Highly prospective exploration company

Resource projects cover more than 1,713 km2 in three provinces at various stages, including the following: hematite magnetite iron formations, titaniferous magnetite & hematite, nickel/copper/PGM, chromite, Volcanogenic Massive and gold.

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Message: Letters to Our Great Sovereign and to The Unhurried Directors
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6 September 2012

Hello Peter Smith.

Even though you haven’t answered my previous correspondence, I believe you should be given this additional opportunity to demonstrate, yet again, your disrespect for the shareholders. You can do that by simply following your usual inclination to ignore us.

Of course, there’s a hole in my strategy. You could totally cross me up (and make me look like a fool) by responding thoughtfully and courteously. That’s the chance I’m taking.

You will note (in the following letter), I’ve taken to calling you our “Great Sovereign.” That’s because of the distance you’ve put between yourself and the people who’ve financed your imperial reign. Of course, again, you could put a hole in my argument, by initiating a behavioral makeover.

In any event, I will not be following your example of stubbornly staying out of touch (as though it were a virtue, which must be rigorously defended at all costs). So, this is what I’ve been doing today: Writing, as follows, to the Fancamp Directors who’ve been slow to respond. Also, I’ve been communicating much the same information to the Advisory Board and to others who’ve befriended “Shareholders for Accountability at Fancamp.”

Yours truly.

Hello [Unhurried Director].

$18,641,455 = Fancamp market capitalization (at yesterday’s close).
$10,667,750 (with trading restrictions) = Value of our CHM shares (at yesterday’s close).
$7,470,000 (with trading restrictions) = Value of our RGX shares (at yesterday’s close).

$503,705 (in terms of single dollars, not thousands of dollars) = Without CHM and RGX.

Many millions of dollars = Value of Fancamp’s NSR positions in CHM and RGX.
Many millions of dollars = Value of Fancamp’s properties, not counting Magpie.
$11,293,145,566 ($102.99 per share) = Value of Magpie at 2% of Market.

Of course, these are shocking statistics, especially the Magpie numbers. You can double-check my Magpie arithmetic in the Addendum I’ve added to this letter.

As I said earlier, I represent very substantial numbers of very substantial shareholders. We are eager to hear from you. We are not overdramatizing it when we say, “Justice delayed is justice denied.” Expecting investors, for no good reason, to absorb serious financial blows is (with no exaggeration) an injustice. This is no longer a fledgling company seeking its first investors. We have the resources to do something about the disconnect between our share price and the reality behind our property values.

Regarding our abysmal market capitalization: Simply put, it’s intolerable. The shareholders will no longer endorse any Director who does nothing about it. I’ve had it said to me, families are coming apart over this. We want to know why the response is not to respond. What’s going on? Why has the company adopted no course of action? Universally, all the other companies in our industry seek out investors. Far from seeking out new investors, our Great Sovereign does not so much as acknowledge his few remaining shareholders even deserve to have their written questions answered.

Who do we have in our executive suite? Great Princes surrounded by Royal Courtiers? Inquiring minds want to know. The course of action left open to the shareholders is to choose up sides and get on with it already. We are not interested in being represented by strong silent types. If you have opinions favorable to shareholders but prefer to keep them to yourself, to us, that’s the equivalent of being anti-shareholder. We expect better.

We’re a non-exclusive organization that has significant proposals out there, centered on improving communications between Fancamp and investor analysts and investor advisors. Getting on the right track means, to start with, we must establish excellent channels of communications amongst ourselves.

The company, by having zero coherent communications strategies (and by not so much as giving it a moment’s thought), is setting itself up to visit further hardships upon its shareholders. The company has shown that it is only adept (or inadept) at delivering its investment message to an empty auditorium. The only people who are listening (in the outside hallway) are the company’s handful of diehard shareholders. That’s not a recipe for success. We’re out of patience—and endurance—with incommunicative people who live in ivory towers.

The Addendum to my introductory letter laid out the basis for doing something positive. Have you read it? What do you think? The best way to inform us whether or not you support what we’re doing is to tell us either way. Even briefly, kindly spend the time to write or email or phone. Thank you.

Best regards.
Shareholders for Accountability at Fancamp.


P.S. The Addendum with the Magpie arithmetic follows on the next page.


Addendum [Separate page. I posted much the same previously on Agoracom, on its own.]

On 5 July 2012, I posted on Agoracom Magpie 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 oxides combined with 15% iron and 10% impurities and smaller metal components). Breaking the metals down into their pure oxide forms gets more than approximately 39% higher market prices than breaking them down less and leaving in 15% iron. I explained this in greater detail in my 5 July 2012 posting (as follows).

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, predominately from the 4 September 2012 markets’ closing. I have no chemical or metallurgical or geological expertise. This is purely an exercise in mathematics.

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 ($122.48 CAD metric tonne 28 August 2012)
Million metric tonnes = 251.01 = Fe2O3 deducting Ferro Titanium, Ferro Chrome, Ferro Vanadium

Million metric tonnes = 64.77 = Ferro Titanium ($6,935.77 CAD metric tonne 4 September 2012)
Million metric tonnes = 14.97 = Ferro Chrome ($2,724.98 CAD metric tonne 4 September 2012)
Million metric tonnes = 1.79 = Ferro Vanadium ($24,520.00 CAD metric tonne 4 September 2012)

$30,743,704,800 (251.01 million metric tonnes x $122.48 market price) = Fe2O3
$449,229,822,900 (64.77 million metric tonnes x $6,935.77 market price) = Ferro Titanium
$40,792,950,600 (14.97 million metric tonnes x $2,724.98 market price) = Ferro Chrome
$43,890,800,000 (1.79 million metric tonnes x $24,520.00 market price) = Ferro Vanadium

Total = $564,657,278,300 Market Price

1% of Market Price = $51.49 per share ($5,646,572,783 / 109,655,620 shares outstanding)
1.5% of Market Price = $77.24 per share ($8,469,859,175 / 109,655,620 shares outstanding)
2% of Market Price = $102.99 per share ($11,293,145,566 / 109,655,620 shares outstanding)
2.5% of Market Price = $128.73 per share ($14,116,431,958 / 109,655,620 shares outstanding)
3% of Market Price = $154.48 per share ($16,939,718,349 / 109,655,620 shares outstanding)
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