5. 5
Continental Mining Opportunities
The Mining Specialists
Continental Mining Opportunities S.A. is registered in Peru, based
in Panama.
The company has brought together a number of well respected, trustworthy and experienced partners
to manage mining projects in the past and looking forward to future projects coming online. The
company has developed a strong network of associates to ensure that clients are successfully guided
through the myriad of rules which exist when conducting business in non - EU states.
Continental Mining Opportunities (CMO) is currently focusing its mining efforts on South America,
as we already have an existing relationship with miners, mining infrastructure and all the necessary
ingredients for quality control. Because we operate at ground level we are visibly based on project sites
to ensure that operations and deadlines meet agreed schedules. Several key, lucrative opportunities
have been identified and Continental Mining Opportunities, as mining specialists, now bring these to
the retail market.
Continental Mining Opportunities (CMO) S.A is
registered in Peru, based in Panama.
6. 6
CMO has identified the country of Peru as a key gold rich area located in the western South America region.
Peru is located in there, bordering the South Pacific Ocean between Chile and Ecuador and has a population
of approximately 29.5 Million.
The Inca Empire centred on Peru once ruled much of South
America, but was already in decline when Spain began its
conquest in 1531. The Incas worshipped a sun god, and the
warm yellow glow of gold was believed by many ancient
civilisations to belong to the sun god, or to be related to the
sun in some other way.
Peru’s rich and varied heritage includes the ancient Incan
capital of Cuzco and the lost city of Machu Picchu. The
country boasts spectacular scenery, including Lake Titicaca,
the world’s highest navigable lake.
A growing number of visitors are being drawn to its variety
of attractions, such as its archaeological treasures, the Andes
mountain range and the Amazon rainforest, which makes
up about half of the country.
It is rich in many natural resources, among them copper, silver, lead, zinc, oil and gold. The country
experienced an economic boom during the last decade and in 2011 Peru was said to have one of the world’s
fastest-growing economies; between 1999 and 2011 GDP increased from 4,400 to 10,200 per capita.
Peru is the largest gold producer in Latin America and the sixth largest worldwide. Foreign investors,
attracted by the government and encouraged by favourable conditions, are keen to be involved in
exploiting the country’s minerals which constitute an increasing value of exports, falling into an export
category which increased from 3.463bn in 2005 to 10.252bn in 2011*
* Figures taken from Peru Petro State Agency.
Location
Peru is the largest Gold Producer in Latin America and the
sixth biggest producer worldwide.
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Why Gold Mining?
A balanced portfolio will provide exposure to a broad
range of sectors.
Gold is found as a free metal and in tellurides. It is widely distributed and is almost always associated
with pyrite or quartz, being found in both veins and alluvial deposits which determine the method of
extraction. It is believed that 80% of the world’s deposits remain untapped.
Why buy gold, when you can buy a stake in the producer and
benefit from greater Profit at source?
75% of all gold ever produced has been mined since 1910; much of the gold mined throughout history is
still in circulation in one form or another. Gold is a rare natural resource.
In times of economic uncertainty gold is a highly valued commodity – it is the ultimate ‘hard currency’
sought and held as reserves by governments throughout the world.
Pure gold is measured in troy weight, but when gold is alloyed with other metals the term ‘carat’ is used to
express the amount of gold present and thus the purity.
9. 9
History of Gold
Gold has been used as a principal store of value for over 4,000 years and has formed a powerful part of
every human culture, associated with wealth and social elites; it has provided the basis of public and
private wealth for generations and whilst other assets have faltered, the price of gold has risen strongly
over the past decade.
The use of gold grows each year as a key element across many
industry sectors.
It has been prized from the time of ancient civilisations, spawning many legends with King Midas, the
Golden Fleece and El Dorado all taking their place in mythology. Many iconic historical artifacts such as
Tutankhamun’s Death mask and the mask of Agamemnon were made from gold, with the earliest coins
made from a naturally occurring mixture of gold and silver called electrum used by the Lydians as early as
the 7th century B.C.
The chemical symbol for Gold is ‘Au’ from the Latin word Aurum meaning shining dawn or glow of sunrise.
Gold and copper were the first metals to be discovered by humans around 5000 B.C. and are the only two
non-white coloured metals. Gold is a dense, soft metal with a bright yellow colour, making it attractive for
fine jewellery and other precious objects. It is also the most malleable of all metals and retains its lustre
without tarnishing in air or water. Absolutely pure gold is so soft that it can be moulded with the hands.
10. usage of Gold
The use of Gold grows each year as a key element across many industry sectors.
