Aberdeen International Reports Value of Investment Portfolio and Cash of $1.43 per Share for Fiscal 2011 Year End (January 31, 2011)admin
ABERDEEN INTERNATIONAL INC. today announces that the value of its investment portfolio as at January 31, 2011, the end of its 2011 fourth fiscal quarter, was approximately $123.7 million including a cash balance of $14.4 million. This equates to a value of $1.43 per share based on Aberdeen’s investment portfolio alone and does not include the value of its gold royalties. This report of the portfolio value is not equivalent to the “Net Asset Value” or “NAV” that has been previously reported by Aberdeen as it does not include assets and liabilities of the Company that are not treated as portfolio investments. Rather, this press release refers only to the cash, equity investments (private and public), option-type investments (e.g. warrants) and corporate debt/loans receivable of the Company.
The value of the investment portfolio increased from the third quarter results for the period ending October 31, 2010 by approximately $36.6 million or 42%. The audited year-end financial results are expected to be released in early to mid-April, 2011, and will include shareholders’ equity value (previously referred to as “net asset value”) which includes the value for our royalties as well as other assets and liabilities.
New Dividend Policy
Aberdeen’s board of directors has approved a $0.02 per year dividend to be paid semi-annually. It is anticipated that the payment date for the first semi-annual dividend of $0.01 will be March 31st with the second payment being made on September 30th. The record date to determine those shareholders entitled to receive the dividend payment will be set in accordance with the policies of the Toronto Stock Exchange. The Company’s opinion is that by initiating a dividend policy, it will send a message to the market that Aberdeen’s business model is sustainable and generates significant free cash flow. Our first and most important priority will be to continue making great investments in early-stage resource companies, and returning a relatively small amount of capital to our shareholders that should not materially affect our liquidity or ability to execute on new opportunities. The Company believes this will simultaneously enhance shareholder value, while providing the Company with the flexibility and liquidity to pursue its corporate objectives. In addition to paying dividends, the Company will also use excess capital, when available, to purchase Aberdeen shares through a continuing Normal Course Issuer Bid (see Aberdeen news release dated February 8, 2011). Management believes the combination of a secure and growing dividend combined with an active NCIB program is the best way to optimize the capital structure and enhance shareholder value at this time. Issuance of the dividend payment remains subject to receipt of all necessary approvals, including the approval of the Toronto Stock Exchange.
During our fourth quarter we received royalty revenue of USD $554,635 from combined gold production of 40,624 oz between October and December, 2010 at the Buffelsfontein Mine and Mine Waste Solutions operations in South Africa. Royalty revenue for the year totaled $1.9 million from 156,689 oz of gold production at the two operations. Aberdeen holds a 1% royalty on gold production from the Buffelsfontein Mine (operated by Simmer & Jack Mines Ltd.) and a 1% royalty on gold production from Mine Waste Solutions (First Uranium Corp.).
David Stein, Aberdeen’s President and COO, commented, “The past year has seen exceptional performance from our portfolio as demonstrated by these results. Our investment portfolio has more than tripled over the past two years – this is organic growth without raising capital and while implementing a substantial NCIB program. Our strategy of restructuring distressed public companies in 2008-2009 has resulted in tremendous profits – some of which we were able to crystalize in the past year. Increasingly, we have been investing in private situations where we can effectively exercise our active shareholder strategy and acquire interests in great resource assets at a much better price and valuation than we typically see in the public markets. While the majority of the value increase in the portfolio last year came from growth in our public holdings, such as Sulliden Gold, Avion Gold and Crocodile Gold, we also realized significant growth from private holdings going public such as Forbes & Manhattan Coal Corp. and Aguia Resources. What particularly excites me as a shareholder of the Company is that I see a number of value-creating events within our portfolio that do not necessarily rely on a robust or “hot” junior mining market. We have three private holdings currently completing “going public” transactions at the moment (either through mergers with a public company or by initial public offerings), and we anticipate performance shares from Forbes & Manhattan Coal Corp., Aguia Resources and Sagres Energy likely to be vested to us this year as well, at no additional cost. That being said, I think the portfolio is well positioned to take advantage of a broader shift into the commodities of global economic growth. This is represented by large investments in iron ore, coal, uranium, oil & gas, and agricultural minerals, while at the same time retaining a large weighting in gold and precious metals holdings.”