique, and the Yukon region of Canada.

Source: http://www.tucsonshowguide.com/stories/sep04/roughissue2.cfm#eme

Virtually all emeralds have inclusions, natural fractures and stress fissures within thestone. While this is unacceptable in most gemstones, it is part of the nature of

emeralds and is to be expected. Emeralds have been treated for centuries with oilsto minimize the effect of these inclusions. Statistics show that 99% of all emeraldgems are treated or "oiled" to reduce the optical refraction of the inclusions.

Colombian emeralds still dominate the upper end of the market, while the Africanstones take the middle and lower market segments. But more high grade Zambianemeralds are finding their way to upper markets.

4.2 Demand

Colombian emeralds still dominate the upper end of the market, while the African

stones take the middle and lower market segments. But more high grade Zambianemeralds are finding their way to upper markets.

Zambian stones, however, are typically "cleaner" than Colombian or Brazilian stoneshaving fewer inclusions and are rarely treated with fillers. This is appealing to manyretailers who prefer the purity of the crystal radiating through the stone.

4.3 Pricing

Price is another attraction of Zambian stones. Emerald is twenty times more rarethan diamond but sells at about the same price per carat. In extra fine qualities,

Colombian emeralds with no sign of treatment can reach highs of $20,000 per caratwholesale in sizes over 5 carats. Zambian stones of equal quality typically would bein the $10,000 per carat range. The vast majority of emeralds however, are less thantwo or three carats. A one carat Colombian gem would bring between $1,000 to$4,000 per carat, while the Zambian would bring something between $300 and$1,200. Zambian stones typically sell at about a 25% discount to Colombian, thoughthis disparity is shrinking as more dealers and collectors are moving to the cleanerZambian emeralds.

8/12/2019 1869288

11/25

11

The following table shows a range of retail price that could be typical for one (1) carat of

emerald. Emeralds are one of the most rare and valuable of all gemstones.

Grade Weight Minimum Maximum

Price/carat ($) Price/carat ($)

AA (Extra Fine) 1carat (0.2g) 2900 9800

A(Fine) 1carat (0.2g) 1125 2900

B(good) 1carat (0.2g) 525 1125

C(Commercial) 1carat (0.2g) 30 525

*2-3%emerald of which one third is really high quality

*5-8%low grade emerald saleable of good color.

*10-15%beryl (below minimum green and chrome standard) saleable.

*75-80%rejects (saleable as beryl ore) beading material.

The sizes of the emerald pieces also determine the pricing. Big pieces of good quality

emeralds will attract very high prices as compared to small pieces of the same quality. A

good combination of colour, cut, clarity and crystal will make any piece of this gem valuable.

4.4 Marketing and Distribution

4.4.1 Local Competition:There are a little more than 400 mining plots in the restricted area. The vast

majority are not being actively worked. Approximately twenty to thirty arebeing worked but most are severely undercapitalized.

Following the elections in 2001 pressure has been placed on the Ministry ofMines to enforce existing laws and we have seen a dramatic increase of activityfrom the ministry and the Department of Mine Safety. Many artisan miners arescrambling for cash to produce the required environmental impact studies, toestablish safe procedures and conditions at the mining operations and toconform to regulatory maintenance standards.

These additional burdens and costs may drive the smaller operations from themarket, thereby limiting competition. The bigger players will likely pick up their

plots and licenses.

8/12/2019 1869288

12/25

12

In the Emerald Restricted Area seven of 23 mines are operational. The largest,Kamakanga, (a private company), and Kagem, (a semi - privatized entityoperated by a Indian - Israeli consortium and the Zambian Government), aresaid to produce approximately 60 to 65% of Zambia's emerald exports. Thetotal value as estimated by the Ministry of Mines is placed at 500 million USD

annually. The actual numbers are certainly higher as more than half of therough emerald is smuggled out of the country. The Ministry of mines has beenreluctant to release the production numbers of individual mines so solidfigures are difficult to determine at best.The world wide rough emerald market by extrapolation is similarly difficult toestimate. The finished gemstone numbers elsewhere in this paper provide themost reliable estimate of world demand for colored gemstones. The value offinished stones is much higher than the rough, but the finished stones byweight are only 20 to 25% of the rough from which they are cut.

4.4.2 World Competition:Since emerald is a world commodity of sorts, local competition is not as

significant as it is for many businesses. All producers are selling into a worldmarket. Emeralds are produced in several parts of the world.

The number one producer in the world is Colombia. Colombian stones enjoythe reputation as the world standard by which all other emerald is judged.There are some 150 known emerald mining sites in Colombia. Three majormines produce the majority of Colombian emerald exports. The best know areMuzo and Chivor, know to have been mined off and on since the time of theIncas. Coscuez mine however is the largest Colombian producer, drawing fromsome sixty mining locations. Colombia is the largest supplier of emeraldgemstones to the US.

