PRIVATE AND CONFIDENTIAL
 (Available through USERPROFILE-access only)

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I.   General Description

- An idea of the personal psychological test;

- Cash-flow Pro-forma—privileged access opportunity;

- Some conditions of the investment in trading.

II.  General Characteristics of the Programs

III. Conclusions

IV. Modus Operandi

PROPOSAL MEMORANDUM.
Trusty Management of Funds for Buying/Selling of Technical Gold and Raw Diamonds

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Summary

I.   General Description

Program Overview. International Investment Council, (IIC) has good political and private relationship in D.R. Congo for a long time. It is a unique opportunity of prolongation for 2008 its license for trading with technical gold and raw diamonds. The high yield earned thereby is due to the significant difference between the low internal local purchase prices of these commodities and the selling market prices overseas. This is at the root of the Kimberly Trading Program under the UN  Kimberly Process Regulation. As usually, a part of the profit generated by the trading is granted back in the country for support of other IIC’s programs in the education and research field.

Private Suggestion. The question here is not whether the participation in this Program is a good investment opportunity that may support your business. Neither are the figures of the cash-flows pro-forma showing the profit that would urge you to involve $500 thousand of your cash (the optimal starting capital). For an individual who have never visited such exotic countries like Congo and is not experienced in any degree in the field of diamond/gold trading, this investment is a matter of one-hundred percent psychological question rather than one of financial profitability. Therefore, let you first get familiar with the real figures, terms and conditions of the investment, and then you will put yourself to our psychological test... You may find it at the bottom of the file. That will be an excellent experiment...

There are several key requirements set forth in Modus Operandi (Section IV, below) and any investor, cash provider (called "Partner") has to be informed and agree to follow them implicitly. You might not spend your time in vain to review this Summary, if you have even slight hesitation whether you will keep or not these requirements.

1.  The pivot point in this business is the availability of cash in a so called "trading" or "investment" account with a local bank. This account must be opened and registered under the rules and regulations of Mining Code and Kimberly Process. It is an absolute must the funds invested in the Kimberly trading to meet with lex rei sitae1 and, finally, to be free of any liens or backed-up bank instruments. It is strictly recommended the Partner to have physically attendance—to participate personally or through his agent in the Congo in the course of operations.

2.  The second key point is the Parties to schedule the business venture on appropriate step-by-step bases.  There are at least two steps supposed to be seconded by the Partner.

(i)  Redemption Period. This is the time when the IIC's team trades under a temporary sub-license, and the first initial operating costs are covered by the trading return plus some prceeds preliminary agreed (e.g. 15 percent of the investment). During this period both Parties have to cover entirely whole expenditures, plus the IIC's price2 of the "know-how"—all contacts and other information. The Partner is free to cancel any further participation in the Program or the relationship with IIC, if he so desire.3

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(ii) Lasting Market Position. So long as the first successful step is over, next one is setting up a JV Company in Kinshasa. The Company will obtain full trading and export license, rent certified office and residence, implements Internet based virtual accounting control system, develop the market, and prepare engineering investment program that is expected to be supported by a part of the yield earned Kimberly trading.

 

1 (lat; law theory) The Act for the Location of the Belonging.

2 This price is $300,000. (It is agreed with the Congolese government and London Club (eec is member) that this amount is assigned to meet some specific need of the mutual relationship.).

3 This note is to remember you to write down questions to be personally discussed with Prof. G. Angelow as personally responsible for the Program.

3.  Next point focuses the initial operating costs and technical expenses such as: business-trip traveling, accommodations, allowance, internal transport, phone communications, etc. During the Redemption Period they are in 100 percent for the account of the Partner on a "door-to-door" bases. IIC submits breakdown of the  operating cost and pro-forma invoice after approval of the breakdown, as well as a Tentative Cash-Flows Pro-forma.

4.  Partner shall provide affidavit for clean and legal origination of the funds intended for investment.

5.  During either stage, the (i) Redemption Period and (ii) Lasting Market Position as described in Paragraph 2 above, Parties shall make charitable expenses for a NGO with great importance for the people of the Congo. In generally, the total value of the above should not exceed 10 percent of the gross income from operations. Ii is a practice on our part, almost the whole part of remuneration received from our participation in the Program to assign back to Congo to meet technical expenses for the Congolese Government costs associated with severing borrowing credit and other Governmental transactions conducted by IIC.

7.  IIC's Obligations. IIC contacts local private companies and will carry out the following:

  • Organize the initial preparations for caring out the business including financial management of the operations, conditions of life, appropriate business environment, etc.

