Presentation on theme: "American Alliance Financial & Funding Group Corporate Summary – March 2008."— Presentation transcript:
American Alliance Financial & Funding Group Corporate Summary – March 2008
2 Legal THIS 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.
3 AAFFG Company Profile A financial services institution with its vast assets under management, unique approach, dynamic relationships, and core expertise. Leading global conduit focused on the following sectors: Banking Energy Mining and Minerals Government Technology
4 AAFFG Mission AAFFG 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.
5 Corporate Structure
6 AAFFG Key Management Steven V. Cross – Chairman & Chief Executive Officer Robert Tunnison – Executive Administrative Assistant Phillip Long – Chief Financial Officer CD Rowsell – Senior Executive Vice President, Investments Gary Wiess – Senior Vice President, Commodities Alexander Chang – Executive Vice President, Legal Counsel – Asia Thomas L. Woodall – Senior Vice President, Chief Legal – Americas William C. Brannan – Senior Vice President, Economics & International Planning Richard Scales – Senior Vice President, Financial Management Jim Lewis – Chief Geologist Paul Pomp – Chief Silica Engineer Gordon Pomp – Silica Production Manager Steven Hopkins – Project Lifeguard Supervisor (EDCU – Utah Governors Office) Stacy Hopkins – Chief EDCU Coordinator
7 Limited Partnerships and Joint Ventures LP/JV NameType% Owned% RevenueDescriptionValuation Card LPSilica51%35%18 billion tons$2,160,000,000,000 Card LPGold51%35%7 million ounces$3,500,000,000 Arco Hills LPSilica51%40%20 billion tons$2,400,000,000,000 Crow ClaimsSilica51%40%18 billion tons$2,160,000,000,000 Appleman LP Gold, Silver, Platinum, Palladium, Iridium 51%40% 50 million tons mineral deposits $851,000,000,000 Aces OilOil100%58% 140 million ~ 1.94 billion barrels $7,000,000,000 Ecco Drilling LPOil Driller70%80% Bosonda LPWater/LPG51%80% Wealth Management LPFinance51%80% Business Solutions LPFinance51%80% Tote International LPTechnology51%30% WMG Software LP Commodities Exchange 75%74% Shintoc -Yige JVOil Refinery80%50% Boardwalk Property LPEmeralds/ Property51%30%175,000 oz. Composite Power JVGold/Metal Tailings51%40%40 million tons Silica China Hubei JVSilica51% 50%700 million tons Need A PartsAutomotive51%10-25% Golden Light StudiosEntertainment51%40% A&J HoldingsPower Plant51%40% PremierWood Products85% ASGPower Plant51%40% Shintoc-SAJ JVCommodities51%40% Accelerated Communications Technology51%40%
8 AAFFG Corp - Financial Projections All figures in $USD 5 Year NPV = $5.25 billion (Taxes and Depreciation not included in all calculations) Based on Investment Capital of $252 million over 27 month period Investment Recovery (Cumulative Break even) Q2 2009 Cash Flow Positive Q1 2009 (Peak Cumulative Loss ~ $94 million) 200820092010201120125 YEAR TOTAL TOTAL GROSS REVENUES $ 206,065,650 $ 2,693,164,583 $ 6,490,779,879 $ 12,526,893,516 $ 17,052,054,796 $ 38,968,958,424 TOTAL EXPENSES $ 121,120,020 $ 1,762,201,017 $ 4,085,896,126 $ 6,460,027,880 $ 8,934,345,248 $ 21,363,590,291 TOTAL GROSS PROFIT $ 84,945,630 $ 930,963,566 $ 2,404,883,753 $ 6,066,865,636 $ 8,117,709,548 $ 17,605,368,133 AAFFG SHARE OF LP/JV PROFITS $ 50,845,105 $ 481,634,027 $ 1,116,891,701 $ 2,641,119,054 $ 3,496,299,819 $ 7,786,789,706 LESS: AAFFG REQUIRED CAPITAL $ 111,149,875 $ 126,000,000 $ 15,000,000 $ - $ 252,149,875 AAFFG SHARE of GROSS PROFIT (- LOSS) $ (60,304,770) $ 355,634,027 $ 1,101,891,701 $ 2,641,119,054 $ 3,496,299,819 $ 7,534,639,831 LESS: AAFFG CORPORATE EXPENSES $ 17,510,058 $ 33,845,973 $ 43,048,400 $ 56,518,858 $ 80,431,004 $ 247,370,183 AAFFG EBITDA $ (77,814,828) $ 321,788,053 $ 1,058,843,301 $ 2,584,600,197 $ 3,415,868,815 $ 7,287,269,648 Less: Depreciation and Amortization $ - Less: Income Tax Expense $ - NET PROFIT - (LOSS) $ (77,814,828) $ 321,788,053 $ 1,058,843,301 $ 2,584,600,197 $ 3,415,868,815 $ 7,287,269,648 CUMULATIVE NET PROFIT - (LOSS) $ (93,830,718) $ 227,957,335 $ 1,286,800,637 $ 3,871,400,833 $ 7,287,269,648
