Icon Industries Limited

Icon Industries Limited

October 09, 2008 14:43 ET

Icon Industries Limited: Chairman's Report to Shareholders

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 9, 2008) - Icon Industries Limited (TSX VENTURE:ICN) -

To All Shareholders,

It would be a complete understatement to say that the first 9 months of 2008 have been very difficult for the financial markets in general and for the junior resource markets in particular. To emphasize this degree of destruction, one need only to look at the TSX Venture Index which has lost well over 60% of its value in just 4 months. The last time the Index lost was in the crash of 1987 and then it took a whole year. In short, we have witnessed the development of a virtual tsunami and then watched it grow to where it has wiped out the value of the majority of junior resource companies.

But before we start climbing out on the proverbial 'window ledge', let's examine this destruction of value and in analysing its origin, the extent of its destruction and its possible aftermath, see if we can learn and, more importantly, gain from this unprecedented event.

To try and understand what's happening and where we are headed, let me relay the thoughts of an experienced investor friend of mine who has lived through many market corrections and who I believe correctly and properly put this financial tsunami and its level of destruction in perspective while at the same time providing a 'road forward' for those who survive it. It is an analogy that you've all heard before but, given its appropriateness to our present times, it is well worth repeating.

I QUOTE: "This financial tsunami had its creation in August 2007 when the first sign of trouble in the subprime mortgage sector raised its ugly head. Like all tsunamis it rolled onward picking up momentum and growth wherein it inevitably began to envelope other financial institutions and financial instruments throughout the industrialised world. Unfortunately, and with subsequent dire consequences, very few people at the time recognized it as a tsunami, but rather just a financial blip relegated to one small area of the U.S. economy. Certainly a bad call by everyone, but especially the banking fraternity and the elected representatives in Washington, D.C.

And while this tsunami continued to engulf the financial markets, we in the resource industry, while aware of the collapse of these other markets all around us, completely ignored the warnings of pending disaster and thought ourselves exempt from any likewise calamity as commodity prices remained close to their all time highs so we had no need for concern, and why should we; China, India, in fact the whole world, still needed our copper, nickel, zinc, etc., and so let's not be overly worried, and heck, gold was always the 'go-to commodity' whenever financial instruments and markets hit the skids, so those of us in the Au game are insulated anyway.

Boy, were we wrong!

You see, as in a real tsunami, nothing is spared, everything is vulnerable, and everything and everyone is affected. Tsunamis are by definition indiscriminate. They rollover everything in their path and are in no way selective or play any favourites.

And if you take the time to analyse the aftermath of any tsunami, you will see that for all tsunamis there are only two types of survivors: 1) the lucky ones; those that are thrown into a tree or equivalent and hang on for dear life until the tsunami is over; and 2) the person fortunate to be on a structure that is unaffected by the power of the tsunami, like a hotel or similar building.

And when the tsunami is over and the waters have receded and the lucky one comes down from his tree and the luckier one comes off his balcony, they can do one of two things: 1) go forth and try to help the unfortunate that are barely surviving, or 2) they can seek out the dead and steal their 'gold watches'." (Certainly, the second option is exceedingly insensitive to a human tragedy but one is reminded that this is only an analogy).

However, regardless of the selfishness of the second option of the analogy it is still very pertinent and meaningful to what has happened to the junior resource industry today, and more importantly, how it will affect your company, Icon. Whereas this financial tsunami has virtually wiped out an incredible number of resource companies, be they large or small, to say nothing about the demise of some of the biggest and oldest financial companies and institutions around the world, happily, I can proclaim that Icon is not one of them, but is in fact one of the survivors. The reality is, the aftermath of this tsunami has left many, many juniors, and even mid-tier resource companies without the necessary funds to continue their exploration and/or development projects and therefore must be considered to be the severely damaged casualties of this tsunami and, as with all severely injured, may not make it much longer as viable resource companies.

Icon, on the other hand, has a strong treasury of non-flow-through cash sufficient to allow it to hold on and wait until things settle, while at the same time permitting it to take advantage of any 'fire sale' of assets that become available in the resource market, and we are poised and prepared to do exactly that; to seek out and secure those 'gold watches'.

Presently we are completing the due diligence on a host of resource projects that have been brought to us by companies incapable of financing their on-going exploration, and sadly may in fact have trouble even paying their salaries or office rents, as their treasuries become progressively depleted. Even the good old standbys, family, friends, and fools have been tapped too often already and most don't have the stomach for more risk, especially in these unsettling times. And to exacerbate the problem, it does not look like the regular financing facilities through brokerage channels will become available for juniors for quite some time.

To put it bluntly, and with little compassion, as we are not talking about human lives here, we are working our way through a vast selection of 'gold watches' and we intend negotiating as hard as our hard assets permit to secure as valuable a project as possible for the least cost.

So in as much as our share price has been decimated like every other listed company, I reiterate: Icon is in the enviable position of being able to purchase outright, or joint venture, projects that would never have presented themselves without this tsunami of a world-wide financial crisis having happened, and we, your Management, intend on taking full advantage of this unprecedented situation with the objective of putting in place the assets that, when this market turns again to resource companies, Icon will be one of the first juniors to be recognized for its value by the investment community.

Yours truly,

On Behalf of the Board of Directors of

Icon Industries Limited

T. Barry Coughlan, President & Chairman

Certain matters discussed in this press release may contain forward-looking statements. Investors are cautioned that all statements, other than statement of historical fact, involve risks and uncertainties, including but not limited to: exploration and mining risks and financing risks. There can be no assurance that such statement will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Investors are encouraged to review Icon's fillings on SEDAR at www.sedar.com.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

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