RE: Mutual FundUranium Focused Energy Fund has some:BHP,Rio tinto
Areva,Cameco,PDN,SXR,DML,FUI,UEX,UMN,U,EMC
Issuer:
Uranium Focused Energy Fund (the “Fund”).
Issue:
Units of the Fund (“Units”).
Issue Price:
$10.00 per Unit.
Issue Size:
Approximately $100 million.
Minimum Subscription:
200 Units ($2,000).
Exchange Option:
The purchase price for each Unit may be paid either by cash or by the exchange (the “Exchange Option”) of common shares or units of any of the issuers specified herein (collectively, the “Exchange Eligible Issuers”). An election to exchange units of Exchange Eligible Issuers for Units pursuant to the Exchange Option must be received by MFL Management Limited through CDS by 5:00 p.m. (Toronto time) on February 23, 2007.
Rationale:
The Fund has been designed to capitalize on the view of the Advisor that the uranium sector will continue to provide attractive opportunities for investment over the next several years. The Advisor expects that primary uranium supply will continue to fall short of global demand over the life of the Fund due predominantly to limitations in the production capacity of existing mines, while secondary uranium supplies, such as inventories, stockpiles and decommissioned nuclear weapons, which historically have bridged the global uranium supply shortfall, are expected to steadily decline. In light of the significant capital and time requirements associated with the development of new uranium mines, the Advisor expects uranium prices to remain strong over the life of the Fund, providing a favourable environment for uranium exploration and production companies.
Investment Objectives:
The Fund’s investment objectives are to:
(a) Achieve capital appreciation of the Fund’s investment Portfolio over the
life of the Fund; and
(b) Pay quarterly distributions to Unitholders.
Investment Strategy:
The Fund’s Portfolio will be focused on the securities of issuers that operate in or have exposure to the uranium sector (“Uranium Related Securities”), supplemented with the securities of other energy related issuers that operate in or have exposure to the energy sector (other than the uranium sector) (“Energy Related Securities”), in each case as determined by the Advisor. The Advisor will determine from time to time what percentage of the Portfolio is to be comprised of Uranium Related Securities and what percentage of the Portfolio is to be comprised of Energy Related Securities, and expects that Uranium Related Securities will comprise approximately 70-80% of the value of the initial Portfolio. The Portfolio will be focused on securities which, in the view of the Advisor, are of high quality issuers that exhibit strong fundamentals and, in the case of issuers of Uranium Related Securities, possess superior prospects for exploration and development and offer the potential to benefit from the favourable supply-demand fundamentals in the uranium sector.
Quarterly Distributions:
The Fund will not have a fixed quarterly distribution amount, but will at least annually (commencing in December 2007) determine and announce an indicative quarterly distribution amount for the following 12 months based upon prevailing market conditions and the estimate by the Manager of distributable cash flow for such period. The initial indicative distribution amount for the period ending December 31, 2007 is $0.125 per Unit per quarter, corresponding to an annualized distribution of $0.50 per Unit per annum and representing an annualized yield of 5.0% per annum on the original subscription price. The Portfolio will be required to appreciate at a rate of approximately 5.5% per annum in order for the Fund to maintain a stable net asset value while making quarterly cash distributions.
Redemption:
Redeemable on September 30 (each a “Valuation Date”) of any year commencing in 2008 at a redemption price per Unit calculated with reference to the NAV of the Fund determined as of the applicable Valuation Date less any costs associated with the redemption.
Termination Date:
December 31, 2013.
Loan Facility:
The Loan Facility will permit the Fund to borrow an amount not exceeding 25% of the value of assets within the Portfolio. The Fund initially does not intend to borrow under the Loan Facility.
Manager:
Middlefield Energy Management Limited.
Advisor:
Middlefield Capital Corporation.
Independent Uranium Industry Consultant:
Global Fuel Solutions has been engaged to provide analysis and opinions regarding uranium market supply-demand fundamentals and associated pricing implications. Mr. Clark M. Beyer, principal, has over 20 years experience in trading, marketing and consulting in the international markets
for uranium and nuclear fuel.
Distribution Reinvestment Plan:
At the election of each Canadian resident Unitholder, distributions may be automatically reinvested in additional Units.
Listing:
Application will be made to list the Units on the Toronto Stock Exchange.
Eligibility:
Eligible for RRSPs, DPSPs, RRIFs and RESPs.
Selling Concession:
2.80% per Unit, payable on cash subscriptions or pursuant to the Exchange Option.
Management Fee:
1.10% of NAV per annum. The Manager, and not the Fund, will pay an advisory fee to the Advisor pursuant to an advisory agreement.
Service Fee:
0.40% of NAV per annum, calculated and payable quarterly.
Sizing: Late February 2007 (Anticipated February business).
Timing:
Closing: Mid-March 2007.
Listed on TSX mar 15/07