From: Wade
Date: 04-Jun-97-08:23 PM
I didn't want to interupt your thread because a lot of you are heading in the right direction on this thing. But, since we made a public announcement I will expand on a few of your comments.
First, with respect to the credentials of individuals, please let me clarify something (since I received a call from Noranda Inc today). Mr. Turner is on the Board of Directors for Noranda FOREST and not Noranda Inc. (big difference, especially to US).
Second, Basil Punit is "special advisor for North American investments into Guyana" -- this was on the original press release sent out by IBI to the media but "edited out" on some of the news services, like Canada Stockwatch. I guess they thought that this part was not important. Anyway, one of you loyal shareholders informed me of the mistake and I called Stockwatch to correct it. I guess Stockwatch thought this guy was just an Accountant for P/W ---well, he is much more than that. Basil has helped us secure the gold properties in Guyana for Placer Dome and he helped us secure the timber in Guyana as well.
Now for some math (because I saw some of you refering to some numbers in the previous messages).
Say Guyana has "45" million acres of MATURE timber to harvest. Like it was said in one of the previous messages, if they clear-cut the timber, it WOULD look like a desert.... so say they allocated say, 1 to 1.4 million acres of timber to a RESPONSIBLE timber company, say a company like Noranda Forest for example. The RESPONSIBLE timber company could plant new trees after the mature ones were cut down and "reforest" the harvested area. If you are working on an area 1/45th of the total area (1 million out of 45 million) when you take reforestation and the length of time it takes for trees to grow to a marketable stage -- you see that this could go on for ever. For you finance majors, a perpetuity if you will.
Let me qualify this first by saying that the following is just an example of how things could potentially work out...it may or may not work out exactly like this. Some math...
Say that the net cash flow from each acre of trees is $500 Canadian(it's actually $U.S. but I use Canadian so you can relate it to our shareprice... ...till we hit the NASDAQ)after all operating expenses. On 1 million acres, that would be a net cash flow of $500 million. Say that IBI was looking for a 40% stake (as an example) in the net cash flow. That would mean $200 million would come IBI's way. Spread $200 million over 140,617,020 shares and you get $1.42 in cash per share.
Question: Would you pay 13 cents a share in order to get back $1.42? (What is this, rocket science?)
Answer: You tell me.
Now here are some variables that could change this:
1) IBI's actual percentage of the deal 2) The length of time it takes to harvest. 3) $U.S. vs. $Canadian
You guys talk to your brokers and ask what P/E ratio the "other" stocks you guys are buying are trading at. (P/E - Price/Earnings ratio. The MULTIPLE of a stocks net earnings that a stock trades at) You ask your broker what people pay in the marketplace for a stock with a net cash flow of $1 or more per share...you guys do some serious homework on this fact and even discount what I say by "50%" or more and you will see that this stock is really, really, really undervalued.
I can tell from your comments on this thread that some of you guys really know your stuff and are going to do very, very well with this stock. There are some even bigger things coming that none of you know about yet.
For those of you still "Confused", "Frustrated" and "Still Holding (confused and frustrated) do some homework to confirm the above discussion.
The reason that the stock price is where it is right now is because not enough people are doing thier homework on this stock and because this deal hasn't been finalized yet. I am a hard person to get a hold of generally, but there are a lot of other ways you can check this out. But please do me a favour: Don't call Noranda and bug the receptionist about some "pending deal". We are still in the negotiating stage and they won't tell you anything till it's a done deal anyway. So please don't p--s them off. You'll see it in the paper.
Rocket science aside: If a group with a "BIG" bunch of trees want to get together with a group with a "BIG" bunch of chainsaws and take some little OTC listed company for a ride there must be way, way more to this.....make sure and read the Globe and Mail very, very carefully over the next couple of weeks.
Wade.
P.S. To those of you who have sent me e-mail over the last 3 weeks, I am sorry I haven't replied yet. I will as soon as I can. Ditto on updating the website...that's my baby as well. I hear ya.
I'm in the office till at least midnight tonight if you want to give me a call. |
