President's Communications
| Oct 22, 2008 President's Letter to Shareholders I would like to take this opportunity to provide you with an update on our activities over the last few months and more importantly Serengeti's plans for the future. We have developed a strategy that will enable us to continue to advance our principal project Kwanika towards a decision point and focus on the very highest probability exploration targets within our large property portfolio, while carefully managing our strong cash position to ensure we not only survive but thrive in these challenging times. As management and significant shareholders of your company, we share your frustration with the erosion of the company's share price and market capitalization. We are not alone of course, with the TSX-Venture Exchange having declined 69% over the last year. To put the deterioration of our share price into perspective, our current market capitalization of $8.5 million represents a 15% discount to our working capital of $9.7 million. We expect to finish 2008 with approximately $8.5 million in the treasury. In addition, in the future, we anticipate receiving a refund of 30% of our estimated $10 million (2008) qualifying exploration expenditures. All of this puts us in a very favorable position in these uncertain times. Where are we at Kwanika? In early August 2008 we completed the drilling program at Kwanika, thereby reducing our expenditure burn rate to a modest level to respond to the difficult market conditions. To date we have completed and reported results on 56,037 meters of drilling in 123 holes outlining a significant body of copper-gold mineralization in the Central Zone, partially defining a copper-molybdenum +/-gold bearing South Zone and recently indicating a potential third copper zone to the North. For up to date drill results go to www.corebox.net or select the link on Serengeti's homepage. We are currently working with the respected firm, Scott Wilson RPA on the completion of a resource estimate at Kwanika for incorporation into an independent NI 43-101 report scheduled for completion by year end. We have also recently initiated a metallurgical test program on a representative sample from Kwanika with SGS Minerals Services. Serengeti also plans to complete a scoping study and preliminary economic assessment for the project in the first half of 2009. This strategy will bring us to a decision point on how we can best maximize our shareholders investment in the project. Alternatives at that point may include seeking a strategic investor, vending a minority interest in the project, a royalty or concentrate off-take financing agreement or a joint venture with a major mining company. The activities outlined above represent modest incremental expenditures that should be accretive in terms of project value. Also, one of the attractive features of Kwanika is the exceptional copper-gold grade that is present locally within the Central Zone which may allow significant flexibility in terms of scaling a potential future mining operation. Where are we at on the balance of the exploration portfolio? While we have been focused on Kwanika over the past two years, we have also continued to advance a number of properties to the drill stage within our extensive portfolio (now exceeding 2,400 square km) in the mineral rich Quesnel Trough of BC. With our partner, Fjordland Exploration Inc. (FEX) (joint funding) we recently announced the identification of six priority IP geophysical targets as a result of a 110 kilometer reconnaissance induced polarization survey within the QUEST Joint Venture. At our Croy Bloom/Davie Creek property, Newcrest Mining Limited (a major Australian gold-copper mining company), is currently drilling four long holes targeting deep porphyry systems in a program budgeted at $1.4 million. The option agreement with Newcrest requires them to spend $10 million in order to earn a 51% interest. Newcrest may potentially acquire an additional 14% interest to bring their holding to 65% by spending an additional $25 million. This deal with Newcrest is a validation of the merits of the exploration properties within Serengeti's portfolio. In the current climate we will certainly consider doing additional deals to leverage our exploration efforts, although we may choose to fund future drilling of some of the very highest probability targets ourselves. British Columbia continues to be one of the best jurisdictions in the world to discover and develop mineral deposits and we intend to take full advantage of this opportunity. In Summary ... We have positioned Serengeti not only to survive, but thrive in today's challenging market environment. To quote John Kaiser in a recent Bottom Fish Report, who outlined the following criteria for thriving in the current environment "...Sufficient working capital to keep projects alive for at least another year, a project with pounds and/or ounces in the ground whose rock value at current metal prices is still higher than the associated cost of mining such ore, a well rounded management team committed to the company and each other, and evidence of significant third party shareholders with long term vision and which are supportive of management..." We are proud of what we have achieved at Serengeti, we have the cash, the people, and the asset base to unlock our full potential. This is the second in a series of regular updates aimed at keeping you informed as to our plans and progress. Please visit our website at www.serengetiresources.com as we do keep it updated, and if you would like to send us any comments, questions, or concerns contact us thru: http://www.serengetiresources.com/s/SendMessage.asp Yours truly,  D.W. Moore President & CEO SERENGETI RESOURCES INC.
Our Vision Statement:
A mineral exploration company creating shareholder value through grassroots discovery. | |
