STRYTON MINE # 1 Sebastian County, Arkansas November 2015 1 - - PowerPoint PPT Presentation

STRYTON MINE # 1

Sebastian County, Arkansas November 2015

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EXECUTIVE SUMMARY -1

• Stryton Mineral Resources LLC in early 2014 entered into a 10 year mining rights lease with two

additional 10 year terms at it’s sole option, totaling 30 Years

• High grade Metallurgical Coal reserves of over 23 million tons are available on 2900 Acres of private

leased land of one family and 160 acres of another.

• All necessary mining and environmental permits which took over 18 months to obtain have been
• btained and a bond for $ 970,000 has been posted with the Arkansas Mining Department.
• The company Stryton Minerals & Resources LLC has been capitalised by an investment and

promoter loan of close to $ 6.5 million.

• All the prep work for the project including civil, electrical and environmental work has been completed

and excavation of coal has started.

• The MET coal being mined is one the best quality coals to be found in North America.
• Sales of the coal started by shipping to a local converter in Feruary 2016 unwashed coal. The wash

plant will be operational by June 2016.

• There will be two contractors doing the mining. The first contractor will primarily be involved in

removing the soil extracting the intial coal and the second contractor who will bring in a highwall machine to excavate the coal at a high production level. Till the highwall miner starts producing which will be in February/March the first contractor prepares the location and starts doing the initial production.

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MINING CONTRACTS

• The mining contract started with one contractor(M&R Debris) who has completed all the

preparation work for the land including the roads, the drainage, the water discharge, the area for overburden and soil and finally the facing up of the seams of coal.

• This contractor will continue to produce coal initially till the contractor with the highwall

equipment comes in. The highwall contractor will be a subcontract to M&R Debris wherein the two will work together. The first will be responsible for soil removal and seam face up and the highwall contractor will remove the coal.

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Leadership Board of Managers

Terradev NR LLC Dansa Holding LLC Deepak Lalwani

President

Edward Anderson

Head Engineering and Project Management

Executive Team Aarin Energy LLC MEMBERSHIP of STRYTON MINERAL RESOUCES LLC Atul Goyal

CEO

Sanjiv Sagar

CFO/CMO

Board of Managers

Deepak Lalwani Atul Goyal Sanjiv Sagar

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Executive Team

Atul Goyal (CEO) : A results-oriented entrepreneur with 30 years of hands-on business experience as a senior executive in the verticals of textiles and minerals with exposure to international trade and finance. He is well-networked with buyers of natural resources worldwide and has spent the past three years consulting in export-import and financing of commodities. He is currently also the CEO of the entity. By utilizing excess capacity of miners and engineers in the region and adopting modern mining methods that are more economical, Atul has designed a typically capital-intensive project, to become low investment and more profitable. He has been able to bring a difficult project in terms of permits and licensing to a stage wherein it is now ready to produce. His experience includes:

• Sarju International Ltd (director) : He was responsible for setting up the business developing the
• vendors. Managing design production and sales of a garments business including interacting and

concluding with large international clients. This became a very large garment enterprise in India.

• Country Cousins Clothing, Inc. - New York (President) : Set up the garments business in the US. Managed

the import, sales and distribution to national wholesale clients. Was responsible for Coordinating and production of all Fashion lines for the company, responsible for negotiating credit lines with financial institutions and responsible for setting up of entire US office infrastructure and creation of internal financials models.

• Gordon & Ferguson, Inc. – New York (CEO) : managed all facets of the business. Managed 30 employees,

sales and distribution over $ 25 Million.

• Aarin Group LLC – New York (Director) : As an M&A and advisory firm was responsible for all legal and

advisory matters relating to the project from introduction to closing. Involved in bringing deal sizes from $10million - $ 150 million to the firm. Working closely on deals with Greenlight Capital

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Executive Team

Sanjeev Sagar (CFO) : He an aluminous of IIT Delhi. A senior level executive with 30 years of experience in finance, project management and implementation. He has a special focus currently in mining and oil-and-gas industries. He has frequently supported new companies in their growth trajectory. He is also well networked in India and elsewhere in the Coal trade and finance. His experience includes:

• Being on the board of Oriental Quarries and Mines Pvt Ltd: this started as a new entity in the aggregate mining

and processing business with some investors and today it is a profitable entity with a revenue of $ 15 million in India.

