RE: RE: RE: Question (Second part)As I have stated before, I ask a question to AFA about the valuation, and this is the answer I received:
Dear Sir,
The evaluation of a project like Haib copper is based on the price that Major mining companies are currently willing to pay for copper resources in the ground.
It is important to understand that the price for copper in the ground differs substantially from the current market price of refined copper that is currently at 4 dollars per pound (Lbs).
Current prices presently being paid for copper resources in the ground ranges from 5 cents to 20 cents per pound (Lbs). A high grade project with define proven reserves will be at the top of the scale while a low grade project with only historical inferred and indicated resources will be at the lower end of the scale.
Haib hosts inferred and indicated historical resources totaling about 4 billion pounds (Lbs) of copper in situ (in the ground). Using the lowest value of the above scale as a guide, the value of 100% of the Haib should therefore be about 200 million US dollars. Therefore, one could assume the value of the 15% interest of Afri-Can in the project at about 30 million US dollars. Naturally, these are rough numbers (back of the envelope math) that have not passed the test of negotiation between buyer and sellers. Furthermore, market conditions and the timing of a listing will also affect that value. Therefore, to be on the safe side, one should be cautious and discount that value by 50%, which still give a value of 15 million US dollars for the 15 % interest of Afri-Can .
As we will spin-off our interest in favor of our shareholders trough share dividend payment, we currently estimate the value of the dividend at $ 15 million or a value of about 6 cents per share held of Afri-Can. (These numbers are based on the current number of shares outstanding). Combining that value, with the current share price of Afri-Can of 6 cents presently being given as a value for the Diamond project of the Corporation, you end up getting a potential value of the Company right now of more then 12 cents per share.
Of further interest is the fact that the 6 cents values presently given by the market for our diamonds project is much lower then the present enterprise valuation given by RBmilestones analyst, base on their review of our diamonds projects, which stands at 26 cent per shares. So for us, we clearly believe that our share price does not reflect the value of our project.
It is important to keep in mind that the above numbers are based on the current markets and could vary over time before we finalize the spin-off and new listing. However, this basic evaluation is the same since last March and has resisted present markets condition seen during the last 3 months.
Kind regards
Pierre Leveille
President & CEO
Afri-Can Marine Minerals Corp.
1801 Mc Gill College Avenue, # 1325,
Montreal, Qc. Canada
H3A 2N4
Tel: 1-514-846-2133