Investors seeking junior mining resource exposure can find significant value in Aberdeen International (AABVF.PK). The company trades on the Toronto Stock Exchange under the ticker symbol AAB. It has a market capitalization of about $51.70 million.
According to the company, AAB is a global resource investments corporation and merchant bank focusing on private and publicly listed small resource companies. As I see it, the company is essentially an exchange traded investment fund whose success is highly depended on management's expertise and reputation with early stage mining companies.
Currently, the company offers significant value as it trades at about 40 percent discount to the value of the investments and loans it holds in its portfolio. To an investor seeking exposure to the junior mining space, AAB offers great value as an investor can essentially purchase the portfolio for roughly forty cents on the dollar.
The table below shows a summary of the portfolio AAB is holding. There are additional Royalty Interest assets, which were netted against the company's total liabilities. For more details see the company's reporting here.
Since we can only use publicly traded companies to determine the value of the holdings as of February 11, 2012, I have used the total decline in publicly traded companies and applied it to private investments. Cash and Loans Receivable remained flat since we have no reliable method of estimating current balances.
Original Cost | Oct.31.2011 | Feb.10.2012 | |
Total private investment | $16,471,504 | $17,624,515 | $14,099,612 |
Total publicly listed investment | $38,527,725 | $62,510,497 | $52,030,854 |
Cash | $8,316,461 | $8,316,461 | |
Loans & Accounts Receivable | $14,382,670 | $14,382,670 | |
Total | $54,999,229 | $102,834,143 | $88,829,597 |
Shares outstanding | 86,166,139 | 86,872,139 | |
Net Asset Value | $1.19 | $1.02 |
A note of caution, as an investor you must feel comfortable buying the underlying securities that make up the AAB portfolio and the exposure to the junior mining space. As history shows this area of investing can be highly risky as well as rewarding.
I also recommend monitoring the potential dilution from options and warrants, since more shares outstanding will reduce the per share value currently offered. To see the portfolio's holdings as of October 31, 2011 see here.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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