Is Brazil a good choice for mining?
As a mining country, Brazil is the biggest iron ore producer in the world, as well as substantial deposits of zinc, bauxite, copper, tin, nickel, gold, diamond, manganese, magnesium, lead, niobium, kaolin, talc, coal, titanium, quartz, phosphate, vermiculite, zirconite, tantalite, graphite, clays, limestone, fluorite, asbestos, chromate, oil and natural gas, ornamental stones, gems and others. There are over 1802 active mines in Brazil - the majority are open pit mines and with ISO 9000 certificates. Mining generated roughly 2.9% of the country's GDP or US$12.9 billion by the end of the year 2002. The Brazilian government estimates that US$35 billion in mining investment will be required before 2010, of which US$4 billion will be directed to exploration and research with the remaining US$31 billion earmarked for increased mineral production.
Approximately 40 Canadian mining exploration/equipment/service companies are active in Brazil due to the increased dynamics of the local market since important changes to the Brazil 's mining legislation that took place in 1995. The overall performance of its mineral sector has showed a small but continuous growth in exploration and production, attracting new private investments done by foreign companies mainly. Notwithstanding its low investments in mineral exploration, Brazil stands out in the world's mineral scenario, because, without any great effort or investment, it is still the home of large reserves and has a considerable output of minerals. The situation indicates that reversing the flow of investments could change such a scenario. For the private investor, especially the foreigner, the traditional areas are known for their stiff competition, in which it is normally only possible to invest through negotiation of acquired mining rights - purchased and/or arising out of association. However, extensive areas are still practically virgin, without suitable surveys from the exploratory point of view. Therefore, the Minerals of Brazil, being of continental dimensions and with basic facilities able to support new projects, have provided a new frontier, perhaps the world's last big one, in which financial resources, when actually put up, are a means of revealing vast and promising mineral deposits.

What makes Brazil competitive with the rest of the diamond-bearing countries?
South Americans are easily entertained, are used to the heat, have considerably reduced labour costs and the environment and amenities provided will be above the normal living standards for the workers - creating a loyalty (from fear of losing their jobs). York-Rio is operating in a country that favours mining, on virtually flat land with minimal overburden and no significant environmental issues. There is an excellent infrastructure of paved roads and easy access to the site. Power and water are close at hand. This type of infrastructure and topography and the ability to mine year-round result in a highly favourable and relatively low-cost exploration program.

Why mine diamonds?
Diamonds have such a rich history and global attraction. The mere mention of the word "diamonds" fills the mind with a multitude of images. Athletes wear them, celebrities bear them and lovers share them. Everyone desires them and yet only 5% of the world's population actually owns them. Their value has overwhelmingly increased since their discovery. Statistics prove that the demand in the marketplace for diamonds will continue to exceed its supply until at least the end of this decade. York-Rio is perfectly positioned in a virtually un-tapped territory renowned for gem-quality diamonds that is essentially without competition. There simply is no gem that has the international appeal of a diamond.

Does Brazil favour mining?
"One of the Brazilian government's priorities is to invest in mineral research and exploration", says Minister of Mines and Energy, Dilma Rousseff. President Luiz Inácio Lula da Silva announced the completion of the first Geological Map of Brazil on a 1:1,000,000 scale. The task was accomplished by the Geological Service, part of the Ministry of Mines and Energy. "It is the most significant and important set of digitally available data in geology, geochemistry, and geophysics". President Lula da Silva announced the allocation of US$56.6 million ($160 million reals) for the production of new geological maps until the end of his term in office. The new maps will cover 2.5 million square kilometers of Brazilian territory, a 72% increase in scope compared to what currently exists. According to the President, the goal is to expand the areas mined in Brazilian territory by 30%, adding US$1.9 billion ($6 billion reals) in mineral wealth to the Gross Domestic Product ( GDP ) and generating 500,000 new direct and indirect jobs, as well as improved safety conditions for the companies and the population involved.

Is Brazil politically stable?
President Luiz Inacio Lula da Silva has achieved political stability through a broad social and political coalition of the federal government, state governors, the business community, and trade unions. Over the past decade, investors have been attracted to Brazil by the growing economic stability and a significant reduction in inflation rates. Brazil is poised for economic growth and a rise in foreign investment.

