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Aberdeen Reports Shareholders Equity of $1.08 Per Share and Third Quarter Financial Results

12/16/2009

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  • Investment Portfolio increases to $57.7 million, or $0.66 per share
  • Royalty Income of $481,828 received in the quarter and $1,343,936 received year to date
  • Asset base continues to benefit from strong gold price environment
FOR IMMEDIATE RELEASE

Toronto, Ontario, December 16, 2009: ABERDEEN INTERNATIONAL INC. (“Aberdeen”, or the “Company”) (Toronto Stock Exchange: AAB) is pleased to announce that it has released its financial results for the three and nine months ending October 31, 2009.
As at October 31, 2009, Aberdeen’s Shareholders’ Equity was $94.4 million, or $1.08 per share. Aberdeen’s shareholders’ equity increased by $5.2 million from $89.2 million at July 31, 2009, and increased by $6.9 million from $87.5 million during the nine-month period ending October 31, 2009. The primary reason for the increase in Shareholders’ Equity was an increase in the value of the Company’s investment portfolio (including an increase in cash and cash equivalents) by the end of Q3.
Aberdeen received royalty revenue of $481,828 from 42,380 gold ounces sold at Simmer and Jack’s Buffelsfontein Mine and First Uranium’s Mine Waste Solutions Tailings Recovery Operations during the three-month period ending October 31, 2009. This revenue was up from $409,835 in the previous quarter on sales of 40,247 gold ounces from the same mines. Aberdeen’s royalty revenue in Q3 increased due to an increase in the average gold price as well as increased gold sales. This increase was partially offset by a stronger Canadian dollar, which negatively impacts revenue received in US dollars.

Investment Portfolio Posts Strong Performance
($ millions) October 31,2009 July 31,2009 January 31,2009
Cash and cash equivalents $ 5.8 $ 1.3 $ 1.4
Investments


    Publicly traded 36.2 29.7 21.7
    Private 3.1 7.8 5.3
    Non-trading warrants


      Intrinsic value 3.1 2.5 0.3
      Option value 5.9 4.9 3.3

9.0 7.4 3.6

48.3 44.9 30.6
Equity accounted investments 1.8 1.9 1.9
Loans receivable 1.8 2.6 4.0
Total $ 57.7 $ 50.7 $ 37.9
Shares outstanding (millions) 87.5 87.5 94.9
$/share $ 0.66 $ 0.58 $ 0.40

Aberdeen benefited from the performance of its investment portfolio (cash and cash equivalents, investments and loans receivable) in Q3, increasing in value by $7.0 million from the previous quarter to $57.7 million, or $0.66 per share. Key contributors to this increase were Crocodile Gold/Franc-Or Resources (which merged after the end of the quarter although the transaction was announced previously), Sulliden Gold, Allana Resources and Longford Energy. In addition, the Company increased its cash position during the quarter by selling some equity holdings.

Gold Investments Continue to Add Value to Portfolio

During Q3, Aberdeen continued to benefit from the theme of higher gold prices and increasing investor interest for gold equities. In addition to its 1% NSR royalty on Simmer and Jack’s Buffelsfontein mine and First Uranium’s Mine Waste Solutions operation in South Africa, Aberdeen’s biggest equity holdings were junior gold and precious metals companies. Even though the performance of these stocks was positive, overall junior and small cap gold equities lagged larger capitalized gold stocks in Q3. Since the end of the quarter, Aberdeen has benefited from increased risk tolerance among investors and has seen its interests in Avion Gold, Crocodile Gold, and to a lesser extent, Sulliden Gold increase significantly.

Among Aberdeen’s top gold equity holdings, Crocodile Gold (CRK-TSX) continued to pursue a “go-public” transaction by merging with Franc-Or Resources. The transaction was approved just after the quarter ended at a shareholders’ meeting on November 2nd, and Crocodile Gold began trading on November 6th. Even before the merger was completed, Franc-Or Resources shares performed well implying that Crocodile Gold was being well received by the market. Since the end of the quarter Crocodile Gold’s share price has increased a further 27% (as of December 11, 2009).

