Net Asset Backing 16.1 to 73.7 cents

Widespread Portfolios net asset backing per share 

We wish to advise that the unaudited net asset backing per Widespread Portfolios share, as at 8 a.m. today, ranges from 16.1 cents to 73.7 cents, depending on the valuation methodology applied to our major asset, our 6.4% shareholding in Asian Mineral Resources (“AMR”).

Share of AMR net assets

This net assets calculation assumes our Asian Mineral Resource shareholding is valued at our share of AMR’s audited net assets, an approach consistent with our major shareholding in AMR and continuing significant influence within the company. The recently published Asian Minerals annual report records net assets of CAD 48 million. This figure is based primarily on construction costs capitalised since the mining license was granted in December 2007. This carrying value has been sustained, in discussion with the AMR auditors, based on project valuations that obviously match or exceed CAD 48 million (as if they hadn’t an impairment write-down would have been necessary).

May 2009 20 day volume weighted average price

Our recently published audited financial statements include the AMR shareholding at the twenty day volume-weighted-average-market price as at 20 May 2009. This approach, dictated by New Zealand International Financial Reporting Standards, results in an NTA per WID share of 20.5 cents.   We consider this price irrelevant as a) it assumes an efficient market exists for AMR shares and b) that the market value of small parcels of AMR shares is the same as that for large holdings. Neither assumption is correct in respect of Asian Minerals shares 

AMR market price today

The last price the AMR shares traded at in Canada. We also consider this price irrelevant for the reasons already stated.

Malaysian Smelting project valuation

Malaysian Smelting Corporation, a Malaysian listed mining conglomerate also represented on the board, holds the second largest shareholding. Its recent annual report records that its 18.2% Asian Minerals shareholding is valued at CAD 26.4 million, effectively valuing the company at CAD 145 million. This audited carrying value is based on an audited robust project valuation of the Ban Phuc Nickel Mine forecast cash flows. This project valuation obviously matches or exceeds CAD 145 million. 

Our view

We prefer the bricks and mortar based net assets figure of CAD 48 million, partially because this would be the floor price if it were decided by Asian Minerals to sell the project together with the mining license, exploration programme data, and other intellectual property in the company. Approximately CAD 75 million has been invested in the project since 1989.

Your view

We have detailed the various valuation approaches that can be applied to our shareholding in AMR. Given the transparency of this information, our shareholders are now in a position where they can then decide for themselves what they consider to be the value of our shares.

Using the share of AMR’s net assets approach, the fully diluted NTA per WID share, assuming all the remaining warrants are exercised, ranges between 63 cents a share (assuming all warrants are exercised by 30 June 2009 @ $1.986 and $2.186) and 87 cents a share (alternatively assuming all the remaining warrants are exercised @ $2.986 and $3.286 between 1 July 2009 and 30 June 2012). 

This NTA per share information is also available on our website (www.widespread.co.nz)  and is updated daily.

For and on behalf of the Board,

Chris D Castle

Onekaka, 26 June 2009