Hi TeleProbe,

Very nice and thorough analysis. Bravo!

I have looked at this during the last few days as well, but from the point of view of the potential value of FNC. I would bring in the Market Cap at the end for comparison, since the Market Cap value is completely beyond our control. Often, they are out of whack, but that's what the market says (could be due to manipulation.

Value of FNC Holdings

1. Cash: 8M + 3M (from latest deal with CHM) plus $2.2M (BOL JV) = 13.2M (- small cash burn, which is ignored in this order-of-magnitude estimate)

2. Marketable securities $17M CHM (15M shares CHM) + $6.75M (9M shares RGX) = $23.75M

3. NSRs: 1.5 CHM +1% RGX: These are longer-term components. Could be lucrative if we are willing to wait fro a minimum of say 3 years, for the mines to get operational = many $M/yr.

If we are holding on to these NSR we could be becoming a royalty company, just sitting there collecting annual cash flow from the NSRs.

But we could sell them for cash: = minimum $50M, could be 2 x $50M

judging from estimate from previous posts (30M/yr for CHM alone), and one recent example in which KWG sold it NSR at McFaulds for $18M. This is just an example of the order of magnitude of the sale, and not by any way a one-to-one comparison.

4. McFaulds, Chromite, Ni and surface rights, proximity to NOT: JV with BOL may result in a huge gain for the 40% of the JV, if BOL hit some big Ni deposit = many $M

Surface rights for CLF to access the transportation corridor = many $M

Proximity to NOT Eagle. NOT may want to pay premium for this = many $M

Not sure if this belongs to FNC alone or as a part of the JV, anyone for better interpretation?

Just a guess, say all 3 above = $ 50M

5. Magpie: This is a major one, over 40% of Magpie (IPO imminent) = $ 50M

6. Lac Lamelee (longer-term) = many $M

7. Other properties (Appacachians, Red Paint & Norway, Desolation) = many $M

Total 1 to 7: minimum $187 M + many $M (for 6 and 7) = $220M (assuming $33M for all other properties)

This is approximately 8 x the Market Cap of $27.8M

Using the order of magnitude our valuation of FNC should be in the range

0.25 (current SP) x 8 = $2 minimum/share

with many wild cards such as Magpie and McFaults in the short-term which could improve the $2.00/share significantly. Similar thing could be said about items 6 & 7 above, but I am not brave enough to speculate . Any one?

Feel free to adjust the end result if you have better information.

goldhunter