Special Investment Project

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1 Special Investment Project MESTIA, GEORGIA 2011

2 Mestia Treasure of Caucasus Mestia, Central-West Caucasus, 1450 meters above the sea level surrounded by sub alpine pine and chestnut forests and majestic mountains. The area is an important cultural centre and contains a number of medieval monuments, churches and forts which are on the list of UNESCO World Heritage Sites. Mestia Specific Master Plan-prepared by international consultant EcoSign Mountain Resort Planners. Situated high above the town of Mestia lies a beautiful alpine plateau which is the chosen location for the new Atsvali Village Center. Year around destination with winter ski-resort and summer outdoor related activities skiing, Heli-skiing, climbing, snowboarding, horseback riding, rafting, fishing, hiking, hunting and etc.

3 Natural Conditions and Government Offerings The Mestia Atsvali Study Area has good north slopes from the Town of Mestia at 1,400 meters up to the Atsvali Plateau at 1,880 meters with slopes then rising up to a mountain peak at 2,388 meters. Total vertical drop in Mestia is 988 meters, which would qualify for an Olympic or World Cup Men s Downhill piste. Average temperature: winter 6.4 C / summer C Average number of daylight hrs hours/day The government offers investors: Mestia Comprehensive Development Vision, General Planning and Specific Master Plan prepared by international consultant EcoSign Mountain Resort Planners Ltd, Canada and Geographic,Georgia Land for nominal price 1sq.m =1 USD Rehabilitated roads Mestia International Airport Development area available for hotel and residential multiple dwelling units in the form of townhouses, single family/chalets and summer recreation homes. Reconstructed city centre The new ski cable way constructed by Leitner-Poma Inc. Length 1400 meters. This N.1 fixed grip quadruple chairlift is currently being installed at a capacity of 1,000 passengers per hour. Three main ski trails available with difficulty levels: average (2670 meters) and above average/sports style (2600 meters)

4 Inside Mestia Improved communal infrastructure (water, sawage, energy). New road constructed from center of Mestia to the ski-station Reconstructed buildings in the city center Reconstructed historic and architectural heritage Svaneti Towers Improved general condition of the internal road Planned extension of road rehabilitation program to achieve highest villages (2011)

5 Mestia on the Map of Georgia Modern Infrastructure: Mestia International Airport- Kenn Borek Air a Canadian airline operating flights Batumi International Airport New Poti International Airport (by 2012) New Anaklia Zugdidi Airport (by 2012 ) Kutaisi International Airport Easy Access: Tbilisi 497 km Capital of Georgia Kutaisi 244 km Zugdidi 136 km Poti Biggest Port (FIZ) 208 km Batumi- Resort and Entertainment Centre 278 km Zugdidi Mestia rehabilitated road

6 Tourism Trends in Georgia In Thousands 35% 35% 35% 16% 33% F F F Government Policy towards Tourism Development: Creation of an annual winter resort in Samegrelo- Zemo Svaneti region of Georgia Free Tourism Zone in Kobuleti and Anaklia Development of Spa Cities around Georgia Anticipated annual tourist growth of 37% in the next 3-5 years 12,000 Historical and Cultural monuments 103 Resorts and 182 Resort Areas 8 National Parks 2400 Springs of Mineral Waters Curative Climate

7 Tourism Accommodations in Mestia Main Hotels: 4 star hotel Tetnuldi 34 rooms 3 stars hotel Mestia 30 rooms 3 stars hotel Svaneti 25 rooms Over 45 Guest Houses in the villages Totally: 429 number of beds Accommodation price range for single room GEL Basic tourist information: Transportation SUVs and mini busses available Guided cultural tours and sports routes Different Museums: Mestia Historical Ethnographic Museum, Historical Ethnographic Museum (Ushguli branch) etc Historical Sites Protective Svan Towers come from the early middle ages and are on the list of UNESCO World Heritage Sites. They were primarily used as defensive structures during invasions. Most of these towers are meters tall and have 4-5 floors.

8 Four Season Mountain Resort Mestia has a great potential to become a place for year round fun and adventure. Resort guests and day use visitors can spend holiday and vacation time in a unique environment that offers a wide variety of seasonal, active and passive recreation and leisure activities Average temperature: winter 6.4 C summer C Summer in Svaneti offers an array of stunning landscapes, lush and wild flora, rare wildlife, flowing rivers, tranquil lakes and big blue skies. During the summer this gorgeous setting presents countless opportunities for outdoor fun and adventure, including hiking, horseback riding, rafting, fishing, hunting, camping, exercises in nature and more. Proposed activities for winter season are Heli-skiing & free-ride, downhill skiing, snowboarding, snow tubing, Nordic spa, ice skating, climbing, kid s snow play zone, free-style snow parks and etc.

