A-CAP RESOURCES LIMITED€¦ · PROFILE A-Cap Resources is a junior pure-play uranium exploration...

eResearch Corporation: Exempt Market Dealer www.eresearch.ca

Update Report December 18, 2009 . . . . . . . . . . 3

A-CAP RESOURCES LIMITED

Recommendation Speculative Buy

Risk High

Price (December 17, 2009) A$0.37

52-Week Range A$0.60 - A$0.08

Target Price (12 Months)

A$0.80

Shares O/S 161.2 million

Market Cap $59.6 million

Average Daily Volume 50-day: 378,100

200-day: 392,400

Year-End June 30

Salient Statistics Book Value Per Share A$0.13

Price/Book Value 2.8x

Properties Per Share A$0.063

Mo. Burn 2009A A$305,700

Mo. Burn 2010E A$287,500

Analysts Shash Patel, B.Sc., MBA

Bob Weir, B.Sc., B.Comm, CFA

eResearch Corporation

56 Temperance Street

Suite 501

Toronto, ON M5H 3V5

Telephone: 416-643-7650

Toll Free: 877-856-0765

(A$0.37; ASX:ACB)

Data Source: www.BigCharts.com

UPFRONT Investors looking for an interesting uranium play should consider an

opportunity such as that offered by A-Cap Resources, with its world-class,

low-grade, high-tonnage, open-pit uranium deposit having good surrounding

infrastructure and being located in a mining-friendly jurisdiction.

RECOMMENDATION We recommend A-Cap Resources Limited (“A-Cap” or the “Company”) as a

Speculative Buy for long-term risk-tolerant investors. The shares are quoted

only on the Australian Stock Exchange. Our 12-month Target Price is

unchanged at A$0.80.

PROFILE A-Cap Resources is a junior pure-play uranium exploration company whose

primary focus of activities is in Botswana, Africa, where the Company has 12

uranium properties, including its flagship Letlhakane Uranium Project.

HIGHLIGHTS Pure-play uranium exploration company;

Contains a global inferred resource of 158 million lbs of U3O8;

World class, low grade, high tonnage deposit;

Ranked in the world’s top 20 undeveloped uranium deposits by the Bank

of Montreal;

Potential to add further resources within the Letlhakane Uranium Project;

Commenced an Environmental Impact Assessment (EIA) study;

Commenced Bankable Feasibility Study (BFS) in August 2009;

Good infrastructure in and around the Letlhakane Uranium Project; and

Well financed to carry out its 2010 fiscal year activities (completed $10M

financing in June-July 2009).

A-Cap Resources Limited Update Report ______________________________________________________________________________

eResearch Corporation: Exempt Market Dealer 2

TARGET PRICE

The environment for junior mining companies has improved since March 2009. Stock prices have moved up

from their March lows when many companies were being valued based on economic depression scenarios. As

economic conditions continue to improve, investors will place higher valuations on junior mining companies

such as A-Cap.

Our Target Price for A-Cap is maintained at A$0.80 per share, which is supported by our derivation of an

intrinsic value for the Company, as outlined in the “Valuation” section of the report on page 6.

RATING HISTORY

The following table summarizes the coverage provided by eResearch on the Company. All reports listed in the

table are available on the eResearch website: www.eresearch.ca

Date Report Type Recommendation Stock Price Target Price

Dec. 11, 2006 Initiating Speculative Buy A$0.78 A$1.10

Feb. 2, 2007 Comment No Change A$1.35 A$1.65 (Increased)

Apr. 5, 2007 Update Changed to Sell A$2.10 A$1.80 (Increased)

Jan. 29, 2008 Comment Changed to Spec. Buy A$0.44 A$0.75 (Lowered)

Oct. 16, 2008 Update No Change A$0.25 Withdrawn

Mar. 24, 2009 Bulletin No Change A$0.15 No Change

May 13, 2009 Bulletin No Change A$0.40 No Change

June 12, 2009 Bulletin No Change A$0.465 A$0.80

July 28, 2009 Bulletin No Change A$0.355 No Change

Sept. 21, 2009 Perspective No Change A$0.405 No Change

Dec. 18, 2009 Update No Change A$0.37 No Change

THE COMPANY

A-Cap Resources Inc. is headquartered in Hawthorn, Victoria, Australia. The Company is focused on uranium

exploration of its tenement properties in Botswana.

CORPORATE STRATEGY

A-Cap’s strategy is to exploit its “first mover” advantage in Botswana with the objective of becoming the

country’s first uranium producer. To achieve this goal, A-Cap will

Aggressively drill and explore its tenement properties in Botswana;

Use proprietary knowledge of the Letlhakane Uranium Project, and use the latest exploration

technologies;

Complete a project Environmental Impact Assessment (EIA) and a Bankable Feasibility Study

(“BFS”) to advance its Letlhakane Uranium Project; and

Build and develop management and staff.

http://www.eresearch.ca/



PROPERTIES

1. Location The figure below shows the location of A-Cap's tenement holdings across Botswana. The Letlhakane Uranium

Project is circled in red.

