The proposition is that he could set up his own company and take over a proposed gold mining opportunity in Sierra Leone. At present the opportunity is in its early exploration stages. It was an opportunity Abigail came across while prospecting for copper but she does not feel she has the time to take it further.
So far the current indicated mineral resource discovered from test drill holes is estimated at 11,000 ounces of gold. There are a number of test areas still to evaluate. The area is in a remote part of the jungle.
At present Peng has been delaying giving an answer to Abigail while he evaluates the results. He can finance it as he has just inherited his father’s estate, which includes shares in a major publicly listed UK chemical company valued at over £6 million, which he could sell.
He has engaged you, an old UCLAN friend, to evaluate the project. The date is December 2012. At present his best assessment of the costs and revenues are as follows:
1. Payment to Abigail of £2m at the commencement of the project (1 Jan 2013) for exploration work to date and the rights to mine in the area for a period up to and including 2018 conferred by the Sierra Leone central office of mining to Abigail.