Andrew Racz
Director of Research
300 East 54 Street, Suite 26C
New York, NY 10022
Phone: (212) 319-6949
Fax: (212) 753-1944

The Douglas Lake Story In The Age Of Fear

June 25, 2008


The second part of the sentence actually comes from the Saturday, June 21, 2008 edition of the F.T. weekend financial news. To quote the facts and put our prospects in perspective, the newspaper correctly states that the developing countries, with limited amounts of foreign exchange income and reserves, are cracking under the burden. World leaders are meeting to highlight national stability issues as in certain countries like Haiti, the government may be toppled and several Asian countries are risking popular anger by cutting fuel subsidies and lack of fuel and food.

This is a world crisis. For the first time since 1973, there is a price run on both oil and food. In 1974, the price of sugar ran to 60¢, up from 12¢, and actually created mystical stories, both on Wall Street and in Hollywood. The world leaders are meeting in Jeddah, Saudi Arabia, to warn developing countries about the cost of oil and food. Various countries have resorted to borrowing, like Morocco, for $800 million from Saudi Arabia, to pay for oil and cereal imports. The Austrian Economic Minister, Martin Bartenstein, spoke up in Saudi Arabia about the risk of social tension caused by high oil prices, as well as food prices.

An interesting illustration may point to the coming food panic crisis and even revolution, unless international activity begins an improving trend. The following table is of interest.

Family income spent on food:

United States

10 percent


20 percent


30 percent


50 percent


65 percent

Douglas Lake, at least by intention, is in the middle of some contribution to the world crisis. On Friday, June 20, 2008, the chairman of Douglas Lake met the agricultural minister in Tanzania. Douglas Lake has sizeable holdings of gold exploration properties and recently obtained a $6 million investment in the company by agency of the Chinese government. The meeting in China, which actually took place twice in the last three weeks, indicated that additional sums of money could be forthcoming, not only for gold exploration and gold delivery but also for exploration and exploitation of Tanzania food. Agriculture occupies 80 percent of Tanzania's land and 80 percent of Tanzania's production. Since by the end of 2008, Douglas Lake is likely to produce between 50,000 to 100,000 ounces of gold and be a positive cash flow generator, it may be in a good position to attract Far Eastern, particularly Chinese, monetary reserves to exploit Tanzania's land.

Since the collapse of the Soviet Union and the development of the world on capitalistic ground, there has been some spectacular achievement.

  1. Russia has developed a trillion-dollar economy in oil and today it is de facto the largest oil producer in the world.

  2. Russia developed these gas reserves to such a level that it's largest company, Gasprom, which happens to be by now the third largest company in the world, is supplying at least one-third of Europe with natural gas.

  3. The liberated China, the China which liberated itself from the Great Leap Forward and the Cultural Revolution, today has monetary reserves of at least $2.5 trillion and, in fact, it is the world's largest international banker. The Chinese are now de facto creating the One China policy which basically says that Hong Kong, Taiwan, China are working together on a daily basis and that cooperation is creating an industrial but particularly monetary colossus. Only some hundred years ago JP Morgan created in the United States.

  4. The food crisis brought forward the picture and the concept of Africa. Africa to some extent is the richest continent in the world. It is represented in almost every mineral, it has 600 million inhabitants, and an uneducated population which has shown at every level that people are willing to get educated and today are willing to work. Many foreign investments have been made in Africa: Copper in the Belgian Congo, aluminum in Katanga, gold mining in Mali and the Ivory Coast and the old Abyssinia. Actually, Africa created the second, Ghana, and the third, Tanzania, largest gold producer in the Continent. It is easy to see that with the development of the mines and the high commodity prices, the cash flow enables many African governments to develop the infrastructure. 

I would like to state with my personal experience and many visits to Africa, that very few African governments want to join terrorists or old-fashioned communist theories.

When I was a student at Cambridge,
the slogan was "Africa for the Africans".

In the year 2008, the slogan is "The World Needs Africa".

I would like to state that in 2008, some forty years later, if there was a free election all over Africa, they would say that they want to get rid of HIV, they want to get educated, and they are willing to work. The rich land of Africa and 600 million people should be taken seriously.

