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Gold/Mining/Energy : Solv Ex (SOLVD)

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To: V.P. who wrote (3266)	6/3/1997 7:32:00 PM
From: Dominic Cerino	of 6735

They could use the money from the sale of stock to purchase or exercise options or warrants from the company thereby building up the cash reserves for the company. Doing this allows them to bypass the investment bankers who always take a big cut on any secondary and the company is not beholden to anyone. This also is a way to get needed cash instead of borrowing and paying interest. If a company does this they could actually have cash on hand and with no debt. It has been done by companies whose mangement is very dedicated to the eventual success of their company. When they do start something like this they never put all the money back in. This is for two reasons, first they must pay taxes on the previous quarter's sales and secondly they should at this point waived salary to save money and taxes etc. and use some of the proceeds to live on. I am not saying that this is what SOLV is doing. All I am saying is that it may be what they are doing , seeing how their reputation on the street and to the lending community has been soiled by the shorts. It is an alternative way to raise needed funds for a company which does not increase the debt. Dominic

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