2. Overview

Area Direct Mineral- Properties (km 2 ) Interest ization Status

Letlhakane Uranium Project 2,141 100% Uranium Advanced Exploration: - PL's 45/2004, 138/2004, 125/2009 - Commenced EIA and BFS

- Global Inferred Resource of 158Mlbs of U3O8

Makghadighadi Project 3,000 100% Uranium Early stage exploration: - PL’s 71/2008, 72/2008, 73/2008, - GeX Surveys to undertake airborne survey

74/2008, 134/2005, 135/2005, 122/2009

Northwest Project 1,359 100% Uranium Early stage exploration: North Uray (PL136/2005) and - Completed prospectivity study and follow-up

South Uray (PL137/2005) targets defined 12 Prospecting Licences in total approx. 6500



LETLHAKANE URANIUM PROJECT SUMMARY

1. The following is a summary of the significant features and developments of A-Cap’s flagship Letlhakane

Uranium Project. A more detailed description of the Company’s properties, including the Letlhakane

Uranium Project, is provided in Appendix 1.

Contains a Global Inferred Resource of 158 million lbs of U3O8 at a grade of 100ppm. Optiro Pty Ltd.

updated the Mineral Resource estimate in November 2009;

Commenced an Environmental Impact Assessment (EIA) study in late January 2009, and will run for 12

months;

Engaged Lycopodium Minerals Pty. Ltd. as manager of a Bankable Feasibility Study (BFS), which started

in August 2009. The BFS study is expected to take one year.

Appointed Ian Glacken of Optiro Mining Optimisation Consultants to perform mineral resource

modelling; and

Serviced by local infrastructure including a major highway, roads, railways, a power line, and a water

pipeline;

COMMENT: During the 4th quarter of 2009, Optiro updated the resource estimate as part of a BFS currently underway. This update takes the resource to 158 million lbs from the previously stated 98 million

lbs, an increase of 59%. The updated resource includes a new Inferred Resource at Serule of 42 million lbs.

COMMENT: The Company plans to bring the Letlhakane mine into production by 2011.

The following is a map of the Letlhakane project highlighting the Mokobaesi Deposit, and the Gorgon and

Kraken prospects within the area of the Inferred Resource.



2. Included in Optiro’s updated mineral resource estimate is a new resource at the Serule Uranium Project.

At a cut-off grade of 100ppm, the new resource at Serule contains 42 million lbs of U3O8 in the Inferred

category. The map below shows the area of the Serule Inferred Resource highlighted in green which is

located 6km south of the Letlhakane project.

3. Mineral Estimate for Letlhakane and Serule at 100ppm U3O8 cut-off grade:

Project Mt U3O8 ppm U3O8 Mlbs Mt U3O8 ppm U3O8 Mlbs Mt U3O8 ppm U3O8 Mlbs

Letlhakane 143.1 159 50.2 201.0 148 65.5 344.1 152 115.7

Serule - - - 119.5 160 42.1 119.5 160 42.1

Global Total 143.1 159 50.2 320.5 152 107.6 463.6 154 157.8

Note: The Global Total U3O8 ppm is a weighted average for Letlhakane and Serule.

Indicated Inferred Total



VALUATION

We valued A-Cap Resources Limited using the eResearch-derived Property Ratio Method, which focuses on

corporate comparisons using the following criteria:

Companies having properties that host similar mineralization characteristics;

Companies that are similar in terms of being at the same stage in the production cycle; and

Companies located in the same region or in regions that are geologically similar.

A-Cap’s peer group (described below) is comprised of four ASX-listed companies with the following

attributes

(1) Focused on uranium;

(2) Contain JORC-compliant uranium resources solely for projects in Africa, from which most of their value

is derived; and

(3) Committed to developing a uranium mine on the African continent.

Bannerman Resources Limited (“Bannerman”)

(TSX:BAN), (ASX:BMN), (NSX:BMN)

Bannerman is a junior uranium exploration and development company with two key properties in Namibia.

The 80%-owned Etango Project is Bannerman’s flagship asset and is located on a trend southwest of Rio

Tinto’s Rössing uranium mine and to the west of Paladin Energy’s Langer-Heinrich mine. A Prefeasibility

Study on the Entango Project was just completed in December 2009 based on a life-of-mine production

estimate of 97Mlbs U3O8 at a cut-off grade of 100ppm.

