Widespread Portfolios 2008 AGM Presentation


2007/8 was a mixed bag 

•      Our major investments (AMR, KSO and WEN) all made good progress in operational terms

•      Did not translate into improved market values

•      Hence, a reduction in our portfolio value with a corresponding reduction in our own market value

•      Our shares and warrants were actively traded

•      Shares were recently consolidated 50:1 (short term pain but long term gain)

The detail.... 

Reported after tax loss of $751,000 - real result (ignoring unrealised loses and non-cash provisions) was profit of $569k

•       Net assets per share decreased from 105 cents to 85 cents (now 72 cents)

•       Shareholders increased from 810 to 850

•       Issued capital is now 21,435,782 shares and 8,505,123 warrants

•       Widespread traded frequently on the NZSX (1.8 million shares and 388,000 warrants in the last 12 months)

•       Last sale at 46 cents and 20 cents values the company at $11.6m vs. $23m last year, $10.2m in July 06 and $5.4m in July 05

•       Net assets are presently $15.4m, ($25.3m last July and $10.2m in July 2006) 

 Chart - 30 month market value & net assets trend

 Chart - Portfolio Composition
(present net assets per share 72 cents)

Asian Mineral Resources
2007/8 milestones

•             Mining license granted December 2007

•             Mine development commenced immediately

•             Processing plant and mining camp under construction

•             $67 million raised in last 12 months to finance operations and construction

•             Offtake agreement signed with Chinese nickel smelter group Jinchuan

•             Active exploration programme underway, there are a number of other already identified prospects nearby 

 AMR - recent developments

•       June 13, Vietnam Ministry of Finance announces 20% export tariffs on minerals (incl.nickel) plus oil and gas

•       Vietnam investment regulations (prima facie) protect AMR's earlier position

•       Other Vietnam govt agencies agree the tariff is destructive of foreign investment

•       This week AMR advised that "it has initiated discussions with the appropriate Vietnamese governmental authorities and has begun enlisting the support of other interested parties in seeking to have the tariff increase rescinded"

•       This will take time to resolve and the outcome is not certain

•       AMR has not quantified the impact of the proposed tariff on the project economics

•       AMR needs to raise $45m for working capital and to complete the mine and plant, continue the exploration programme etc

•       This is required before the tariff situation is likely to be resolved

•       AMR has announced that "it is continuing financing negotiations in parallel with alternative financing mechanisms"

•       Existing major shareholders (Malaysian Smelting Corporation, The Dragon Fund, Jinchuan, etc) should logically support the financing.

•       Financing issues aside, the project continues to be on schedule for concentrate production in the second quarter of 2009  

•       AMR has other eggs in the basket (adjacent orebody and various exploration initiatives)

 King Solomon Mines ("KSO")

•       ASX listed Inner Mongolia (China) based mineral exploration company

•       WID is largest shareholder with 11% and has board representation

•       "Greenfields" explorer (no defined or measured mineral reserves yet)

•       Focus is on large scale copper/molybdenum and gold targets

•       Most exciting projects are Marmot Ridge (Cu/Mo), Wuritu (Cu), Bu Dun Hua (Au, Cu), Beyinhar North (Au), Naogaoshandu (Au)

•       Very active exploration programme 8 months/year

For more info, visit www.kingsolomonmines.com or attend their AGM in Wellington on August 15

 KSO Capital Structure

Shares                              90.8 million

Options                           6.8 million

Cash  (31 Mar. 08)     $6.3 million (6.9c)

Mkt. Capitalisation    $10.9 million (12c)

12 month trading       10c - 23c

Marmot Ridge Cu-Mo Project

•      Large hydrothermal alteration system (>6sq km)

•      Geological setting analogous to neighbouring Ivanhoe deposit

•      7,000m diamond drilling to date

•      Widespread anomalous Cu in drillholes

•      Significant Mo mineralisation in drillholes (6 out of 7 in current programme)

•      Target: 500Mt + Cu-Mo deposit

 Widespread Energy (WEN) 

•       WID holds 26.7% of NZAX listed WEN and is also the manager

•       WEN holds 11.8% interest in Green Gate Limited, the holder of four petroleum exploration permits (PEPs) in three South Island areas (Canterbury, Murchison and Great South Basin)

•       WEN has 100% of PEP 38526 over the prolific oil seeps at Kotuku on the West Coast

•       WEN has 100% PEP 50439 for an area of over 3,286 km2, off the West Coast of the South Island between Hokitika and Punakaiki.

•       WEN now has six oil/gas opportunities in NZ

Chatham Rise Phosphorites (1)

•      WEN has also (in conjunction with Widespread Portfolios) applied for an exploration license over part of the Chatham Rise.

•      The area under application contains large quantities of phosphorite nodules (rock phosphate), presently imported from Morocco by the NZ fertiliser industry.

•      Ravensdown alone imports 750,000t

•      The energy-related logic driving this project is the projected rapid increase in biofuels that is likely to result in substantially increased demand for fertilisers and on-going  increases in fertiliser prices.

 Chatham Rise Phosphorites (2)

•       The nodules also contain fluorine, rare earth minerals and other valuable by-products.

•       Early 80s exploration by Fletcher Challenge, and other companies indicated economic concentrations of phosphorite on the Chatham Rise.

•       Rapidly increasing superphosphate prices and advances in underwater mining technology (e.g., Neptune Minerals and Nautilus Minerals) mean exploration and development is now significantly more feasible. 

•       The phosphorite resource may exceed 100m/t (worth NZ$46b+) and could prove economically viable depending on extraction costs.

•       ASX-listed Mine Makers (MAK) has a measured resource of 71m/t in the NT. Since Feb 08 the market value of MAK has risen from Aud$20m to a peak of Aud$267m

Chatham Rise (3)

•       WID/WEN plan a 2 year work programme that, if successful, will be followed by more detailed exploration and evaluation.

•       This will include feasibility studies updating the work already undertaken 25 years ago (new technology, different costs)

•       GPS not in existence then, now makes it possible to precisely mine the seabed with automated equipment 

•       Feasibility studies carried out for deep sea miner Neptune Resources are very encouraging 

•       Significant interest in this project from very large, overseas based mining conglomerates

•       All major NZ fertiliser companies have already made contact

•       Our 3,048 sq km license application has been surrounded by a subsequent application of 71,750 sq km by Auckland company Chatham Phosphate Limited 

WID Outlook

•      Last year the 12 month forecast for a possible increase in net assets per share (if all went according to plan) was 48% from $1.16/share to $1.72.

•      Actual result was a reduction of 38% to 72 cents (despite AMR getting its mining license)

•      So, no forecast this year.....

•      But, key value drivers are 1) the successful financing and completion of the Asian Minerals nickel project, 2) good exploration results from King Solomon and 3) the grant of the Chatham Rise prospecting license.