RE: Wall @ 37 centsVery good question especially in light of rumors several weeks ago that San Gold was firming up an acquisition "or two"!!! If you don't follow SGR, the release was:
Mr. George Pirie, President and CEO of San Gold Corporation (TSX: SGR) (OTCQX: SGRCF), is pleased to announce it has entered into an option agreement with Cougar Minerals Corp. (TSX-V: COU) to acquire an 80% interest in 18 mineral claims comprising approximately 2,800 hectares near Bissett.
The properties are adjacent to San Gold's properties to the east and south of the SG#1 deposit.
As part of the agreement, San Gold is required to undertake the following expenditures on the Properties: (i) $200,000 on or before the first anniversary of the option agreement; (ii) $300,000 on or before the second anniversary of the option agreement; (iii) $400,000 on or before the third anniversary of the option agreement; and (iv) $600,000 on or before the fourth anniversary of the option agreement. During the term of the option agreement, San Gold shall be the operator.
In addition, the Company is required to subscribe for a private placement of $200,000 units of Cougar immediately following execution of the Option Agreement and an additional $200,000 units of Cougar on or before each of the first, second and third anniversaries of the Option Agreement. Each unit will be comprised of one common share of Cougar and one common share purchase warrant of Cougar exercisable for a period of two years from the date of issuance. The price of the units and the exercise price of the warrants will be equal to the market price of the common shares of Cougar as at the date of announcement of the applicable unit offering, subject to applicable regulatory policies. All amounts are in Canadian dollars.
Upon San Gold fulfilling all of the above obligations, it will earn an 80% interest in the Properties.
Now we all know that a few scant months ago George had privy to the BGE books and records and is well aware of what is under our skirts, so to speak, however, a basic knowledge of law is all that is required to understand that he can't use that information to benefit himself, or SGR, for what is arguably a reasonable period of time after his departure from the BGE board. So what is second best, buy up whatever else is around in the Rice and wait-a-spell; SGR has enough development work to keep itself busy for some time and the only gamble they risk in waiting is that some other eager party arrives in the meantime to snatch up the prize (which again is why BGE needs a poison pill). I was recently out on a field trip, and the word from the Bissett bar scene is encouraging, but more importantly the word from other claim holders is better. There is activity brewing.
Sorry, why the block at 37 pennies was the question. IMO, simple, management has not been diligent enough and taken the prudent care necessary to monitor into the hands of which brokers it has been placing sizeable blocks of shares in recent private placements, and when that occurs, a junior company often makes the classic mistake of thinking it is attracting new shareholders when in fact it is merely selling to existing holders with large holdings of free trading shares. Nice exchange if you can get it; even at a few pennies per share; one free trading share in exchange for a 4-month hold share plus 1/2 warrant.
These flippers will be gone soon as new believers enter the scene, and a few more deals such as that by SGR, and a few more drill results AND A RESERVE ESTIMATE by BGE, and we'll slip out of the 30's for good.
More news to follow on the next deal of the day from the Rice!!