Forum Archive Index - June 2000

["Leslie Robinson " <leslie.r@xtra.co.nz>]

Title: Re: [sharechat] Iddison Holdings ords

Phillip - perhaps I can help you.

Iddison Holdings Ltd - which incidently has just changed its name to Zedex Ltd - is the company that acquired the Vietnam businesses previously carried on by IT Capital Ltd. The principal activity of the company has been that of a Vietnam investor. While it has interests in poultry and building products (both currently dormant) speculative appeal now lies in its mineral interests in that country which are showing a lot of promise.

These are held as direct interests in two gold exploration joint ventures in Vietnam (Phuoc Son and Na Pai) and an approximately 23% interest in the Canadian listed company, Olympus Pacific Minerals Inc.

Allthough the Na Pai prospect looks interesting at the moment most of the companies efforts are going into proving up reserves in the promising Phuoc Son gold exploration Joint venture project in central Vietnam. Currently my understanding is that Zedex owns 10% of the project outright, Olympus owns 51% and the balance is owned by Canadian company Ivanhoe Mines Ltd.  Ivanhoe is not contributing to the current drilling program and it's interests will be diluted over time proportunate to the actual expenditures of the other two parties.

Early results from the drilling at the Phuoc San have been exceptional. Quoting from a recent Olympus letter to shareholders: " The Phuoc San Project appears to be highly prospective, since a substantial resource potential has already been identified.... by drilling along a site length of only 300 metres. As the total strike length available for exploration ( on this and similar structures within the licenses) exceeds 10 kilometres, the entire Phuoc San project is considered to have a speculative gold potential in the order of several million ounces."

For more details I suggest you visit the Olympus web page - www.oym.net - and in particular the news releases section.  

Details of the capital structures of these companies is as follows:
        Zedex :     Shares on issue: 12.6 million
                        Owns 5,686,446 (22.38%) shares in Olympus as well as 5,304,090 warrants
                        the full exercise of all warrants outstanding would take Zedex to 30.82%                    
                        ownership of Olympus.
                        
       Olympus:    Shares on issue 25.4 million
                         Warrants outstanding 10.6 million

Valuing Iddison Holding/Zedex isn't that easy. I think the best place to start is to look at what is the value of the companies stake in Olympus.

Taking Fridays closing price for Olympus (symbol OYM on the Vancouver stock exchange) of 40c Canadian we get the following valuation for the Zedex stake:  5.6 million shares @ CAD 0.40 = CAD 2.,240,000. Which is NZD 3,200,000 at current exchange rates which in turn equates to around 25.4c per Zedex share. Obviously with it's direct interests the true value will be higher but this is a good place to start.

Whats the downside risk? .... the price of gold falls out of bed.... they don't find any more gold... the Vietnamese authorities sieze the land etc ,etc.... take your pick.

Whats the upside? .... try working out the value per share for Zedex if they prove up a million oz field and then sell out to a larger mining concern at say $USD 50 an oz - I think you'll be surprised at how high the numbers come out.    

I hope this helps.