Tanzania is a poor country. However, in the last few months a revolution has taken place in the financial markets and point out that Africa can take, and Tanzania in particular can take, a great role in increasing the world's food production which is heading towards a major disaster of historical proportion.

In my capacity as International Monetary Advisor to Douglas Lake, I had many conversations with members of the Tanzanian embassy, the Minister of Economic and Trade Affairs, and the Deputy Chief, Minister Plenipotentiary Consular, as well.

Tanzania wants to develop its agriculture. As usual, the people who arrive first are those who want to exploit what they call the colonialist version of the past and the future. A large amount of land had been purchased by speculators getting leases for ten years and wanting to produce biofuels. This is wrong.

A number of speculators also arrived from companies in the West, claiming to have large territories of minerals or agriculture under contract, raise money, issue themselves millions of shares and invest a small amount in Tanzania. The profit is the insider shares they sell and the money they raise in the West is solely paid out as expenditures.

I have recommended to my company's board and I trust this will be presented formally to the Tanzanian government, that we want to develop more minerals and more agriculture. Dar es Salaam actually has a stock market. It is a stock market of only six stocks and eight debentures. However, it can be expanded. What I recommended is to form a company registered both in Tanzania and in the United States, raise a certain amount of money and identify land holdings and acquire land, and identify agricultural production. This company should be owned let's say 60 percent by Douglas Lake, 20 percent by an agency of the Tanzanian government, and 20 percent reserved for private placements.

Having established our objectives and having made our projections and our forecast, we would then raise additional capital either for the new company, which is 60 percent owned, and acquire more land and actually put some agricultural production into action.

The simple step which would represent a minute percentage of the agricultural production capability of Tanzania, can be a revolutionary cooperation because it could be delivering agricultural products to the markets, it would participate in the obvious increase in price of the land, and at the same time would benefit not only by spending money but by stock holdings of the Tanzanian people whose gross national product is minuscule, $1,000 a year, and whose 40 million inhabitants would be the happy beneficiaries of this activity.

It doesn't take too much imagination but a little research to indicate that the possibilities I describe can be multiplied by not only hundreds but thousands, and therefore out initial company could become a meaningful entity which is not only producing agricultural goods desperately needed in the world, but at the same time is delivering monies, stocks and hope for the 40 million inhabitants of Tanzania.

This and only this kind of relationship can bring a permanent relationship between entrepreneurial companies, foreign investors, the Tanzania government and the Tanzanian people, and at the same time deliver some food products to a starving world.

I purposefully do not wish to throw around numbers because the possibilities are very large. However, I make a prediction that if this company, which I call Tanzanian Agriculture, is successful, both the parent, Douglas Lake, and Tanzanian Agriculture will attract large amounts of foreign money.

The 21st century is for change. The 21st century basically benefits from American foreign policy that overthrew the Soviet Union, overthrew communism. It began in 1972 when President Nixon, in February of that year, shook hands with Prime Minister Chou En Lai. We have to continue this trend. If we look back to development of China between 1972 and 2008, and we attach numbers to the land values on each company, if we attach numbers to the personal income of the average person in China in the two years, we can then calculate the possibility of African land, agriculture, Western ingenuity for the remaining part of the century.


Information contained herein is based on data obtained from recognized statistical services, issuers reports or communications or other sources believed to be reliable. However, such information has not been verified by us and we do not make any representation to its accuracy or completeness. Any statement non-factual in nature constitutes only current opinions which are subject to change. BERAL INC. or their officers, directors, analysts or employees may have positions in the securities or commodities referred to herein, and may as principal or agent buy and sell such securities or commodities. An employee, analyst, officer or a director of BERAL INC. may serve as a director for companies mentioned in this report. Neither the information nor any comment expressed shall constitute an offer to sell or a solicitation of an offer to buy any securities or commodities mentioned herein. There may be instances when fundamental, technical and competitive opinions may not be in concert. This firm may from time to time perform investment banking or other services for or which investment banking or other businesses from any company mentioned in this report.



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Andrew Racz. 300 East 54 Street, Suite 26C, New York, NY 10022
Phone: (212) 319-6949 Fax: (212) 753-1944. E-mail:

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