  • Deign a unique Draft of Memorandum with addendum in compliance with the specific attitude of the Partner and a JV Agreement, and provide them to the Partner for review and approval process.

  • Takes care about the entry visas, highest level VIP-protocol welcome in Kinshasa, privilege accommodation and security; working visas and all permissions as requires under the Mining Code for the Partner's personnel, if any.

  • Three-month license for local Kimberly commerce and internal traffic and sub-license for international trading and export of diamonds/gold.

At closing, this Summary is neither supposed to get a line on complete answers of the above questions, nor to spell the strategy out, nor to discuss the whole procedure. Generally, it is to outline the problems only coming along a good understanding between the Parties. IIC is open for alternative options for construing business relationship. If a general agreement over the above is achieved, Parties are supposed to appoint date for detailed consideration concluding with a Memorandum for Good Understanding between them.

II.  General Characteristics of the Programs

This section reveals the procedure, terms and conditions of the Trading Program (called “Program”).

Description

First Step,
Redemption Period

Second Step,
Lasting Market Position

The gold is in form of sand and/or small ingots (like the ice rocks from the fridge). The Au-metal content is 22-22.5 carats.

Minimum Amount Invested:

Maximum Amount Invested:

Minimum Term: 

Maximum Term:

Turnover Period:

For gold:

For diamonds:

Yield from One Turnover:

For gold:

For diamonds:

Compounding:

$500,000

 

3 months

4 months

 

2 weeks

2 weeks

 

24%

15%

Required

 

No limit (to be discussed)

2 years

No limit (to be discussed)

 

10 days /17 turnovers per ˝ year

40 weeks p.a.

 

30%*

50%*

Recommended (see example algorithm)

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* Such a profitability may be achieved so long as the participants have contract for delivery of row diamonds to end-users in the USA or EU only.

Programs.

    For gold: The Gold Trading Program is carried out in Congo and Switzerland. The development of the Program strictly follows the rule and regulations of the International Kimberly Agreement, the diamond taxations in Congo and all anti-terrorism requirements and restrictions.

    For diamonds: The Diamond Trading Program is carried out in DRC and South African Republic (or other export destinations). The Partner will not have right to use the operative trading information and to reveal it one year after IIC retires from the JV.

The Investment. The amount invested could be increased by the Partner during the trading period.

Termination. The Partner may terminate the agreement in any time after the Redemption Period by two-week written note. No penalties will be clamed to the Partner. No requirement for the Partner to stay any reason for the termination of the trading. An immediate balance record will follow the termination. Once the record is approved the balance is wired within three banking days to the Partner’s bank account.

Turnover. The turnover period correlates with the amount invested and the final term of investment within a very short margin.

The trading procedure may be launched within 10 working days after the date of crediting the IIC’s account with the sum of one-month operating,  traveling and settlement costs.

This Memorandum is expression of interest to render service to you based on the terms indicated above. Any commitment on our part for performance of the Program would be contingent upon a comprehensive analysis of a plan construed on the achieved investment conditions and the circumstances existing at that time.

III. Conclusions

The procurement of export license for diamonds in DR Congo is an intricate and extremely complicated cash-consuming acquisition. It is understandable that is a matter of special privileges to obtain trading license promptly.

To proceed with the procedure hereinabove outlined, we advocate exchange of documents and other papers and information prior to appoint a meeting for comprehensive discussions. However, as we promised at the second paragraph above (Private Suggestion), put yourself to the psychological test. If you don't stand it, it's better you close this page from the computer and from your life too. You'll never take this risk. It seams as though it is some sort of joke, but actually it is almost the truth as itself. Click your black dancing new business associates below and enjoy.

The following topics should be further discussed and agreed:

  Share- and profit-distribution; admission deposit and the price and payment manner of the know-how.

  Budgeting of the Project, cash flows, evaluation of the risks, etc;

An immediate commencement of implementation of communication system for Visual Accounting Supervision with privileged access for the Parties;

  Alternative forms of organization of the business - investment(s) in the real economy.

          

 IV. Modus Operandi

Partner writes Letter of Assignment of job to IIC on corporate letterhead.

  • IIC submits draft of Memorandum for Understanding for review. Once the Memorandum is approved, Partner is welcome to visit IIC for final discussions, or provides legal invitation to IIC to visit him. A pro-forma invoice for disbursement of IIC's expense will be received in return.

  • Parties sign the Memorandum.

  • Partners wires the first-month operating cost to IIC.

  • IIC arrange the entry visa for the Partner(s), rent a house for accommodations, and other working preparations in Congo.

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