BERAL, INC.  
Andrew G. Racz  
Director of Research  
300 East 54 Street, Suite 26C  
New York, New York 10022  
Telephone: (212) 319-6949  
Fax: (212) 753-1944  

 E-mail: mlikar@aol.com   

June 4, 2008

This East African nation of 40 million is considered one of the poorest in the world. Yet, circumstances are in Tanzania's favor. Gold and agriculture can lift its $4-5B GNP—influx of foreign capital, increased mineral and agricultural process are opening up untold opportunities. First and foremost – they have arable land.

Political leadership is vital!!

Tanzania has no foreign entanglements, its credit in the international banking world is solid.

It is attracting Chinese and Indian capital. Ten million a piece – but hundreds could be coming.

Is Tanzania a silent but solid part of the

                                          African Economic Miracle?

When Tanzania modernized its Mining Act in 1998, it attracted numerous international mining companies including AngloGold Ashanti, Barrick, Newmont and Placer Dome. Now the third largest gold producer in Africa, Tanzania is quickly emerging as one of the premier gold mining countries in the world.

Tanzania has attracted all the major international mining companies including:

AngleGold Ashanti, Barrick, BHP, Newmont and Resolute.

• Foreign capital committed to agriculture
  
  
• Higher exports at higher prices.
  
  
• Stable case flow.
  
  
• Increased investments in infrastructure.
  
  
• Growth in Taxation and Government investment.
  

Once upon a time there were rubber plantations. The people in Pakistan were poor.

Once upon a time there were gold mines in South Africa and the people in the Orange-Free State were poor.

Once upon a time there were rice paddies and the people in Vietnam were poor.

It wasn't that the colonist rulers didn't know how to run a mine or what was selling well on the world market. They did what they wanted to with the original African population and they simply did it. They made a lot of money.

Comes Tanzania—40 million population with a GNP of $4.5 billion and 80% agriculture in the country.

At the time when agricultural prices are soaring—corn almost $6, wheat over $5, soy bean at $12—and the Tanzanians are poor, but a new world of opportunity emerges.

Biofuels take up land, are easy to make, cheap compared to agriculture, and provide big profits for the industrialized world.

But, Tanzania has to become a winner. Moneyed foreigners buy up the land, tied up for 10 years, and turn it into biofuels. Once again unscrupulous modern day colonists deprive a poor nation, deprive them of the potential profits in corn and even dislocating Tanzanians at will. — My advice is… fight them. Seek friendly foreign investment.

Once upon a time Graham Greene wrote a book, and Marlon Brando made a movie, "The Ugly American."

What's happening in the year 2008 with Tanzania, where agriculture could lift this poor nation among respected nations in Africa, the biofuels resurrect the age of colonialism which, in 1954, Prime Minister Mendez-France declared: "The era of de-colonization has begun."

This is counter-revolution! This is an insult not only to Tanzania, not only to Africa, but to the progress of the United Nations. The G-8 nations are supposed to lead. Let them practice. The 21st century has never been said to be the successor of colonialism and the colonist empires of the international unlicensed biofuel merchants.

Worldwide investment in biofuels rose from $5 billion in 1995 to $38 billion in 2005 and is expected to top $100 billion by 2010, thanks to investors like Richard Branson, GE and BP, Ford and Shell.

Tanzania is one of the poorest countries in the world. It is twice the size of California and its boundaries are Kenya, Uganda, Zambia, Mozambique and the Indian Ocean. Having ports or potential ports and airports could actually accelerate the growth of this country of 40 million people.

The country's climate is tropical along the coast of the Indian Ocean and temperate in the islands. It has a population of 40 million people and has the lowest median age in the world, approximately eighteen years. The country was decimated by HIV/AIDS-related illnesses and the turnaround in such unfortunate circumstances is, again, a potential growth for the country in the future.

Ninety-five percent of the population is Bantu, with some mixture of Arab and other African nations consisting of five percent.

The country is a democracy. The name of the country officially is the United Republic of Tanzania. Its capital is Dar-es Salam. It is eight hours before Washington.

The constitution was written in October 1984. It designates a chief of state who is also president of the country. The current president is Jakaya Kikwete. The cabinet is appointed by the president from members of the National Assembly, The recent election gave Mr. Kikwete a majority vote of 80.3 percent. The National Assembly, called Bunge, has 274 seats, of which 232 are elected by popular vote, 37 allocated to women nominated by the president and 5 members of the Zanzibar House of Representatives.

The Permanent Commission of Inquiry consists of a chief justice and four judges. The political parties are the Party of Democracy and Development, the Revolutionary Party, and the Tanzanian Labor Party. Tanzania has representation in the United States under Ambassador Ombeni Johana Sefue, 2139 R Street N.W., Washington, D.C. 20008, Tel. 202-935-6125, Fax. 202-797-7408. Representation at the United Nations is Ambassador Mark Green, whose office is in Dar-es Salam.

