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StockPotentials March 26, 2010 . . . . . . 3

ABERDEEN INTERNATIONAL INC.

Price (March 26, 2010) $0.40

52-Week High-Low $0.52 - $0.18

Shares O/S 87.5 million

Market Cap $35.0 million

50-day Average Volume 126,200

200-day Average Volume 234,600

Year-End January 31

Symbol TSX: AAB

Website www.aberdeeninternational.ca

Financial Data

eResearch Analysts: Bill Campbell, B.Comm.

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

Note: This report was prepared with public information only.

Source: www.bigcharts.com

THE COMPANY

Aberdeen International Inc. (“Aberdeen” or the

“Company”) is a Toronto-based, global investment and

merchant banking company focused on small capitalization

companies in the mining, energy, and agricultural

commodities sectors.

The Company seeks to acquire equity participation in pre-

IPO and early-stage resource companies where it can

provide value-added managerial and board-level advisory

services as well as financial support.

Aberdeen’s goal is to generate triple-digit returns on its

investments over an 18-to-24-month holding period. The

Company’s management team has raised over $1 billion in

the past five years.

INVESTMENT CONSIDERATIONS

Strengths Management team and board of directors have extensive

mining experience;

Proven ability to raise funds; and

Diversified portfolio of attractive investments.

Challenges Political risk in some areas in which the Company

invests;

Investment portfolio geared to volatile mining sector;

and

Share trading fairly illiquid.

http://www.aberdeeninternational.ca/

http://www.bigcharts.com/

Aberdeen International Inc. eResearch StockPotentials


BACKGROUND

Aberdeen had originally operated as a Canadian exploration and royalty company. However, in July 2007, it

completed a Change of Business transaction into a publicly-traded global resource investment and merchant

banking company. In anticipation of its Change of Business, the Company raised $60 million through a private

placement in June 2007.

INVESTMENT PORTFOLIO

The Company’s investment portfolio continued to grow through the fourth quarter of fiscal 2010 (three months

ended January 31, 2010). As at January 31, 2010, its total value was $0.78 per share compared with $0.66 per

share at the end of October 2009 and $0.40 per share at the end of fiscal 2009. A summary of the Company’s

holdings is shown below:

Investment Holdings (January 31, 2010)

Publicly-Traded

Symbol millions

Crocodile Gold Corp.

TSX: CRK $12.0

Sulliden Gold Corporation Ltd. TSX: SUE $7.3

Avion Gold Corporation TSX-V: AVR $5.4

Other

$14.4

Total Publicly-Traded

$39.1

Private

$7.7

Non-Trading Warrants Crocodile Gold Corp.

$4.9

Allana Potash Corp.

$1.1

Dacha capital Inc.

$1.0

Other

$3.2

Total Warrants

$10.2

Loans Receivable

$7.9

Cash

$3.3

TOTAL

$68.2

Source: Company



NET ASSET VALUE

The following table indicates the Company’s net asset value (“NAV”) since its conversion to an investment

and merchant banking company in the third quarter of fiscal 2008.

As shown in the table above, the Company’s NAV grew rapidly from the third quarter of fiscal 2008 to the end

of the second quarter of fiscal 2009, before declining significantly in response to the collapse in equity markets

and virtual elimination of credit for mining development.

With the recovery in equity markets in 2009, increased availability of credit, improved economic prospects in

many areas and an astute investment performance, management achieved a strong recovery in the Company’s

NAV to its pre-market crash level (on a per share basis) by the end of the third quarter of fiscal 2010 (October

31, 2009).

CONTINGENCY

The Company engaged a leading South African law firm and, in July 2009, filed a claim against Simmer and

Jack Mines, Limited and First Uranium Corporation in connection with a US$10 million loan and gold royalty

agreement which it had made with Simmer in late 2006. Simmer filed a statement of defence in November

2009. The Company anticipates that court proceedings will begin before the end of its current fiscal year.

FINANCIALS

(1) Q3/F2010 versus Q3/F2009

For the third quarter of fiscal 2010, the Company reported earnings of $0.06 per share compared with a loss of

$0.46 per share for the same period in fiscal 2009. The dramatic improvement reflected improved conditions in

the mining industry in the latest period, which enabled the Company to achieve an unrealized gain on its

investments of approximately $13 million compared with an unrealized loss of $47.6 million in the year-earlier

quarter. The Company also benefited from a decline in the unrealized loss on its Simmer and Jack royalty and

loan to $0.4 million compared with $19.2 million in the third quarter of fiscal 2009.

