Levon Resources Ltd (New) LVNVF

I heard back from Taj Singh, CEO of Discovery Metals

[Heywood_Silvers]

Thank you very much for your note. Much appreciated. I ve commented below on your queries. Apologies for the length but I thought it would be good to be a bit more descriptive. Re: your comment on Discoverys currently high market valuation: Discovery is trading at almost is all-time low. We went public at 50c approximately two years ago and raised $15M at that time, with a lot of the financing coming from insiders, founders and management. Our stock in fact moved towards 80c early on. We are doing this deal at a very low point in our share price, 22c ($15M market cap), which we believe a very attractive entry point for investors. Re: your comment on fair value: As part of the merger talks, Levon actually hired financial advisors and paid them a substantial amount of money to provide an opinion on fair value. Their conclusion was that this deal is fair from a financial perspective. Contributed capital is not the sole factor in valuation because of the fact that many companies may have spent a lot of money on a project but the project simply may not be economic. For public companies, market value (i.e. share price) is considered to be the value of the company taking into account the assets, the balance sheet, the teams behind it, the jurisdiction of the assets, the potential of the assets, etc. Levons management and directors all believe the deal to be fair and they are all excited and supportive of the deal; proof of this is that all Levon insiders have signed lock-up agreements in favor of the deal. Also to note, Discovery has substantially more cash on hand than Levon at the current time, approximately 4 times the amount of cash. Other notes on Discoverys value: The value of contributed capital for Discovery does not take into account the fact that one of our key projects, Puerto Rico, used to be a direct ship ore mine. Historically the mine produced 1Mt of 40% Zn ore + very high silver. To put that in context, the value of that ore at $1.15/lb Zn (not even including the silver) would be about $1000/t of ore. If you minus transport and treatment charges (say $250/t) you end up at $750/t margin and at 1Mt thats over $750M of value. That value was from no drilling, as the artisanal miners simply mined visually, as mineralization was very strong. Our two years of work on the project give us reason to believe that 1Mt of historic production was only the beginning of what we have here since its never even been drilled. The +3km of underground workings at the Puerto Rico project allows us to sample and eventually drill from the underground and will allow us to understand and define the deposit more than if we were just at surface. That 3km of underground development today would cost over C$10M of construction costs (C$3000/m); many companies as you know develop drifts in the underground to help them explore from the underground. Along the underground workings, we took close to 1000 channel samples and we were averaging close to 30% ZnEq (Ag-Zn-Pb) across mineralization in the workings. That means there could be substantial ore still remaining in / around the very high-grade ore that was picked out. The interesting thing about this is that this very high-grade ore wouldnt need any capex for processing, as the ore is mined and shipped out directly for processing at a treatment facility (have to have > 20% Zn for direct-shipping). Also FYI - both companies spent significant time at each others assets during the due diligence phase of this agreement and spent significant amounts of time going through all the data. As far the team goes: Discovery is part of the Oxygen Capital group of companies. This includes PureGold, Liberty Gold, Sun Metals and Discovery (all publicly listed). Over the past 5 years, Oxygen has raised over $225M to develop, advance and build its projects and it has successfully sold many of its projects to majors over the years, making a lot of money for shareholders in the process. Cordero would have very strong support to be able to finance and advance its exploration and engineering programs and add value. Additionally our management team, including myself, were all a part of a large mine build in Mexico several years ago. We built a 30ktpd open pit gold mine in Sonora. We directly involved with the feasibility studies, engineering and construction. This experience could be directly applied to Cordero (similar size). The combined company: We believe the combined company will of course benefit from simply being larger and more liquid, but the two companies are also very complementary to each other. The assets of the companies are located in the same mineralized belts, in the same part of Mexico and the deposit types share many similarities. We think the combined company will be one of the leading silver-focused Mexican explorer/developers in the space with lots of potential value to be added in the near-term and longer term. Please feel free to connect with me if you have any more follow-up questions or clarifications. My contact info is below. Thanks, Taj

[DSAENT]

Nothing said here changes my mind 1 iota... Still going to vote NO and I can't think of anything they can say to change my mind. I feel this is just a takeover of a Great Asset by a smarter management team ( than ours ( Levon )) !!!  for pennies on the dollar.

[Cubalibra]

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