Acquisition of Land and Water
Following a two-year period of feasibility and analysis as to the suitability of the project land for a sand and gravel mining project, in August, 2005, Southwestern Investment Group, Inc.’s affiliated company, SW Villaneaux, LLC, acquired approximately 300 acres of farmland. At about the same time, TKO, LLC (an entity that is wholly separate from any of Southwestern Investment Group, Inc. affiliated companies) acquired approximately 80 acres for farmland, adjacent to Southwestern’s land purchase. These 385 acres are located just south of the City of Fort Lupton, Colorado (approximately 25 miles northeast of Denver).

Each of the two companies also purchased water rights from the respective selling parties and have each, subsequently sold those water rights to a local municipal water company.

Sand and Gravel Mining
The two companies had created SW TKO Joint Venture, LLC, as a joint venture for the development of the mining and potential water storage reservoirs. Having completed all of the engineering work, the joint venture quickly obtained a Use by Special Review permit for mining from the local municipality. A permit from the Colorado Division of Minerals and Geology was also obtained. The project is known as “Lupton Lakes.”

SW TKO Joint Venture, LLC also entered into a gravel mining lease with Lafarge West, Inc. for the mineral extraction process, and processing commenced in June, 2006.

The sand and gravel deposit is up to 50 feet deep. Extraction is planned to take 13 years to be completed, with the mining being done in sections of approximately 25 acres at a time.

Water Storage
The post-mining land use will be a two compacted clay lined water storage reservoirs for a total of approximately 11,500 acre feet of water storage.

SW TKO Joint Venture, LLC is currently under contract for the sale of the water storage.