Toubani Resources Ltd T.TRE

RE: RE: RE: RE: RE: RE: link for Poyry valuation

[markvrd]

Cedar,

I started off in my first post saying this report was a piece of the puzzle -- and it is.   It's not the whole and never said it was.   I do also appreciate the link.   It's very useful.

They would have to have a different set of skills to evaluate the ownership, corporate structure, and legal contracts.    From the report and other work they've done, I can gather that they are forestry and resource valuation experts with a leaning towards the technical side of the equation.  They can look at a forest operation and assess its commercial value on the Chinese market based on the mix/age of the trees, reforestration plan, etc.  They can also correlate documentation from the company with what they see on site visits and what they hear talking to forestry bureaus.    They would know if there was a suitable number of employees and if the equipment seemed appropriate.   Essentially they know the elements of a forestry operation and can make sure the physical pieces are there and that what the company says matches with the physical pieces.  Being involved for ten years, they would also have seen a good sample of TRE's business.

I think where their scope ends however, is in validating that what the company says about ownership of the resources is true.   They don't go through the details of all the contracts.   They don't know, or need to know complex corporate structure needed for a foreign company to operate in China.   They are not lawyers.   To prove that kind of stuff takes a different skillset -- primarily expertise in contracts,  Chinese corporate law,  and International law. 

To me, however, it is a big deal that these guys have gone in 6 times over the past ten years and viewed operations and alleged assets.   This indicates that at very least, there is standing timber in abundance and a forestry operation.   Next step of course, is to figure out the complex ownership hierarchy and that's the part the E&Y has obviously contributed to over the years but also the part that PwC is going to need to prove out.

There is no doubt that the ownership side of the equation is complex and needs to be clarified and for that, we have to wait.    

Mark