Aberdeen International Inc.
TSX : AAB

Aberdeen International Inc.

June 16, 2008 16:30 ET

Aberdeen Announces Q1 2009 NAV of $1.08 Per Share and Q1 2009 Financial Results

- Net income of $12.0 million or $0.12 per share during the quarter - Royalty loan facility increased in value - Aberdeen to host conference call on Tuesday June 17th, 2008 at 10:00am ET

TORONTO, ONTARIO--(Marketwire - June 16, 2008) - ABERDEEN INTERNATIONAL INC. ("Aberdeen", or the "Company") (TSX:AAB) is pleased to announce that it has released its financial results for the quarter ending April 30 2008.

As at April 30, 2008, Aberdeen's Net Asset Value ("NAV") was $110.4 million, or $1.08 per share. The components of Aberdeen's NAV are as follows:

- Cash and cash equivalents of $19.1 million;

- Portfolio Investments at fair value of $54.0 million;

- Discounted Cash Flow value of Convertible Royalty Loan Facility on the Buffels Gold operations of $49.0 million;

- Other assets of $9.4 million; less

- Total liabilities of $21.0 million (including $18.1 million in future tax liabilities).

- Based on shares outstanding at the end of the quarter of 102,209,073.

Aberdeen will host a conference call to update shareholders on Tuesday June 17, 2008 at 10:00 am ET, which Stan Bharti and George Faught will moderate.



Conference call details

Conference call date: Tuesday June 17, 2008

Conference call time: 10:00 AM ET

Dial-in number(s): (416) 695-6140 Local and International
1-877-323-2010 North America Toll Free


Stan Bharti, Chairman of Aberdeen stated, "this quarter Aberdeen has seen continued growth in our NAV since transitioning to a resource merchant bank. During the quarter, Aberdeen entered into a lock-up agreement with Consolidated Thompson Iron Mines Limited (TSX:CLM) for its acquisition of Quinto Mining Corporation (TSX VENTURE:QU). The acquisition of Quinto was valued at $1.54 per share at the time of the announcement and has subsequently run to $1.84 per Quinto share as CLM continues to gain value. This is a potential significant realized gain in our portfolio and we are pleased to see such a gain so soon since our investment."

For the quarter ending April 30, 2008, Aberdeen recorded earnings before tax of $18.0 million and net income of $12.0 million. The first quarter continued to be quite active for Aberdeen, as the Company made significant investments in Sulliden Exploration Inc. ("Sulliden") and Magma Metals Limited ("Magma"). Sulliden has an advanced gold exploration project in Peru while Magma is advancing one of the best PGM exploration projects in North America.

On January 31, 2008, Aberdeen announced it had initiated a Normal Course Issuer Bid 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 purchase for cancellation a maximum of 8,188,834 shares in 2008. As of today's date, Aberdeen has re-purchased for cancellation 1,221,600 shares.

Aberdeen Royalty Loan Agreement

Despite the strong performance during the quarter, Aberdeen is currently trading at approximately a 45% discount to NAV possibly due to a lack of appreciation of the mechanics of the conversion feature and the valuation parameters of the Convertible Royalty Loan Facility with Simmers. In order to assist the market in determining the value of the Royalty the Company is spending some time this quarter to reinforce the mechanics of the Royalty Loan Facility in detail.

Key elements of the Simmers news release dated April 16th, 2008 that will favourably impact the value of Aberdeen`s gold royalty include:

- Increased life of mine ounces of 22.7% from 5.0 million ounces to 6.2 million ounces.

- Increased inferred resource by 160% from 3.0 million ounces to 7.8 million ounces.

- Re-commissioning of the Buffels' North Plant to treat 19 million tonnes of low grade broken ore adding 35,000 ounces per year production over seven years. Aberdeen currently holds a security interest over the North Plant.

- Commencement of definition drilling program and 3D seismic surveys aimed at exploiting the world class shaft infrastructure at Strathmore to convert approximately 35 million conceptual ounces to compliant resources.

- The Strathmore conceptual resource referred to by Simmers' lies within a 4.5 kilometre radius around the centre of the existing Strathmore shaft system and falls primarily in the Hartebeestefontein claim and would add incremental value to the Company's Royalty with a total life of mine production of approximately 11.9 million ounces of gold subject to the 1% Net Smelter Royalty.

In addition, First Uranium confirmed that the current operation of the Tailings Recovery Project (Mine Waste Solutions) remains unaffected by the power situation in South Africa and that the estimated average annual life of mine production has increased from 126,000 ounces to 130,000 ounces.

Clearly the news from both Simmers and First Uranium provides a positive impact on the valuation of the Company's gold royalties. Further, Aberdeen's Royalty Loan Facility is a top line revenue level interest and is not impacted by the escalating South African power rates.

In determining the value of the Royalty Loan Facility the Company is relying on production forecasts provided by Simmers and First Uranium as disclosed to the market through its National Instrument 43-101 ("NI 43-101") compliant technical reports. In addition, the Company is taking a more conservative approach to gold prices than consensus street estimates using a long term gold price at $700 per ounce versus consensus street estimates of $768 per ounce.

In this quarter a combination of increased life of mine gold production and a revaluation of long term gold prices led to the gain in the estimated fair value of the Royalty Loan Facility.

Royalty Loan Conversion

- If Aberdeen calls for conversion of the US$10 million Loan Facility into Simmers shares at R0.80 and the Simmers shareholders do not approve the loan conversion to equity, then the loan will mature on December 31, 2008.

- Simmers will repay the US$10 million loan principal on maturity (December 31, 2008).

- As a consequence of the equity conversion not being approved by Simmers shareholders, a 1% life of mine gold royalty will come into effect on both the Buffels underground mine and First Uranium's Tailings Recovery Project effective January 1, 2009.

- Aberdeen would also be entitled to a 1% royalty on any gold produced from the greater Buffels Area comprising twelve claims including the Hartebeestefontein 422IP claim and Strathmore project which could potentially add 11.9 million ounces of gold production which would be subject to the to the Company's 1% life of mine royalty.

Simmers and First Uranium recently released an updated technical report on the Buffels Tailings Recovery Project prepared by Minxcon dated April 16, 2008. We are pleased to report that this technical report confirms certain of the terms of the Royalty Loan Facility.

For greater clarity and disclosure Aberdeen's Royalty Loan Agreement has been posted on SEDAR.

George Faught, Aberdeen's President and CEO, stated, "We are pleased with the progress made during the first quarter. We have seen our investment portfolio appreciate significantly in value. During the quarter we made strategic investments in Sulliden Exploration and Magma Metals which both could have significant upside for Aberdeen." Mr. Faught went on to state that, "Aberdeen is particularly pleased with the increase in value of our Royalty Loan Facility with Simmers. While gold production from the operations has fallen below forecast, Simmers continues to deliver significant growth in the value of the Royalty through increased life of mine ounces for both the underground operations and the Tailings Recovery Project. The Strathmore Project, while conceptual at this stage, could also add significant future value to the 1% tail royalty."

Mr. Faught also stated "we fully expect our share price will trade in line with our NAV once the market has a full appreciation for the terms of the Convertible Royalty Loan Facility. We also anticipate that the significant value of the Royalty Facility will materialize once the convertibility feature of the loan is exercised later this year."

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.

Contact Information

  • Aberdeen International Inc.
    George Faught
    President and CEO
    (416) 861-5887
    or
    Aberdeen International Inc.
    Stan Bharti
    Executive Chairman
    (416) 861-5876
    Website: www.aberdeeninternational.ca