Widespread Portfolios Fact Sheet at 14 June 2010
SUMMARY Widespread Portfolios is listed on the NZSX (code WID) and has been operating successfully as a niche investment company since 1989. The company listed by means of a reverse takeover of NZIJ.co.nz Limited in December 2003, The company has 23,490,449 shares and 8,505,123 30 June 2012 warrants on issue.
FINANCIALS Audited net assets at 31 March 2010 were $4.999 million (21.3 cents/share) Unaudited net assets as at 14 June 2010 were $11.7 million (50 cents/share), reflecting the effect of a recent independent valuation of the Chatham Rise Rock Phosphate prospecting licence.
MARKET VALUE $3.3 million (ords - 13.3 cents, warrants 1.5 cents)
OPERATING PHILOSOPHY Widespread is a venture capital investor in the mining sector.
The primary objective is to achieve growth in shareholders' funds. The objective is not to make trading profits on a regular annual basis by selling successful investments. A year in which NTA per share increases by 20% or more is a good year, regardless of the accounting profit or loss that may have been incurred. The company has no borrowings and is funded entirely by shareholders' equity. The company does not pay dividends: all profits are retained and reinvested. Another key aspect of the WPL investment approach is the relatively narrow spread of investments held at any one time. Often 4 or 5 investments represent at least 90% of the portfolio value.
MANAGEMENT STRUCTURE Widespread has no staff. The company is operated under contract by Chris Castle.
DIRECTORS Linda Sanders (chairman), Chris Castle, Denis Kelly, Jill Hatchwell, Keith Hindle
MAIN ASSETS Chatham Rise Rock Phosphate Project (49.8% of portfolio) Asian Mineral Resources (25.8%), Widespread Energy - oil and gas assets (8%), King Solomon Mines (5.2%), other strategic investments (6%) and cash and small holdings (5.2%).
CHATHAM RISE ROCK PHOSPHATE PROJECT
Widespread Portfolios (10%) and Widespread Energy (90%) comprise a joint venture that holds an exploration licence over an area off the coast of New Zealand believed to have significant seabed deposits of rock phosphate and other potentially valuable minerals.
The year one work programme involves reviewing and analysing technical data, studying environmental impacts, assessing the project economics, and designing an exploration programme to be undertaken in year two.
The licence area of 4726 square kilometres is 600 km east of Christchurch, at very shallow depths on the Chatham Rise and in New Zealand territory. The exploration permit is for two years with further priority rights to extend the permit or apply for a mining licence.
Extraction of the rock phosphate would provide a locally produced alternative to the 1 million tonnes of this material annually used in New Zealand and currently imported from Morocco, thereby reducing our carbon footprint as well as high transport and foreign exchange costs.
Rock phosphate is an essential ingredient of fertiliser and can be applied directly to pasture with less environmental damage than super-phosphate from run-off. Extensive exploration in the 1970s and 1980s identified a potential 100-year supply for the New Zealand market. Recent substantial increases in the market value of rock phosphate and advances in offshore extraction technology mean it is now feasible to harvest this resource. The deposits are comprised of nodules lying on the seabed at relatively shallow depths and the relevant technology for such extraction is used routinely.
ASIAN MINERAL RESOURCES (AMR) Widespread holds 4.3% of this TSX.V listed company that is developing a nickel mine in Vietnam. Following the imposition by the Vietnamese government of a 20% export tax on nickel in June 2008 (combined with weak world nickel prices) the project was subsequent mothballed. Development has recently recommenced following an improvement in nickel prices.
KING SOLOMON MINES Widespread holds 11% of King Solomon which is exploring for minerals in the under explored Inner Mongolia section of a major fold belt that elsewhere hosts world-class gold and copper deposits.
KSO has a strong project portfolio which includes Bu Dun Hua (near Wudan) acquired in 2007 after recognizing porphyry Cu style alteration around a modest quartz-hematite vein system known as the Lao Ping Tong mine. Despite widespread sand and colluvium cover, KSO has worked systematically outwards from Lao Ping Tong through 2008-2009 and late in 2009, located the outer margin of a strongly altered and Cu-Mo mineralised porphyry intrusive complex.
This discovery, under 35m of cover, is an important step in KSO’s endeavours following its selection of Inner Mongolia as an appropriate exploration environment for low cost discovery of new bulk-mineable porphyry style deposits.
In 2008, KSO undertook detailed mapping, geophysical surveys, surface sampling and drill testing of two fault zones in the Lao Ping Tong area. Strong Pb/Zn mineralisation, widespread alteration and porphyry-style veining provided strong evidence of a nearby mineralised porphyry intrusive.
In 2009, it drilled 6 diamond holes, 5 at the Whitehorse prospect 1km northeast of Lao Ping Tong. Three of the 5 holes intersected strongly altered sulphide-mineralised intrusive rocks under tens of metres of colluvium and drifting sand cover.
The 2010 exploration programme is presently underway.
KSO also holds Marmot Ridge, a porphry copper prospect along geological trend from the giant Oyu Tolgoi copper-gold deposit, and Wuritu, a potential high-grade shear hosted copper deposit. Other prospects include Sonid North & South containing regional shear hosted disseminated gold targets. More information can be found at www.kingsolomonmines.com
WIDESPREAD ENERGY Widespread Portfolios holds 20% of NZAX listed Widespread Energy, a venture capital investor in the energy sector. Widespread Energy has invested in the following opportunities:
- Chatham Rise Rock Phosphate Project (see above)
- Akura Limited (privately owned, Fiji based oil explorer) which holds 3 granted petroleum exploration licences in Fiji
- Petroleum Exploration Permit (PEP) 38526 over the Kotuku Oil Seeps, West Coast, South Island
- 11.7% of Green Gate Limited, which holds PEP 51150 onshore Taranaki, expected to be drilled in calendar 2010
- PEP 50439 covering an area of over 3,269 km2, off the West Coast of the South Island between Hokitika and Punakaiki.
KEY VALUE DRIVERS
Notwithstanding the setbacks encountered in 2008 and 2009, significant capital growth is still anticipated in the value of Widespread's major investments. However, given the portfolio weightings, an increase in the value of the Chatham Rise Rock Phosphate Project will have the most effect on Widespread's asset backing per share.
SHAREHOLDERS Directors hold 12.7%, top 20 shareholders 46.6%, 803 other shareholders
