NAV could increased from $0.69 to $0.88Aberdeen reported a NAV at October 31, 2008 of $0.69 per share which included a conservative estimate for the value the royalty loan facility at $29 million or $0.30 per share which was based on receiving the Simmers shares. In prior periods, the Company had estimated the fair value of the loan facility on a discount cash flow analysis of expected cash flow from the remaining graduated royalty and interest payments, the repayment of the US$10 million principal and the 1% NSR for the life of the mines.
If the conversion is not approved by Simmers shareholders and the NSR is received, the fair value of the loan facility at October 31, 2008 would more appropriately be based on a discounted cash flow analysis which was estimated at $53.6 million. This estimate would include gold production from both Simmers and First Uranium and the key assumptions used in determining the fair value of the loan facility include the following: 1) receipt of a graduated royalty until December 31, 2008; 2) repayment of the US$10 million loan on December 31, 2008 and thereafter receipt of a 1% NSR for the life of the mines; 3) 5% discount rate; 4) US$850 gold price through fiscal year 2010, and US$700 thereafter; and, 5) life of mines and gold production estimates as publicly disclosed by Simmers and First Uranium.
Aberdeen's 3rd quarter NAV would have increased from $0.69 to $0.88 per share based on receiving the 1% NSR compared to receiving the Simmers shares, thus providing Aberdeen shareholders with superior value