KRS Mining Limited

105 Trelowarren Street, Camborne, Cornwall TR14 8AW, UK

emails: krs.mining@gmx.com or krs.mining@engineer.com
Skype: kseecharran Phones: +44 75 0303 4457 or +91 88282 08843 or +91 960 515 3056
Company registration number: 8764893

BUSINESS PLAN FOR BUNTUNGWA EMERALD MINE

SUMMARY:
The Buntungwa Emerald Mine is located in the Lufwanyama District in Ndola Rural in the Zambian
emerald belt (Figure 1). This is one of the richest emerald deposits in the world. This is exemplified by
the world's largest emerald being found in the vicinity at the Kagem Mine. The project is highly
profitable and can benefit from inward investment. There is a plethora of mining skills in the area
spanning three generations. The downturn in the copper mining industry in the country means that
eager workers can be sourced to drive the project forward. Zambia is an investor-friendly country in
which foreign investments are protected by law. The quality of emerald found on the property varies
from poor (industrial grade), which sells at about $US 5/g, to good (gemstone grade) marketing at
about $150/g. Aquamarine, associated with emerald mineralisation, can be a useful, and lucrative,
by-product. In addition, aquamarine can help to cushion the shock, should there be a fall in the price
of emerald. Zambia hosts the second best emerald deposit in the world, after Columbia. Columbia is
a mature emerald-mining country and deposits are almost completely depleted. An initial capital
expenditure of $1.6m is required. The payback period is one year. The project will provide
employment for about 65 people on a full time basis. The pit has to be dewatered and the slopes cut
back to make them safe, before mining can commence. The estimate for this preliminary work is
about three months.

Figure 1: Map showing the emerald mining area of Zambia

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LOCATION:
The property is bounded by the following survey beacons:

Beacon A, (grid reference 14 250 Easting, 43 419 Northing)

Beacon B, (grid reference 13 023 Easting, 43 388 Northing)
Beacon F, (grid reference 15 000 Easting, 43 470 Northing)
Beacon G, (grid reference 15 000 Easting, 42 750 Northing), and
Beacon H, (grid reference 13 023 Easting, 42 750 Northing)

BACKGROUND TO EMERALD MINING:

Emerald is the green variety of a group of minerals collectively known as beryl (Be 3Al2(SiO3)6). It is
coloured green by trace amounts of chromium, and sometimes vanadium. The sheer beauty and
rarity of the mineral are two attributes which account for its immense value. Priceless emeralds have
been sought, and collected, by mankind, for over 3 000 years. The growth of the middle classes in
Asia (India and China), has fuelled its resurgence as that sought after gem.
In Zambia, emerald was first discovered in the Kafubu Emerald Area of Ndola Rural by the Rhodesia
Congo Border Company in 1928.
REGIONAL GEOLOGY OF EMERALD MINERALISATION:
The regional geology consists of three major lithostratigraphic units, namely: The Basement Complex,
The Muva and Katanga Supergroups.
The Kafubu Emerald Area is underlain by rocks of the Muva Supergroup. The
Muva Supergroup comprises quartzites and quartzose schists near the base
overlain by quartz-mica schists (locally called CHIKUNDULU) interlaced with talcmagnetite
schist (locally called PAIDAS). Emerald mineralisation is closely
associated with tourmaline-quartz veins replaced in the talc-magnetite schist.
The tourmaline-quartz (Locally called FIRESTONE) veins are believed to be the
source of beryllium (Be) fluids which contributed the formation of the mineral
beryl while the schist is known to be the source of the chromium (Cr), the
element responsible for the green colour of emerald.
Consequently, ideal areas for emerald mineralisation are those localities underlain by the talcmagnetite schist. The schist-hosted emerald deposits have been interpreted as the result of
interactions between the intruding granitic pegmatites and and/or their accompanying fluids and
pre-existing mafic or ultramafic rocks or the invasion of fluids related to fertile granite or pegmatite,
producing metasomatism in ultramafic/mafic rocks. The emeralds then formed as a form of contact
metamorphism or metasomatism at the borders at the pegmatite or hydrothermal quartz feldspar
mica veins and the surrounding mafic or ultramafic rocks. The geological map of the area is shown
in Figure 2.

