1American Alliance Financial & Funding Group Corporate Summary – March 2008
2LegalTHIS CORPORATE SUMMARY DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY FROM ANY PERSON IN ANY STATE OR OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO A PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. THERE IS NO PUBLIC MARKET FOR THE SECURITIES, AND NONE IS EXPECTED TO DEVELOP IN THE FUTURE. THEREFORE, INVESTORS SHOULD BE AWARE THAT THEY MIGHT BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS. This Executive Summary contains “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. For example, forward-looking statements may predict future economic performance, describe plans and objectives of management for future operations and make projections of revenue and other financial items. Prospective investors should not rely on such forward-looking statements because the matters they describe are subject to known (and unknown) risks, uncertainties and other unpredictable factors, many of which are beyond our control.
3AAFFG Company ProfileA financial services institution with its vast assets under management, unique approach, dynamic relationships, and core expertise. Leading global conduit focused on the following sectors:BankingEnergyMining and MineralsGovernmentTechnology
4AAFFG MissionAAFFG is dedicated to creating value for its stakeholders and operating under the premise to:Reinvest a significant portion of its net proceeds into the betterment of communities of the world it engages.
12Summary of Silica Leases The 3 distinct mineral leases on 40,000+ acres contain an estimated 50 billion tons of quartz silica rock of very high purity, as well as an abundance of quartz crystals of gemstone and fiber optic quality.The British Columbia sites are located near rail facilities connected to port facilities at Vancouver, BC or Prince Rupert, BC. The Idaho site is also close proximity to rail facilities.Geologic sampling has revealed exceedingly pure samples of silica comprised of 97.7% to 99.3% silica, with iron oxide contents ranging from 0.02% to 0.05%. Majority of prospect is covered with only 2-4 inches of overburden consisting of moss and light soils.Underlying the main silica deposit, there is an inferred gold deposit varying from feet in depth from the surface.AAFFG is General Partner owning 51% of the limited partnership and 40% of net revenues.
13Location of British Columbia and Idaho Silica Sites
14Silica Diverse UsesGlass (a colorless, high-purity form is called fused silica)Silica gel (used as desiccants in new clothes, leather goods, electronics)Raw material for ceramics such as earthenware, stoneware and porcelain.Raw material for the production of Portland cement.Food additive in powdered foods or to absorb waterElectronic insulator as the natural oxide coating grows on silicon is a electric insulator, possessing high chemical stability.Raw material for aerogel for spacecraft, defense.Extraction of DNA due to its ability to bind to the nucleic acids.Added to medicinal anti-foaming agentAs hydrated silica in toothpaste (abrasive to fight away plaque.)As fumed silica as pharmaceutical excipients. Improving flow properties of materials required for modern tablet and capsule
16Potential Silica Buyers/Partners Chemical Manufactures (DuPont, Dow, BASF, Pharmaceuticals)Petro-chemical ProcessorsSolar IndustryElectronics IndustryGlass IndustryConstruction Industry
17Initial Silica - Production and Pricing 10,000 metric tons per month mined in Year 1 from each of the 3 North American mines.Overview of pricing of silica production:Raw decorative silica stone = $120 per ton.OR crush and grind silica stone into granular silica = $6,000 a ton.OR grind granular into powder = $7,500 a ton.OR by heat in a refinery furnace into a gel = $6,500 an ounce ($208,000,000 a ton)
18Risk Factors – Silica Production No customers to purchase the commodities, inadequate demand.Change in TechnologyEnvironmental, Local PermitsProduction Health Risks – SilicosisDelays due to weather, equipment failure, staffing
19Risk Mitigations – Silica Production Company actively pursuing silica buyers from diverse industriesCompany plan to ramp up production and refineries as demand and technology evolvesCompany working closely with local and national governments to secure permits and partnershipsCompany outsourcing production to experienced mining producers to reduce injury, equipment misuse, and staff training
20Silica Financial Projections 200820092010201120125 YearTotal Silica Revenue$ ,100,000$ 699,840,000$ 1,465,920,000$ 2,669,760,000$ 5,508,000,000$10,396,620,000Total Operating Expenses$ ,825,000$ 454,896,000$ 879,552,000$ 1,468,368,000$ 2,754,000,000$ 5,596,641,000Total Profit$ ,275,000$ 244,944,000$ 586,368,000$ 1,201,392,000$ 4,799,979,000Cumulative Total Profit$ ,275,000$ 258,219,000$ 844,587,000$ 2,045,979,000$ 4,799,979,000AAFFG Profit$ ,088,750$ 93,895,200$ 224,774,400$ 460,533,600$ 1,055,700,000$ 1,839,991,950AAFFG Cumulative Profit$ ,088,750$ 98,983,950$ 323,758,350$ 784,291,950$ 1,839,991,950AAFFG Total Investment$ ,000,000$ 42,000,000$$ ,000,000AAFFG Cumulative Investment$ ,000,000$ 69,000,000$ ,000,000AAFFG Net Cash Flows$ (21,911,250)$ 51,895,200$ 1,055,700,000$ 1,770,991,950Cumulative Net Cash Flows$ 29,983,950$ 254,758,350$ 715,291,950$ 1,770,991,950$ 1,770,991,9505 Year Net Present Value = $1.3 billion (8% discount rate)Based on Investment of $69 million over 14 monthsInvestment Recovery (Cumulative Break‑even) in Q3 2009Cash Flow Positive Q (Peak Cumulative Loss ~ $22 million)