What is the value of the Brazilian money?
The value of any currency obviously fluctuates but the present value of currency of US$1 = R$3.64 (Real) is very favourable to York-Rio.

What are the tax rates in Brazil?
Operational costs are competitive and major international corporations such as Mercedes Benz and General Motors have moved into Brazil . While there are a number of tax tiers that include corporate income tax and social contributions on revenues and net income, Brazil does pass the test often applied that the nation's total tax take should not exceed 50% of the free cash flow of the project. The total tax take is about 38% of total cash flow.

Are there legal formalities and bureaucracies in Brazil?
Brazilian rules and regulations are very stringent and many North American companies fold up and leave because they cannot or are not willing to comply. For example, failure to acquire even one of the seven different environmental permits disqualifies a mining license application. While developing the Rio Paranaiba Project, York-Rio will face a maze of regulatory requirements. The expenditure of US$3 million will be necessary to get to a state of readiness for a Public Offering. This will lead to continued corporate affairs, licensing and permits. Many other junior mining companies are still trying to find their way through the regulatory maze. Our knowledge of the processes gives us a competitive advantage.

How do cultural differences factor in with an investment in Brazil?
Brazilian culture has been shaped not only by the Portuguese, who gave the country its most common religion and language, but also by the country's native Indians, the considerable African population, and other settlers from Europe, the Middle East and Asia. The result involves fascinating music, earthy writers, and tasty food. Cultural differences in Brazil dictate a different approach for North Americans who often do not understand the ways and style of Latin Americans. The view that North Americans are here to exploit us - as indeed many have - is fairly common in Minas Gerais. We established a Brazilian presence, contributed to local schools, hospitals and political campaigns. The key is to show respect for the locals, treat them fairly, and engage them in the process of developing their local economy. He established a Brazilian presence, learned the language and contributed to local schools, hospitals and political campaigns since in the local economy, the know-who is often more important than the know-how. He realized that the key was to show respect for the locals, treat them fairly, and engage them in the process of developing their local economy. York Rio Resources Inc.’s keen awareness of cultural issues has been internalized by its management team as a competitive advantage.

Why the Rio Paranaiba?
The Rio Paranaiba acts as a major drainage channel in the region eventually leading to the Parana River (one of the world's longest rivers with an extension of over 4,000 kms) and as a result contains significant alluvial deposits (the primary source of alluvial diamonds). Alluvial diamonds tend to be of higher quality than those of deep-ground mines as upwards of 80% of alluvial diamonds are of gemstone quality vs. 80% of deep-ground mining production yielding only industrial-grade diamonds (those used in industry and abrasives). The swell of the river is minimal even during the rainy season. The claim site is located on easily accessible farmlands in a rural farming environment with close proximity to the town of Coromandel (just northeast of Uberlândia). Uberlândia is a major nearby city with an airport. It is the home to some of the biggest private companies in Brazil . This is also the location of the major mining equipment companies (where repairs and service are easily accessible).

What makes you so sure that there are diamonds on the property?
Based on the historical results, recent documented findings of the area, "kimberlite indicators" and "indicator minerals" found on the surface (highly unusual) - lead to an extremely high probability of diamond retrieval. We feel it is not a question of if there are diamonds, but rather how quickly that we can retrieve them.

What are the names of some "indicator minerals"?
Certain minerals are present in the rocks from the upper mantle that occur with diamonds in kimberlite and lamproite pipes. Some of these minerals, being resistant to weathering and denser than quartz sand, concentrate in channel bottoms. Because they occur in far greater abundance than diamond, exploration geologists look for these "indicators" among the gravel of regions they suspect may host diamond-bearing pipes and "diamondiferous gravel & veins". Indicator minerals for a diamond include, in order of decreasing significance: garnet, chromite, ilmenite, clinopyroxene, olivine, and zircon. But the order of persistence in streams is zircon, ilmenite, chromite, garnet, chromian diopside, and olivine. The diamond itself is obviously a most important indicator.

Are there any kimberlite pipes on the property?
Samples of rock formations with kimberlite indicators were found during a preliminary assessment of the claim area by qualified geologists. Keep in mind though that this is not the focus of York-Rio. Should any kimberlite pipes be found and determined as mineable, this would be considered a bonus. It has not been factored into any calculations. There are presently about 50 kimberlite pipes in the world that are deemed as economically feasible to mine. Having said that, if deemed economical, it is a clear roadmap to success.