5.0 DESCRIPTION OF THE PROJECT

It is important to emphasize that the project is not complex and the only major

activities are open pit mining, dewatering and removal of overburden/ waste

rock. The sub-sections below briefly describe the major activities of the

project. The simplicity of the project compared with large scale copper mines

on the Copper-belt is indicative of minimal environmental aspects andsubsequently the nature of environmental impacts.

The schedule of activities will be similar to any other mining ventures, starting

with mining which will include ripping of overburden, blasting of virgin rock

and the ore body (vein) and dumping of the overburden. There after ore

crushing and washing shall follow. During washing the sorting is done and

finally storage of ore and disposal of slimes from the washing plant.

8/12/2019 1869288

13/25

13

Other scheduled activities are domestic waste and sewage management, pit

dewatering, domestic water supply, fuel storage, construction of fuel storage

facilities, access roads, housing units, security facility, mechanical and metal

fabrication workshop, salvage yard, magazine, wash bay, oil and water

separator etc.

Decommissioning and closure of all these (above mentioned) activities is also

part of the schedule.

A life time of 10 years will be the total time in which all these activities will be

implemented, starting with infrastructure that requires construction, followed

by routine activities which are cyclic and ending with decommissioning and

closure activities.

5.1 OPEN PIT MINING PROCESS AND MINING MACHINERY

Mining activities will be done using open pit mining methods. Major activities

will include removal of overburden material, de-watering activities, defining

the pit benches to comply with standard open pit mining methods and

generation of waste rock and overburden material.

The open pit to be developedwill have a length of 100m, width of 80m and

depth of 50m. The pit sections will have benches with maximum heightof 8m,

bench widthof 3m and 45oas an angle of inclination.

In gemstone mining, about 99% of the mined out material is waste and only

about 1%is the raw material from which gemstones may be extracted. To get

to the vein, the pit will be designed in such a way that it will be wide on the

surface and it will be narrowing as it gets deep thereby making a triangularcross-sectional shape. Based on these factors, the stripped out material is

estimated at 1.6 million cubic meters as shown below.

Current pit foot print (circumference) = 6.48 hectares (64,800m2)

Current depth = 50 meters

Mined out volume = (64800 x 50)/2

8/12/2019 1869288

14/25

8/12/2019 1869288

15/25

15

6.0 EMERALD EXTRACTION

1) Emerald bearing ore is carefully extracted in the in the mine by Chiselmen, working with Hammer and Chisel.

2) All biotite- cover rock is treated in a washing plant and emerald-bearing ore particles are picked on a belt or a sorting table.

3) In the emerald room at the mine as much matrix as possible isseparated and the recovered emerald is locked in the strong room.

4) Cobbing:*Soaking in hot water 2-24hours

*Remove as much unwanted material as possible, but not 100 percent, by

splitting larger pieces under a hydraulic press, followed by working with

pincers/pliers (not hammer and anvil).

*Prepare stones by opening-up, using existing cracks etc.

5) Knocking-prepare clean emerald particles, uniform in respect of colour,

freedom from inclusions together with partial grading using pincers/pliers.

Fibre optic light being stronger than sunlight and exactly focused on the

stone. Adhering narrow rims of quartztourmaline and biotite are

removed by grinding wheel with a flexible shaft or with a steel file.

6) Sorting, grading, preparation for the market;

Oiling

- Soak in warm water with house hold detergent, half an hour

- Soak 2-3times in fresh water (may be cold).

- Dry in sun light or infrared lamp.

8/12/2019 1869288

16/25

16

- Submerge in oil (same refractive index as emerald, e.g. baby oil) a little

warmer than room temperature, 3-4 hours.

-

Put stone on tissue paper, wrap it, and wipe to remove outside oil.

Grading (after oiling)

Small parcels (100g)may be mixed, LARGER are treated as follows;

-Size grading (sieves, weighing of bigger stones)

-colour grading bluish green-pure green (=best colour)

-grading according to quality (clarity, presence of inclusions).

7.0 ECONOMIC EVALUATION

Detailed data are available from the deposits in Ndola Rural Zambia. 250-

500g/m2 (vein area) emerald run-of-mine (ROM) are extractable, at a

recovery rate of 85-90%. Of this, 65-80% is extracted by chisel men in the

mine, the balance in a washing plant.

The stones are not evenly distributed, but concentrated in pockets on 8-15%

of the total vein or contact stone area. In the pockets which occur on footwall

and hanging wall of the tourmaline vein, either side, concentrations of ROM

emerald of 1500-2000g/t are found (at 3-4t/m2vein area).