The Company is financially strong with working capital of $71.7 million and no long-term debt as at October

30, 2009 .

Salient statistics are shown on the following page.



($000s) Q3/F2010 Q3/F2009

Net Investment Gains

9,395 (49,473)

Other Revenue

(1,103) (16,761)

Total Revenue

8,292 (66,234)

Pretax Income

7,886 (64,082)

Pretax Margin

95.1% na

Net Income

5,098 (44,639)

Net Margin

61.5% na

EPS

$0.06 -$0.46

Shares OS (million)

87.5 97.6

(2) 9Months/F2010 versus 9Months/F2009

For the first three quarters of fiscal 2010, Aberdeen reported earnings of $0.09 per share compared with a loss

of $0.31 per share for the first nine months of fiscal 2009. As was the case in the third quarter, the improved

results reflected the benefit of unrealized gains on investments in the latest period of $28.2 million compared

with an unrealized loss on investments of $40.9 million in the year earlier period. The unrealized loss on the

Simmer and Jack royalty and loan declined to $8.5 million in the latest period from $16.4 million in the fiscal

2009 period.

($000s) 9Mos/F2010 9Mos/F2009

Net Investment Gains

23,509 (35,617)

Other Revenue

(7,607) (8,288)

Total Revenue

15,902 (43,905)

Pretax Income

13,202 (44,039)

Pretax Margin

83.0% na

Net Income

8,593 (31,217)

Net Margin

54.0% na

EPS

$0.09 -$0.31

Shares OS (million)

90.5 100.7



OUTLOOK

Following the significant rebound in commodity prices which took place in 2009 and an increased availability

of financing for mining companies, prospects for the global mining industry are now on a sounder footing.

Although commodity prices are not expected to rise significantly in 2010 as they did in 2009, they should

continue to have moderate growth, fuelled by continued strong demand from China and sustained recovery in

industrial countries. In this environment, we expect that the demand for financing of new mining projects will

continue to grow, providing opportunities for Aberdeen International to provide funding for new small-cap

resource companies.

In a recent presentation, the Company indicated that the value of deals being evaluated for near-term

investment was approximately $5 million. In addition, the Company will benefit from further significant

growth of its existing investment portfolio. Based on consensus estimates of the 12-month target prices of its

three major holdings - Crocodile Gold, Sulliden Gold, and Avion Gold – the Company’s share positions in

these companies would provide gains of at least $20 million over the period. This excludes the impact of any

warrants that Aberdeen has in these companies.

VALUATION

We have chosen two merchant bank/mining investment companies to provide comparable valuations for

Aberdeen. They are Endeavour Financial Group and Pinetree Capital Ltd.

As shown in the table below, these companies are trading at an average 29% discount to their net asset value

and at 1.2 times trailing 12-month earnings. Aberdeen is trading at a 63% discount to its net asset value and at

1.1 times trailing 12-month earnings. As investors become more aware of Aberdeen over time, we believe that

its discount will narrow, providing significant capital appreciation potential.

CORPORATE COMPARISONS

Stock Shs. O/S Mkt Cap EPS P/E NAV Discount

Company Symbol Price (million) (million) (ttm) (ttm) P.S. to NAV

Endeavour EDV $2.48 94.6 $235 $2.51 1.0 $3.41 27%

Pinetree PNP $1.73 132.3 $229 $1.19 1.5 $2.53 32%

Avg 1.2 Avg 29%

Aberdeen AAB $0.40 87.5 $35 $0.35 1.1 $1.08 63%

Source: eResearch



MANAGEMENT

George Fraught - CEO

Mr. Fraught has over 25 years of senior management experience in the natural resource, financial services and

pharmaceutical industries.

David Stein - President & COO Mr. Stein was previously a senior partner and equities analyst at Cormark Securities, having joined Sprott

Securities, Cormark’s predecessor company, in 2001.

DIRECTORS

Stan Bharti George Fraught David Stein Hon. Pierre S. Pettigrew

Mike Hoffman Dr. Bernard Wilson Bruce Humphrey

CORPORATE INFORMATION

Aberdeen International Inc.

65 Queen Street West

Suite 815

Toronto, ON, M5H 2M5,

Telephone: 416-861-5899

Website: www.aberdeeninternational.ca

http://www.aberdeeninternational.ca/

Download - StockPotentials March 26, 2010 - Investor ideas, … · StockPotentials March 26, 2010 . . . . . . 3 ABERDEEN INTERNATIONAL INC. Price (March 26 ... Allana Potash Corp. $1.1 Dacha

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