Investment opportunity

  • High-yielding investment in industrial sector, development of large deposit of dolomite in Vidzeme, Latvia.
  • Secured debt, 17.5% planned annual return.
  • Investment principal buyback is available at 5% penalty rate.

Project description

The Company Dreimanis Ltd. was founded in 2008 in Latvia. Company’s Head office is located in Latvian city Lici. Dreimanis Ltd. is known Latvia as a reliable supplier of high-quality materials, providing not only stable deliveries of their products, but remarkably high level of service as well. Over the years of working in the market, the company has gained tremendous experience in woodworking and rock mining development.

 

Part of the free funds is invariably spent on the modernization of production - the purchase of new equipment, improvement of working conditions, increasing the level of environmental friendliness and safety. The company management considers it as their duty to actively promote the introduction of modern technologies in the production and the organization of continuous staff development.

The result of it is a steadily increasing output that meets strict European standards for reliability and environmental friendliness. Timely fulfillment of contractual obligations is also included in the list of main business priorities.

Thanks to this strategy, Dreimanis Ltd. has managed to acquire an excellent reputation in the Latvian construction market, which is one of the most important factors for the development of the company. Today, regular customers and partners of the enterprise are the largest companies in road construction and construction complexes.

Mining and processing of dolomite - a new area of activity of Dreimanis Ltd

In the last few years, the direction of mining and processing of dolomite has been developing particularly actively. It was chosen as a priority, since there is every reason to believe that this would be the most attractive prospect to work with.

In the light of the growing trends in the world market for the transition to the use of technologies and materials that are not harmful to the environment, the popularity of dolomite is growing rapidly.

For reference

Dolomite is a beautiful mountain mineral, rich in natural shades, durable, frost-resistant and refractory, easy to process, widely used in many industries, primarily in construction.

Dolomites are included in the category of sedimentary carbonate rocks, the reserves of which on the Earth are practically inexhaustible, and they make up about a third of the total carbonates of the planet.

But with a huge reserve of carbonates on Earth, most of the deposits are at the bottom of the oceans. Mainly only superficial dolomite deposits are available.

The demand for dolomite and materials based on it in the Latvian construction market is extremely high. Demand is significantly higher than supply, and there is no reason to expect changes in this trend in the coming years.

One of the dolomite deposits is located in the Latvian region of Vidzeme, where this mineral lies close to the surface and has a high density, which makes its extraction highly economically practical.

The high density and strength of dolomite mined in Vidzeme is confirmed by independent geological studies and the fact that the products manufactured by Dreimanis Ltd. at the Piekalni field meet the quality standards SII, NI, NII according to A. S. 2012 standards. The crushed stone produced by the company has been successfully used for the construction of both motorways and railways, as well as for the production of reinforced concrete structures.

Development prospects of Dreimanis Ltd

The rapid growth of Dreimanis Ltd. led to the decision to attract additional investments for the purchase of a large batch of equipment, with the help of which it is planned to process the already mined and owned dolomite pit. 800,000 m3 of ore are now ready for shipment to processing; the market value after processing this volume is 8,000,000 €. The acquisition of the necessary equipment will allow to complete this task in the shortest possible time and provide the fastest payback.

When calculating the volume of necessary investments, the fact that the largest construction companies prefer to cooperate with suppliers who can supply goods with a 90-day delay in payment was also considered, which implies that Dreimanis Ltd. will require additional working capital for the smooth operation.

In a favorable combination of circumstances, investment funds combined with the company's own financial assets can be used to conduct research and development that will bring Dreimanis Ltd. to a new level of development, which will further increase the potential of the enterprise.

In order to start the planned project Dreimanis Ltd. Is planning to attract an investment of EUR 2,000,000 in several tranches. The total amount may be increased afterwards based on the actual demand. The project is fully secured by first-hand mortgage on the land plot and the whole volume of the mineral deposit in it.

Market

Adopted from Fact.MR

The pharmaceuticals industry is the key driver for the market growth of dolomites as it contains magnesium salts which are used to prepare medicines. The dolomite also serves as a supplement for people with the lack of calcium and magnesium. The growth in the construction industry and infrastructure across the globe has led to the expansion of the dolomite market. Dolomite has a wide application in industries. The mineral powder of dolomite is used as a filler in various sectors, which leads to the growth of dolomite market. With the advancement of mining technology that is leading to different types of extraction of dolomite crystal, the demand for dolomite in the market is growing. The developing trends of interior decoration are leading to the market growth of dolomites as it is used in the manufacturing of glass and ceramics. Another market for dolomites is in the agricultural sector, as it is used by farmers for reducing soil acidity. The Dolomites are used as a soil conditioner in horticulture, thereby increasing the demands for dolomites in the market aiding to the growth avenues from the dolomite market.

 

The raw dolomites are replaced by igneous rock containing the minerals of olivine in industries hampering the market growth of dolomites. Dolomite has some side effect on its direct consumption through the mouth for longer periods. It may cause various health disorder such as illness, irritation, diarrhea and vomiting. Such side effects of dolomite affect the growth of its market.

Asia Pacific dolomite market is expected to witness significant growth owing to the increasing road construction activities in the region. The growth in agricultural exports aids in boosting the growth of the dolomite market in the APEJ region in the countries including China, India and others. The North America and Europe regions is the leading consumer market with the technological advancement in dolomites mining industries. The MEA and Latin America regions are estimated to grow in the upcoming years with the development of industries in float glass production.

Sample repayment schedule

Envestio participant’s investment - EUR 1 000.00
Payments:

  • 11.10.2019 - EUR 14.38
  • 11.11.2019 - EUR 14.86
  • 11.12.2019 - EUR 14.38
  • 11.01.2020 - EUR 14.86
  • 11.02.2020 - EUR 14.86
  • 11.03.2020 - EUR 13.9
  • 11.04.2020 - EUR 14.86
  • 11.05.2020 - EUR 14.38
  • 11.06.2020 - EUR 14.86
  • 11.07.2020 - EUR 14.38
  • 11.08.2020 - EUR 14.86
  • 11.09.2020 - EUR 1014.86

Total expected return: EUR 1 175.44

Invest in this project

 

Loan information

Loan IDEN018117
Project start date11.09.2019
Borrower“Dreimanis” SIA, Reg. Nr. 41503046418, Latvia
Funding Target€ 500 000
Loan PurposeFinancing the development of large deposit of dolomite in Vidzeme, Latvia
Loan Period12 months
Interest Rate17.5% per annum
Repayment of Loan PrincipalIn full at the end of the Loan Period
Investment principal buyback availableYes, 5% penalty rate
Payment of Interest PaymentsMonthly, on a specific date
Financing typeSecured debt
Guarantee from the Project’s ownerFirst-hand mortgage on land plot and mineral deposit in favour of Envestio Collateral Agent

 

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