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Highlights:
- Indicator entered into an agreement to purchase 60% of Rio Verde Enterprises Inc, an active Colombian emerald business.
- Agreement allows Indicator to leverage their gemstone exploration knowledge and experience in exchange for emerald production.
- Rio Verde Enterprises experience and network of relationships established over the past decade provides Indicator access into the world most sought after emerald region.
- Colombia produces the worlds highest value emeralds.
The Opportunity:
2009 offered numerous opportunities to add projects to Indicator's portfolio and the company identified one unique prospect in particular: COLOMBIAN EMERALDS.
Much like diamonds, emeralds are highly sought after gemstones with top quality emeralds commanding some of the highest prices per carat in the jewelry industry.
Colombia produces the world's most desirable emeralds and accounts for 60% of global production. Once worth an estimated $500 million annually (1990), the Colombian economy and market has displayed a steadily improving business environment with the recent success of major and junior mining companies such as Ventana Gold, AngloGold Ashanti and Greystar making this is an optimal time to enter the region.
Entry into the Colombian emerald industry gives Indicator an early start in the development of key relationships and project exposure.
The Option:
Indicator has negotiated the right to purchase a 60% stake in Rio Verde Enterprises Inc., a private Canadian company with interests in the emerald fields of Colombia and an established emerald exporting, marketing and sales business.
Under the terms of the Letter Agreement, Indicator must issue 100,000 common shares to Rio Verde and spend $1,000,000 over 18 months (the "Evaluation Period") on the exploration and development of the Colombian emerald properties and the marketing and sales of cut and polished gemstones.
Upon completion of the initial expenditure, Indicator will have the right to purchase 60% of Rio Verde by investing $5,000,000 into Rio Verde and issuing it a further 2.4 million common shares of IME stock. In addition, Indicator will have a onetime right to extend the Evaluation Period by an additional 18 months under certain conditions that include an additional $1,000,000 evaluation expenditure.
The Partner:
Rio Verde has spent over a decade establishing extensive relationships within this gem industry and has access to emerald projects currently in production. Their integrity and reputation among Colombian emerald miners is unparalleled and Rio Verde's in-depth knowledge of the industry makes this a unique opportunity for Indicator to gain entry into this lucrative category.
Rio Verde's experience combined with Indicator's technical and operational expertise creates an excellent potential for significant revenue from existing operations as well as future discoveries.
The Plan:
2010 will be a year of growth, exploration and development of the partnership, with Indicator being exposed to the sales and marketing of emeralds. Rio Verde has successfully operated a business that buys Colombian emeralds and sells them globally. The company is in an excellent position to learn about this market and its nuances from this unit of Rio Verde and secure an established cash flow and existing client base.
After the initial due diligence phase Indicator will seek to finance the project. Once financing has been secured, negotiations will begin with mine owners to introduce modern exploration techniques to increase production in exchange for a percentage of production.
Marketing of the gemstones will occur simultaneously to exploration in an effort to secure the demand and move the supply from mine to market creating a revenue stream.
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