• Being on the board of AvH Resources India Pvt Ltd ( part of a large European group Ackermans & van Haaren)

which is substantially invested in a listed Cement company – Sagar Cements in India. He has supported the entity in its growth and transactions over the years. Has supported AvH in all its investments in India.

• Director in Ace Global Consulting with a focus on advising clients on growth strategies, transactions for fund

raising, exit and acquisition. Project management and implementation support

• Senior executive at Ernst & Young : He has had two stints at Ernst & Young and in the last stint he was

responsible for the business advisory practice in New Delhi. He managed a team of 20 people

• Director & Partner at Protech India Ltd: Was responsible for creating during the early years of India opening up
• ne of the most successful consulting and project implementation firms in India (in the business of joint

ventures, collaborations and technology transfer). Supported a number of international entities to implement successful projects in India in various different industry sectors. He managed a consulting team of 30 people

• He has been involved in implementation of the Coal Mining Project and has helped raise the initial capital for

the project. He is currently supporting Stryton Minerals and Resources on the finance and marketing efforts. The projections of income and expenses are based on the principals’ experience in operating mines and knowledge

• f export-import of commodities.

Ned Anderson (Chief Engineer) : A civil engineer with over 30 years of experience in various engineering and mining

• projects. He has also been instrumental in jump-starting operations for mines in the region and is leading the effort at

Stryton by bringing Brixey Engineering on board and managing them.

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Executive Team

Deepak Lalwani : Based on his extensive entrepreneurial experience, Deepak has created uniquely affordable business models with a very low risk. Deepak has now become the major investor and

• perating member of the company. His experience of running businesses which are profitable and

keeping a handle on the costs brings a lot of value to the project. Some of his successful ventures include:

• World Wide Granites Pvt Ltd (CEO): Implementing and running a project in granite quarrying and

factory for polishing and cutting. Developed and executed a business plan which made owning a factory redundant yet multiplied sources of supply of finished Granite for Export. Did Contracts with Factories for export and effective capacity utilization, materials management, manpower, and cost control.

• Hebal Constructions Pvt Ltd (MD) : Conceptualized and implemented residential and construction

projects successfully. Supervised conceived, constructed, and developed both a residential and a commercial project at lowest costs with high standards, both of which went on to become Landmarks in the city existing to this date.

• Hebal Finance Pvt Ltd (MD) : Bill discounting and financing of high net worth companies. Responsible

for growth of turnover to excess of US $ 8 Million in 1996 with access to a capital reserves base exceeding US $ 20 million

• KRIPPA LLC (CEO) : Manufacture, import, distribution and international sales of watches and
• electronics. Made it a profitable venture by creating new product lines and items. Developed

hundreds of profitable products, created unique solutions which resulted in average profits of fifty to hundred thousand per annum per product with total revenue from 3 – 7 million per annum. Designed in house and manufactured overseas items in demand for Import. Diversifying into internet marketing and higher end product lines

• 4328 Colden St LLC(CEO) : Identified prime location in NY, negotiated and purchased land, demolished

existing structure. Completed construction of ready to move in apartments with all amenities targeted at middle class residents providing “Luxury for Less”. Entire project completed and rented

• ut with property tax abatement for fifteen years, resulting in positive cash flow and a secure

investment

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Company Overview

• The 3,060 acre land is owned by primarily by two families – One Family owns 2,900

acres and the other family owns 160 acres.

• Stryton has entered into a 10 year mining rights lease with two additional

10 year terms at it’s sole option, totaling 30 Years.

• The exercise of mining rights require a payment royalties to the land owners.
• All of the Sugarloaf coal is Metallurgical coal also known as MET Coal.
• The area is known to have high-grade, low-volatile MET Coal. Based on the test

results of new samples taken from the excavated site, it is characterized as Superior MET Coal suitable for use in production of Steel.

