7936567 Canada Inc SWYDF

RE:RE:From Mr. Manson's 2012 Letter to Shareholders

[mjl777]

Yes, I know all about the Lassonde Effect and the fact that dilution is a necessary condition (It's the magnitude of the dilution that's disappointing, especially since the proposed deal is directly opposed to co. communications on the issue!). But these things don't mean that I have to like the deal. It is more dilutive than necessary and what's more, the market agrees with me. I also understand how one-shot financing is designed to lower the project risk. But, there's a trade-off involved because one-shot financing also means the company has committed to finance 100% of the project with the most expensive equity possible. I would have preferred that the company take its chances with staged financing and a new face at the helm. It's ex. ironic that Stornoway advanced Renard on an extremely high risk basis, but now chooses a project financing approach intended to minimize project risk. It's clear to me that the company's strategy for Renard was poorly conceived and one that made ultra-expensive and dilutive financing necessary.