What about security of staff and diamonds?
While the Rio Paranaiba Project is far removed from the major urban areas of Brazil , York-Rio has taken prudent protection measures. We have a close relationship with local police and we have the ability to attain a permit to allow full-time armed guards at the security fence that will enclose the washing plant where diamonds are extracted from the ore. Only site managers or an investor representative will have access to the closed and secure sorting room at the end of the washing plant. During transportation of the product to market the normal practice of an armed escort and the use of security companies like Brinks will be employed.

What is the environmental impact to the area?
Alluvial diamond mining, as proposed by York-Rio, is a green approach to mining. The environment is not adversely affected by the use of chemicals, and our diesel oil tank will be properly isolated with a recovery sump in the unlikely event of a leak. The site will be transformed to a green field after mining activities have ceased. It is important to York-Rio to respectfully comply with all the rules and regulations of the Brazilian government. Furthermore, York-Rio is morally obligated to the preservation of the environment of its host communities.

What is the corporate history?
York-Rio is very confident in the team that has been brought together to reach its goals. The quality of such a project can easily be assessed by the quality of people attracted to it. A near-flawless strategy simply includes the addition of capable and experienced management to strengthen the areas of concern as the forward momentum of the corporation leads us through the necessary phases of growth.

What are the projections for the claim site?
1. Average price for the diamond production: calculations made at a very low estimate of US$400 per carat.
2. Average diamond content in the ore gravel: based on 0.15 carats per cubic meter for the region.
Based on the size of project . guesstimate profit of US$350 - $800 million dollars minimum.
Sustainability . guesstimate of 10 to 20 yrs. minimum @ 1,000 m³/day x 2 washing plants.
These figures will be firmed up with the results of the Topography Report and then even more so when the Technical Report is complete. Keep in mind that the pricing per share will increase along the way. Once the "grade results are firm", there will be no further need to take in private money. A Public Offering will occur at that time as risk will not be a factor.

What is the rough cost of excavating?
The cost of excavation is estimated to be approximately $4 to $6 per cubic meter. This includes everything – wages, expenses, diesel, management, legals, taxes etc...

Why not purchase mining equipment from Canada?
Due to the difference in parts, it is not suitable to attain product from Canada (or ay other market). An equipment breakdown could set the company back several weeks of down-time waiting for parts to arrive. Conversely, it is a show of faith to the South American companies to do business with them. As well, many offer training and servicing as part of their contractual agreement with mining companies.

Why lease the equipment?
Some of our investors had suggested purchasing equipment in Canada and shipping the
equipment to Brazil without regard to the various expensive pitfalls.
Purchases entering Brazil are tagged with an extremely high tariff to avoid an imbalance
in trade.
Various multinational companies have established their operations in Brazil.
Our research has shown that the lease of equipment in Brazil vs. Canada is an economically
sound policy. There is a difference in parts, it is not suitable to attain product from
Canada (or any other market). An equipment breakdown could set the company back
several weeks of down-time waiting for parts to arrive. Conversely, it is a show of faith
to the South American companies to do business with them. As well, many offer
training and servicing as part of their contractual agreement with mining companies.
Leasing in Brazil is the best approach. The equipment, together with the service plan
preclude any major down time, like waiting for repairs to be made or parts to be
shipped. We will have access to new equipment as it becomes available and training for
the operators, which is a great benefit over both the short and long term.

Does York-Rio have the financial strength to survive until a healthy cash flow is maintained?
Junior mining companies are terribly under-capitalized . the process has not been thought through . and the question arises, "Are you raising enough money?" The concern then would be if something of value was found . can you afford to mine it? York-Rio's ultimate goal is a total of US$10 million ($5 million for equipment & $5 million for capitalization). This is sufficient to do one of two options: 1. Hand off the project to a major . or . 2. Develop the project ourselves. US$500,000 of the initial US$3 million investment sought by York-Rio will be used to maintain a healthy cash reserve to successfully bring the Rio Paranaiba Project into the public arena. This will provide a sufficient hedge against unforeseen contingencies.