FEC Resources Inc (FECOF)

[irishintelligence]

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From:
Date: Wed, Aug 7, 2019 at 2:22 PM
Subject: FEC Resources Valuation: more than $34,000,000
To: paul wallace <[e-mail]>, clint5841 <[e-mail]>, CCPR <[e-mail]>, Kagetsu, Brett <[e-mail]>
Cc: Riaz Sumar <[e-mail]>, Tim Strong <[e-mail]>, richard asbridge <[e-mail]>, Tim Strong <[e-mail]>, <[e-mail]>, <[e-mail]>, <[e-mail]>, <[e-mail]>, <[e-mail]>, <[e-mail]>, <[e-mail]>, <[e-mail]>, <[e-mail]>, Vernon Cooney <[e-mail]>, <[e-mail]>, <[e-mail]>, <[e-mail]>, <[e-mail]>, <[e-mail]>


Paul:

We established long ago that the PXP Energy was an excellent proxy for the value of our 6.8% of Forum Energy.

Recently we did the same with Atok Big Wedge.

To underscore the accuracy of the Atok Big Wedge proxy I encourage you to read this: "Atok, which reported a net loss of P33.36 million in 2016, currently does not have an active operating mine. It is banking only on the prospects of its minority stake in Forum Energy Ltd, which has a 70% interest in SC 72." (https://www.rappler.com/business/169821-duterte-philippines-china-ties-roberto-ongpin-reed-bank)

There are approximately 2,500,000,000 shares of ATOK outstanding. Dennis Uy purchased 100,000,000 shares for $4M which represents a 4% ownership stake in Atok Big Wedge.

Atok Big Wedge owns 20% of Forum Energy and Atok Big Wedge is valued at $100,000,000, therefore 100% of Forum Energy is valued at $500,000,000 and 6.8% of Forum Energy is valued at $34,000,000. (we can set aside the fact that Dennis Uy paid P 2.00 per Atok Big Wedge share although Atok consistently trades above P 10.00)

The remaining 6.8% of Forum Energy, the only material asset owned by FEC Resources, has tremendous value. You can achieve that value by offering to sell the 6.8% through a formal, independent, global, and transparent bid process.

Please advocate for our business and focus on shareholder value. Thank you.







https://www.philstar.com/headlines/2019/08/01/1939724/china-acknowledges-philippines-acceptance-perfect-mou-oil-exploration


https://www.cnnphilippines.com/news/2019/8/4/president-duterte-xi-jin-ping-bilateral-talks-2019-fiba-world-cup.html

https://www.philstar.com/business/2019/08/02/1939789/pxp-energy-eyes-more-oil-gas-prospects





On Thu, Jul 25, 2019 at 2:25 PM wrote:
Paul:

The market has spoken.

https://news.abs-cbn.com/business/07/16/19/udenna-corp-buys-100-million-shares-in-mining-firm-atok-big-wedge

This recent Udenna/Atok-Big Wedge transaction values the FEC Resources 6.7% stake in Forum Energy at $30.15M.


Outstanding news.









On Mon, Jun 10, 2019 at 7:11 PM wrote:
Paul:

The company will run out of money in the near term and, as has been stated, the issuance of FECOF shares or debt is a solution for funding. Yet the only buyer of shares would be PXP Energy (or a related entity) and the only lender would be PXP Energy (or a related entity).

What happens next?

Solution #1) PXP Energy or related entity provides cash to FECOF. Result: additional evidence of conflict of interest, oppression, misconduct, and improper procedure.

Solution #2) Bankruptcy. Result: hard to know how the court will react to this https://www.fecresources.net/ceo-and-board-member-email.html and others.

Our objections have been clearly articulated by way of a formal memo and it is challenging to understand why you continue to go down this path. SC-72 will be developed, Forum Energy will be rewarded, and between now and that time FECOF minority shareholders will either be properly compensated or simply wait for the right time to litigate.

Limitations periods are not relevant in some/all cases dealing with conflict of interest, oppression, misconduct, and improper procedure, therefore, the question is why not resolve this now when it would be relatively inexpensive to do so? Cash, PXP Energy Shares, Forum Energy Shares; you have many options to resolve this in the near term. Yet if you do not, this is perfectly acceptable to LGI, as it is inevitable that the value of Forum Energy will rise and the book value of our shares of FECOF will rise concurrently.









On Mon, Jun 10, 2019 at 2:14 PM paul wallace <[e-mail]> wrote:

> Hi
>
> I just wanted to advise you that after discussion with the other directors, I am proposing to attend the upcoming FEC Resources AGM by telephone.
>
> Given the subject matter on the agenda, I find it hard to justify the cost of travelling to Vancouver.
>
> Kind regards
>
> Paul