21Metals and Mining Overview AAFFG receives 40% of gross profit from Appleman LP, Card LP, and Composite Corp JVTotal Reserve Value > $300 billionAppleman LP owns mineral deposits of 50 million tons on 1,280 acres in ColoradoValue of reserves in 2005 ~ $851 billion, today’s value > $2 trillion54,300,000 oz. gold704,700,000 oz. silver61,100,000 oz. platinum86,900,000 oz. palladiumEconomic life of mine = 20 years5 Year estimate gross revenue = $13.6 billion
22Card LP Gold OverviewCard LP includes inferred 7 million ounces of Gold at feet (below the Silica)Market value of gold reserves ~ $7 billionEconomic life is 20 years5 Year estimated gross revenue = $803 millionInitial investment capital = $69 million (included in silica investment)
23Composite Corp JV Overview Composite Corp JV purchase rights to 4.2 million tons of mineral tailings in NevadaMarket value of reserves ~ $72 billionQuantity of minerals2,727,333 oz. gold (.64 oz/ton)17,898,124 oz. silver (4.2 oz/ton)20,454,998 oz. platinum (4.8 oz/ton)2,045,500 oz. palladium (.48 oz/ton)3,025,635 oz. rhodium (.71 oz/ton)Economic life = 12 years, $65 million initial capital investment5 Year estimate gross revenue = $6.5 billion
24Precious Metals Projections 200820092010201120125 Year TotalTotal Metals Revenue$ ,695,658$ 1,200,724,583$ 3,587,259,879$ 7,099,533,516$ 8,186,454,796$ 20,119,668,432Total Operating Expenses$ ,556,520$ ,675,017$ 2,421,964,126$ 3,233,779,880$ 4,077,465,248$ 10,722,440,791Total Profit$ ,139,138$ ,049,566$ 1,165,295,753$ 3,787,003,636$ 4,003,989,548$ 9,213,477,641Cumulative Total Profit$ ,188,704$ 1,422,484,458$ 5,209,488,093AAFFG Profit$ ,655,655$ ,219,827$ ,118,301$ 1,546,301,454$ 1,643,595,819$ 3,758,891,056AAFFG Cumulative Profit$ ,875,482$ ,993,783$ 2,115,295,237Total Investment$ ,000,000$ ,000,000$ ,000,000$$ ,000,000Cumulative Investment$ ,000,000$ ,000,000AAFFG Cash Flows$ (50,344,345)$ ,219,827$ ,118,301$ 3,633,891,056AAFFG Cumulative Cash Flows$ (7,124,518)$ ,993,783$ 1,990,295,2375 Year Net Present Value = $2.6 billion (8% discount rate)Investment Recovery (Cumulative Break‑even) in Q1 2010Based on Investment of $125 million over next 27 monthsCash Flow Positive Q (Peak Cumulative Loss ~ $50 million)
25Oil Exploration Overview AAFFG receives 58% of revenues from wholly owned subsidiary - Aces Oil & GasAces owns lease claims covering 37,000 acres in Nye County, NevadaReserves of 140 million barrels at shallow depths (~5,500 feet)Based on $100 per barrel less 50% for contingency = $7 billionFurther deep reserves of 1.8 billion barrels (> 12,000 feet) or valuation of $90 billionEconomic life is 20 years with 60% derived in Years 1-5
26Why Nye County Nevada2 of the largest producing wells in the lower 48 states currently active in Nye CountyOnly 24 months expected return on investment from initial strike to explore, develop, and produce the prospectUp to 100 wells can be drilled in the areaHuge upside with the extensive oil at deeper structures and expected large deposits of natural gasAAFFG has spent $5 million on satellite, assays, and extensive drill sampling.
27Oil Investment Analysis Approximately $56 million required to relocate, establish 20 wellsAdditional $244 million to optimize explorationExtensive interest from future buyers including Oil companies and Government entities.Demand is assured
28Oil Exploration Financial Projections 200820092010201120125 Year TotalNye County, Nevada Revenues$ 52,500,000$ 420,000,000$ 950,000,000$ 2,160,000,000$ 2,580,000,000$ 6,162,500,000Nye County, Nevada Expenses$ 42,000,000$ 336,000,000$ 760,000,000$ 1,728,000,000$ 2,064,000,000$ 4,930,000,000Nye County, Nevada Profit$ 10,500,000$ 84,000,000$ 190,000,000$ 432,000,000$ 516,000,000$ 1,232,500,000Total ProfitCumulative Total Profit$ 94,500,000$ 284,500,000$ 716,500,000$ 1,232,500,000AAFFG Profit$ 6,090,000$ 48,720,000$ 110,200,000$ 250,560,000$ 299,280,000$ ,850,000AAFFG Cumulative Profit$ 54,810,000$ 165,010,000$ 415,570,000$ 714,850,000Total Investment$ 28,000,000$$ ,000,000Cumulative Investment$ 56,000,000$ ,000,000AAFFG Cash Flows$(21,910,000)$ 20,720,000$ ,850,000AAFFG Cumulative Cash Flows$ (1,190,000)$ 109,010,000$ 359,570,000$ 658,850,000All figures in $USD5 Year Net Present Value = $473 million (8% discount rate)Investment Recovery (Cumulative Break‑even) in Q1 2010Based on Investment of $56 million over next 17 monthsCash Flow Positive Q (Peak Cumulative Loss ~ $22 million)
29Investment Opportunities Strategic, Equity, Diversified Position in AAFFG Corporation (Parent/Holding Co.)Investment in AAFFG LLC Limited Partnerships & Joint Ventures:Pure Silica (USA, Canada, China)Metals Mining and Tailings (USA)Oil Exploration and Drilling (USA)