Tanzania is one of the poorest nations in the world. The entire economy is based on agriculture, which provides 85 percent of the exports and employs 80 percent of the workforce. The country has traditionally been the recipient of World Bank and IMF loans.

Long-term growth is now accelerated because of mineral resources, particularly gold and other minerals. The gross national product is about $4.5 billion, per capita income of $1,100. The labor force is 80 percent in the agricultural segment.

As an illustration, one million ounces of gold production is a billion dollars, which is meaningful when we look at the total export/import market. The budget is about S3 billion. Domestic expenditures amount to $3.5 billion, and public debt is 24 percent of the GNP. The mineral products which include some diamonds, gold, iron mining and fertilizers would accelerate the elimination of impoverishment of the country. It has good trading relationships with China, India, the Netherlands and Japan, each amounting to about 7 percent of exports, and the imports amount to $4.6 billion in total. Import partners are South Africa, China, Kenya, India and the United Arab Republic.

It is easy to see that if we superimpose $2-3 billion future potential revenues from mining resources, the country's small external deficit would turn into a loss and cash would be available to develop industries and actually absorb some of the working population. Surprisingly, the foreign exchange and gold reserves are $2.4 billion. The addition in a five-year period of some $10 billion surplus would change the monetary stature of the country in the world.

The Tanzanian mineral policy recognizing the rising volume of revenues generated by the new mining industry, Tanzania is trying to provide a tax structure which is fair to the country but at the same time keep or even attract foreign private companies to explore the potential mining assets of the country. The country is lucky to have some of the largest mining companies operating there, such as Barrick Resources, Resolute Mining Ltd. of Australia, Anglo Gold Ashanti Ltd. of South Africa and London, and Tanzanite Ore from England.

The current thinking is, and the finance minister recently announced, that Tanzania will have an effective tax rate on [miner's profit] of 47 percent, up from 31 percent, but introduce a range of measures including windfall variable profit taxes all lumped together. The Tanzania mineral companies pay 30 percent in corporate tax and royalties of up to 5 percent for diamonds and gold.

These numbers are now being debated, and President Kikwete is working on a comprehensive mineral tax clause. It is important to mention that the Tanzanian government is fully aware that it has no capital to invest in building a mining industry, and at the same time it needs a fair shake from the profits that commodity prices are now bringing.

On May 14, Tanzanian finance minister Mkulo submitted a budget. It has reviewed the tax system, recognizing that Tanzania, next to South Africa and Ghana, is the continent's third gold producer, The government is anxious to become a number two gold producer in Africa and accelerate the production with the monetary realities of the world. This East African nation will need 300,000 metric tons of corn this year but has sufficient rice requirements. The finance minister said that all these factors contribute to inflation and the best way to curtail inflation is to produce hard currency through the mining industry and offset the growing prices in the agricultural segment.

Furthermore, the minister of finance also mentioned that the development of industrial companies based on the profits of the mining companies is the best way to fight poverty in the country and therefore he emphasized that foreign companies mining Tanzania's mineral resources is a matter of prime consideration.

Regional Geology

Honorable Joseph Rugumyamheto - Chairman of the Board

David Groves - Director

Harp Sangha - CEO/President and Director

Antonia Haughton - Chief Financial Officer and Director

Gus Sangha - Director

The Honorable Joseph Rugumyamheto retired in January 2006 after 30 years of public service in Tanzania. For the past five years, Hon. Rugumyamheto has been the Permanent Secretary in the President's Office of Tanzania, reporting directly to the President of Tanzania. He graduated from Stanford University in the U.S. and was responsible for all civil servants in the Tanzanian government.

Douglas Lake has a busy and historical month in May and June 2008.

On May 9, the company announced that it has concluded an agreement with Tanzanian National who had mineral rights to four prospecting licenses. The area of 430 square kilometers and have high gold concentration in the area.

The area has alluvial gold deposit property licenses. The current production generates, without maximized mining equipment, about 150-200 high-grade gold per month. Even at that rate, with 2,000 pounds yearly production, the revenue is $2 million per annum.

Engineering studies indicate that with sufficient capital investments, the production can increase 200,000 pounds per year. At the current price of $1,000 per pound, this would be equivalent to $100 million per annum, which is equivalent to $250,000 revenue per share, a considerable difference with the current share price of less than 50 cents.

During the month of May, management had negotiations with Chinese businessmen. This negotiation moved to Beijing. There are favorable indications that an agreement will be concluded in the early part of June 2008 whereby the Chinese company will inject monies for working capital and acquire 20 percent of Douglas Lake at the price around or higher than the current 45 cents per share.