Deep Yellow Limited (“Deep Yellow”)

(ASX:DYL)

Deep yellow is a pure uranium exploration company with properties in Namibia and Australia. In Namibia,

the company’s principal focus is its mid-to high-grade Reptile Project with a JORC-compliant resource

totaling 46.4 million lbs of U3O8. In Australia, the company is focused on defining its discoveries in the Mt.

Isa district of Queensland.

Extract Resources Limited (“Extract Resources”) (TSX:EXT), (ASX:EXT)

Extract Resources is an Australia-based uranium exploration company whose main asset is the Husab Uranium

Project, which contains the Rössing South and Ida Dome deposits. This project is rapidly developing into a

world-class uranium deposit and contains a JORC-compliant resource of 292 million lbs U3O8.

West Australian Metals Limited (“West Australian Metals”)

(ASX:WME)

West Australian Metals is a junior uranium exploration and development company focused on its 80%-owned

Marenica Uranium Project in Namibia. The project contains 34 million lbs U3O8 JORC compliant resource

and covers 706 sq km, with good prospects for both secondary and primary uranium deposits.



Property Ratio Valuation Method

A-Cap Resources Limited is compared to the four peers in our Property Ratio table.

Table 1: Corporate Comparison

A-Cap Bannerman Deep Yellow Extract Resources West Australian

Resources Limited Resources Limited Limited Limited Metals Limited

ACB: ASX BMN: ASX DYL: ASX EXT: ASX WME: ASX

Stage Exploration Exploration Exploration Exploration Exploration

Financial Statement Date: Jun 30, 2009 Jun 30, 2009 Jun 30, 2009 Jun 30, 2009 Jun 30, 2009

Corporate:

Share Price (50 day avg) A$ 0.40 A$ 1.15 A$ 0.36 A$ 8.48 A$ 0.13

Shares O/S 161,200,000 201,710,934 1,123,876,958 1,123,876,958 449,540,896

Market Cap (Based on 50 day avg) A$ 64,480,000 A$ 231,967,574 A$ 404,595,705 A$ 9,530,476,604 A$ 58,440,316

Mineral Properties:

Book Value (Cost) (1) A$ 10,211,230 A$ 82,620,126 A$ 136,129,402 A$ 122,815,138 A$ 8,387,314

Market Value A$ 56,624,157 A$ 221,850,171 A$ 389,574,844 A$ 2,048,052,233 A$ 55,975,772

Difference A$ 46,412,927 A$ 139,230,044 A$ 253,445,442 A$ 1,925,237,095 A$ 47,588,457

Property Ratio 5.55 2.69 2.86 16.68 6.67

Average Ratio (Peers) 7.22

Adjusted Book Value (1) A$ 18,711,230

Adjsuted Property Ratio 3.17

Selected Ratio 7.00

Common Equity (Per Statements) A$ 16,976,973

Adjusted Common Equity (Selected Ratio)(2) A$ 136,044,353

Equity Per Share (Per Statements) A$ 0.11

Adjusted Equity Per Share (Selected Ratio) (3) A$ 0.81

Note 1: Book Value is at date shown; Adjusted Book Value is adjusted for expected capital expenditures of $8.5 million over the next 12 months.

Note 2: Shareholders' Equity is adjusted for additional equity (estimate) issued to finance capital expenditures over the next 12 months.

Note 3: Adjusted Equity Per Share is calculated on 161.2 million shares O/S (Dec 2009). No new shares are expected to be issused within 12 months.

Source: e Research

eResearch Approach eResearch’s method of property valuation takes into account the following:

The book value of the property is at the time of the latest financial statements, and the market value is at

the date indicated in the table;

The property value is adjusted for cash and cash equivalents, which after allowing for working capital

requirements, are assumed to be used for exploration purposes;

We estimate the amount of capital expenditures to be spent over the next 12 months by the Company and

adjusted the book property value accordingly;

Assuming 100% equity financing of capex, we estimate the amount of equity and the number of shares to

be issued, and adjust the equity per share of the Company, accordingly;

Our Property Ratio shows the premium attributed by the market to the mineral properties portfolio in

comparison to its book value of the property; and

The Selected Ratio we chose for the Company (see “Analysis of the Property Ratio” following) reflects

our expectation for the Company’s potential, after a careful analysis of the property, the expected drill

program, the potential of the property, and the timelines that the Company is expected to achieve over the

next 12 months.

In our Analysis of A-Cap Resources Limited, we took into account the following:

The property value is adjusted for A$7,285,086 of cash and cash equivalents;

We estimate the amount of capital expenditures to be spent over the next 12 months to be A$8.5 million;

and

With A$12.9 million of available cash resources, A-Cap is fully financed to complete its planned

exploration activities over the next 12 months. No equity financing is contemplated during this time.