This is due to its outstanding characteristics which include an extremely high resistance to corrosion and
an ability to conduct both heat and electric current. These factors make gold the single-most reliable and
indispensable metal in the development of new technologies.
The unique properties of gold also make it useful in medicines and medical devices, pollution control,
air bags, mobile telephones, laptop computers, space travel, and many other high-tech applications.
Approximately 11% of the demand for gold comes from such technological applications.
Universities, research institutes and private enterprises throughout the world are discovering new
characteristics and applications for gold nanoparticles on an almost daily basis.
Gold is a highly valued metal with many applications. It is used in:
• Coinage & monetary exchange
• Medicine
• Food and drink
• Photography
• Jewellery
10
• Dental work
• Electronics
• Radiation shielding
• Glass colouring
• Automotive industry
11. 11
The following graph illustrates the performance of Gold over a ten year period against Dow Jones Index
Source: Goldprice.org
Performance of Gold
2000 2002 2004 2006 2008 2010 2012 2014
+ 750%
+ 500%
+ 250%
0%
- 250%
dow jones
Gold
12. 12
Mining Method
Mining employs three principal methods of ore extraction depending on how the Gold is found; Alluvial,
Long Wall and Open Cast.
Various projects will employ Open Cast mining which is the technique of extracting minerals from the
earth by removing them from an open pit. This differs from traditional methods that require tunnelling
and is similar to quarrying.
Open Cast mines are used when deposits of commercially useful minerals or rock are found near the
surface, where the surface material covering the valuable deposit is relatively thin or the material of
interest is structurally unsuitable for tunnelling.
Open Cast mines are dug on benches, which describe vertical levels of the hole. These benches are usually
at 4M-60M intervals, depending on the size of the machinery that is being used. Most walls of the pit are
dug at an angle less than vertical, to prevent and minimise damage and danger from rock falls. This will
depend on the type of rock, how weathered it is and also how many structural weaknesses such as fault,
shears, joints or foliations occur.
The walls are stepped with the inclined section of the wall is known as the batter and the flat part of the
step known as the bench or berm. The steps in the walls help prevent rock falls continuing down the entire
face of the wall. In some instances additional ground support is required and rock bolts, cable bolts and
shotcrete are used.
13. Price of Gold has quintupled since 2001, this is because
institutions have turned back to gold to hedge against
inflation, economic turmoil and political unrest.
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14. 14
faqs?
Q. What am I buying into?
A. You are buying a Limited Partnership in a UK Incorporated Limited Partnership Company (LP). The LP
owns a 30% stake in a gold mining Joint Venture – Continental Mining Opportunities SA in Peru. In return
for the investment, the partners will enjoy a fixed financial benefit for a 6 year lease on their share of the
mine. It is important to understand you are not buying a share in a gold Mine.
Q. Why is this opportunity different from buying Physical Gold?
A. Buying Physical Gold involves a long buying and storage process, carrying unnecessary storage and
fluctuation risk. A share in LP that owns a stake in Gold Mining Operations involves benefits from Gold
Production at source.
Q. What will be the legal structure in Peru?
A. The new Joint Venture company in Peru is named as Continental Mining Opportunities SA and the
Limited Partners in the UK will hold a 30% stake in the Joint Venture Company.
Q. What is a lease?
A. A lease is the period of time that the partners of the LP have been allocated to receive post tax profit
from the mining activities of the project.
Q. When does the lease begin?
A. The lease begins from the first full day of production and processing utilising the new flotation method
using the on-site processing facility.
Q .What is a Limited Partnership and why should we go for a LP?
A. A Limited partnership is a form of partnership similar to general partnership, have more than one Limited Partner. The general partner(s) in the LP have ?
which allows the LP to
management control and share
the right to use partnership property, whilst having a pre-defined profit proportion and having joint and
several liabilities from the debts of the partnership. In a Limited Partnership, every act of General Partners
that is outside the ordinary course of the limited partnership’s activities is bound by the authorization of
the Limited Partners.
Q. How are Limited Partnerships calculated?
A. The cost of every Limited Partnership is calculated by dividing the total project cost by the total number
of equal partnerships.
Q. What paperwork will a Limited Partner receive as a proof of their share?
A. The UK Limited Partnership will register your Partnership with the Registrar of Companies in England
and Wales, after which your Limited Partnership documents would be forwarded to you, as a proof of your
partnership in the LP.
Q. Are there any annual fees?
A. No, there are no annual fees that need to be paid.
Q. How is the processed Gold sold?
A. The processed ore after mining and refinement is shipped under guard and security to Gold buyers in
Peru, where Gold is sold to buyers at Spot Price.