9 Mestia Development Concept Combination of favorable natural conditions and infrastructure create conducive environment for the development of Mestia. The concept of the resort area consists in combining winter and summer recreation through the expansion of an improved ski and snowboarding area in winter with riding, rafting and other summer recreational activities. The resort Vision Master Plan is developed and designed by Canadian company Ecosign, mountain resort planners with 35 years experience in this industry. The Mestia-Atsvali Resort Concept has been proposed in two main locations. The ski area and the new Alpine Village area proposed in Atsvali, and an additional village and base is proposed near Mestia Town. A detachable gondola or a pulse gondola with 4 groups of 3 eight passenger cabins per group could act as a people-mover to connect the Town of Mestia with the Alpine Village at Atsvali Plateau. A resort base will include hotels, ancillary commercial facilities, day-use parking, training center, residential multiple dwelling units in the form of townhouses, single family/chalets and summer recreation homes. Total Net Base Development Area is 96.8 Ha. the Mestia-Atsvali Resort Base could generate a total of over 9,000 skiers from parking and overnight accommodation, which balances with the mountain SCC of 9,000.

10 Base Development Area The Mestia-Atsvali zone has 8 terrain pods, which have the potential to service approximately 9,740 skiers/snowboarders per day. In order to develop this area at least 14 hectares of base lands would be required. Resort base area development includes access roads, overnight accommodation, commercial space, day-use parking and village pedestrian space. Base Land Use according to types: Village 29.1Ha; Number of Beds Main staging zone for skiing, as well a center for shopping, restaurants, pedestrian space and other resort activities. building height is limited to 4 to 5 floors and the ground level is reserved for non-accommodation uses. Multi family/townhouses 26.4Ha; Number of Beds Attached walk-up units that have their own garage or surface parking area. Townhouses can be up to 3 floors. Single family/chalets 47.9Ha; Number of Beds Privately owned detached units. Summer recreation homes Ha Nordic facility 30Ha Includes amenities such as a sport and fitness center or cross country skiing center and training facility. Day use parking 3.8Ha Day visitors arrive by car or bus to the resort s parking lots from where they can access the resort s recreation facilities and commercial amenities

11 Ski Resort Summary Winter/ski season lasts for 5 month, from December to April. Average temperature in winter Average Number of Daylight Total Skiable Area (Hectares) Total Vertical Drop Highest Elevation Lowest Elevation 6.4 C hours/day 188 ha 988 meters 2300 meters 1400 meters Total Number of Ski Lifts 6 SCC Total Hourly Capacity Total VTM/Hr (000) The Atsvali ski area mountain development concept, at build-out, will have a total of 6 major lift systems for skiing including a double platter lift and five detachable quadruple chairlifts. After construction lifts will accommodate a total of approximately 9,000 skiers at one time. Two moving carpets would be installed in a beginner/teaching zone. Total Skier Service Floor Area will be 9,172 square meters.

12 Accommodation and Base Staging Capacity MESTIA-ATSVALI Total Area Net Dev. Area Ha. Number of Beds Number of Skiers Mestia Base Within Skier Walking Distance (*WSWD) MB1-MB Outside Skier Walking Distance (*OSWD) MB5-MB Total Mestia Accommodation Base Parking Mestia Base Capacity (*WSWD) Atsvali Base Within Skier Walking Distance (*WSWD) AB1-AB Ski-in/ski-out AB Summer Recreation Homes AB11-AB Total Atsvali Accommodation Base Parking Atsvali Base Capacity (*WSWD) - Ski-in/ski-out Total Mestia/Atsvali Accommodation Base Total Mestia/Atsvali Base Capacity (*WSWD) 9 081

13 Mestia-Atsvali Resort Concept

14 Glossary The ski industry has a number of terms and technical jargon specific to ski area development, hence, a glossary is provided: Skier (Comfortable) Carrying Capacity (SCC) The number of skiers/snowboarders that a given ski area can comfortably support on the slopes and lifts without overcrowding, or those that may be accommodated at one time and still preserve a congenial environment, while providing a quality experience to each skier ability level. Terrain Pod A contiguous area of land deemed suitable for ski lift and trail development due to its slope gradients, exposure and fall line characteristics. Comfortable Skier Walking Distance defined as the distance a person walking in ski boots and carrying ski equipment can comfortably walk in 10 minutes. A walking speed of 2.7 kilometers per hour (0.75m/s) is assumed, which translates to 450 meters over level ground. Total Staging Area the total amount of base area staging terrain required to provide adequate shelter, parking, congregation and snow play areas, and maintenance and utility compounds. VTM/Hour (000) - (Vertical Transport Meters Per Hour) The number of people lifted 1,000 vertical meters in one hour (vertical rise of a lift, times the lift capacity per hour, divided by 1,000). An area s total VTM, is the sum of VTM for all lifts. Available Ski Terrain net developable terrain within the pod. It is assumed that pods will be able to support skiing on 30 percent of the useable terrain within the pod depending on topography, as well as the shape of the pod. Parking Area assuming 2.5 skiers per vehicle and 32 square meters of gross land are per vehicle.

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