Analysis of the Property Ratio

The Property Valuation Approach is based upon an analysis of the Property Ratio, which measures the

premium the market currently places on a company’s mineral properties. All else being equal, a higher

premium indicates the market is anticipating greater future value from the assets in the ground, while a lower

premium may represent an undervalued asset. Our analysis utilizes the latest available financial statements for

the respective companies.

A-Cap’s current Property Ratio of 5.55X is less than the average ratio of 7.22X for its peers.

The average ratio is significantly influenced by Extract Resources, which experienced a sharp price

appreciation over the last year, rising from the $1.00 range to over $11.00 per share, and now trading near

$8.00. The increase reflects the good news of drilling results over the year at the company’s Husab

Uranium Project.

Below is a range of Selected Ratios and the resulting potential stock price for A-Cap over the next 12

months:

Selected Ratio Potential Stock Price

5.00X $0.57

6.00X $0.69

7.00X $0.81

8.00X $0.92

9.00X $1.03

We are choosing a ratio of 7.00X as the most appropriate for A-Cap at the present time. We believe this

ratio could be achieved, reflecting:

(1) It is lower than the average for the four companies; and

(2) A-Cap’s contains a larger resource than 3 of its 4 peer comparables.

At the Selected Ratio of 7.00X, the intrinsic value of A-Cap Resources Limited is $0.81 per share.



FINANCIAL REVIEW & OUTLOOK

Financial Year End

June 30

Revenues

The Company currently generates no revenues. A-Cap will report losses for the next couple of years until it is

able to bring its Letlhakane Uranium Project into production.

Cash Burn Rate

The operating expenses and cash burn rate for 2009 significantly increased over the prior year due to the

Employment and Consultancy fees associated with the Scoping Study. They will remain high for the

upcoming year due to the Employment and Consultancy fees associated with the Bankable Feasibility Study

commenced in August 2009.

We estimate the average monthly cash burn rate to be A$287,500 for 2010 compared to A$305,700 in 2009.

Cash and Marketable Securities

At June 30, 2009, the Company had A$7,285,068 in cash. Based on the Company’s operating and capital

spending to date, and factoring in the second tranche of A$6.8 million equity financing completed in July, we

estimate current cash resources to be approximately A$12.9 million.

Cash at June 30, 2009 A$ 7.3M

Second tranche equity A$ 6.8M

Burn rate (for 4 months) (A$1.2M)

Cash at October 31, 2009 A$12.9M

Capital Expenditures for Exploration

Capital expenditures will increase for the upcoming year due to the commencement of the Bankable Feasibility

Study. In addition to it, there will be ongoing exploration at Serule and Gorgon South, where A-Cap has

previously drilled economic uranium mineralization intersections. We estimate capital expenditures to be

A$8.5M.

BFS consultants A$2.5M

Resource upgrade drilling A$1.7M

Geochemistry A$0.5M

Metallurgical testwork A$1.8M

Direct BFS expenditure A$6.5M

Ongoing exploration A$2.0M

Total capital expenditures A$8.5M

Financing

The Company completed a A$10M equity financing in two tranches. The first tranche of A$3.2M was

completed in June 2009 and the second tranche of A$6.8M was completed in July 2009. With the completion

of this financing, the Company is in a strong position to carry out its Bankable Feasibility Study and planned

exploration program over the next 12 months.



SELECTED FINANCIAL INFORMATION

TABLE 2: SELECTED FINANCIAL INFORMATION

A$ Year Ending Year Ending Year Ending

June 30 2008 June 30 2009 June 30 2010E

Statement of Income/(Loss):

Operating Income - - -

Non-Operating Income 833,784 368,013 400,000

General & Administrative Expense (1,893,209) (3,668,403) (3,450,000)

Non-cash items adjustments (279,294) - -

Net Income/(Loss) (1,338,719) (3,300,390) (3,050,000)

Total Shares Outstanding 110,095,078 126,245,078 161,200,000

Weighted Average Shares Outstanding 110,095,078 112,504,530 161,200,000

Earnings (Loss) Per Share ($0.01) ($0.03) ($0.02)

Statement of Cash Flow:

Net Income (Loss) (1,338,719) (3,300,390) (3,050,000)

All Non-Cash Items 569,763 2,285,895 1,000,000

Cash Flow from Operations (768,956) (1,014,495) (2,050,000)

Capital Expenditures (Properties) (5,596,512) (3,750,549) (8,500,000)

Other Investing Items (806,777) 835,690 200,000

Free Cash Flow (7,172,245) (3,929,354) (10,350,000)

Working Capital Changes (66,396) 479,450 (826,177)

Equity Financing (22,374) 2,700,500 6,800,000

Change in Cash (7,261,015) (749,404) (4,376,177)

Cash, Beginning of the Period 15,295,505 8,034,490 7,285,086

Cash, End of the Period 8,034,490 7,285,086 2,908,909

As at As at As at

June 30 2008 June 30 2009 June 30 2010E

Balance Sheet:

Cash 8,034,490 7,285,086 2,908,909

Other Current Assets 1,035,224 196,934 196,934

Mining Properties 6,010,527 10,211,230 18,711,230

Other Assets 387,718 373,823 -

Total Assets 15,467,959 18,067,073 21,817,073

Current Liabilities 613,250 1,090,100 1,090,100

Total Liabilities 613,250 1,090,100 1,090,100

Shareholders' Equity 14,854,709 16,976,973 20,726,973

Total Liabilities & Equity 15,467,959 18,067,073 21,817,073

Book Value (S.E.) Per Share $0.13 $0.13 $0.13

COMMENT: The entire cost of issuing A$10M in equity, approximately A$0.5M, was deducted from the first tranche of A$3.2M in June 2009.



RECENT DEVELOPMENTS

Appointment of New Director

Mr. Paul Ingram was appointed as director on June 1, 2009 (see “Management and Directors”, Appendix 2, for

Mr. Ingram’s background and experience).

Infill and Exploration Drilling Activities

As part of the BFS, A-Cap has undergone an extensive exploration and resource infill program. The Company

has announced that it has completed resource infill programs at Kraken and Gorgon North. Final round of

drilling is now complete for the BFS and samples have been dispatched to SGS laboratories in Perth for

testwork. These drilling results provide additional data used in the resource upgrade released in the 4th

quarter

2009. A-Cap will now commence a “Resource Growth” exploration strategy, targeting new prospects outside

the current resource area. Upcoming exploration will target Gorgon South, Gorgon West, Serule North

Extension, Serule Western Extension and Bolau. (see following map)

COMMENT: A new resource at the Serule Uranium Project has been included in Optiro’s updated Mineral Resource estimate in December 2009. At a cut-off grade of 100ppm, the new resource at Serule contains 42

million lbs of U3O8 in the Inferred category.



Hollow Auger Results

A-Cap recently released results from its Hollow Auger (“HA”) drilling program across the Mokobaesi

Prospect. Assay results from this program are on average 47% higher grade than the factored (0.85 factor)

radiometric probe grades that were used in SRK’s June 2008 resource estimate. It was anticipated that there

would be a significant rise in the estimated uranium grades for the Mokobaesi portion of the deposit when the

resource update was completed in the 4th quarter 2009, and this has been borne out. Optiro updated the

resource estimate as part of a BFS currently underway. This update takes the resource to 158 million lbs from

the previously stated 98 million lbs, an increse of 59%.

Note on the Letlhakane Uranium Project: Prior to Optiro’s updated resource estimate, the Letlhakane Uranium Project contained an inferred resource of 98Mlbs of U3O8 at a 100ppm cut off. However, approximately 60% of the Inferred Resource is classified as “Primary Ore” which, based on limited previous

work, has metallurgical recoveries of up to 50%. On-going exploration has revealed that there are higher-

grade zones within the Primary Ore that may be open to alternative mining techniques. A-Cap requested

Lycopodium conduct a study into the metallurgy and possible treatment options for the Primary Ore. The

objective of the study is to determine if the 60Mlbs of U3O8 in the primary ore can be economically recovered.

COMMENT: An increase in the grade of the secondary mineralisation is significant for the economics of the Letlhakane Uranium Project as this mineralisation is close to the surface, has good metallurgical recovery

and will potentially be the starting point for any mining operation.

COMMENT: The upgraded resource will be combined with current metallurgical testwork to provide the basis for an updated mining plan for the secondary and oxide mineralization. The update plan will form the

basis of the BFS. A-Cap has committed to a further program of metallurgical testwork on the primary ore.

These results will be incorporated into the planning at a later stage.



APPENDIX 1: PROPERTY PORTFOLIO

Letlhakane Uranium Project

The Letlhakane Uranium Project, comprised of 3 Prospecting Licenses (PL’s 45/2004, 138/2004, and

125/2009) in eastern Botswana, is A-Cap’s flagship project. The main project areas, Letlhakane, Serule West

and Serule East, all lie within the Letlhakane prospecting license (PL45/2004) and are well serviced by local

infrastructure including a major highway, roads, railways, power line, water pipeline and the villages of Serule

and Gojwane which provide much of A-Cap’s unskilled workforce. A-Cap’s main operational base is 70km to

the north in Francistown (population approximately 100,000).

The main Mokobaesi deposit lies within the Letlhakane resource (oval shaded area above), which also

encompasses the Gorgon North, Gorgon South and Kraken prospects.

