Business Plan for Small Scale Mining in Sierra Leone

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DIAMOND AND GOLD MINING PROJECT IN SIERRA LEONE

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9.25 CT DIAMOND FROM SIERRA LEONE
CONTENTS

1. GENERAL
2. INITIAL REQUIREMENTS

GENERAL

For the last 2 years our company has been closely following the Sierra Leanean diamond “Industry” if we can call it that. Sierra Leone is a small country in West Africa mainly known because of the bloody and vicious civill war which ended about 3 years ago. I have visited this country a few times – each time for a period of 1 month or more. During those vistts I tried to familiarize myself with the diamond and gold mining industry. During those visits – I have been in Freetown (the capital of Sierra Leone) in which I successfully dealt with all the necessary licences needed in order to visit the mining sites – and purchase diamonds and/or gold. After obtaining the necessary licences, I mostly moved around in the small mining towns and villages. During those visits I tried to purchase gold and diamonds from the miners – but without much success. The quantities of available gold from the miners are very small (gold mining is usually done by one person who digs and washes the gold – and does not have the necessary funds to emply labour or use mechanized equipment). Diamonds can be obtained and purchased easy but in order to buy them – a big invested is required and also a very deep knowledge in rough (both condition I can not fulfill).

But those trips and the close knowledge of the country led me to the conclusion that the best investment it this country is the mining. The local miners do not have the funds for large scale mining and the knowledge to use mechanized equipment. The mining is usually done usually by individuals in a very small scale – and some of those individuals, lucky enough to shoew some profit – reinvest the profit in hiring labour to develop and enlarge their activities.

Foreign investor are not very eager to invest in this country. This is a very backward country, no roads, no electricity and running water in most of the small towns and villages. Even in the Capital – electricity is scarce (few hours every second day) and running water is not available everywere. It is very hard for a large company to consider a large investment in this country when even the basic condition of getting to the work site and back – with trucs and heavy equipment, requires the to invest in building or enlarging the roads to the sites. Furthermore – althought it is a very quite and safe place for the last few years – the civil war took it’s toll by givind the country a very bad reputation. But in the last period of 2004, this situation is starting to change, and more investors are starting to take interest (small investors mostly but also big companies.

Following my investigations and visits in this country – I have decided to initiate the Sierra Leone Mining Project.

INITIAL REQUIREMENTS
My last trip in Sierra leone was used mainly in fulfilling but all the initial requirements needed in order to start the activity

1. STARTING A COMPANY

Our company name (started in November 2004) is CPG Africa trading ompany Limited. This is a general purpose company that can deal in any type of business activity – but the first activity stated is the companie’s memorandum, is the acquisition of gold and diamonds mines. I am the main shareholder of the company – with and additional local as a secondary share holder (see enclosed copy of company memorandum)

2. DECIDING AN AREA TO START THE ACTIVITY

In order to decide on a starting point for our activity – we have initiated private audiences with the chief Geologist of Sierra Leone Geological Department. During our meetings we have decided on an area in the nord of Sierra Leone called Kamakwie. This is a relatively new and promising mining area. It has not been yet heavily mined (only for the past year or so) but according to the big Lebaneese...
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