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CGrowth Capital Bond Ltd :: Project Information 2382

The Businesses

Powder River Resources, Inc.

P.R.R. is an oil exploration and extraction specialist benefiting from the many decades of experience in the sector which its officers and connected entities have garnered under the direct control of the management of CGrowth Capital, Inc.

Wyoming is fast becoming the preeminent “race” state as oil companies’ clamor to obtain drilling licences in the state’s increasingly viable oil fields. The number of applications for drilling permits spiked considerably last year.

The flood of APDs, as permit applications are commonly called, amount to the oil and gas industry’s version of pre-race jockeying. Firms are wrestling to lock down prime positions in readiness for when oil prices rebound, mindful the day may not be too far in the future. Powder River Resources, Inc. has all necessary licences in place with no regulatory bars to their being able to react immediately to the most propitious trading conditions.

Monthly Average APD’s

2014 450
2015 567
2016 540

This flags up Wyoming as a national leader in oil and gas production as well, currently ranking as the eighth-largest crude oil and the fifth-largest natural gas producer in the U.S. last year, crude oil production jumped 9 percent to roughly 69 million barrels and the number of proven oil reserves was increased to 706 million barrels.

New technologies reawaken existing plays and pipeline export capability continues to expand to U.S. markets to the east and west of Wyoming. Wyoming is just getting started in the horizontal development of its resources and has a very strong future for additional development in this area. In May 2015, Wyoming’s oil production passed 200,000 barrels a day. Some industry experts are saying that oil and gas development in Wyoming will continue at this pace for the next 20-25 years. A particular and noted allure to Wyoming is that much of its oil reserves are shallow, comparatively speaking the cost of drilling is therefore lower than elsewhere.

Principally for the purposes of this investment Powder River Resources, Inc.’s business involves the exploitation of an area known as West Salt Creek Oil Fields in Natrona County, Wyoming. Leases are owned outright on an area comprising some 3,400 acres producing mainly oil but some gas production from the Powder River Basin which is forecasted to sharply increase in the near future.

 

graph-wyoming.jpg

 

Reserves are based upon management assessment at the present date which indicate in excess of 6 million barrels at current market price circa, ¼ billion US Dollars.

These are management working interpretations and it is worth noting the history of oil production in this field which produced some 36 million barrels. There is also the neighbouring giant Salt Creek Field which thus far has produced some 684 million barrels of oil. Geologically the area has similarities which makes for efficient and predictable extraction outcomes.

It is against this backdrop that Powder River Resources, Inc. is rightly accepted as a constituent of this offering. The last arms-length sale of these areas and rights, which now rest with Powder River Resources, Inc. was for in excess of US$5m in 2012.

A major oil corporation in early 2015 finalised a transaction for the acquisition of holdings within Salt Creek, Wyoming for a reported US$2Billion.

S.M.R.L. Ana Paula Bebe

Mine: Ana Paula Bebe (Silver, Zinc, Lead Mine)
Registration No: 12040103
Register Date: 6th May 2007

This is a Peruvian multi-metallic ore mining company at a site that contains mainly deposits of lead, silver and zinc together with other quantities of gold, copper, molybdenum, iron and antimony. It is located 480 kilometres from the city of Lima in the Department of Ancash, in the province of Peru.

The country itself boasts the second-highest production of copper and silver, and sixth-highest production of gold in the world. Several Peruvian companies are currently listed on U.S. exchanges. It is an established commodity developed economy.

In the past ten years, the Peruvian economy has grown over 6% per year on average, largely due to the country’s mining industry, which accounted for more than 60% of its exports. Even with the Chinese forecasts showing slower than usual growth, there will still be signicant demand for metals.

This particular mine was established in 2007 and since then the 1,100 hectare site (300 hectares of which have been explored so far) has been developed considerably. Infrastructure now in place includes a wholly owned 8 kilometre road connecting the mine to surrounding communities with plans for a further dedicated highway to deal with increased production.

There are no political or community objections to the venture and all necessary permits are approved.

Topographically the mine is excellently situated with the adjacent River Monza providing direct access to water, the lack of which can so often present an impediment to exploration and extraction operations. It shares much of its geology with the neighbouring Antamina mining operation and is geared to emulate the production levels for which the Antamina operation is world renowned.

In terms of asset valuations, independent consultants have provided the following reports as to proven and probable reserves (adjusted to October 15th 2015 market prices).

10 Hectares Where Borings Occurred:

Lead 5,535 metric tonnes @ US $2,075.50 per MT. = US $11,487,892.50

Silver 630,711 ounces @ US$17.32 per oz. = US $10,923,914.52

Zinc 3,766 metric tonnes @ US$2,349.50 per MT. = US $8,841,168.50

Gold 1,244.70 ounces @ US $1,248.90 per oz. = US $1,554,505.83

TOTAL. Proven & Probable Reserves = US$ 32,807,481.35

Reserves On 300 Hectares:

Whilst there is every likelihood that a vast array of other metals including gold will be found at the site possibly in significant quantities the following figures which form the basis of valuation relate only to the anticipated core mining activities.

Lead 128,000 MT. = US$265,664,000.00

Zinc. 144,000 MT. = US$338,328,000.00

Silver 10,800 oz. = US$187,056,000.00

TOTAL. Inferred Reserves = US$791,048,000.00

Indicative reserves of the remainder of the as yet unexplored sites are cited in the report as standing at US$3,405,186,000.00

It is anticipated that continued development should look to the production of 350 MT. per day of lead and zinc. On that basis the profitability should allow for an operation able to fund the post-modern working practices and result in up to date technology. This will ensure that the operation is insulated from upheavals which might beset less advantaged parts of the Peruvian mining economy. For those closely connected with the industry this mine represents the likely future of models for successful mineral exploration in Peru.

