Diamonds in Alberta, Ashton, Pure Gold, Montello, New Cla Message Board

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Gold/Mining/Energy : Diamonds in Alberta, Ashton, Pure Gold, Montello, New Cla

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To: Jesse who wrote (436)	2/5/1998 2:34:00 PM
From: Bruce Lock	Read Replies (1) of 822

In an EOP financing, the price of the unit is actually set at the time the EOP is approved. If you notice the Vulcan news release today, the Yorkton financing is also an EOP. I would suspect that most or all of the finacings Yorkton will do for companies in the Alberta diamond play will be EOPs. One of the reasons for this is that it is a financing which is retailer based as the stock will be immediatley free trading and will not have a 12 month hold period as with a traditional private placement. It is obviously hard to predict the market price of a stock in the future so it looks like Yorkton has used $0.40 as a reference point for VIP. From my understanding the key element of an EOP financing is the dollar amount. For example if the play takes off and for some reason VIP is trading above $1 the EOP could be amended and the number of units reduced. A no penalty "market out" clause for an agent involved in any financing is pretty much standard. If a financing was guaranteed by an agent it would probably only happen in an excellent market and they would probably charge a higher commission and a few other goodies I'm sure. This financing and any other financings a Junior gets from Yorkton, to me is good news for the whole play (Don't you agree?). The fact that it looks like the Brokerage firms are starting to back this play is great. With investment funds a little gun shy with specualtive stocks, it has to be the Brokerage firms that lead the charge to rejuvinate the spec market. As more money flows from the Brokerage firms, retail investors should gain more and more confidence in the market and the potential of the Alberta diamond play.

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