9 Balance Sheet ASSETSLIABILITIES Cash$50,000 Accounts payable $2,444,577 Accounts receivable$0 Short-term notes$0 Short Term Investments $0 Taxes payable$0 Prepaid expenses$0 Accrued payroll$ 4,477,083 Total Current Assets$50,000 Total Current Liabilities$ 6,921,660 Investments – LP (Non Minerals and Mining)$ 1,969,730 Long Term Notes Payable $ 7,578,000 Investments - LP Mining and Minerals (Valuation * Rev Share)$3,214,355,000,000 Total Long Term Assets$3,214,357,019,730 Total Long Term Liabilities$7,578,000 STOCKHOLDERS EQUITY Paid in Capital$0 Retained earnings$3,214,342,520,070 Total Shareholders' Equity$3,214,342,520,070 TOTAL ASSETS$3,214,357,019,730 TOTAL LIABILITIES & EQUITY$3,214,357,019,730
10 Oil Contracts DealPartner Contract Term Potential Annual QuantityPotential Annual Profit Buy Mazut 100/CT180CNPC 1 10 Years18 million MT$45,000,000 Buy D2 (Diesel)CNPC5 Years12 million MT$18,000,000 Buy Crude OilCNPC10 Years480 million barrels$480,000,000 Sell Crude OilPDVSA 2 10 Years480 million barrels$480,000,000 Buy Crude OilCNPC5 Years35 million barrels$36,000,000 Notes: 1 CNPC – China National Petroleum Corporation 2 PDVSA - Petroleos de Venezuela, S.A.
12 Summary 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 600-800 feet in depth from the surface. AAFFG is General Partner owning 51% of the limited partnership and 40% of net revenues.
13 Location of British Columbia and Idaho Silica Sites
14 Silica Diverse Uses Glass (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 water Electronic 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 agent As 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
15 Pure Silica Hi-Tech Uses Solar Panels created from Silicon Wafers Optical Components - lenses, prisms, reflectors, mirrors, filters, optical flats. Analytical Instruments - UV spectrophotometer cells, fire control devices, reticle substrates,interferometer plates Semiconductor Electronic - Microcircuit substrates, microwave devices, photomasks, sputter plates, excimer lasers Lasers - beam splitters, brewster windows, medical/industrial systems, Q-switches, UV excimers Energy - Laser fusion research, isotope separation, solar cell covers. Spacecraft/Aircraft - Docking light covers, windows, re-entry heat shields, ring laser gyros. Fiber optics
16 Potential Silica Buyers/Partners Chemical Manufactures (DuPont, Dow, BASF, Pharmaceuticals) Petro-chemical Processors Solar Industry Electronics Industry Glass Industry Construction Industry
17 Initial 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)
18 Risk Factors – Silica Production No customers to purchase the commodities, inadequate demand. Change in Technology Environmental, Local Permits Production Health Risks – Silicosis Delays due to weather, equipment failure, staffing
19 Risk Mitigations – Silica Production Company actively pursuing silica buyers from diverse industries Company plan to ramp up production and refineries as demand and technology evolves Company working closely with local and national governments to secure permits and partnerships Company outsourcing production to experienced mining producers to reduce injury, equipment misuse, and staff training
20 Silica Financial Projections 5 Year Net Present Value = $1.3 billion (8% discount rate) Based on Investment of $69 million over 14 months Investment Recovery (Cumulative Break even) in Q3 2009 Cash Flow Positive Q2 2009 (Peak Cumulative Loss ~ $22 million) 200820092010201120125 Year Total Silica Revenue $ 53,100,000 $ 699,840,000 $ 1,465,920,000 $ 2,669,760,000 $ 5,508,000,000 $10,396,620,000 Total Operating Expenses $ 39,825,000 $ 454,896,000 $ 879,552,000 $ 1,468,368,000 $ 2,754,000,000 $ 5,596,641,000 Total Profit $ 13,275,000 $ 244,944,000 $ 586,368,000 $ 1,201,392,000 $ 2,754,000,000 $ 4,799,979,000 Cumulative Total Profit $ 13,275,000 $ 258,219,000 $ 844,587,000 $ 2,045,979,000 $ 4,799,979,000 AAFFG Profit $ 5,088,750 $ 93,895,200 $ 224,774,400 $ 460,533,600 $ 1,055,700,000 $ 1,839,991,950 AAFFG Cumulative Profit $ 5,088,750 $ 98,983,950 $ 323,758,350 $ 784,291,950 $ 1,839,991,950 AAFFG Total Investment $ 27,000,000 $ 42,000,000 $ - $ 69,000,000 AAFFG Cumulative Investment $ 27,000,000 $ 69,000,000 AAFFG Net Cash Flows $ (21,911,250) $ 51,895,200 $ 224,774,400 $ 460,533,600 $ 1,055,700,000 $ 1,770,991,950 Cumulative Net Cash Flows $ (21,911,250) $ 29,983,950 $ 254,758,350 $ 715,291,950 $ 1,770,991,950
