Mineral Water

1. Mineral Water Venture at Serra Gaúcha Region Antonio Prado - RS

2. Venture Location in Brazil Rio Grande do Sul

3. Serra Gaúcha Venture Location in Serra Gaúcha Region Venture Location

4. Main Access Roads • Approximate distance between • Antonio Prado and : • Caxias do Sul 58 Km. • Porto Alegre 178 Km. • Rio Grande 460 Km. • Uruguaiana 720 Km. • Florianópolis 420 Km. • Curitiba 520 Km. • São Paulo 924 Km.

5. Aerial View of Antonio Prado City Population: 12 thousand inhabitants

6. Aerial View of the Region Antas River

7. Aerial View of the Venture Region Native Forest Preserved Well Location Site the venture shall be performed

8. Aerial View of the Venture Region Native Forest Preserved Well Location Main Well Test Well Site the venture shall be performed

9. Main Well Test Well Three-dimensional illustration of the region’s landscape

10. Impounding House Main Well with production capacity of 110.000 liters/hour

11. Well Heading Well manufactured in stainless steel, meeting export standards

12. Well’s Construction Profile • Characteristics of Main Impounding Well: • Depth: 107 m • Static level (water): 16,74 m • Dynamic level: 45,00 m • Construction Aspects: • Sanitary seal in concrete up to 44 m; • Pre-filter inner covering from 44 m to 107 m. • 8” stainless steel inner covering (filter)

13. Production Capacity Outflow x Displacement Estimated production capacity of 110m3/hour .

14. Well Distribution in Brazil with Outflow Superior to 100 m³/h In Brazil there are 732 water points registered for exploitation of Mineral Water, out of which 319 are wells and 413 are springs. Of this total, just 12 wells/springs have an outflow superior to 100.000 liters/hour, and from these 12 ones just 2 are located in the South Region of Brazil, where only one well/spring located in Paraná State is drilled in Basalt Rocks. As we have a well with an outflow of 110.000 l/h, which is under final approval by DNPM, we will become, along with the existent well in Paraná State, the biggest outflow well in Brazil drilled in Basalt Rocks.

15. Simultaneous pumping simulation of two wells Test Well Main Well Test Well Main Well According to simulation above, the depression cone presented by simultaneous pumping of the two wells is 1.271,8 meters. Considering a maximum pumping regime of 12 hours daily, we will have a total water volume in the two wells of 1.920 m3/day or 1.920.000 liters/day. 

16. Aquiferous Features • In the place where the industrial complex shall be implemented, west region of Antonio Prado County, the subterraneous waters belong to the fractured aquiferous of Serra Geral (volcanic rocks), which has its permeability due to fissure or fracture of its lithology. • In this region, the volcanic rocks have a differentiated geological composition with predominance of acid terms composed of minerals rich in calcium, sodium, magnesium, potassium, silicon and bicarbonate (HCO3). • These properties confer to the water a differentiated hydrochemical characteristic from other mineral waters in Brazil.

17. Aquiferous Features • The maintenance of recharging zones of the subterraneous aquiferous are guaranteed due to an extensive zone of native forest in increasing recovering, which covers an extensive area around the impounding wells. This situation also guarantees the integrity of the hydric source quality to be explored. • There are strong indications these days that these hydrochemical features are associated with a very particular situation found in a very restricted area, which represents approximately 4% of the extensive covering of basaltic volcanic flowing occurring in the southern part of Brazil.

18. Water Quality(“IN LOCO” Study) (microbiological parameters) (physical-chemical parameters)

19. Water Quality(LAMIN Final Analysis)

20. Main Components Present

21. Main Components Present

22. Main Components Present Principais Componentes Presentes

23. Main Components Present

24. Main Components Present

25. Comparação com outras Fontes Fontana di prima X Ouro Fino (Premium)

26. Comparação com outras Fontes Fontana di prima X Evian X Perrier

27. Water Standards for Beverage Applications (Beers, Soft Drinks, Juices, Teas and Others) It must be observed that beverages, especially those canned, must have a perfect chemical balance. That way, the water conditions and all other components must be in accordance with minimum specific standards. The water matter becomes increasingly important once it is the means where all other components are dissolved. The minimum quality required standards for some water to be applied as raw-materials in the production of a beverage can be subdivided into physical-chemical and microbiological ones. Water physical-chemical standards for use in beverages: The following table shows the minimum desirable physical-chemical standards for chemical safety and balance in a beverage fabrication. It is important to emphasize that the standards described below are recommended for most beverages, having very little variation in the required conditions from one to another. For instance, beer or soft drinks requirements are very similar.