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January 2014: Lease Down Payment & Signing February 2014: Mining Plan & Drilling Start February 2015: Final Stage of Permitting July 2015: All Environmental & Mining Permits Received February 2016: Start shipment of unwashed coal

Project Milestones

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Project Reserves

Engineering report shows high levels of economically mineable reserves:

i. Proven reserves of 6,800,000 tons – 5.0 to 8.0 feet in thickness ii. Probable reserves of 1,005,000 tons – same thickness iii. Inferred reserves of 15,300,000 tons – slightly thicker iv. Total reserves of 23,105,000 tons v. At an annual mining rate of 500,000 tons, the coal reserves would last at least 46 years. vi. The first year projection is based on only 430,000 tons.

Mining Methods and Costs. Depending on the depth where coal is located, and the

equipment and personnel available, mining Methods and cost differ significantly.

i. Underground Mining : Deeply located coal requires underground mining which in turn require more safety measures and higher staffing costs. ii. Surface Mining : Relatively shallow (down to 150 feet) coal seam allows for mechanized mining with machines like the Addcar Highwall Mining System

• This is almost half million pounds of heavy machinery that extracts coal up to 1,600 feet

horizontally and can be operated by a three or four man crew, with no personnel going underground at any time. Stryton has retained a local engineering and construction firm, M&R Debris Management LLC, that leases this equipment on a per-ton cost basis.

• Adjoining government lands offer possible reserves of an additional 50 MM tons for Phase III

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Stryton Project Coal Quality

Stryton Mine Coal is well within Industry Parameters for Met Coal 0% 20% 40% 60% 80% Moisture Ash Volatile Matter Fixed Carbon Sulphur Stryton Mine Coal Industry Parameter Moisture Less than 8% Ash Less than 10% Volatile Matter Less than 20% Fixed Carbon Greater than 65% Sulphur Less than 1.20% BTU / LB Greater Than 14,000

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Location Advantages

• Proximity to other mines, therefore an

existing eco structure for mining including convenient transportation ( river loading port at Van Buren) and competent workforce availability

• The same seam with consistent

Superior Met coal quality runs into adjacent lands, which are already being successfully mined today

• Adjoining government land with

possible reserves of 50 + MM tons that can be mined in Phase IV

• Airports ( Fort Smith & Fayetteville )
• Rivers
• Loading points for coal
• Highways

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Stryton Mining map

Mining 1400 ft. further from Phase I during the Phase II period

Phase 1 Mining site Using Addcar Highwall Mining System

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Government Map

Our Mines are located near Hartford & Fort Smith

These maps are taken from Arkansas Geological Survey Office, an Arkansas state governmental agency

Property showing coal on surface-1

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Property showing coal on surface-2

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Entry to the property

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Perimeter of mine site with permits and plans

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Excavation equipment on site

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Excavated Seam about 60 feet deep

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Sedimentation Pond for run off and ultimate discharge

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Sedimentation Pond for run off and ultimate discharge

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Mine and area preparation

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Start of shipment

UGM Addcar Systems LLC – the highwall contractor

• UGM ADDCAR Systems LLC is an international highwall mining (HWM) specialist based in Ashland Kentucky, USA with over 25

years experience operating HWM systems in the coalfields of Australia, USA, South Africa and India.

• ADDCAR highwall mining systems have produced in excess of 100Mt of coal and is the leader in maximizing resource

recovery and cost effectiveness for the clients.

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Stryton Entity-Level Advantages

• No Thermal Coal Legacy Costs
• Able to profit at lowest Met Coal Prices
• Existing Relationships with International Buyers
• Superior Quality Met Coal with proven reserves.
• All Governmental and Environmental permits in place
• No Gestation period
• Project is already in Excavation Phase
• Costs of Operation – Most of the machinery will be initially leased by mining

contractor enabling an output at a very reasonable cost per ton of coal

• extracted. This also allows for savings of upfront capital expenditure.