*Values in US$ are based upon present market prices at October 7th 2016

 

Project Partners International S.A.C.

Mine: BUTCHA II (Lime Quarry)

Registration No: 01-03313-15

Register date: 11th November 2014

A recently acquired non exploited asset, this venture has been deemed the ideal fit alongside its two established partners in the collaboration.

A non-metallic mine quarry that contains mainly deposits of limestone. The mine has proven and probable reserves that are conservatively estimated to be greater than 100,000,000 metric tons. The limestone has 98.5% purity on average which presently, after baking, commands a price of US$125.00 per metric tonne the essence of the profitability to extracting lime relates to its role in the processing of all other mined commodities.
 
In the mining industry, lime products are used to refine and condition metal ores and non-ferrous metals such as Copper, Zinc, Nickel, Gold, Silver and Aluminium.

For this application, lime products are used in the froth flotation of Copper, Nickel and Zinc and are used in Gold and Silver processing to ensure proper pH in the leaching circuit.  They are also used in Aluminium processing to precipitate impurities and regenerate caustic properties. In addition to its refining capabilities, lime products can be used in the mining industry to scrub acid gasses from smelting operations, to dry and stabilise mining waste sludge and as a reagent in mining water treatment plants.

Limestone is used directly on a large scale, worldwide basis, in a number of industries. Some uses of aggregates and lime include:

  • Rock aggregate used in construction;
  • As a feedstock for cement manufacturing;
  • In the mining industry for pollution control; and,
  • In the use of lime as a chemical agent in the copper mining industry, where Peru is the second largest producer of copper in the world.

Note the following as a general overview of this part of the country’s mineral industry;

Despite presently low metal prices, Peru the world’s third-largest copper producer is on track to double annual production as new projects near completion and recently inaugurated mines ramp up output.
 
Peru’s mining industry, which has invested a total US$34bn in new projects and developments since 2011, saw a variety of venture expansions come online in the first quarter of 2016, on schedule.

LOCATION

BUTCHA II lime mine is situated 574 kilometres from the city of Lima, in the department of Cajamarca, in the province of San Pablo. It is located in the northern highlands of Peru at approximately 2,750 m (8,900 ft.) above sea level in the valley of the Mashcon River.

SITE

The surface area covers 400 hectares (988 acres). There are no liens or anticipated issues with the asset. Again, the area was chosen having ensured that there would be a good relationship with the local communities, as well as the owners of the farming communities and local mining companies.  Butcha II is adjacent to and surrounded by several very productive mines such as Yanacocha the world’s fourth largest goldmine and the largest in South America.

VIABILITY

Peruvian law dictates that mines must buy local lime for their operations if available and the largest mines are in the department of Cajamarca itself thus Butcha II has the immediate benefit of a legal “off-take agreement”. The mine once operating, can produce 500 metric tons per day with one kiln.

Investment shall provide for a facility large enough for expansion with consideration for the installation of two kilns. Present reports suggest that with one kiln operating 365 days a year producing 500 metric tons a day gross sales would be US$22,812,500.00 per year and so two kilns would produce 1,000 metric tons per day and gross sales would be US$45,625,000.00 per year. The tax on the corporation will be 28%. It is expected that the net profit after taxes (NIAT*) will be an estimated US$15,000,000.00 and US$32,000,000.00 respectively.

Based upon a conservative valuation of just 0.5% of the given reserve to formulate a net project value of US$62,500,000.00 or a two kiln profit forecast approach with annual net profits of US$32,000,000.00 with an almost infinite supply for 20 years this project is strongly collateralised, readily realisable and completely and properly warranted for inclusion within this bond.

*Definition of ‘Net Income after Taxes - NIAT’ An accounting term, most often found in a company’s annual report that is meant to show the company’s definitive “bottom line” for the accounting period. In other words, it shows what the company earned after all its expenses, charge-offs, depreciation and taxes have been subtracted. This calculation is usually shown as both a total dollar amount and a per share calculation.

Summary

Technical data is available for review on our website at www.cgrowthcapitalbond.com The projects are free of many of the obstacles which are often presented in the mining and drilling environment.

CGrowth Capital, Inc. with over 20 years trading history which has been the prime mover in forming this alliance between the three project entities has successfully invested significant resources in exploration and extraction activities throughout this period.

The company has every confidence that each of these operations shall prosper as stand-alone investments. However, this spread of investment base provides for an added layer of security which takes into account both financial and political considerations.

The stability of United States governance in particular, is always of comfort to participants. Peru for its part is an established functioning democracy whose economy has developed in a culture which has always recognised the importance of foreign investment.

We are firmly of the view that the CGrowth Capital Bond Project has everything necessary in place to ensure the success of this venture and look forward to securing its position as a sound investment for all concerned. Further information relating to CGrowth Capital, Inc. and its broad spectrum of activities is available on this website.

Insurance

The bond issuer is insured under a variety of policies provided by major underwriters. Cumulatively at 7th July 2016, the issuer holds Umbrella policies to USD$20 million.

Each of the 3 borrowing project companies are insured under these policies. USA entities USD$10 million and Peruvian entities USD$10 million. Cumulative USD$20 million.

These policies cover significant risks and are annually renewable. The next renewal dates are in 2017. The bond issuer intends to maintain sufficient cover until maturity of all bonds to protect its obligations.

The bond issuer intends to increase cover level from time to time commensurate with its levels of obligation. At the present date and exchange rate cover is ample for the bond issuers obligations.