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Gold/Mining/Energy : Peruvian Gold Ltd. PVO
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To: Robert Dydo who wrote (498)3/28/1998 8:14:00 PM
From: Rolly  Read Replies (1) of 892
 
Robert, the information you presented about the numerous outstanding warrants concerns me as well. The number of shares outstanding after the smoke clears was one of the first concerns many of us had when we first read of the deal. Now you've added more doubt to the viability of this deal by disclosing to us the number of outstanding warrants that will cause further dilution if and when they are exercised. Well, at least this will save the company the costs incurred to do a stock split down the road as I don't think one will ever be needed with this many shares outstanding, even if they hit an elephant sized deposit.
You've also indirectly answered a question that I've had since this deal was announced. I couldn't figure out why GBU would be so interested in PVO if the Rosia Montana deposit may be one of the largest deposits in Europe (why cut PVO shareholders in on the action) Why not just go back to the market and do another private placement when the time is right at perhaps higher stock prices. Well, my thoughts are that the merger deal proposed between GBU and PVO resulted in GBU paying less than cash value for the shares of PVO (which is effectively what happened as I view this as a reverse takeover) and they didn't have to issue one single warrant (other than what PVO has outstanding). Just from the information you presented to us earlier, it appears GBU had to issue one warrant for every share issued in its past private placements..It appears GBU too must be a little concerned about the number of warrants outstanding and hence found this deal more attractive than another private placement.
In closing I must continue to remain convinced that these companies must be onto something massive. For if they are not..................,well you know the answer to that.
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