Q. How are draw downs determined?
A. The LP will be entitled to 30% post tax draw downs of the Joint Venture Company Continental Mining
Opportunities SA.
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15. ?
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Q. Can Limited Partners take physical gold as a draw downs instead of cash?
A. As gold is produced and sold in Peru, the draw downs cannot be paid in the form of Physical Gold.
Q. Why is it not possible for the current owners to approach a bank for lending facilities?
A. Unfortunately, there are not bank lending criteria to support small mining projects, this however
provides an opportunity to investors to be involved in a lucrative lease such as one under the control of
Continental Mining Opportunities SA.
Q. When can the Limited Partners expect their first draw down?
A. Draw downs will be paid to Limited Partners on a twice yearly basis. The first draw down will be payable
to Limited Partners six months after the new plant becomes fully operational.
Q. When will the draw downs cease?
A. The draw downs will cease 6 months after the lease expires, so the Partners will enjoy the profits of 6 full
years of operations.
Q. How are draw downs calculated?
A. Draw downs will be calculated and paid at the end of every 6 monthly accounting period.
Q. Where will the Limited Partners draw down be paid to?
A. Draw downs will be paid to the UK Limited Partnership net of withholding tax in Peru and will be shared
proportionally amongst the Partners based on their number of shares in the LP.
Q. Can I sell my contribution in the Limited Partnership?
A. If a Limited Partner wishes to sell their share in the LP, we will use our best endeavours to match the
Limited Partners holding with another buyer, but this is not guaranteed. Any secondary market would be
created by Continental Mining Opportunities SA.
Q. Can a Limited Partner transfer their contribution to someone else?
A. Yes, this is possible and the new Limited Partner would enjoy the benefits for the remainder of the
lease. A Limited Partnership transfer form must be completed for necessary changes to be made with the
Companies House Registrar.
Q. How long will the new plant take to install and how long before it becomes operational?
A. With necessary financing in place, the plant would take 60 days to install, whilst subsequent test runs
would take another 7 to 10 days, following which the plant would be fully operational.
Q. What are the advantages of having a processing plant on site?
A. The principal advantage is cost reduction, which would result in increased profitability, owing to no
transportation cost. The onsite processing facility also allows for 24 x 7 operations. 95% of neighbouring
mines, especially in Ecuador do not own a processing facility, which results in a delay of at least 21 days in
between mining and processing.
Q. Do we use any dangerous chemicals when processing?
A. Our mining operations are environmentally friendly and we are compliant with the regulations of the
local government. We have installed a new tailings pond, where waste is held and neutralised through the
use of Sodium Peroxide, to ensure that any waste that is produced does not have any negative impact on
the local environment.
Q. When was the last Geological Report conducted?
A. The last comprehensive report and survey was conducted by Professor Dr. Felix Hruschka of Montan
University, Leoben, Austria, in May, 2003 which identified Gold and other deposits. As mining operations
have not been conducted post survey, the reserves remain intact.
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16. London Office:
Rex House, 4th Floor, 04 - 12 Lower Regent Street,
London, SW1Y 4RG, UK
Panama Office:
East 53rd Street, Marbella , MMG Building, Piao 2,
Panama City, Republic of Panama
Telephone: + 44 (0) 203 600 0352
Fax: + 44 (0) 871 266 4039
Email: info@continental-mining.com
Web: www.continental-mining.com
RISK WARNING
Purchase of mineral rights carries a high degree of risk. Contribution to early stage projects has intrinsic risk as the rights that are purchased may never produce a yield or capital
return, for example lack of economic viability, geological faults and landslides may disrupt production, worker strikes and other operational difficulties may occur. Any fall in the Gold
price will also affect the return from this operation. Individuals must be aware that there is no established market place and any secondary market would be created by Continental
Mining Opportunities SA, and is not guaranteed. Individuals should seek independent advice before any purchases and only invest with risk capital they can afford to lose. By
becoming a Limited Partner in a Limited Partnership by way of contribution you are not liable for the debts and obligations of the firm beyond the amount you have contributed.
You may not take part in the management of the business and you do not have any power to bind the firm in any transaction. Prospective Purchasers of Limited Partnerships should
not treat the contents of promotional material as advice relating to legal, taxation or other matters. A purchase of a Limited Partnership is not categorised as an investment product
under the Financial Services and Markets Act, 2000 and therefore not a regulated Product. The Financial Services Compensation Scheme and the Financial Ombudsman Scheme does
not apply to this transaction.
