President's Communications
| Apr 16, 2009 President's Letter to Shareholders Serengeti achieved a significant milestone in late February with the release of the initial resource estimate from the Central Copper-Gold Zone at our 100% owned Kwanika property . The independent N.I. 43-101 compliant report backing up this estimate has just recently been filed on SEDAR and is available on our website at http://www.serengetiresources.com/s/Updates.asp?ReportID=344368 Reproduced below is an extract from the key table in the report outlining the Indicated Resource at two different copper-equivalent (CuEq) cutoffs plus a less well defined extension to the zone that falls in the Inferred Resource category.
At the lower cut-off, the zone is estimated to contain 1.6 million ounces of gold and 1.1 billion pounds of copper within which a higher grade, 75 million tonne zone averages 0.42 g/t Au, 0.41% Cu, containing 1 million ounces of gold and 684 million pounds of copper. We are particularly pleased to have advanced the project to this point in a relatively short time frame since the discovery in late 2006. Excellent potential also remains to expand the resource and make new discoveries in the immediate Kwanika area as outlined below. With the resource estimate in hand, we can rank ourselves against our peers in terms of contained copper and gold. The following charts, one looked at in terms of copper equivalent and a second in terms of gold equivalent compare Serengeti to a peer group of companies with bulk tonnage copper-gold or gold-copper projects mostly in the Americas. In both plots, enterprise value (EV) is calculated by subtracting a company's cash from its market capitalization. EV is a measure used by analysts to estimate the underlying value of a company's assets.  Click to Enlarge  Click to Enlarge As one can see the market is currently attributing little value to Serengeti's Kwanika asset given that our cash position essentially equals our market capitalization. This is not a reasonable valuation for the Kwanika asset. We therefore believe there is significant potential for price appreciation when this is recognized in the market place. Serengeti's strong financial position ($8.9 million in working capital at March 31, 2009) will enable us to conduct a significant drilling program this summer, exploring for extensions to the Kwanika mineralized system and potentially making new discoveries on several of our other properties. We plan a 27 hole, 6,000 meter program starting in June 2009.
In addition to the drilling outlined above, we are pleased to have a partner, Newcrest Mining Limited of Australia, funding a C$ 1-1.5 million follow-up drill program on our Croy Bloom property this coming summer. Finally, a refundable tax credit of approximately $2.5 million is expected from the BC government in 2010 which will essentially replace our 2009 exploration budget. To summarize we have a key copper-gold asset at Kwanika and we have the cash, a plan and the people to give us the opportunity to succeed. Whereas the price of gold has demonstrated some volatility of late, the price of copper has shown remarkable strength and the stock market is starting to show some signs of recovery. When that recovery comes, Serengeti will be well positioned to seize this opportunity. This is one of an ongoing series of regular communications aimed at keeping you informed as to our plans and progress. Please visit our website at www.serengetiresources.com and we always welcome your calls and emails. Yours truly,  D.W. Moore President & CEO SERENGETI RESOURCES INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
