RE: Forsys news todayIn my view Forsys is not satisfied with the wording of the Weatherley's news release. The price for the remaining 10% stake in Valencia was just 1 Mio US$ but it's not clear what they got the 2m shares issued for. Apparently there are 2 more assets included in the deal:
- mining lease Khorixas property (nuclear fuels + other metals)
- 15% stake in Omatje Mining Company that holds the Ondundu gold licence
Seperately the execution of the Elbe Mining JV agreement was released (this is associated with a work committment of 5 Mio N$ for Forsys).
The uranium-part of the Khorixas Property will for sure being added to the Forsys nuclear-fuels licence portfolio but the non-nuclear-fuel parts could be transfered to Namibian Resources (spin off).
But what makes 15% in Ondundu Gold and Khorixas worth 2 Mio. shares in Forsys or 9 Mio. US$? Ondundu has a historic gold-resource of 470k oz with an igv of 300m US$ (15%=45m US$) and Khorixas is difficult to value due to a lack of information. Let's hope Forsys will comment on this a coming news release.
Let's have a look at the proposed spin-off; the structure of Forsys is as follows. Forsys Metals is a Canadian entity that is listed at the TSX. Forsys holds a 100% stake in 1400596 Ontario Inc a non-listed Canadian entity. 1400596 Ontario Inc. holds a 100% stake in Westport Resources, a Namibian entity that holds all of Forsys non-uranium assets in Namibia namely:
- Omatje Mining company (32% + 15% = 47%) that holds 100% of the Ondundu Gold project with a historic gold resource of 470,000 oz
- Elbe Mining JV (Westport to earn 60% by spending 5 Mio N$ (0.7m US$). Elbe Mining (EPL 3136) has seen a lot of exploration, even a feasibility and the start of an underground operations construction all conducted by Falconbridge that stopped just 35m before they reached the ore because of low metal prices. Forsys got a 43-101 compliant report and the non-compliant resource stands at 3.29Mt with 1.56% copper, 1.47% Zinc, 10.05 g/t silver and 0.55 g/t gold with a metal value of 157US$/t or 517 Mio US$ for the whole project.
- Rundu project (100%) ERL 54 early stage diamond project
- Sperrgebiet Zinc project (EPL 2797) Teck Cominco spent 650,000 C$ on exploration of this property but cancelled the option agreement
- Omaruru Gold project (EPL 3166). Early stage gold project with no historic resource. Anglo Gold identified some anomalies in the 90ies.
In my view Forsys will spin-off up to 100% of 1400596 Ontario Inc. Don't know if the go for a reverse takeover of a TSX-V shell or if they go for an AIM listing or if the plan an IPO at the TSX-V but 1400596 Ontario Inc. is the right vehicle that contains all of the non-uranium assets of Forsys.
Cheers
Art