The Al Masane project consists of a mining lease area of approximately 44 square kilometers in southwestern Saudi Arabia approximately 640 km southeast of Jeddah. The Saudi government granted ARSD a thirty (30) year mining lease which commenced on May 22, 1993 with the option to renew or extend the term of the lease for additional periods not to exceed twenty (20) years. Presently, the site can be accessed by heavy trucks via the 20 kilometer improved asphalt road from Sifah. The elevation of the Al Masane project is approximately 1,620 meters above sea level.
The Al Masane project contains extensive ancient mineral workings and smelters which were discovered by Hatem El-Khalidi, President and CEO of the Company while flying over the area and later mapped by him on camel back during 1967. From ancient inscriptions in the area, it is believed that mining activities went on sporadically from 1000 BC to 700 AD. The ancients are believed to have extracted mainly gold, silver and copper. Various regional investigations of the Al Masane area have been carried out by the United States Geological Survey ("USGS") mission.
The Company and eight Saudi investors formed a Saudi joint stock company under the name Al Masane Al Kobra Mining Company (AMAK) and received a commercial license from the Ministry of Commerce in January 2008. The Company's mining lease has been transferred to AMAK and AMAK is building the mining and treatment facilities, and will operate the mine. The Saudi investors have contributed capital of USD$60 million cash and have loaned AMAK another USD $12 million while financing is being pursued with the Saudi Industrial Development Fund (the SIDF). The SIDF issued a letter of commitment for USD$88 million in June of 2010 with certain conditions to be met prior to closing. The expected closing date is January 5, 2011. AMAK has all powers of administration over the Al Masane mining project. The Company has four directors representing its interests on an eight person board of directors with the Chairman of AMAK (holding the tie breaking vote) chosen from the directors representing the Saudi investors. The original documents are in Arabic, and English translations have been provided to the parties.