Cooperation ZIRCONIUM PROJECT - KARNA MINERALS, ENERGY RESOURCES

Cooperation: ZIRCONIUM PROJECT [Nov. 24, 2007 6:49:06]

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ZIRCONIUM PROJECT IN CENTRAL KALIMANTAN

Zirconium product

One of the major applications for zirconium is as a structural material in the chemical processing industry. Zirconium excellent resistance to corrosive attack in most organic and inorganic acids, salt solutions, strong alkalis, and some molten salts.
The unique corrosion resistance of zirconium can extend it’s useful life beyond that of the reminder of the plant, consequently maintenance cost are reduce and downtime is minimize. The product being use for boilers, evaporators tanks, reactor vessels, valves, piping , nuclear reactor and ceramic coatings.

Heat exchangers

The outstanding performance of three heat exchangers used in the production of hydrogen peroxide precipitated the purchase of several more zirconium heat exchangers for use in the production of rayon by a large chemical producer. This experience has led to the expanded use of zirconium exchangers by a broad spectrum of the chemical process industry.

Identification of potential international buyer for zirconium product.

The group has identified various potential buyer available in the U.S., Australia , Europe and the largest users in Asia is The People Republic of China, where among the potential users are :
1.Xixing Xinxing zirconium co, 2. Henan Billions chemical co ltd, 3.Beijing huanno zhang xing technology, 4.Lehang Zirconium chemical plant, 5.Chinese glaze co. ltd etc.

The assignment of zirconium mining concession area in Central Kalimantan

10.000 HA potential zirconium mining concession in Kualajelai near the beach site, about 3,5 KM hours by combine boat/car transport south of Pangkalanbun, central Kalimantan.
TDBH expected in the future to own 5 other similar concession in nearby area either by acquisition or work with royalty payment with another concession owner, in order to be able to support the production capacity to supply the increasing international demand of zirconium mining product.

With the mining location near the beach site, once the project in motion it will not too difficult for the company to open jetty for immediate forwarding of the zirconium product for export abroad or for local supply.

Laboratory analyze report by Department of Energy and Mineral of Republic of Indonesia

The laboratory analyzes report for the sand obtained from 3 different area in the assign location, stated that the potential zirconium available is 0,42%, 91.20%, 88.65%, as describe on their statement.

Potential reserved on the assign location.

The Directorate General of Mining and Energy in Central Kalimantan research in the area (report available), that the potential deposit for C (open pit mining) of zirconium product in the Kualajelai area is around 1.191.980.000 metric-tons of zirconium sands with the assumption that Kualajelai area about 75 KM2 .

Therefore with the assumption that for every 1 HA of the concession area can produce approximately 2200 M-tons of zirconium continuously. TDBH may expect the production capacity or reserved from it’s 10.000 HA assign area will produce at least 22.000.000 M-Tons. With 60% productivity at grade 58/65 % zirconium at open market with fob price of USD.720 m-ton, this assets could easily produce an economic value in the long term of USD.9.504.000.000.

Potential buyer ready to open L/C.

Currently TDBH with it’s known ability and networking with the local government, has obtained L.O.I. from SanDong Zibo Guo Tai Steel Manufacturing co,Ltd, in China who continuously willing to absorb the supply of monthly 50.000 M-tons.

The current zirconium business activities in central Kalimantan.

On the recent visit to central Kalimantan, both to Kualajelai area (the closest airport is Pangkalanbun). With port of export is Kumai port where there is container yard facilities available. And to Sampit where the closest airport presently Palangkaraya, with also container yard and international seaport available in Sampit.

There are many Chinese buyer physically being presented in both of the area, to purchase from zirconium collector who purchase from traditional miners, to support their industry. The latest report from Department of Trade that annual export presently recorded of 539.038 m-tons zirconium export with transaction value of USD.14,7 millions,( being exported in 2006).

Recommended strategic business approach.

A. While processing the ownership/legal right of the prospective area, the 10.000 HA zirconium acreage along with the AMDAL (the environmental assessment report), geologist report to be able to analyze the exact reserved and to be able to focus (to start from) the potential area, it will cost around USD.350.000,- . Further exploitation and equipment will require at least USD.750.000, make the total investment of USD.1.100.000. The process step required at least 6-8 months before able to begin production.

B. Build cash-flow temporarily from bleaching-plant and trading.
With the recent activities made based on field findings, that with the initial investment of USD.165.388.83 to build bleaching plant in Kumai (the closest area for export and later accepting the raw material from Kualajelai assign area), plus working capital of USD.648.247.54 or total capital required of USD.813.635.64, where the set-up can be ready in 45 days.

This will immediately build cash-flow for the venture, while processing the concession area legality/exploration until exploitation stage. Once the acreage ready for production, this can reduce the bleaching plant cost (point 6 of buying the zirconium sand) and (point 18 export license may than use the venture own license as the license will be issued in conjunction with the legal right of the concession or KP)

Investment conclusion

With close to USD.2 millions value of investment, with less than 24 months payback clear legality, with readily available captive market. This investment is an excellence proposition to be considered.

KARNA.RESOURCES@GMAIL.COM

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