Here is a possible reason for the increase today and perhaps previously. This is a infomercial sent out by Stockwatch and paid for by ??? Note the misstatment of one (or perhaps more?) facts - ie, this states that the Canadian Court ruled favorably for AGM whereas the opposite is true. The "valuation" set forth in the infomercial means diddly squat unless the Indonesian courts rule in AGM's favor which is a long long way from certain.
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AG Armeno Valuation at US$289 Million
--------------------------------------
We have had a significant development on the Armeno story. It goes like
this: When the decision was made to sue PT Pukuafu Indah (PI) in the
Indonesian courts several months ago, the heads-up management of Armeno
engaged a well regarded mining engineering company based in Toronto,
Canada, Broad Oak Associates, to investigate and report the value of the
property in dispute. The report, which was delivered recently by Geoffry S.
Carter of Broad Oak Associates, had this disclaimer. "I have not received
any interest, either direct or indirect in the property or do I
beneficially own, directly or indirectly, any securities of AG Armeno or
any affiliated company." The report listed values under a variety of
conditions. It said: "The 90% interest in the participating 20% carried
interest in the Batu Hijau mining project is valued at U.S. $289 million
dollars."
The number is the Net Present Value (NPV). Broad Oak's report is
approximately US$100 million less than the amount we stated in our earlier
reports, which was US $386 million. The difference arises from using
different interest discount rates to calculate the NPV. For instance, we
reported the interest discount rates used by Newmont Mining Company.
Newmont had several NPV Figures based on discounts of 10% to 15%. We
selected the 10% figure. Broad Oak did their calculations independently.
They used a median rate of 12.5%, and arrived at a lower NPV. Either amount
is substantial. Here are some calculations.
Armeno has approximately 29.6 million shares issued currently. Broad Oak's
$269 million computes to slightly over US$9.76 a share. That is about 100
times greater than today's offering price of US 9-10 cents per share!
Options and warrants must not be overlooked. There are 8.5 million
outstanding. Adding these to the share issued gives us a fully diluted
number of 38.1 million shares. Divide $269 by that and you still get over
US$7.58 per share, 76 times today' offer price. There are a number of
different values calculated, varying with the discount rates, which we have
touched on, and other variables such as actual mining costs, the
percentages of copper and gold able to be retrieved from the ore, and most
importantly, the market prices of the metals. Broad Oak's range of values
was a low of $208 million ($7.02 per issued share, or $5.46 per fully
diluted share) to US $417 million ($15.50 per issued share, $10.95 per
fully diluted share). Look at the upside potential versus the downside
risk. Can you now see why we think that this is such an unusual
speculation?
Where does the situation with Armeno stand today? What are their chances?
We hesitate to say that everything will be peaches and cream, but we are
very optimistic. Armeno has, after all, won the first round with the
decision in its favour by the British Columbia court.
There are now two different lawsuits. One is the civil suit against PT
Pukuafu Indah (PI), which is being heard in Indonesia. The next scheduled
court date is for October 26th. At that time, Armeno will present its side
of the case, including, no doubt, the Broad Oak valuations. Meanwhile, the
assets of PI have been frozen by the court until the case is resolved.
There have been hints at a possible out of court settlement, but nothing
more than that.
The second lawsuit names Newmont Mining Company as the defendant. It is
being heard in the Supreme Court of British Columbia. It is based on the
allegation that Newmont Mining interfered in the agreement between Armeno
and PI, and in so doing, caused damage to Armeno. Newmont's initial defense
was to claim that the B.C. court did not have jurisdiction. The lone judge
who heard the argument agreed with Newmont's lawyers, and so ruled. Armeno
immediately filed a Notice of Appeal to the three judge Appeals Court,
citing errors in interpreting the law. A decision has not yet been
announced on the appeal. Should it go against Armeno, they will no doubt
take the case to the U.S. Federal Court where thee is no question of
jurisdiction. As a matter of interest, Newmont Mining Company recently sent
a letter to Armeno advising them to pursue both lawsuits, including the one
against themselves, saying that this should not interfere with a possible
settlement (between Newmont and Armeno).
We believe that the share price, which was never very big, has fallen as
much as 50% for the usual reason - lack of news. Those who first heard this
story and decided to buy shares have done so. Others may have heard of it
but chose not to buy shares for their own reasons. As initial buy offers
were then filled, and fewer new ones appeared, it is normal for prices to
set back. The price is in no way an indicator of outcome.
So, by virtue of this update, which is not thought of as inside
information, you now have the whole story, more information than most
people have. You know where the court cases stand. You know the value of
the property by an independent, objective, and qualified mining engineer.
This is not a usual speculation. As a matter of fact, because it is a
litigation, many people stay away from it, thinking that it will take years
to resolved.that it is a case of David against Goliath.
We cannot say how long these cases will take, but we will note that most
lawsuits are usually settled out of court. The very act of "settling"
implies that there is a valid claim. A settlement, therefore, suggests that
Armeno shareholders might benefit. By how much? There is no way to know at
this time, but we see little possibility that Armeno will be hurt. By
settling out of court, both parties save time and legal fees. We are hoping
for an early resolution.
Need we expand upon the wisdom of buying more shares if you can afford it?
An opportunity such as this may not come again ever, or at least not for a
very long time.
Just to remind you, AG Armeno Mines & Minerals trades on the Vancouver
Stock Exchange under the symbol AGM, and on the OTC Bulletin Board, symbol
AROYF.
For more information, visit AG Armeno's website at agarmeno.com,
or call Jake Kalpakian at (604) 681-1519, from the U.S. call
1-800-665-3119. You can also email Mr. Kalpakian at mailto:armeno@axion.net
=================================
AG Armeno Mines and Minerals Inc.
e-mail: mailto:armeno@axion.net
Web site: agarmeno.com
=================================
DISCLAIMER
----------
This is not a solicitation to buy or sell securities, and shall not be
deemed to offer any securities. Such an offering may only be made by
prospectus. This is not a prospectus and does not purport to be a complete
analysis of the Company's financial position. All claims made should be
verified by the reader. Investing in securities is speculative and carries
a high degree of risk.
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