21 Metals and Mining Overview AAFFG receives 40% of gross profit from Appleman LP, Card LP, and Composite Corp JV Total Reserve Value > $300 billion Appleman LP owns mineral deposits of 50 million tons on 1,280 acres in Colorado Value of reserves in 2005 ~ $851 billion, todays value > $2 trillion 54,300,000 oz. gold 704,700,000 oz. silver 61,100,000 oz. platinum 86,900,000 oz. palladium Economic life of mine = 20 years 5 Year estimate gross revenue = $13.6 billion
22 Card LP Gold Overview Card LP includes inferred 7 million ounces of Gold at 600-800 feet (below the Silica) Market value of gold reserves ~ $7 billion Economic life is 20 years 5 Year estimated gross revenue = $803 million Initial investment capital = $69 million (included in silica investment)
23 Composite Corp JV Overview Composite Corp JV purchase rights to 4.2 million tons of mineral tailings in Nevada Market value of reserves ~ $72 billion Quantity of minerals –2,727,333 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 investment 5 Year estimate gross revenue = $6.5 billion
25 Oil Exploration Overview AAFFG receives 58% of revenues from wholly owned subsidiary - Aces Oil & Gas Aces owns lease claims covering 37,000 acres in Nye County, Nevada Reserves of 140 million barrels at shallow depths (~5,500 feet) Based on $100 per barrel less 50% for contingency = $7 billion Further deep reserves of 1.8 billion barrels (> 12,000 feet) or valuation of $90 billion Economic life is 20 years with 60% derived in Years 1-5
26 Why Nye County Nevada 2 of the largest producing wells in the lower 48 states currently active in Nye County Only 24 months expected return on investment from initial strike to explore, develop, and produce the prospect Up to 100 wells can be drilled in the area Huge upside with the extensive oil at deeper structures and expected large deposits of natural gas AAFFG has spent $5 million on satellite, assays, and extensive drill sampling.
27 Oil Investment Analysis Approximately $56 million required to relocate, establish 20 wells Additional $244 million to optimize exploration Extensive interest from future buyers including Oil companies and Government entities. Demand is assured
28 Oil Exploration Financial Projections All figures in $USD 5 Year Net Present Value = $473 million (8% discount rate) Investment Recovery (Cumulative Break even) in Q1 2010 Based on Investment of $56 million over next 17 months Cash Flow Positive Q2 2009 (Peak Cumulative Loss ~ $22 million) 200820092010201120125 Year Total Nye County, Nevada Revenues $ 52,500,000 $ 420,000,000 $ 950,000,000 $ 2,160,000,000 $ 2,580,000,000 $ 6,162,500,000 Nye County, Nevada Expenses $ 42,000,000 $ 336,000,000 $ 760,000,000 $ 1,728,000,000 $ 2,064,000,000 $ 4,930,000,000 Nye County, Nevada Profit $ 10,500,000 $ 84,000,000 $ 190,000,000 $ 432,000,000 $ 516,000,000 $ 1,232,500,000 Total Profit $ 10,500,000 $ 84,000,000 $ 190,000,000 $ 432,000,000 $ 516,000,000 $ 1,232,500,000 Cumulative Total Profit $ 10,500,000 $ 94,500,000 $ 284,500,000 $ 716,500,000 $ 1,232,500,000 AAFFG Profit $ 6,090,000 $ 48,720,000 $ 110,200,000 $ 250,560,000 $ 299,280,000 $ 714,850,000 AAFFG Cumulative Profit $ 6,090,000 $ 54,810,000 $ 165,010,000 $ 415,570,000 $ 714,850,000 Total Investment $ 28,000,000 $ - $ 56,000,000 Cumulative Investment $ 28,000,000 $ 56,000,000 AAFFG Cash Flows $(21,910,000) $ 20,720,000 $ 110,200,000 $ 250,560,000 $ 299,280,000 $ 658,850,000 AAFFG Cumulative Cash Flows $(21,910,000) $ (1,190,000) $ 109,010,000 $ 359,570,000 $ 658,850,000
29 Investment 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)