Sulliden Gold (SUE-TSX) is another core gold holding that progressed well during Q3. Sulliden Gold completed an important financing (in which Aberdeen participated) in September, which should give the company a substantial budget to drill the project in 2010 with the idea of expanding the resource and complete a feasibility study as well. Avion Gold (AVR-TSXV), currently Aberdeen’s third-largest holding, saw its share price struggle in Q3 as it incurred a hiccup in gold production, but since the end of the quarter the company has gotten back on track with its production ramp-up and the share price has performed well, and the Company is looking forward to posting a strong performance from this holding in Q4.

George Faught, Aberdeen’s CEO stated, “We are pleased with how our holdings have benefited from the rising price of gold. We are well positioned to take advantage of an increasing gold price through our royalties in South Africa and our equity positions in key projects such as Sulliden Gold, Crocodile Gold and Avion Gold”.

Simmer Loan Agreement

On February 16, 2009, shareholders of Simmer and Jack voted against the conversion to equity of the Loan Facility thereby granting Aberdeen a 1% Life of Mine NSR on all the Northwest assets of Buffels Gold Mines. Aberdeen has received and continues to receive a 1% royalty from both Simmer and Jack, and First Uranium for the Buffels underground operation and the Mine Waste Solutions operation.
In July 2009, Aberdeen filed a statement of claim against Simmer and Jack and against First Uranium seeking payment of the outstanding Graduated Royalty from October 16, 2008 to December 31, 2008 and the unpaid loan principal of US$10 million.

Outlook

The outlook for Aberdeen’s investment portfolio is bright, and while the portfolio benefited from a rising price of gold in Q3, since the end of the quarter the price has continued to rise, hitting a closing price of $1,212.50/ounce on December 2nd. Gold has retreated from its high, but the fundamentals appear strong and supportive of strong gold prices for the foreseeable future. This robust gold price environment bodes well for value and income from The Company’s gold royalties as well as the performance of the Company’s substantial gold equity holdings.
Over the past few months, Aberdeen has reviewed several new potential investments at the private equity stage. Since the end of the quarter, Aberdeen has made investments in two small private companies and is in the process of assisting the set up of new management and business plan. Aberdeen’s President and COO David Stein remarked, “The private equity deal flow is as good as we have seen it in a long time. While the initial investments we are making are relatively small, we see tremendous potential to launch several exciting new resource companies in 2010 and we expect to create significant value from our efforts.”
Aberdeen has also been engaged with potential partners in establishing joint ventures that would extend the Company’s reach in terms of both capital available for investment and resource opportunities around the globe. Aberdeen is currently completing legal documentation on its first joint venture fund, which, if successful, would generate fee-based income for the Company going forward, in addition to extending the Company’s financial reach. Aberdeen is in discussions with other potential partners, and is excited by this new avenue for growth, and will provide more details if and when any of these opportunities are finalized.

About Aberdeen International Inc:

Aberdeen is a publicly traded global investment and merchant banking company focused on small cap companies in the resource sector. Aberdeen will seek to acquire significant equity participation in pre-IPO and/or early stage public resource companies with undeveloped or undervalued high-quality resources. Aberdeen will focus on companies that: (i) are in need of managerial, technical and financial resources to realize their full potential; (ii) are undervalued in foreign capital markets. Aberdeen will seek to provide value-added managerial and board advisory services to companies. The Corporation’s intention will be to optimize the return on its investment over an 18 to 24 month investment time frame.

Aberdeen International Inc.
Please visit the Company’s web site at www.aberdeeninternational.ca or write us at
dstein@aberdeeninternational.ca

For further information please contact:
David Stein
President and COO
Tel: (416) 861-5812

George Faught
CEO
Tel: (416) 861-5887

Stan Bharti
Executive Chairman
Tel: (416) 861-5876

Cautionary Notes

Cautionary Note Regarding Forward-Looking Information This press release contains "forward looking information" within the meaning of applicable Canadian securities legislation. Forward looking information includes, but is not limited to, statements with respect to the future financial or operating performance of the Company, valuations of investments, proposed transactions and investments, investment philosophy, Simmers litigation, liabilities and commitments and royalties. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: financing not being available at desired prices; general business, economic, competitive, political and social uncertainties; other inherent risks of the mining industry and investment industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.