I would like to inform the public on the following as a result of my trip to Baja last week.
As announced in June, the company ProCon Baja JV (ProCon) was formed as a Joint Venture between Inmobiliaria Contel (49%) and ProGreen (51%), with ProGreen in effect controlling management.
I can now communicate that the second joint venture, announced in May, was replaced with a new agreement dated August 11, with the 1,900 acres as well as the option for the 12,000 acres, now in the name of ProCon. This means that in the future, we will be able to reflect the land value and development costs as assets, bringing 51% onto ProGreen’s balance sheet.
The strategic business arrangements that we’ve been able to achieve leading up to and including the formation of ProCon, and the subsequent transfer of the second joint venture to ProCon, have put ProGreen in a unique and strong position in Baja California.
As more general information, I would like to mention that we have several further opportunities for much more land in the area, both for agriculture use as well as for potential real estate developments.
Last week, I was also looking into possible opportunities in the Ensenada area and was surprised to find an expat community made up with people preferring to mingle with the local way of life as opposed to creating a mini US enclave in Mexico. The advantages for choosing Baja to retire are many, superb climate year around, low cost of living and the easy way of life with so many attractions for fun outdoor activities. Ensenada is close to the border and also offers facilities of a city of some 300,000. I feel there are great possibilities for developments in this area directed to the US expat market.
There are also real opportunities in Ensenada for residential developments aimed at the local medium income population, where there is great demand for new housing and local financing available.