4415 Caribou Rd

Nederland, CO 80466
May 10, 2018

Grand Island Resources LLC

 

Executive Summary

1 
 
 4415 Caribou Rd
Nederland, CO 80466
May 10, 2018

Grand Island Resources LLC. (“GIR” or the “Company”) is a gold and silver mining and exploration
company with proven production assets located in Nederland, Colorado, United States. The Company is
presently permitted for mining operations up to 70,000 tons per year. The underlying strengths of the
Grand Island Resources LLC are the following:
1) The mining operation is in a proven historic mining district that has previously produced
500,000 ounces of gold and 20 million ounces of silver. At today’s current prices, this is
approximately $ 1 Billion USD in value. GIR is focused on reestablishing and expanding
operations.

2) Since 2017 the Company has completed an extensive effort to compile, catalogue and digitize
the wealth of historical data and information to obtain an enhanced understanding of the mining
resources and to develop a mining and operational plan. We have identified 65 historical
reports written by engineers, geologist and the Colorado School of Mines concerning the
Cross/Caribou district.

3) Today the GIR mine site has 292,100 measured, indicated & inferred gold equivalent ounces
and a grand total of 1,200,000 tons of ore including inferred ore resources located on 2550 acres
within our 3.5 square mile block with 130 patented and 105 unpatented mineral claims based on
recent NI 43-101 dated February 5, 2018.

4) The ore is a high value ore with an average fully diluted grade of 0.22 oz. per ton of gold for a
total of 59,000 ounces of measured & indicated gold. The ores have an average fully diluted
grade of 3.62 oz. of silver per ton for a total of over 1 million ounces measured& indicated.

5) Permitted mine allows for clear path to revenue generation through completion of an onsite 200
tons per day core milling facility (approved) that will produce high-value gold and silver
concentrate to be shipped to a third-party smelter for final processing.

6) Operational capacity of 70,000 tons of gold and silver ore by 2021 with gradual ramp up to that
volume from 2019 onwards. Expected revenues of $ 11.7 million for 2019, $ 31.5 million by
2020 and $ 70.7 million or more for 2021 and forward.

7) High operating margin operation with an EBITDA margin of more than 45% at 200 tons per
day production volume resulting in a projected EBITDA of $ 31.5 million for 2021, increasing
to $ 70 million after the implementation of phase II development.

2 
 
 4415 Caribou Rd
Nederland, CO 80466
May 10, 2018

8) Efficient production economics with a mining, processing, smelter and refining, general and
administrative cost and royalty cost of $ 538 dollars per oz. of gold produced. Low cash cost
provides for financial flexibility to address any temporary weakness in future gold prices.

9) A $ 2.0 million per year “multi-year” development cost for the core drilling program will
increase resources, both measured and indicated plus inferred, thereby extending the life cycle
of the Caribou/Cross Mine operations. By continuing this process we feel the mine has between
10 to 20 million ounces of gold and between 80 and 100 million ounces of silver throughout the
entire district and a life cycle of over 70 years.

10) Clear and targeted operating plan going forward with two distinct phases.

a. Phase I: Focus on completion of onsite custom mill, restart of the high-grade gold and
silver mining ore production program and completion of a new shaft with access to both the
Cross and Caribou mines.

b. Phase II: Extensive drilling, permitting and mine development program to develop future
production scenario which includes an underground mill upgrade. The goal of the Phase II
together with Phase III drilling program is to prove a total 1 million oz. of gold resources.
Expand operations to 200 tons per day with onsite milling. This will allow the Company to
move into its Phase III and gradually increase operations from 200 TPD to 800 TPD

11) $ 30 million capital improvement expenses plan to allow for completion of Phase I including
the construction of new shaft for the Cross Mine ($ 6.0 million), 200 tons per day Cross mill ($
3.3 million), new buildings ($ 2.2 million), water treatment upgrades ($ 0.9 million), Phase II
drilling program for $ 5.8 million and mine capital expenses of $ 3.5 million and operating
capital of 3.7 million for a total of $ 30 million of start-up related investments through the fall
and winter of 2019.

12) Upon Funding, debt free balance sheet with proven assets and no legacy debt, environmental or
legal issues. Main assets of Grand Island Resources are wholly owned by the Company and
include:

a. Land: Patented claims with the Bureau of Land Management and wholly owned.
b. Active mine permits and 200 tons per day mill authorization.
c. Fixed assets: Existing infrastructure investments in operating structures, equipment, roads,
ponds and tunnels.

13) Transparent corporate structure with Nederland Mining Group, LLC owning 100% of Grand
Island Resources, LLC.

3 
 
 4415 Caribou Rd
Nederland, CO 80466
May 10, 2018

14) Existing management team structure in place with Nederland Mining Consultants, LLC
(“NMC”), proven mine management and operational support to Nederland Mining Group, LLC
and Grand Island Resources, LLC. The management and operations team has more than 150
years of gold mining experience.

