News Alert....
BW0057 MAY 26,1999 5:01 PACIFIC 08:01 EASTERN
( BW)(FL-VENCAP-HOLDINGS)(VCAH) VenCap Holdings Inc. - Timber and Lumber Joint Ventures in Venezuela - and Guyana to Meet $30 Million Order
Business Editors
ORLANDO, Fla.--(BUSINESS WIRE)--May 26, 1999--VenCap Holdings Inc. (OTC BB:VCAH) announces that after a considerable period of timber inventory assessment and market potential analysis, the company has concluded, verbally and in principal, three joint ventures with South American producers who hold significant acreages of forestland in Venezuela and the Cooperative Republic of Guyana. In addition to its current proposed holdings, VenCap has identified additional JV's as sources of supply necessary to immediately export the volume of timber and cut logs which will be required to meet its current sales orders.
In order to match supply with its current immediate demand, the company determined it was necessary to gain access to additional available timber acreage to meet the order requirements of international buyers for significant volumes of the same types of timber (roundwood) and sawn lumber in lengths appropriate to the needs of end users.
Strong international interest in the types of wood available in the areas of interest was paramount to VenCap extending its domain to meet the needs of its timber buyers. The Company recently received a Letter of Intent from a substantial European timber buyer to supply them with a minimum of 15,000 m/3 per month, with delivery to begin as soon as possible. It is the Company's intention to immediately enter into a formal agreement with this buyer, which could result in more than $30 million in gross income in the first year. The terms of the contract could include a renewal clause, which could extend the relationship for many additional years (Note: 1 m/3 = 424 board feet).
VenCap has entered into marketing/export joint ventures with the three aforementioned enterprises, whose holdings comprise some 1.375 million acres of forestland, which could provide over 25 million cubic meters (m/3) of various species of wood (85% hardwood; 15% softwood). These tree types are already accepted and utilized worldwide in timber and milled lumber production. Although the Company has not ratified a formal agreement with two of the three producers, additional contracts for monthly delivery of significant volumes of timber and milled lumber are in negotiation at the present time.
The new direction being forged should strategically position VenCap to (1) provide a range of critical construction and manufacturing products, (2) gain a significant market position/share by virtue of geographic location, pricing and economies of production and (3) provide substantial return on investment.
Political, social and economic changes occurring in Venezuela and Guyana are creating unprecedented interest and opportunities. For its part, VenCap plans to create model production programs which could increase in-country technology and productivity, protect natural resources through proper management, and educate and reward the local population through enhanced wages and benefits. All of this will result in a more rewarding economic development environment.
VenCap Holdings also announces Sabana Mining Company, C.A. Letter of Interest
Additionally, the company would like to announce that it has received a Letter of Interest from Sabana Mining Company, C.A. ("Sabana") of Venezuela, to join Sabana in a diamond and gold concession in the southeastern part of the country. In exchange for financing and operating the concession, VenCap would receive a 70% interest in the concession. Sabana, a former producer, has received a legal opinion from its Venezuelan counsel that it may enter into a future joint venture relationship with the company.
As a result, VenCap has initiated discussions with RMS Ross regarding the latter's acquisition of the Company's innovative gold recovery system for the joint venture. The Company has requested additional documentation from Sabana and RMS Ross in order to evaluate the potential economic viability of the joint venture. It will announce its findings and determination in the near future.
Safe Harbor Act Disclaimer: This release may contain forward-looking statements that involve risks and uncertainties, including, without limitation, continued acceptance of the company's products and services, increased levels of competition, new products and technological changes, the company's dependence upon financing, third-party suppliers and intellectual property rights, and other risks detailed from time to time in the company's federal filings, annual report, offering memorandum, or prospectus.
--30--KO/na*
CONTACT: A.R. Hardy and Assoc.
Angela Hardy, 407/783-0176
KEYWORD: FLORIDA INTERNATIONAL LATIN AMERICA
INDUSTRY KEYWORD: FOREST PRODUCTS |
