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Gold/Mining/Energy : International Panorama
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To: Dan P who wrote (23)12/20/1996 5:48:00 PM
From: Malcolm Stagg   of 264
 
Daniel and everyone; Here is an interesting write-up on ILP from Stockman's forum last night. Stock closed at $3.30 today on 27.8K shares. Think the plans for '97 should reward us all.

Malcolm

Subject: ILP.V

International Panorama (ILP.V) Close Dec 19/96 CDN$ 3.25
52 week Hi/Lo CDN$0.86-5.40
Shares fully diluted: 24.7 million, Cash on-hand CDN $4 milllion
Contact Zack Dingsdale IR (1-800-931-1818)

I originally introduced this company to our members back in
September. At that time it was trading in the $CDN 3.80 range. I
saw it then as a longer term buy with a terrific potential. I
suggested that beyond an initial position to watch the market for
weakness as buying opportunities. I took a ssmall position then
and have been adding to it. Well it's December now and I remain
as bullish on it as before, and now it's a much better buy.

ILP are in a 51% joint venture partner with Gecamines, the State
owned mining enterprise in Zaire. Together they plan to develop
two tailings projects for Copper and Cobalt. Consisting of
61 million tonnes these above ground, crushed rerserves are a
product of much more inefficient past mining practices. With an
average of 0.195% Cobalt and 0.98% Copper (based on Gecamines
records) this equates to 225 million lbs Cobalt, 1.3 billion lbs
Copper. At todays prices and allowing for est'd recovery rates
this is CDN$8.2 billion in value!

Processing will be done by building a new solvent extraction
(SXEW) and sulphuric acid facility. Scheduled to commence in
May '97 and in production by end of 1998.

Since September ILP have progressed as follows:
-The Joint Venture has been approved by the current gov't.
(more on political risk below!)
-Bateman Minerals and Industrial Ltd., a respected S. African
firm have been hired to do a bankable feasibility study. Their
first report issued in November stated that based on $US12/lb
for Cobalt (currently $21) that ILP would earn $US 900 milion
after tax over a 10 year life. Breakeven is $6/lb! -Drilling
of the tailings to verify grades has been started with 300 holes
and 7 tonnes of sampling-again by an independent company. Results
expected in early January.

Based on conversations with Co. they predict following to
happen soon: -TSE listing by February, NASDAQ later in year
-Tour of sites in Feb. to analysts, banks
-Preliminary report from Bateman in February and final one in March '97
-Financing (60% debt, 40% equity) upon issuance of favourable
report confirming feasibility.
-They are pursuing some other Gecamines owned sites for possible
acquisition in early 1997

My analysis is that the share value could be in the CDN $15 range
based on a 5X multiple of the CDN $3 per share cash flow (at
$12/lb Cobalt) per the first Bateman report. This assumes dilution
to 40 million shares as planned to finance the plant. Other reports
have speculated values from CDN$ 8.50 to over $40 (full production)

The risk is mostly political given the state of affairs in Zaire.
However the recent problems were over a 1000 km away and although
this is not Kansas, mining companies have operated here and the
existing concentrators owned by Gecamines operated throughout
the period. Other companies pursuing projects in Zaire include
Cons. Eurocan Ventures (KEU-T) with a large project just announced
and American Mineral Fields (AMZ-T).You have to compare this
political uncertainty to the risk we normally have in guessing
grade/size in new "underground" explorations.

I think we could see a run-up in the New Year upon a good
report (no surprises)on grades from the drilling. Stock had dropped
to low $2 range with the refugee problems in N/E Zaire. It then ran
back up to $3.50 and was halted temporarily after the company got
too zealous distributing a recent very bullsh report in The Natural
Contrarian which predicted a $45 share price! In the range of
CDN$ 3.20-3.30 now.

I see it as a unique situation and one that could be very exciting
for us in 1997. If after doing your own due diligence I would not
wait too much longer as momentum could pick up soon. Good Investing!
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