- Receives New Gold Royalties - Records Loss of $0.09 per Share for F2009 - Royalty Income of $7.2 million for F2009
TORONTO, ONTARIO, May 01, 2009 (MARKET WIRE via COMTEX News Network) --
ABERDEEN INTERNATIONAL INC. ("Aberdeen", or the "Company") (TSX: AAB) is pleased to announce that it has released its audited financial results for the year ending January 31, 2009.
As at January 31, 2009, Aberdeen's Net Asset Value ("NAV") was $87.5 million, or $0.92 per share, up from a NAV of $0.69 per share at October 31, 2008 (January 31, 2008 - $0.96 per share). The components of Aberdeen's NAV are as follows:
- Cash and cash equivalents of $1.4 million;
- Portfolio Investments at estimated fair value of $30.6 million;
- Estimated fair value of the 1% NSR of $41.5 million,
- Other assets of $26.6 million (including principal receivable from Aberdeen Loan Agreement to Simmer and Jack of $12.4 million and future tax assets of $5.7 million); less
- Total liabilities of $12.6 million (including future tax liabilities of $12.2 million).
- Shares outstanding at the end of the year of 94,874,339.
The current credit crisis and global demand for metals have negatively impacted commodity prices, driving down equity prices for stocks in the resource sector. This has adversely affected the fair market value of Aberdeen's portfolio investments. As a result, Aberdeen recorded a net loss of $9.1 million, or $0.09 per share, during F2009, compared with earnings of $2.6 million, or $.04 per share, in F2008. With the credit crisis and the resulting collapse in equity prices amongst junior resource companies, Aberdeen see's tremendous opportunity to capitalize on its business model. Junior companies have seen the debt markets evaporate for projects and access to equity has been severely curtailed. The Company will actively pursue these opportunities in F2010 and will look to strengthen its balance sheet in order to capitalize on the deep discounts available at this time.
Stan Bharti, Chairman of Aberdeen stated, "2008 has been a year of unprecedented value destruction, in particular to the junior resource market. Yet this also brings great opportunity for a company such as Aberdeen and its active investee model to acquire outstanding assets that will bring tremendous future value to Aberdeen."
Results of Operations
During the year ended January 31, 2009, the Company recorded a net loss of $9.0 million, or $0.09 per share, compared with earnings of $2.6 million, or $0.04 per share, in 2008.
During 2009, Aberdeen recorded net losses on investments of $32.6 million. Shares prices of junior resource companies, the sector in which the Company holds most of its investments, have experienced a sharp downturn over the last two quarters, and metal prices have continued to experience yearly lows. Access to capital has been severely curtailed in the junior resource market which continues to depress stock prices in this sector.
The Company also recorded an unrealized gain of $8.4 million on its Convertible Royalty Loan ("Loan"). In the third quarter, the Company had fair valued the Loan based on receiving Simmers shares in addition to the royalty and interest payments for the balance of the fourth calendar quarter of 2008. Subsequent to year end Simmer's Shareholders voted against the conversion to equity and a 1% Life of Mine NSR was granted on both the Buffels underground mine and First Uranium's Mine Waste Solutions. The Company has estimated the fair value of the NSR based on a discounted cash flow analysis of expected cash flow from the 1% NSR for the life of the mines at $38.8 million.
At year end 2009, the Company recorded a current income tax provision of $0.4 million (F2008 $7.6 million) and a future tax liability of $12.2 million (F2008 $7.4 million). The current income tax provision was the result of royalty and interest income and advisory service fees, partially offset by general and administrative expenses that are currently deductible.
Simmer Loan Agreement
On October 16, 2008 Aberdeen delivered notice to Simmer and Jack Mines Limited ("Simmer") of its election to convert the amount owed by Simmer under the US$10 million loan facility (the "Loan Facility") into ordinary shares of Simmer at a conversion rate of Rand 0.80. Notwithstanding Aberdeen's requests to have a meeting earlier, the meeting took place subsequent to our year end on February 16th, 2009.
On February 16th, 2009 Shareholders of Simmers voted against the conversion to equity of the Loan facility thereby entitling Aberdeen to a 1% Life of Mine NSR on all the Northwest assets of Buffels Gold Mines. Subsequent to year end Aberdeen has begun to receive the 1% income on gold produced at Buffels and Mine Waste Solutions from October 16th to December 31 2008. Aberdeen has not received either the 4th quarter Graduated Royalty nor the $US 10 million principal due on December 31 2008 Accordingly, the Company intends to take all necessary steps to enforce its rights under the Loan Agreement.
George Faught, Aberdeen's President and CEO, stated, "2008 has been a very turbulent year for the junior resource space. The buoyant capital markets of January to July were followed by one of the worst equity market collapses of this century. Throughout this crisis Aberdeen has sought to preserve its capital and look for investment opportunities at deep discounts.. Our business model is to take positions in early stage resource companies and as a result these investments are not easily liquidated in a collapsing market. We make our investment decisions primarily on the quality of the asset and look to assist management in all facets to realize the full potential. As such we see beyond the current downturn and anticipate that our portfolio will generate strong returns in a rebounding economy".
On January 31, 2008, Aberdeen announced it had initiated a Normal Course Issuer Bid ("NCIB") to purchase for cancellation its common shares through the facilities of the Toronto Stock Exchange. Based on the public float of 81,888,340 common shares, the Company may repurchase for cancellation a maximum of 8,188,834 shares through January 31, 2009. At year end the Company has repurchased 8,056,334 common shares under the NCIB at an average cost of $0.32 per share.
Subsequent to January 31, 2009, the Company announced its intention to make a second NCIB to buy back its common shares through the facilities of the Exchange.
About Aberdeen International Inc:
Aberdeen is a publicly traded global investment and merchant banking company focused on small cap companies in the resource sector. Aberdeen will seek to acquire significant equity participation in pre-IPO and/or early stage public resource companies with undeveloped or undervalued high-quality resources. Aberdeen will focus on companies that: (i) are in need of managerial, technical and financial resources to realize their full potential; (ii) are undervalued in foreign capital markets; and (iii) operate in jurisdictions with moderate local political risk. Aberdeen will seek to provide value-added managerial and board advisory services to companies. The Corporation's intention will be to optimize the return on its investment over an 18 to 24 month investment time frame.
Aberdeen International Inc.
Please visit the Company's web site at www.aberdeeninternational.ca or write us at smoore@aberdeeninternational.ca.
Cautionary Notes
Cautionary Note Regarding Forward-Looking Information This press release contains "forward looking information" within the meaning of applicable Canadian securities legislation. Forward looking information includes, but is not limited to, statements with respect to the future financial or operating performance of the Company, valuations of investments, proposed transactions and investments, investment philosophy and liabilities and commitments. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: financing not being available at desired prices; general business, economic, competitive, political and social uncertainties; general other risks of the mining industry and investment industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
Contacts: Aberdeen International Inc. George Faught President and CEO (416) 861-5887 Aberdeen International Inc. Stan Bharti Executive