Fancamp Exploration

I did not make up the $101.12 per share. Not to get lost in my explanations of the arithmetic and to put that arithmetic in context, I will first comment on management’s continuing inactivity.

Reacting to a message I posted here late last Spring, three shareholders called up IR. That’s what it took before even one word was put on our website mentioning Argex Mining. More recently, IR was unaware of important developments at Bold Ventures, weeks after we issued the Press Release describing them. Obviously IR is making no attempt to engage investors when IR is not engaged itself.

I cannot detect management is lifting one finger to do one thing about the price of our shares. This is worse than (as the saying goes) “leaving the store unattended.” A store is a physical entity where sales are made. With a store, there’s always the possibility of self-service. So far as we’re concerned, no business will magically and miraculously transpire all by itself.

How many conversations are we having daily with influential people in the investment advisory community? Zero. It would cost us well below five percent of what we spend on drilling to set up ongoing communications, dedicated to speaking to two such people each and every day.

Why aren’t we doing this or anything remotely resembling this? Incompetence and mismanagement. Collectively, it’s costing us many millions of dollars. Why? Plain and simple, Fancamp management has no understanding of what attending to business requires.

On the job (as part of your career), imagine your livelihood (and the welfare of your family) depended on your making sales. The first rule of salesmanship is to ask for the sale. You will never even approach square one, if you refuse to even pick up the phone or knock on the door. If (so to speak) you sit in the car, refusing to get out, dozing off, refusing to move: How many sales will you make? Will your family prosper? Or go hungry?

Do we have a tough sale to make? We need to stimulate a continuing interest in our portfolio of assets. Dollar-for-dollar, is it worth the investment? Is that an insurmountably difficult thing to accomplish (twice a day)? After all, we’re not asking the investment advisor to write us a check.

Is management’s lackadaisical attitude really costing us millions? Don’t take my word for it. Double-check my arithmetic. To make matters simple, only consider Magpie. Imagine that’s our only asset.

I have no chemical or metallurgical or geological expertise. This is purely an exercise in mathematics. Conduct your own due diligence. When reading a metallurgical report, never depend on non-expert, such as myself, when it comes to drawing firm conclusions. But I do know a thing or two about common sense, which is in short supply at Fancamp these days when it comes to communicating to investors what we have.

The lowest valuation I’ve been able to find of an in situ resource, in percentages, in terms of the present Spot Market Price is 1.4 percent. Rare bonanza deposits have sold for above 30 percent of Spot Market. The purity and the consistency of our Magpie resources are well above average. On the other hand, we do not have a bonanza.

Last April, I posted a message reminding people about the excellent companies Management selected to assist us scientifically evaluating our Magpie resources. The link follows:

http://agoracom.com/ir/Fancamp/forums/discussion/topics/529016-this-is-important-don%E2%80%99t-forget-sgs-and-corum/messages/1673724#message

Fancamp and the qualified geologists we employed termed “successful” the initial tested chemical separation of the components of our Magpie Metal Ore. “Successful” was the word used by P&E Mining Consultants in its Magpie NI 43-101 of 6 June 2012. We also described it that way in our website Company Presentation and in the Press Release we issued about it last year.

So, in all likelihood, we are not looking at resources that are the worst of the worst. I use 2 percent as a modest, well below midpoint, jumping off point to estimate the Magpie in situ values compared to the Market Spot Prices.

On 5 July 2012, I posted the values both in terms of individual metal oxides as well as in terms of those oxides being somewhat less refined (that is containing 75% of the non-ferrous oxide combined with 15% iron and 10% impurities and smaller metal components). Breaking the metal down into its pure oxide form gets more than an approximate 39% higher market price than breaking it down less and leaving in 15% iron. I explained this in greater detail in my 5 July 2012 posting (as follows).

http://agoracom.com/ir/Fancamp/forums/discussion/topics/537431-magpie-ferro-titanium-ore-112-56-share-at-2-of-market/?message_id=1697016#message_1697016

Regardless, of course, more refined ore prices and less refined ore prices will move up and down, in tandem, according to how the market values the underlying metal. So, in the following update, I am simplifying matters by restricting myself to the less refined scenario, which will get us the 39% lower valuation. I am not so much doing that to be conservative, as I’m doing it because, on the Spot Market, non-ferrous metal ores are generally sold in the less refined form (which leaves in an acceptable range of percentages, the midpoint containing approximately 15% iron and 10% impurities and other metals).

I’ve taken the ore tonnages from our 1 June 2012 NI 43-101 Magpie Press Release. I’ve used the Spot Metal Prices, from the 21 January 2013 markets’ closing.

Magpie #2 Deposit In Pit Resource at 15% FeT (Total Iron) Cut-Off (in metric tonnes)
635.2 million tonnes Indicated – Fe2O3 60.78% – TiO2 11.20% – Cr2O3 2.61% – V2O5 0.30%
293.2 million tonnes Inferred – Fe2O3 60.49% – TiO2 11.21% – Cr2O3 2.54% – V2O5 0.32%

433.75 million tonnes = Our share from our 46.72% ownership of Combined Indicated and Inferred
Fe2O3 60.69% – TiO2 11.20% – Cr2O3 2.59% – V2O5 0.31%

Million metric tonnes = 263.24 = Fe2O3 ($121.38 CAD metric tonne 21 January 2013)
Million metric tonnes = 251.01 = Fe2O3 deducting Ferro Titanium, Ferro Chrome, Ferro Vanadium

Million metric tonnes = 64.77 = Ferro Titanium ($7,324.21 CAD metric tonne 21 January 2013)
Million metric tonnes = 14.97 = Ferro Chrome ($2,461.25 CAD metric tonne 21 January 2013)
Million metric tonnes = 1.79 = Ferro Vanadium ($31,260.00 CAD metric tonne 21 January 2013)

$30,467,593,800 (251.01 million metric tonnes x $121.38 market price) = Fe2O3
$474,389,081,700 (64.77 million metric tonnes x $7,324.21 market price) = Ferro Titanium
$36,844,912,500 (14.97 million metric tonnes x $2,461.25 market price) = Ferro Chrome
$55,955,400,000 (1.79 million metric tonnes x $31,260.00 market price) = Ferro Vanadium

Total = $597,656,988,000 Market Price

1% of Market Price = $50.56 per share ($5,976,569,880 / 118,205,820 shares outstanding)
1.5% of Market Price = $75.84 per share ($8,964,854,820 / 118,205,820 shares outstanding)
2% of Market Price = $101.12 per share ($11,953,139,760 / 118,205,820 shares outstanding)
2.5% of Market Price = $126.40 per share ($14,941,424,700 / 118,205,820 shares outstanding)
3% of Market Price = $151.68 per share ($17,929,709,640 / 118,205,820 shares outstanding)