15) The Company is presently in negotiations with multiple companies regarding a gold backed
Crypto currency Coin or Token.

Financial Projections

($ in 1,000s) 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Total

Metal Price ‐ Gold $ 1,230 $ 1,240 $ 1,250 $ 1,260 $ 1,270 $ 1,280 $ 1,290 $ 1,300 $ 1,310 $ 1,320 $ 1,330 ‐‐

Metal Price ‐ Silver $ 17.00 $ 18.00 $ 19.00 $ 20.00 $ 21.00 $ 22.00 $ 23.00 $ 24.00 $ 25.00 $ 26.00 $ 27.00 ‐‐

Total Ounces Gold Produced 223 5,902 15,890 35,078 36,860 36,906 37,274 37,637 37,818 37,955 38,000 319,543

Total Ounces Silver Produced 3,516 93,068 250,568 553,146 581,246 581,961 587,760 593,488 595,351 598,499 599,215 5,038,817

Revenues $ 452 $ 11,697 $ 31,652 $ 70,674 $ 75,178 $ 76,211 $ 77,943 $ 79,670 $81,028 $ 82,298 $ 82,738 $ 669,552

Cost of Goods Sold $ 645 $ 5,517 $ 13,747 $ 28,330 $ 30,326 $ 30,371 $ 30,663 $ 30,952 $ 31,096 $ 31,204 $ 31,241 $ 264,092

Smelter Charges 45 1,170 3,165 7,067 7,518 7,622 7,794 7,967 8,103 8,230 8,274 66,955

Royalty 9 243 633 1,413 1,504 1,524 1,559 1.593 1,621 1,646 1,655 13,400

Total Direct Cost of Sales $ 700 $ 6,930 $ 17,545 $ 36,811 $ 39,347 $ 39,517 $ 40,016 $ 40,512 $ 40,819 $ 41,080 $ 41,169 $ 344,447

G & A and Other Costs $ 1,196 $ 1,270 $ 1,466 $ 1,474 $ 1,476 $ 1,476 $ 1,476 $ 1,476 $ 1,476 $ 1,476 $ 1,476 $ 15,732

Professional Mine Services 513 1,024 846 876 852 800 716 644 600 572 564 8,006

Total Operating Costs $ 2,408 $ 9,224 $ 19,857 $ 39,155 $ 41,673 $ 41,793 $ 42,208 $ 42,632 $ 42,895 $ 43,128 $ 43,212 $ 368,186

EBITDA ($ 1,955) $ 2,473 $ 11,795 $ 31,518 $ 33,505 $ 34,428 $ 35,735 $ 37,038 $ 38,133 $ 39,170 $ 39,526 $ 301,366

EBITDA Margin NM  21% 37% 45% 45% 45% 46% 46% 47% 48% 48% 45%

Note: Assumes smelter fee of 10% and royalty fee of 2%.

Source: Grand Island Resource management estimates.
4 
 
 4415 Caribou Rd
Nederland, CO 80466
May 10, 2018

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This following information specifies certain forward-looking statements of the management

of Grand Island Resources, LLC. and its subsidiary companies (the “Company”). Forward-
looking statements are statements that estimate the happening of future events and are not
based on historical fact. Forward-looking statements may be identified by the use of
forward-looking terminology, such as “may,” “shall,” “could,” “expect,” “estimate,”
“anticipate,” “predict,” “probable,” “possible,” “should,” “continue,” or similar terms,
variations of those terms or the negative of those terms. The forward-looking statements
specified in the following information and the documents incorporated by reference herein
have been compiled on the basis of assumptions made by management and considered by
management to be responsible and reasonable. Our future operating results, however, are
impossible to predict and no representation, guarantee, or warranty is to be inferred from
those forward-looking statements.
The assumptions used for purposes of the forward-looking statements specified in the
following information and the documents included by reference herein represent estimates of
future events and are subject to uncertainty as to possible changes in economic, legislative,
industry, and other circumstances. As a result, the identification and interpretation of data
and other information and their use in developing and selecting assumptions from and among
reasonable alternatives require the exercise of judgment. To the extent that the assumed
events do occur, the outcome may vary substantially from anticipated or projected results,
and, accordingly, no opinion is expressed on the achievability of those forward-looking
statements. We cannot guaranty that any of the assumptions relating to the forward-looking
statements specified in the following information are accurate, and we assume no obligation
to update any such forward-looking statements.
This document does not contain all the information available on the Company and you
should review the Company’s website, public filings including risk factors, the financial
statements and the notes to the financial statements.
This Confidential Memorandum is for the confidential use of the Company and the recipient
and may not be reproduced or distributed in whole or in part.

  STATEMENTS MADE HERE ARE NOT AN INDUCMENT TO SOLICIT OR SELL

SECURITIES
 

5