Scoping Study

A scoping study on the Letlhakane Uranium Project deposit was released in October 2008. The main findings

of the scoping study include:

At a cut-off grade of 100ppm, an Inferred Resource was estimated at 280 million tonnes of ore at a grade

of 158ppm of U3O8, for a contained 44,500 tonnes of U3O8 (98 million lbs of U3O8). The figures

represent a 330% increase in tonnes and a 13% increase in grade, leading to an increase in contained metal

at the same 100-ppm cut-off when compared to the previous resource estimate.

Because of low recoveries for primary ore, the scoping study only considered oxide and calcrete ore

sources which had recoveries between 78% and 90%.

Total Cash Costs of US$33/lb U3O8

Total Capital Expenditures of US$179M which includes US$10M of sustaining capital

COMMENT: During the 4th quarter of 2009, Optiro updated the resource estimate as part of a BFS

currently underway. This update takes the resource to 158 million lbs from the previously stated 98 million lbs, an increase of 59%.

COMMENT: The Company plans to bring the Letlhakane mine into production by 2011.



The Company announced that an Environmental Impact Assessment (EIA) of the Letlhakane project began in

late January 2009, and will run for 12 months. The EIA process is being managed by Metago Environmental

Engineers. As part of the EIA, public participation and information meetings have been held in local villages

and also a further meeting with local government officials. To date, no objections have been received from the

communities. The Map below shows the 7x10km area covered by the EIA study and the potential

infrastructure layout.

Bankable Feasibility Study

The Company also announced that it had appointed Lycopodium Minerals Pty. Ltd. as manager of a Bankable

Feasibility Study (BFS) for the Letlhakane uranium project. The start date for the study was August 2009.

The BFS study is expected to take one year, and will have two stages: (1) metallurgical testwork and process

design (32 weeks), and (2) engineering and costing phase (20 weeks). Delivery of the BFS is anticipated in the

third quarter of 2010. The budget is A$6.5 million, and includes significant resource drilling and metallurgy

studies.

A-Cap has also appointed Ian Glacken of Optiro Mining Optimisation Consultants to perform mineral resource

modelling at the Letlhakane project.



Makghadighadi Project

The Makghadighadi Project, comprised of 7 Prospecting Licenses (PL’s 71/2008, 72/2008, 73/2008, 74/2008,

134/2005, 135/2005, 122/2009), is located in north central Botswana and covers over 3000km2. A-Cap has

appointed GeX Surveys to undertake an airborne survey over Prospecting Licenses 71/2008, 71/2008, 73/2008,

74/2008 which have never been explored for uranium.

Northwest Project

The Northwest Project covers 1,359km2 of property and is comprised of 2 Prospecting Licenses, North Uray

(PL 136/2005) and South Uray (PL137/2005). In the 1970s, Union Carbide collected grab samples with

grades of up to 1328ppm U3O8. A-Cap completed a prospectivity study on these PL’s and several follow-up

targets were defined.



APPENDIX 2: MANAGEMENT AND DIRECTORS

Patrick John Volpe, B.Bus (Acc), P.G. (Tax), CPA, Executive Chairman, Director Mr. Volpe is the Chairman of Cardia Bioplastics Ltd. and Bioglobal Ltd., an unlisted company in which Cardia

is a major shareholder, and a director of Dia-B Tech Limited. Holding a Bachelor of Business degree and a

post-graduate diploma in taxation, he has worked extensively in the stockbroking industry, gaining experience

in many industries including mining, media, transport and services, manufacturing, banking and taxation, both

locally and internationally, particularly in Africa, China and other parts of Asia. Mr. Volpe is a specialist in

corporate restructuring, business acquisitions, investment advising and capital raisings, and has effectively

spearheaded the ASX listing of both A-Cap and Dia-B Tech Limited. In addition, Mr. Volpe has been the

executive chairman of many other publicly-listed companies, including Media Entertainment Group Limited,

Mintech-8 Ltd., E-Com Global Limited and AIM Resources Limited, and has held management and financial

positions with National Australia Bank, Pacific Dunlop Limited and Ansett Transport Industries Limited.

Andrew Tunks, Ph.D (Tasmania) MAIG, Geologist, Managing Director

Dr. Tunks is a geologist and Managing Director of A-Cap. He was Chief Geologist at IAMGold and is

responsible for managing A-Cap’s exploration portfolio. He has considerable experience in the mining

industry, both in Australia and in southern and central Africa, having worked for Paladin Resources, Ranger

Minerals, and others. A member of the Australian Institute of Geoscientists (AIG) and a recent member of the

AIG Council, Dr. Tunks has also lectured at the University of Tasmania and is the author of several

publications. He holds a BSc (Hons) degree from Monash University in Victoria and a Ph.D from the

University of Tasmania.

