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9/9/11 - EAVL – ALEX SPENCER MAGUDE PROPERTY INFORMATION

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9 / 9 / 1 1 - E AV L – A L E X S P E N C E R

MAGUDE PROPERTY INFORMATION

Please notice the 2 proposed pump house points, #1 is located on a tributary of the lake, and #2 is located on the river,

COMMUNITY’S NEEDS

• The community has asked rather rigidly for us to develop first the 400 hectares outlined in the map above,

• However, they will grant us the ownership of 1000 hectares, with exploration rights to much more land (possibly 5000ha) if we develop first this piece.

• It appears that our budget of $20,000 - $40,000 USD will be enough to get fulfill the communities needs (1-2 wells, etc.) before the Memorandum of Understanding is signed.

• The community has promised us ownership of 1000 hectares of land, but demands that we start to develop the 400 hectares above the lake tributary first.

3 ISSUES – INFRASTRUCTRE COSTS

• Electricity is 5 Km away• Where to pump the water from? Possibly the river

which would be 4-5km or the lake tributary which borders the “core” 400 hectares• About 2 km of roads to maintain (I don’t think this

will be a big issue)

WATER

• If we pump water from the lake tributary it borders the land, however there are questions as to if the supply will be sufficient

• If we pump water from the river (4-5ks) we will have a sufficient supply, however costs will be higher

• The Land is very flat, so that will facilitate things• A Portuguese farmer pumped water from “proposed

pump house point #2” to a farm north of ours, about 10km away, therefore the local community does not understand why we can’t do half that distance for our project

• Pumping from the river will increase Electricity costs as the power line is further from the river than the lake

WATER

ELECTRICITY

• The closest non-domestic electric line is about 5km away

VIRGIN BUSH CLEARING

• The bush clearing appears to be quite extensive in most areas

COSTS

• The initial price that we have been quoted at is R95,000 per hectare, which is $13,571 per hectare for irrigation system, pump house, bush clearing, etc.• I think it s possible to negotiate this price to be

about R60,000 per hectare, which is $8,500 USD per hectare.

TECHNICAL ANALYSES

• We have done 2 studys with a team of 4 south African engineers and agronomists

• I took soil samples, 1-15 cm and 15-30 cm , and each respective sample will be analyzed in South Africa and we should have results back in 2 weeks

• Water samples too should be back in 2 weeks time• We will need to hire a team of experts to help us

design what crop to implement, where and how before we start paying for infrastructure cots.

• I believe that we need further technical analysis before implementation, however, I think it would be best to make a decision if we go forward or not with the acquisition of the land based on the data we now have

MY SUGGESTION

• If the decision is to go forward, we get our foot in the door and develop 100-400 hectares pulling from the lake, then we think big. Maybe we could possibly do cattle on the 200-600 ha bush we don’t develop?