High moor peat extraction

Project summary

The object of the investment project is a part of a 63.19 ha land plot (North-East). The site has a special permit for peat extraction, valid until 2030.

The total balance reserves in this part of the site are 213 thousand tons. Industrial reserves are about 150 thousand tons of high-moor peat. The wholesale market price is $ 50 / t.
To calculate the profitability of the project, the selling price of $ 45/1 ton is taken.

The market value of the high peat stock is $ 6,750,000 (Six million seven hundred fifty thousand US dollars)

The technically possible production period for the specified amount of peat is 3 years (50,000 tons / year)

The total duration of the project including the preparatory period is 3.5 years.

Deposit information:
Total balance reserves of high-moor peat 695 thousand tons. Estimated industrial reserves of high-moor peat 480 thousand tons. Total area 258.75 ha
As part of the mining project, the site is divided into parts: 54.65 (South)
63.19 (North-East) 140.83 (North)

Perspective robots in all parts of the field.

Forecast (preliminary) financial results of the project

Gross income of the project from product sales $ 6,750,000 Total project costs $ 3,450,000

Project income from product sales $ 3,300,000
With a total of $ 3,300,000, the investor's share is 49.99% = $ 1,650,000
The required investment amount for the successful implementation of the project: $ 1,350,000

Payback period 2 years (from 2020 to 2022)

Profitability of the project for the investor: from the invested $ 1.35 million The US investor makes a profit of $ 1.65 million. USA, which is equal to 122% for 3.5 years, an average of 35% per annum.

66% of the investment, namely $ 900,000, the investor protects with property (equipment and mechanisms for mining and a production workshop for packaging finished products), which is purchased by a legal entity.

Expenditure part of the project:

Cost item

Production cost $ 10/1 ton

Payment for peat to the owner of a special mining permit 2 $ / 1 ton
Equipment and mechanisms:
for mining (new):

• - Milling drum 1 unit

• - Tedder for milled peat 1 unit.

• - Swath machine for milled peat 1 unit.

• - Machine for harvesting milled peat 1 unit.

• - Peat loader 1 unit

• - Tractor - tractor 2 units.

  for service (used):

• - Small van 1 unit.

• - Passenger car with cross-country ability 1 unit.

  Weights are automobile
  Inventory and tools
  Additional financing for the development and approval of regulatory and technical documentation, compensation for losses of a forestry enterprise
  Preparatory technical work (drainage system, site clearing, removal of the upper soil ball) Equipment for packing (necessary for exporting products), construction of a workshop and laying of an electric line. energy * Other costs (about 10% of the total costs)

This project is designed for the extraction of high-moor peat on a part of the site (63.19 ha). The prospect for the development of this project is the possibility of mining and developing the entire field with an area of 258.75 hectares. The commercial reserves of the site are about 480 thousand tons of high-moor peat, the market value of which is about $ 24,000,000

(Twenty four million US dollars).