Henry James Stacpoole, Director Mr. Stacpoole is also director of Botswana Metals Limited and is a managing director of Stacpoole Enterprises

Pty Ltd., a Launceston, Tasmania-based company involved in civil contracting, drilling and mining

exploration. He has significant experience in developing mining projects. A founding director of Beaconsfield

Gold Mines Ltd. in 1987, he was instrumental in the development of the Beaconsfield gold mine in Tasmania,

and became Chairman of the restructured Beaconsfield Gold N.L. in 1992. A member of numerous Tasmanian

Government Overseas Trade Missions and director, life member and past president of the Tasmanian Minerals

Council, Mr. Stacpoole has considerable mining industry knowledge, both in Australia and at the international

level.

Paul Woolrich, Director

Dr. Woolrich is also a director of Botswana Metals Limited. He has over 35 years’ experience in the

international exploration and mining industry focused on gold, base metals and PGEs. He has spent the last 20

years in senior management positions with Western Mining Corporation, Ranger Minerals Ltd, Orion

Resources, Gallery Gold and Platmin Ltd. From 2004 to 2006, as Project Manager, he was in charge of the

feasibility study of Platmin’s Pilanesberg PGE Project in South Africa. Dr Woolrich is managing A-Cap’s

Bankable Feasibility Study regarding the viability of the Letlhakane Uranium Project. He holds a BSc (Hons)

degree in geology, a MSc in geochemistry and a PhD in metallurgy.

Paul Anthony Ingram, Director

Mr. Ingram is also a director of Impact Minerals Limited. He was appointed non-executive director on June 1,

2009. Mr Ingram has spent over 30 years in the mining industry. He is a geologist with experience in

managing mineral exploration programs for several publicly-listed companies. He has designed and

implemented innovative techniques for exploration in remote areas and has managed projects in countries

throughout East Asia and in Australia. He holds a B.Applied Sc degree in geology.



Richard Charles Baker, Company Secretary Mr. Baker is qualified in law and economics and has held similar positions with other companies in the past 5

years. Prior to that, he worked in accounting positions for many years.

Penny Large, Chief Geologist

Ms. Large has held positions with Acacia Exploration, Anglo Ashanti Gold, and Placer Dome. She holds a

BSc (Hons) from the University of Tasmania.

APPENDIX 3: CORPORATE INFORMATION A-Cap Resources Limited Suite 5.10,

Level 5, Pacific Tower

737 Burwood Rd

Hawthorn Vic 3122

Australia

Telephone: +61 (3) 9813 5888

Facsimile: +61 3 9813 2668



APPENDIX 4: STOCK CHARTS

1. Three-Year Chart

Since forming an elongated “U” from mid-2008 until mid-2009, A-Cap shares have been essentially range-

bound, trading between A$0.30 and A$0.50.

2. Three-Month Chart

The stock continues to trade near the bottom of its narrow trading range. Investor dis-interest at this point

shows up in the lack of trading volume. What will be the catalyst to get the stock moving again?



ANALYST CERTIFICATION

Each Research Analyst who was involved in the preparation of this Research Report hereby certifies that:

(1) the views, opinions, and recommendations expressed in this Research Report reflect accurately the Research

Analyst’s personal views concerning any and all securities and issuers that are discussed herein and are the

subject matter of this Research Report; and

(2) the fees, earnings, or compensation, in any form, payable to the Research Analyst, is not and will not, directly or

indirectly, be related to the specific views, opinions, and recommendations expressed by the Research Analyst in

this Research Report.

eResearch analysts on this report:

Shash Patel, B.Sc. (Act. Sc.), MBA – Shash Patel has been involved with investment research for more than six

years, as a securities analyst and trader, and as a pension and benefits specialist. He joined eResearch in September

2009.

Bob Weir, B. Comm, B.Sc., CFA – Bob Weir has 43 years of investment research and analytical experience in both

the equity and fixed-income sectors, and in the commercial real estate industry. He was at Dominion Bond Rating

Service (DBRS) from 1994 to 2001, latterly as Executive Vice-President responsible for supervising the firm’s 34

analysts and conducting the day-to-day management affairs of the company. He joined eResearch in 2004 and has

been its President, CEO, and Managing Director, Research Services since May 2005.

eRESEARCH ANALYST GROUP

Managing Director, Research Services: Bob Weir, CFA

Financial Services Robin Cornwell

Biotechnology/Health Care Scott Davidson

Transportation &

Environmental Services/

Industrial Products

Oil & Gas Eugene Bukoveczky

Achille Desmarais

Eric Eng

Special Situations

Bill Campbell

Bob Leshchyshen

Nick Smart

Mining & Metals George Cargill

Eric Eng

Kirsten Marion

Shash Patel

Oliver Schatz

Graham Wilson

Michael Wood

Bill Campbell

eResearch Disclaimer: In keeping with the policies of eResearch concerning its strict independence, all of the

opinions expressed in this report, including the selection of the 12-month Target Price and the Recommendation

(Buy-Hold-Sell) for the Company’s shares, are strictly those of eResearch, and are free from any influence or

interference from any person or persons at the Company. In the preparation of a research report, it is the policy of eResearch to send a draft copy of the report, without divulging the Target Price or Recommendation or any reference

to either in the text of the report, to the Company and to any third party that paid for the report to be written.