This Run of Mine (ROM) emerald will yield after preparing and sorting;

*2-3%emerald of which one third is really high quality

*5-8%low grade emerald saleable of good color.

*10-15%beryl (below minimum green and chrome standard) saleable.

*75-80%rejects (saleable as beryl ore) Beading material.

The economic evaluation will only be confined to three grades; gem quality,

cabochon and ornamental (beading material).

8/12/2019 1869288

17/25

17

The sizes of emerald crystals in the biotite rock matrix are between

microscopic and about 20mm x 50mm (hexagonal crystals). Sizes are

distributed log-normal.

8.0 CAPITAL AND OPERATING COSTS

The costs comprise:-

(a)Cost of equipment delivered to site.(b)Mining cost (per month)(c)Direct Productions Cost (per month)

(d)Administration Cost (per month)[The costs per month are calculated assuming that mining will be done for

10 Months/Year]

These costs will be issued for cost of mining operations. The mining

method to be applied at ACME Emeralds Limited will be Open Cast mining.

The limit of open pit will be reached when the additional incremented

bank cubic metres (volume of rock/soil insitu to be mined) or tones of

emerald bearing ore will be costing more.

TRANSPORTATION (AIRFREIGHT)

Assumed mass (2 000kg) @ $1.50/kg $ 3 000

TOTAL $67 750

8/12/2019 1869288

18/25

18

EQUIPMENTItem Quantity Unit cost US $ Total cost

Land cruiser 2 10,000 20,000

Tractor and trailer 2 50,000 100,000

Excavator 4 55,000 220,000

Dump truck 5 25,000 125,000Prefab units/ sheds 8 4,000 32,000

D9 Bulldozer 2 RENT 20,000 40,000

Jack hammer 6 4,000 24,000

Water pump 4 8,000 32,000

Compressor 2 12,000 24,000

Solar Panel 4 2,000 8,000

Strong Room/Warehouse

2 10,000 20,000

Fuel tank 10,000litres

2 4,000 8,000

Motorola Radios 6 200 1200MAJOR EQUIPMENT SUBTOTAL 6,54,200 $

Shovels 100

Chisels 200

Wheelbarrows 50

Pick 50

Chains 20

Ladders 5

Hard hats 60

Overalls 60

Boots 60

Torch 60

Horse pipes 2 by 100m

Safety goggles 60

Leather gloves 60

Washing plant 1

Screens 5MINOR EQUIPMENT SUBTOTAL 12,000 $

Equipment Total 666,200 $

COST OF MINING EMERALDS

Workforce

POSITION NUMBER SALARYUSD/MONTH

Total Nationality

Mine Manager 2 1500 3000 Indian

Mine Engineer 2 2000 4000 Indian

Geologist 1 2000 2000 Zambian

Foreman 4 700 2800 Indian and Zambian

Drivers for cars anddump trucks

8 300 2400 Zambian

Excavator Operator 4 XXX Zambian

8/12/2019 1869288

19/25

19

Front End loaderOperator

2 XXX Zambian

Watchmen 18 900 Zambian

Labour 90 200 Zambian

Total

DIRECT PRODUCTION EXPENSES

Expenses Cost in USD/ Month

Fuel, oil and lubricants 600,0000

Freight & customs

Purchase of new spareparts/Overheads

Field camp general cost 354,000

Sub-Total

ADMINISTRATIVE EXPENSES

Expenses Cost in USD/ Month

Travel and Visa 900

Office administration, accommodation,

consumables and utility bills

2700

Accountancy fees 1000

Postage and telephone 1000

Printing and stationery 100

Legal fees 100

Medical expenses 200

Motor vehicle expenses 300

8/12/2019 1869288

20/25

8/12/2019 1869288

21/25

21

Fn> O : Net cash inflow

Fn< O : Net cash outflow

NPV = PVRPVE

NPV = Summation from n=o to N (Fn/(1+i)n)

M = Fn/(1+i)n

Reject / accept criteria:

NPV > Oaccept project

NPV = O remain indifferent

NPV < Oreject project

10.1 CASH FLOW

END OF PERIOD n (YEARS)

Cash flow 0 1 2 3 4 5

Receipt bn 0 14,412,000 14,412,000 14,412,000 14,412,000 14,412,000

Expenses Cn 4,000,000 +

3,000,000 3,000,0003,000,000 3,000,000 3,000,000 3,000,000

Net flow Fn 7,000,000 11,412,000 11,412,000 11,412,000 11,412,000 11,412,000

M 7,000,000 10,374,545 9,431,405 8,574,004.5 7,794,549.6 7,085,954.1

Assume MARR is 10%. Substituting Fnvalues into the equation for NPV we get:-

NPV= 43,260,4597,000,000

= USD $ 36,260,459.00

==========

8/12/2019 1869288

22/25

22

This is positive hence, the project can be accepted.10.2 COST BENEFIT RATIO

The benefit cost ratio (Eckstein B/C) RA (Eckstein, 1998; Park and sharp-

Bette, 1990, P226) is defined as:-

RA= Present value of cash in- flows (B) present value of cash outflows (C)

