SOUTHERNERA (t.SUF) Message Board

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Gold/Mining/Energy : SOUTHERNERA (t.SUF)

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To: gemsearcher who wrote (3424)	5/20/1999 6:50:00 PM
From: Gord Bolton	Read Replies (1) of 7235

Hello Folks, Just retrieved the proposals for the annual meeting from the mailbox. They are seeking approval for issuing up to 19 million new shares this year. I have no idea why they would want to dilute the chit out of the stock at this time. The company has just turned profitable and has no debt. Why dilute? The Messina mine is bankable- isn't it. Angola has got to quiet down some before anyone will invest there. Camafuca should either be bankable- or not. Management would do better showing us some projects that would make us all want to buy more shares before suggesting massive dilution. Maybe they should grant us all options to buy additional shares at $4.85 per share to fund expansion. Having knocked the price down from $9.00 to less than $4.50 over the last 6 months they seek to adjust the (incentive) stock options to $4.85. This does not look good at all. As a matter of fact if they they wanted shares at $4.85, they should have been in the market and bought as much as they wanted instead of standing around with their hands in their pockets waiting for the risk associated with buying at $4.85 to pass. If they wanted lots of shares they probably could have halted the slide to $4.35 by putting in a big bid at $4.85. Incentive stock options are not a right they are an incentive for increasing shareholder value for all shareholders. Time to get off the teat and back to the farm. The management justify the reduction in price of the incentive stock options by claiming that they are adrift on the sea and had no power to manage in such a way as to increase shareholder value. I would argue that the non explanation for the lower than expected revenue from the 4th quarter was largely responsible for the drop in share price. This is not the management that I would reward. They need to realize that the pie has shrunk at their hands and now they want more pie from the other shareholders who have lost money. Bullchit. Thirdly management proposes golden parachutes for themselves in the event that the company is taken over. If they are managing properly, increasing shareholder value, and successfully communicating their value to the marketplace, I see no reason for a predatory takeover or for managment to be worried about it. Is there not a poison pill in place? How would these golden parachutes add value to the company? If management cannot explain the value of the parachutes to the company, I would suggest that they withdraw their motion. If they want more money- invest in the company and work to improve shareholder value.

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