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US Coal Miners: Legacy Costs

• Existing Big companies have a legacy drag of thermal coal used for electricity, which is :
• High extraction costs
• Low thermal coal prices (which is often half the price of Met Coal)
• Pressure from Environmental Agencies to use Alternative Energy
• Shale gas revolution
• Stryton is using Highwall Mining Method of Coal Extraction which lowers labor and fuel

components, resulting in extremely low mining and extraction costs

• Stryton has Met Coal which is used in Steel Production, for which there are No other

Alternatives

• After years of Warning against using coal, Warren Buffet has actually invested in the

coal industry in 2015 because of valuations available in the market

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Valuation The current valuation of the entity is close to US 18 million

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Met Coal and Steel Production

Metallurgical Coal, also referred to as MET Coal or Coking coal, possesses the ability to soften and re-solidify into a coherent, porous mass, when heated in the absence of air in a confined

• space. The conversion from Coal to

Coke occurs in long, tall, slender chambers called Coke Ovens where the volatiles from the coal escape, leaving behind what is referred to as Metallurgical Coke, which reaches a temperature of approximately 1,000°C before being removed from the ovens. Coke is used primarily as a fuel and a reducing agent in a blast furnace during the smelting of Iron Ore into Iron before it is converted into Steel.

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Special Qualities of Met Coal

Coals considered as candidates for use in coke making must pass a barrage of analytical tests before they can be considered suitable for use.

The ash in Met Coal becomes an impurity in the Coke and therefore displaces carbon in the blast furnace. Lower ash content is preferred. Sulfur must be removed from the hot metal, either within or outside the furnace, and contributes to higher coke rates and lower hot metal

• productivity. Lower Sulfur content is

preferred. Metallurgical Coals are usually classified as High, Medium, and Low Volatile based on their dry, mineral matter. Lower Volatile coal is preferred.

Test Low Vol. Mid Vol. High Vol. Importance Moisture Ideally, as Low as Possible Consumes Energy Ash Ideally, as Low as Possible Coke Impurity Volatility Ideally, as Low as Possible 17-22%Dry 21-31% Dry 31-38% Dry Impacts Coke Yield Fixed Carbon Ideally, as High as Possible Impacts Coke Yield Sulfur (S) Ideally, as Low as Possible Hot Metal Impurity

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Traded MET Supply and Demand

SUPPLY:

• High quality Metallurgical Coal is only found in a handful of areas worldwide.
• Australia is the largest producer and exporter of Met Coal, followed by North America

(United States and Canada).

• Other major producers include Russia, Poland, South Africa, and Colombia.
• Developing regions for Metallurgical Coal production are Mozambique and Mongolia.
• Some of the highest quality Met Coal is generally found in the United States and

Australia and will likely remain in demand as there is no suitable replacement. DEMAND

• Primary consumers of internationally traded Metallurgical Coal are Europe and Asia.
• Europe has a well-established steel making industry but lacks the Metallurgical Coal

to supply its requirements.

• This is also the case for Japan, which has long been a large scale importer of

Metallurgical Coal.

• Imports to India and China are also growing tremendously as these countries develop.
• Growing Asian economies fueled primarily by India and China are expected to support

prices in Internationally traded Metallurgical Coal going forward.

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Steel Demand - Long Term

• Steel intensity is a measure of steel consumption as an economy develops.
• It is the ratio of steel consumption per capita to a country’s gross domestic product (GDP)

per capita.

• Developing countries require growing quantities of Steel to build their Infrastructure, but

they do not have sufficient available economic or natural resources to meet their steel demand.

• China and India, are expected to significantly increase their consumption of Steel as their

economies grow.

• With over 35% of the world’s population, the increasing requirement for Steel in China and

India should create a consistent growth in International Demand for Metallurgical Coal in the future.

• In India, steel makers meet 60 – 65% of their metallurgical coal requirements through

imports.

• Indian domestic coal reserves have high ash content and not suitable for use in Steel

industry.

• With likely growth in Indian steel production, Met Coal imports will grow in parallel.
• Consumption in India of Metallurgical Coal is set to increase by 30% to 59 million tons

between 2013 and 2017, of which almost 70% will be imports.

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SGS REPORT -1

SGS REPORT-2

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SGS REPORT-3

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SGS REPORT-4

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SGS REPORT-5