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Figure 2: Geological map of the area

LOCAL GEOLOGY:
Quartz-Mica Schist, also called CHIKUNDULU
The Quartz-Mica Schist is a greyish cream fine-grained rock. The mineralogy of this rock
comprises quartz and muscovite as the main constituents while biotite tourmaline and
accessory constituents. This rock is characterised by quartz-rich and mica-rich bands running
parallel to the foliation. This rock has been clearly exposed in the main pit on the
property. This rock is usually weathered to laterite, Figure3.
Talc-Magnetite Schist, also called PAIDAS
The Talc-Magnetite schist is easily weathered rock. Its colour varies from greyish-green when
it is fresh to brown when it is weathered. Mineralogically, Composition includes talc, chlorite,
amphibole and magnetite. This rock has not been exposed on the plot, but a magnetic
survey showed that this rock underlies both the eastern half and the central fifth of the plot.
Tourmaline-Quartz Veins, also called FIRESTONE
Several localities littered with Tourmaline and Quartz occurs on the plot. In-situ TourmalineQuartz veins have also been observed. These veins are coarse grained. The Quartz is generally
of the smoky type while the Tourmaline is of the euhedral crystal, black type. The Tourmaline
content varies from trace to about 20%. Medium to coarse-grained muscovite is an accessory
mineral of this rock.

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Figure 3: Buntungwa emerald mine, showing laterite (brown) and a dyke

EMERALD RESERVE ESTIMATION:
The erratic nature of the veins and the emerald mineralisation implies that reserves cannot
be accurately estimated. Certainty can be improved through intensive drilling, say, on a 5m by
5m grid, covering the property. This will be a prerequisite for the preparation of a bankable
feasibility study. Reserves are estimated from neighbouring producing mines, by inference.
The average thickness of the mineral-bearing has been taken as 10 metres. Considering a
strike length of 1 000 metres, a tonnage of 1 120 000 is estimated. Assuming an estimation
error of 40%, and an 8 year mine life. Daily tonnes to be mined is 230. Using an emerald grade
of 5g/m3 and a rock density of 2 800kg/m3. With a stone recovery of 85%, daily production is
expected to be 350 grams. Considering an average selling price of $37.5/g, daily sales value is
$13 100, or $393 000/month.
FINANCIAL ANALYSIS:
Equipment Hire:
Dozer $130/hr @ 10 hrs per day for 84d - 1 off = $109,200
Truck $65/hr @ 8 hrs per day for 84d - 1off
= $43,680
Excavator $130/hr @ 8 hrs per day for 84d - 1 off = $87,360
SUB TOTAL $240 240

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Labour:
CEO Local $5 000/m
= $15 000
COO Expat $23 000/m
= $69 000
Mine Manager Local $4 000/m
= $12 000
Mine Capt Local $3 000/m
= $9 000
Acc/Clerk Local $2 500/m
= $7 500
Gem Grader local $2 500/m
= $7 500
Drivers Local X 2 $1 600/m each
= $9 600
O/B Strippers Loc X 4 $2 000/m
= $24 000
General Labour X 30 $600/m each = $54 000
Ore Sorters X 10 $600/m each
= $18 000
Security Loc X 10 $750/m each
= $22 500
SUB TOTAL $248 100
Consumables:
Diesel
= $20 000
Oils/Greases
= $3 000
Office Items
= $2 000
Safety Attire/Sanitation/Medicines = $12 000
Food
= $60 000
SUB TOTAL $97 000
TOTAL OPERATING COST 3 MONTHS $585 340
Or say $200 000 pm
PROFIT PER MONTH = $193 000
CAPITAL EXPENDITURE:
Wheelbarrows, Picks and Shovels purchase @ $4 000
2 X Computers purchase @ $1 000
2 X Staff Vehicles purchase @ $45 000 each new
1 X Utility Vehicle purchase @ $25 000 s/hand
1 X Water Pump purchase @ $1 500
1 X Portable Water and Overhead Tank @ $15 000
1 X Diesel Generator @ $10 000
Accommodation Tents X 4
Office Building/Furnishing
Accommodation Buildings/Kitchen/Dining & Rec Rooms
Environmental Clearance
Title Deeds/Chief's/Ministry
SUB TOTAL $849 500
TOTAL OPERATING and CAPITAL COSTS $1 434 840
CONTINGENCIES @ 10% $143 484
TOTAL INITIAL CAPITAL REQUIRED $1 578 324

= $4 000
= $2 000
= $90 000
= $25 000
=
$1 500
= $15 000
= $10 000
= $12 000
= $40 000
= $450 000
= $150 000
= $50 000

PAYBACK PERIOD = 1 578 324/193 000 = 8.2 months, say one year

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Figure 4: Aquamarine, a semi-precious stone which could constitute a lucrative co-product

Ramoutar Seecharran
Mining Consultant

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Advice on efficiency enhancement, process optimisation, plant troubleshooting and
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