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News Room / Fancamp Exploration Ltd. Issued Significant Upside Market Valuation in Research Report

Fancamp Exploration Ltd. Issued Significant Upside Market Valuation in Research Report

ACCESSWIRE / March 3, 2014 / Fancamp Exploration Ltd. (TSX VENTURE:FNC) (Pink Sheets:FNCJF) (Frankfurt:3F9) is identified in a newly issued research report by Market Equities Research Group with several potential catalysts that exist in 2014 with potential to result in $50-$100 million market cap for FNC.V, translating to $0.75 per share -- FNC.V currently has 139.2 million shares outstanding and is trading near 10 cents. This comprehensive report places a 12 month price target on shares of FNC.V at C$0.75 based on key valuation drivers which surround the fact Fancamp is transitioning to a royalty company with potential life of mine revenue to FNC.V in excess of $440 million on two projects alone approaching production decisions -- Fancamp possesses royalty assets on multiple large properties that offer home run potential.
The full research report may be found at http://sectornewswire.com/report0301-2014FNC.pdf online.
Fancamp has focused on enhancing shareholder value by acquiring early-stage projects that have potential for rapid advancement, conducting highly efficient exploration programs on them, and then selling / optioning / joint venturing them to solid partners for cash / shares along with taking back a significant royalty on future production.
The company has completed this process for several of its’ valuable mining properties and now has over $1 million in net cash, $5+ million in marketable securities, and $10+ million in long term securities. Along with this solid working capital position, Fancamp has significant royalties on several advanced properties, the most important of which (in our opinion) is the 2%/4% NSR royalty on the Lac La Blache Titanium Project owned by Argex Titanium Inc. (TSX:RGX) , $100+ million market cap). The royalty rate is 2% for the first 2 years and a whopping 4% thereafter. Importantly, a highly positive Feasibility Study was completed for the project (Oct/13) and Argex management is now aggressively moving forward to put a mine into production. This would mean royalty revenue for FNC. The production forecast is for 50,000 tonnes of TiO2 per year for 25 years (1.25 million total tonnes). At a price of roughly US $3500 / tonne, this would generate annual gross royalty revenue of $3.5 million for the first two years (2%), with $7 million in royalty revenue (4%) for all subsequent production. Life of mine revenue would therefore be $168 million to Fancamp using the figures in the Feasibility Study, which represents only a portion of the total deposit. Fancamp also owns 6 million shares of RGX for additional upside.
Fancamp also has royalties on two very large iron ore projects, 1) a 1.5% NSR on Champion Iron Mines Ltd. (TSX:CHM) Consolidated Fire Lake North (CFLN) iron project, which has had a highly positive Preliminary Feasibility Study completed in 2013, and 2) a 1.5% NSR on Lamelee Iron Ore’s (LIR.V) Lac Lamelee South iron project, which had a resource estimate completed in 2013. Fancamp also anticipates significant option payments (over $16m) and a 0.4% NSR (or a 4% carried interest) on KWG’s (KWG.V) Koper Lake chromite project in the heart of Ontario’s Ring of Fire (assuming the option is fully exercised). These projects are all being moved forward with a view to demonstrating feasibility. Fancamp also owns a 46.7% interest in The Magpie Mines, owner of the Magpie deposit in Quebec, one of the largest undeveloped titaniferous magnetite deposits in the world, with critical processing studies continuing to move forward.
Summary of key value drivers:
1) Net Working Capital, Marketable Securities: Fancamp now has working capital and marketable shares (including shares held / released long term) totaling over $17 million.
2) Potential Future Options Payments: KWG has made an initial $50,000 option payment to Fancamp by issuing 10m shares. To earn its initial 60% interest, an additional $1.45m in payments must be made over 3 years. To earn an additional 20%, a $15 million cash payment will be required. To earn a 70% interest in the Beauce claims in Quebec, Bowmore (BOW.V) must pay $800,000 over 3 years.
3) Royalties: There is tremendous upside advancing each of the royalty properties. There is particular upside with the Lac La Blache property in view of the earnestness by which Argex is putting the property into production. Each of Champion, Lamelee, and KWG are aggressively advancing their properties toward feasibility – and each of these royalties would be significant wins for Fancamp over the longer term.
Royalty Property 1) Lac La Blache (RGX) - Potential NRS Value $168 million; NSR = 2%-4%, Resource/Reserve Tonnes (m) = 1.25, Price per Resource Unit = $3,500, Stage of Project = Feasibility Study.
Royalty Property 2) CFLN (CHM) - Potential NRS Value $273.6 million; NSR = 1.5%, Resource/Reserve Tonnes (m) = 182.4, Price per Resource Unit = $100, Stage of Project = PFS, Feasibility Study in 2014.
Royalty Property 3) Lamelee Fe Property (LIR) - Potential NRS Value $201.5 million; NSR = 1.5%, Resource/Reserve Tonnes (m) = 200, Price per Resource Unit = $100, Stage of Project = 43-101 Tech report.
Royalty Property 4) Koper Lake (BOL.V, KWG.V) - Potential NRS Value ???; NSR = 0.4%/0.8%, Resource/Reserve Tonnes (m) = 18.0, Stage of Project = 43-101 Tech report.
4) Other Properties: Fancamp continues to have an inventory of properties, but has dramatically curtailed its exploration programs to husband its resources. The remaining asset with company-making potential is its’ interest in The Magpie Mines (46.7%), which owns a very large tonnage deposit, with very high grades of Fe and TiO2 (along with Cr and V). Its’ massive, homogeneous mineralized rock and positive topographic relief bode well for the project. There are important processing alternatives being considered by leading Canadian and Chinese companies which, if successful, could result in another high value royalty interest.
Several potential valuation catalysts exist in 2014 with potential to result in $50-$100 million market cap for FNC.V, translating to $0.75 per share, .these include 1) Argex securing funding for Lac La Blache; 2) Completion of positive Feasibility Study for CFLN; 3) Positive processing studies for Magpie, 4) Successful drill results at Koper Lake.
The full research report may be found at http://sectornewswire.com/report0301-2014FNC.pdf online.
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Contact information:
Fredrick William, BA Ec.

Managing Director

Market Equities Research Group