Comments from Company management are restricted to correcting factual errors, and ensuring that there are no misrepresentations or confidential, non-public information contained in the report. eResearch, in its sole discretion,

judges whether to include in its final report any of the suggestions made on its draft report.



eResearch Recommendation System

Strong Buy: Expected total return within the next 12 months is at least 40%.

Buy: Expected total return within the next 12 months is between 10% and 40%.

Speculative Buy: Expected total return within the next 12 months is substantial, but Risk is High (see below).

Hold: Expected total return within the next 12 months is between 0% and 10%.

Sell: Expected total return within the next 12 months is negative.

_____________________________________________________________________________________________________________

eResearch Risk Rating System

A company may have some, but not necessarily all, of the following characteristics of a specific risk rating to qualify for that rating:

High Risk: Financial - Little or no revenue and earnings, limited financial history, weak balance sheet, negative free cash flows, poor

working capital solvency, no dividends.

Operational - Weak competitive market position, early stage of development, unproven operating plan, high cost

structure, industry consolidating, business model/technology unproven or out-of-date.

Medium Risk: Financial - Several years of revenue and positive earnings, balance sheet in line with industry average, positive free

cash flow, adequate working capital solvency, may or may not pay a dividend.

Operational - Competitive market position and cost structure, industry stable, business model/technology is well

established and consistent with current state of industry.

Low Risk: Financial - Strong revenue growth and earnings over several years, stronger than average balance sheet, strong positive

free cash flows, above average working capital solvency, company may pay (and stock may yield) substantial dividends

or company may actively buy back stock.

Operational - Dominant player in its market, below average cost structure, company may be a consolidator, company may

have a leading market/technology position.

_____________________________________________________________________________________________________________

eResearch Disclosure Statement

eResearch is registered with the Ontario Securities Commission as an Exempt Market Dealer. eResearch operates two business segments: (1) the

provision of equity research to the investment community; and (2) the offering of its abilities to assist companies raise capital. The research

activities and operations of eResearch are carried out solely by its Research Services division, which provides published research and analysis to

the investing public on its website (www.eresearch.ca), through its extensive electronic distribution network, and through newswire agencies.

eResearch makes all reasonable efforts to provide its research, via e-mail, simultaneously to all subscribers. The capital raise activities and

operations of eResearch are carried out solely by its Capital Services division, which engages only in capital market services with Corporate

Issuers and Accredited Investors. eResearch does not manage money or trade with the general public which, combined with the full disclosure

of all fee arrangements, the strict application of its Best Practices Guidelines, and the creation of an effective "Ethical Wall" between the

Research Services and the Capital Services divisions, should eliminate potential conflicts of interest.

eResearch accepts fees from the companies it researches (the “Covered Companies”), and from financial institutions or other third parties. The

purpose of this policy is to defray the cost of researching small and medium capitalization stocks which otherwise receive little or no research

coverage.

A-Cap Resources Limited paid eResearch a fee of US$35,000 to conduct research on the Company on an Annual Continual Basis.

To ensure complete independence and editorial control over its research, eResearch follows certain business practices and compliance

procedures. For instance, fees from Covered Companies are due and payable prior to the commencement of research.

All Analysts are required to sign a contract with eResearch prior to engagement, and agree to adhere at all times to the CFA Institute Code of

Ethics and Standards of Professional Conduct. eResearch analysts are compensated on a per-report, per-company basis and not on the basis of

his/her recommendations. Analysts are not allowed to accept any fees or other consideration from the companies they cover for eResearch.

Analysts are allowed to trade in the shares, warrants, convertible securities or options of companies they cover for eResearch only under strict,

specified conditions, which are no less onerous than the guidelines postulated by IIROC. Similarly, eResearch, its officers and directors, are

allowed to trade in shares, warrants, convertible securities or options of any of the Covered Companies under identical restrictions.

eResearch makes all reasonable efforts to provide its research, via e-mail, simultaneously to all subscribers. eResearch posts all of its

research on its own website (www.eresearch.ca), disseminates its research through its extensive electronic distribution network, and provides

notification of its research through newswire agencies.

http://www.eresearch.ca/

A-CAP RESOURCES LIMITED€¦ · PROFILE A-Cap Resources is a junior pure-play uranium exploration...

Documents

Transcript of A-CAP RESOURCES LIMITED€¦ · PROFILE A-Cap Resources is a junior pure-play uranium exploration...