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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).
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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.
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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
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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.
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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
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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.
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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.
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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.
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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$6.8M was completed in July 2009. With the completion
of this financing, the Company is in a strong position to carry out its Bankable Feasibility Study and planned
exploration program over the next 12 months.
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SELECTED FINANCIAL INFORMATION
TABLE 2: SELECTED FINANCIAL INFORMATION
A$ 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.
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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.
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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.
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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.
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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.
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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.
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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.
A-Cap Resources Limited Update Report ______________________________________________________________________________
eResearch Corporation: Exempt Market Dealer 17
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
A-Cap Resources Limited Update Report ______________________________________________________________________________
eResearch Corporation: Exempt Market Dealer 18
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?
A-Cap Resources Limited Update Report ______________________________________________________________________________
eResearch Corporation: Exempt Market Dealer 19
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.
A-Cap Resources Limited Update Report ______________________________________________________________________________
eResearch Corporation: Exempt Market Dealer 20
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.
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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.
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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.
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allowed to trade in shares, warrants, convertible securities or options of any of the Covered Companies under identical restrictions.
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