RA> 1 accept project

B= 14,412,000 (1.1)-1

+ 14,412,000 (1.1)-2

+ 1442,000 (1.1)-3

+ 14,412,000 (1.1)-

4

+ 14, 412,000 (1.1)

-5

= 13,101.818 + 11,910,744 + 10, 827, 949 + 9,843,589.9 + 8,948, 718.1

=54,632,819

========

C= 7,000,000 (1.1)0

+ 3,000,000 (1.1)-1

+ 3,000,000 (1.1)-2

+ 3,000,000 (1.1)-3

+

3,000,000 (1.1)-4

+ 3,000,000 (1.1)-5

= 7,000,000 + 2,727,272.7 + 2,479,338.8 + 2,253,944.4 + 2,049,040 + 1,862,764

= 18,372,360

RA= B/C = 54,632,819 = 2.974

18,372,360

RAis greater than 1, hence the project can be accepted.

NOTE:PV = B-C

PV = 54,632,81918,372,360

8/12/2019 1869288

23/25

23

= 36,260,459.00 USD

=========

11.0 PROPOSAL FOR EMPLOYMENT AND TRAINING OF CITIZENS OF ZAMBIA

The company intends to employ about hundred and fifty (150) workers. It is

the core business of strategy of ACME Emeralds Limited always to have a good

relationship with the local society in which business is carried out. We believe

that this is beneficial not only for the society as such but also for the company

in the longer perspective.

Apart from contributing directly to the society by the provision of reasonable

resources to local development the employment and training strategy is also a

very important aspect. The following areas of particular interest have been

identified for the employment and training of citizens of Zambia:

Local labour will be employed to the largest extent possible. Allemployees will be given proper training for their jobs and all labour

regulations will be obeyed with as a matter of corporate standards.

ACME Emeralds Limited will seek to employ Zambian citizens for keypositions to the extent that is possible. Where external expertise is

needed he will instead seek to have at least one Zambian employee

working closely together with this expert with the objective of acquiring

as much knowledge as possible and gradually getting bigger

responsibilities.

12.0 PROPOSAL FOR PROMOTION OF LOCAL BUSINESS DEVELOPMENT

Apart from contributing directly to the society by the provision of reasonable

resources to local development the promotion of local businesses is also a key

8/12/2019 1869288

24/25

24

aspect. The following areas of particular interest have been identified for the

promotion of local business development:

Local business should be engaged to the largest degree possible whensourcing food, building material and services.

ACME Emeralds Limited shall seek to cooperate with the local headmenin order to identify areas where local business can provide valuable

services to the project.

ACME Emeralds Limited shall actively work together with the localbusinessmen trying to identify areas where they can assist the mining

project.

ACME Emeralds Limited shall at any time endeavour not to interferewith the operations of the local businessmen.

ACME Emeralds Limited shall seek to identify areas where it can be ofassistance to the local businessmen also outside of the prospecting

program, such as the provision of the improved infrastructure, business

contacts etc.

REFERENCES

1. Mines and Minerals (Environmental) Regulations of 2008.2. Environmental Protection and Pollution Control Act No. 12 of 1990.3. Public Health Act, Chapter 295.4. Mining Environmental Management, January, 1999.5. Prospect, Placer Dome Inc., December 1998.

8/12/2019 1869288

25/25

25

6. UNEP, 1985.7. SADC gemstone Handbook8. Hickman A.C.J (1973) :The geology of Luanshya Area9. Tembo. F. , Katongo. C, Kambani. S, Simasiku.S (2000) :Geology and

Structural Controls on Quality and Quantity of Emerald Mineralisation in

Ndola Rural Area

10.Sliwa A.S. and Ngulube C.A (1984) :Geological setting of Zambian EmeraldDeposits.

11.Joint Project Geological Survey and Czech Republic12.Njamu. F.M and Sakungo. F in press. Geolgical Map of the Kafubu Emerald

area. Unpublished

13.D.K. Lombe, R.N. Ndhlovu (2001 Jul) Unpublished:Geophysical andGeological Survey Report Plot 21E Ndola Rural Emerald Area

14.D.K. Lombe, R.N. Ndhlovu (2001 Dec) Unpublished :Geophysical andGeological Survey Report Plot 23B Ndola Rural Emerald Area

1 cubic metre6.4 gms