Financing

The Company has completed a strategic alliance and a small initial financing through an arrangement with a publicly traded Canadian mining company. The Company hopes to complete a financing for an exploration program on the concession with the goal of carrying one or more projects to feasibility.

The Company has been approached by a second group regarding financing exploration over the entire concession, with the goal of bringing at least one area to feasibility.

Aggregate Prefeasibility

A pre-feasibility resource estimate has been prepared. An inferred aggregate resource has been determined for two areas for a combined inferred resource of 1 100 000 cubic metres of sand and gravel near the mouth of the Pra River. The first area is a 2-km by 1.25-km area near the mouth of the Pra River. It contains an inferred resource of 1 000 000 m3. The second area is a 500-m by 500-m area is just offshore from Amenano and determined to contain 100,000 m3 of aggregate. The volumes of sand and gravels estimated for each area assumes a 0.40 metres thickness of aggregates covering the entire area.

Aggregate sampling near the mouth of the Pra River.

The inferred resource is limited to only the areas tested and does not preclude additional aggregate resources below the assumed 0.40 metre thickness of aggregate, or additional aggregate elsewhere on the remainder of the concession. For example, additional samples from near the mouth of the Ankobra River recovered usable gravels, but this area was not included in the resource estimate.

For the inferred resource estimate, samples were collected from the seafloor at locations determined by GPS. Each sample was described and evaluated as to its aggregate potential. Every sample returned sands and gravels judged suitable for use as aggregate.

Gold Recovery

Offshore sediment sampling successfully recovered gold from the seafloor in the spring of 2006. The samples recovered were too small to establish grade.

Gold recovered from the seafloor is typically in the form of angular, euhedral grains, indicative of gold that has not been transported far from its original bedrock source.

SEM images of gold grains recovered from the seafloor in the vicinity of the Ankobra River. At left, a euhedral grain, showing indentations of other mineral grains during its formation. Most recovered gold grains are about 100 µm in size.

Market Studies

The following strong and growing markets for aggregates are recognized along the coastline of Ghana:

Housing construction
Road building
Commercial building
Ready-mix concrete
Block making (Figure 6)
Paving stones roofing tiles
Recreational/tourism industry
Government services (schools/hospitals)
Water treatment
Land reclamation
Sports fields

Aggregate is in short supply and the Company believes that pricing will remain strong.

The development of new markets such as bagged concrete/aggregate mixes and ready-mix concrete offers a complement to existing markets. An improved source of natural aggregate will result in concrete construction products (blocks, poured concrete structures) of higher quality and lower costs, due to reduction in prices of transport and reduction of the amount of cement required to make products.

Social and Environmental License

Managing the social and cultural impact of a large project is a key consideration of offshore development. The Company has social obligations to develop the project in a manner that provides maximum benefit to all stakeholders, which includes the Ghanaian people as well as shareholders. Social impact studies will guide the progress of the project so that it unfolds in a way that all stakeholders benefit.

As part of the environmental impact assessment, the natural turbidity levels should be established, so that it can be determined whether the operation will increase the level of turbidity beyond what is natural. The impact of increased turbidity can be dealt with during extraction through the use of baffles and other devices.

Strategies for remediation include creating hardgrounds from undesirable materials and the creation of artificial reefs. The reefs may serve as refuges for fish life, especially in seas that are frequently trawled.