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Diamond Mining JV Investment Opportunity - NC

R10,414,200KimberleyListing: #14484


Kimberley businesses for sale 


R10,414,200

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About this business for sale

Diamond Mining JV Investment Opportunity - NC
A real excellent opportunity has become available for investors to get involved in a joint venture scheme in the diamond mining industry in the NORTHERN CAPE

The company’s main intention is to mine for alluvial diamonds on the old banks of the Vaal River, outside Kimberley. This is an area well known for its huge potential and yield of many well known diamonds.

Kimberley is the capital of the Northern Cape and the capital of the Diamond mining activities in South Africa. The town is equipped with all the mining support supplies and services needed for the operation with specialized people on hand should they are called upon.

The area is well known for its mining activities with numerous mining activities in the surrounding farms. A total of +/- 10 mining operations on a similar and bigger scale are successfully mining, proving a high volume of potential.

It is the intention of the parties involved to start a diamond mining operation in the area with a negotiated first opportunity and consent in place with the permit holders of that portion to start mining as soon as possible.

The company does not hold the mineral rights and it would be therefore in the best interest for all concerned to join in the venture with urgency in order not to lose this opportunity.

By joining in a joint venture, it will be starting a medium scale mining operation which will be profitable to all parties and with unlimited growth potential.

The actual mining operations involve the following steps;

* Open a hole in the ground using excavator.
* Loading diamond bearing ground onto the trucks.
* Transporting ground to screen.
* Screen takes out the big rocks and oversize boulders.
* Oversize material been taken back to the hole for rehabilitation.
* Screened material been fed into the feeder bin attached to the rotary pan.
* Pan separates light and heavy ground.
* Lighter material loaded onto the trucks and transported back to the hole for rehabilitation.
* Heavy material been processed for diamonds.

Diamonds are found in one of three types of ground namely;

* Kimberlite
* Alluvial
* Red ground (rooikoppie)

Alluvial refers to the OLD River when millions of years ago, the river used to flow in the area. Water current and flow brought with it diamonds from different regions. Indications are that there is red (rooikoppie) soil on the farm. That ground will also be washed and processed.

Startup time is estimated to be between 3-4 weeks from the time that the funds are accessible, when the sourcing, purchase, transport and assembly of the equipment and machinery will commence.

While assembling is in progress, the yellow machines such as loaders, excavators and trucks will start preparing ground to be processed and when all machines are assembled production will start immediately.

The initiating partners together with the management team, supervisors and operators will run and operate the planned mine. During brake downs and other specific fields specialized skilled people will be outsourced as needed from time to time.

Sufficient and professional training will be provided to the team to ensure the outmost professionalism and training will be provided for the sake of the project and future prospects.

The principle partner has worked in the area for many years and is a very experienced diamond digger and well known and respected in the diamond mining industry bringing 24 years’ experience and background in the diamond industry and joint ventures with great success.

The other initiating partner has a variety of success in the business world covering a wide field of disciplines including Marketing, Business Management, Communication, First Aid, Incident Investigation, Occupational Health & Safety, etc.

The sale of the diamonds is commonly in the diamond industry through the use of Tender Houses, ensuring that the best prices possible will be obtained. The Broker’s Note is a government assurance that the Diamonds did come from the mine and not from other sources. A daily production register will be on site, all necessary to comply with the law and regulations.

The reward to the company and partners is to find diamonds. It is known that a large stone is a complete “game changer” and this will in all likelihood be located in the area.

The financial indications per the forecast indicates the cost of the operation will be in a breakeven point at 8.97% of the projection or from the normal and standard run of mine known in the area.

The diamond market is very healthy at the moment and the demand for diamonds very high, despite the world economic climate. Virgin ground is becoming very scarce and the fact that most areas are mined out, brought diamond production down over the last 10 years.

The world recession of 2009 also played a major role in the decrease of diamond production and a lot of diggings closed down and never re-started after the recession.

A small scale diamond production operation in and around the Vaal River area will have massive advantages and returns to any mining operation. The average carat ratio in the Vaal River area is 0.90 carats per 100 tons.

With a good knowledge and history of the area this small scale operation will yield a very healthy return.

There is no real competition in the diamond industry as ground is the number one commodity that diggers compete for. The person that can secure the best ground will gain the best yield and will obviously make the most returns.

Diamond producers all supply the same market and success is measured in exclusivity and consistency. To accomplish this, the right ground and setup, equipment, experience and knowledge as well as sound financial backing is essential.

The start-up funding will be discussed with potential investor/s, business partners or financial institutions and the main partners will be willing to enter into a healthy and solid business relationship with ambitious and professional people.

The land and permit owner will receive 15% of production sales. There will be a transparency policy with regards to final product recovery, tender documents, financial status and profit sharing.

The total investment needed is R10, 414,200. The breakdown of the investment is mainly for machinery and equipment (capex), making up a total of +/- 75%. The balance is allocated for running costs (working capital) with 12 weeks (3months) backup should it be needed. With the majority of the investment in movable assets, any investors money 75% secure.

The ROI for this proposal is an average of 184% per annum calculated over five years before tax based on the assumptions made by the initiating partners which they deemed as conservative.

Minimum investment per investor is set at R500, 000. A detailed proposal document, business plan, financial assumptions and capex are available as prepared by the initiating partners for review by potential investors.

This will be followed up with discussions with the partners, reporting requirements regarding progress, profit sharing and site visits to ensure that each potential investor is put in a situation to be able to make an informed decision.

This is a rare opportunity to get involved as a partner in an exciting joint venture project with real potential to earn exceptional investment returns.
Centurion
leon.bahlmann@linkbusiness.co.za
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082 600 3848

Leon Bahlmann