28. Comparison of the physical-chemical standards required for the use of water in beverages (*) The nitrate concentration must be 5.0 ppm maximum, when the water is used for canning.

29. The Venture The hydromineral spa, through the implementation of its industrial unit in the State of Rio Grande do Sul, will promote the exploration of Mineral Water aiming at reaching the domestic and international markets with its products. The venture will be established in a rural area, in Antonio Prado County, northeastern region of Rio Grande do Sul. The city of Antonio Prado is located at a distance of 178 Km from the capital city Porto Alegre, and 58 Km from Caxias do Sul (second metal-mechanic pole in Brazil). Antonio Prado is a remarkable tourist attraction of Serra Gaúcha, for the biggest and most complete architectural complex of the Italian colonization is found there. It was declared by the Patrimônio Histórico e Artístico Nacional (IPHAN) Institute and it is about to receive from UNESCO the title of World Historical Patrimony. The local landscape is formed by mountains that reach 850 meters high, allowing a unique view of valleys and rivers of the region. This region also keeps many forms of preexistent native vegetation preserved.

30. Evaluation of Results • Regarding the mineral water quality: • It has distinct properties. • It is located in a distinct geological region, which gives the subterranean water characteristic hydrochemical properties. • It is a light and digestive water. • It has ideal mineral salts concentrations (Na, Ca, Mg e F) for health maintenance. • It presents elements with beneficial properties for health (strontium, lithium, zinc, vanadium). • The Evaporation Residue contents are in an ideal range for the body’s hydration and thirst satiation. • Once this water has low salts concentration, is very light and meets the required drinkable standards, it is excellent for the manufacture of beverages in general, as beers, soft drinks and others.

31. Evaluation of Results • Regarding Production Capacity: • We have a productive outflow well of 110.000 liters/hour, which after cultivation permission issued by DNPM, will become the biggest productive well in Brazil drilled in basaltic rocks, along with the only Mineral Water well registered at DNPM, with an outflow superior to 100.000 liters/hour located in the State of Paraná. • It shall have conditions to produce the equivalent of 29.040.000 liters/month reaching an annual production of 348.480.000 liters, which is the equivalent of twice the annual sales of the State of Rio Grande do Sul. • We still have, in approximately 1 km radius, 8 more places demarcated for drilling new wells, which will be able to produce approximately 400.000 liters/hour. • This mentioned volume added to the well already functioning can reach a productive outflow of 1.615.680.000 liters/year (one billion six hundred and fifteen million and six hundred and eighty thousand liters/year). • This represents the equivalent of the whole commercialized production in the North, South and Central West regions, or the annual sales volume of the State of São Paulo, which is 1,6 billion liters/year. All information contained in this page can be accessed at the National Department of Mineral Production (DNPM) page through the site www.dnpm.gov.br

32. Future Perspectives Besides this venture, which shall be installed in the first semester of 2007, the company has been performing systematic studies of other occurrences of similar quality in the northeastern region of Rio Grande do Sul, as well as it has been seeking partnerships with other companies in order to get a certification and origin seal of the hydromineral province represented by this part of Serra Geral aquiferous. Studies already performed indicate that, through the installing of deep wells in the same place, at a depth of approximately 680 to 740 meters, we can have the biggest aquiferous in the world (Guarani Aquiferous), which will be able to provide thermal waters impounding with a temperature estimated in 38 to 43 degrees, allowing the preparation of future projects aiming at the implementation of tourist ventures, as hotels, inns and thematic parks.

33. Studies for Thermal Water Wells Venture Location According to studies, we shall reach the aquiferous at a depth of approximately 680 to 740 meters, with a water temperature estimated in 38 ° to 43 ° degrees.

34. Studies for Thermal Water Wells Schematic illustration showing the arrangement of the main hydrogeological units present under the venture location, featuring the Guarani Aquiferous positioning.

35. Studies for Thermal Water Wells Fractures Position

36. Final Considerations We would like to inform that this venture is still under final process of licensing by the Environmental Department (FEPAM) and the Mining Department (DNPM).