BNP Resources Inc. V.BNX.A

June 2016 - Monthly Letter To Shareholders

[2511MacDonald]

(Bus) :       403-978-6376
(Email):             [e-mail]                                                            
 

RE: June 2016 - Monthly Letter to Shareholders

 
Dear Shareholders:
 
The purpose of this monthly letter is to bring BNP shareholders up to date since the last letter.
 

1. I had made some contacts regarding the Yellowknife Pipeline. There is a small group that have been working on it for a few years. I’ll look at bringing them in as partners if we can get some seed financing. They have the native councils in support of the pipeline, and three mines north of Yellowknife, willing to sign gas supply contracts.
2. I’ve put together a funding package that includes an acquisition, a farm-in and development prospects. Total capital for this deal would be $75 million CDN. This may require adjustments depending on target company comments and offer price, as well as terms.
3. Meeting with our property salesman, on July 1^st, to talk about the acquisition possibilities. I’ve prepared 6 separate documents detailing the holding company and the five separate subsidiary companies. This part of the process is much slower. I’ll work with our salesman over the month of July, but if we can’t come up with a suitable friendly deal, with the target company, I’ll need to modify the deal, removing this potential acquisition, replacing it with another purchase or farm in.
4. Once we have a framework for a deal, I’ll need to get working with an agent that has access to US funding, as we need to raise $40 - $60 million US. I’m getting ready to sell the deal to the market in September. At $50 WTI, prospects look reasonable.
5. I talked with one of our shareholders a few weeks ago and he encouraged me to start pushing forward with a deal, as we all want to see the shares trading again. I’ve been working hard this month to get my sidecar funding packages developed. I appreciate shareholder input as we are all in this together.
6. I’m available to talk with shareholders Monday – Friday, 4:00 pm – 6:00 pm Mountain time. If I don’t pick up, just leave a message.
7. I’ll be celebrating Canada Day next weekend and wanted to get the letter out early. Happy Canada Day to all shareholders.

 
 
 
The following are a few activities and observations for this month:
 

1. The Brexit vote caused a market correction on Friday. Gold was up above $1,300 per ounce, in US funds.
2. Our salesman says that heavy oil assets are selling for $20,000 per flowing BOE/day, with standing offers at just $10,000 per flowing barrel. 
3. Saudi Arabia indicates that the price war is over. Oil is trading in a $47 - $50 WTI range.

 
Once again, many thanks to all BNP shareholders & our creditors for their continued support. Our goal is to work towards completion of our recapitalization by April 2017 – April 2018.