Perth, Nov 12, 2008 AEST (ABN Newswire) - CityView Corporation Limited (ASX:CVI)(PINK:CTVWF) address to Shareholders by the recently appointed Executive Chairman, Manuel Africano.
Dear Shareholder,
As I have recently been appointed Chairman of CityView, I thought it only fair that I address all shareholders regarding our Company. I wish to tell you a little about myself, the vision I hold for CityView and how I see we can make the essential steps to achieve the success all of you deserve from the assets CityView holds. It is unfortunate that the global financial markets are in turmoil. CityView has to form a new strategy to cope with the present financial climate. The emphasis on going forward from now must be production to generate profits. Future exploration funding must be generated internally.
For the last 8 years I have been the Minister for Geology and Mines in Angola. Angola has had a monumental struggle with a civil war following independence. My resource rich country producing 2 million barrels of oil per day has a population of only 16 million people. Angola was effectively neglected during this period from conventional development, making it one of the most exciting untouched mineralised countries in the world. I have known some of the CityView officers for the past 4 years. When I was invited to join CityView as a director and non-executive Chairman I was delighted to accept as I had complete knowledge of their assets in Angola and knew they shared one of the best portfolios within the country.
My assessment of the CityView assets is as follows:
- Negotiations with Falcon Oil; Last week I was in Luanda and had an informal discussion with Dr. Horacio Mosquito, the Chief Executive of Falcon. He is well aware of the changing oil price and that the business proposed between CityView and Falcon was not viable with the oil price at the present level. Relations remain good between the two companies and the future is open to further proposals on oil projects in Angola.
- Cameroon Matanda PH72; CityView has stepped back from Matanda due to some confusion within the Cameroon Government over Matanda. It is understood from CityView's representatives that alternative oil licences will be made available, taking into account the CityView expenditure to date. This matter remains under review and is being delicately handled.
Fortitude Minerals Limited; CityView holds 46% of Fortitude. All of the mining interests including the Longonjo diamond alluvial and kimberlite licences reside in Fortitude. This is a key company which requires substantial additional capital to fulfil the work commitments. Not to act on this will jeopardise these assets. The opportunity to take 100% of Fortitude under CityView exists only if CityView is able to meet immediate obligations.
- Canzar Resources Limited; Canzar holds the diamond alluvial and kimberlite rights to the Luachisse and Nhefo projects. CityView under the proposed agreements will hold 20% of Canzar in addition to its existing 10% net profits interests. The opportunity to take 100% of Canzar under CityView exists if CityView takes the correct action.
- Refinery; Negotiations have continued regarding country location of the 100,000 bpd refinery in West Africa. Agreements between the relevant parties are nearing final documentation, subject to on site equipment inspection and approval of Government departments of the inspection reports. These conditions are expected to be fulfilled by the first week in December 2008. Completion is expected within a few weeks after that, hopefully before the end of 2008. CityView will have an opportunity to own a substantial part of this transaction, I have conducted my own investigation with all parties and I am satisfied that the position is real and achievable.
I believe that the best way for CityView to move forward is to:
- Complete the rights issue already announced. This is at 1.25 Aust cents which appears to be a low price. However it reflects the market that we find ourselves in and this amount is the absolute minimum required to protect CityView. Failure of CityView to up-hold its present position in Angola would cause irreparable if not fatal damage.
- Acquire 100% of Fortitude and Canzar with vendor restricted shares based on ownership percentage and mathematically calculated ratios.
- Value the assets of CityView post the acquisitions of 100% of Fortitude and Canzar. Based on historic information and professional valuations that I have reviewed and discussions with the author, I am substantially encouraged that the underlying value per share is considerably higher than the rights issue price. However this value will be further enhanced once the assets are controlled 100% under CityView.
Based on asset value per share and only on that basis, agree a private placement agreement with institutional investors to raise the required capital to participate in the refinery transaction: the entry price would have to be considerably higher than the present market price. Following my review of the transaction, my actual visit to the country concerned and meeting with the politicians, principals, bankers and reviewing the financial studies, I remain convinced that CityView's entry price is attractive to the potential investors. I have had extensive discussions with the potential investors and have formed the opinion they are willing to invest. I have given my informed opinion on the underlying asset value of CityView to the investors post the acquisition of the remaining stakes in Fortitude and Canzar: this is informally acceptable to them and a condition of their investment. This transaction would place hard assets into CityView with potential dividends. In my opinion this is a must as it would substantiate the underlying asset value beyond doubt.
- Immediately take one of the Fortitude and one of the Canzar assets into production utilising a forward sale of production to provide the necessary capital expenditure.
To acclimatise myself with CityView's tasks regarding the supply of equipment such as drilling rigs, DMS diamond recovery plant, earth moving equipment etc., I very recently visited various suppliers in South Africa to ascertain availability and pricing. I am pleased to report one benefit of the down turn in the economy is keen pricing and availability.
It is my future intent to keep CityView's reporting to shareholders transparent, direct and often. I am not a believer in gossip and rumour as a way for shareholders to endeavour to follow the progress of their Company. When there is something to say your Board will say it to all, promptly at the same time in a proper formal notice.
Finally I would like to say we have the finest of assets, which we intend to develop to bring value to the CityView shareholders. I will work tirelessly to lead CityView and promote growth in the value of its the underlying shares. Although the bitter pill for recovery is a low priced rights issue, the rewards will be that we keep and gain proper control of the prime assets, which in turn allows us to reinforce the base with hard assets and become a producer.
Manuel Africano
Contact
CityView CEO, Mark Smyth
Telephone: +61-8-9226-4788
Facsimile: +61-8-9226-4799
Web: www.cityviewcorp.com
| ||
|
