John, here is an email I received from Pure Gold. I asked permission to post this and am just passing on the info.
Here it is.
Frank,
About the warrants:
Obviously, we had hoped (and expected) that our share price would be
trading substantially higher than where it's at. We would have liked for everybody to be able to exercise their warrants and make some money -remember, exercising warrants puts money in the coffers as well. At the same time, we could NOT have predicted 1)the market conditions,
2)that no one else would have any success in the area until now (affecting interest in the play),
3)the amount of time it would take to get results
back from K14, or
4)that results from K91 would have been disappointing.
Had any of these things been different, our shareholders may have been able to benefit from their investment.
There's a number of technical reasons why the C warrants were modified and not the D's.
The series C warrants were issued prior to the amalgamation in conjunction with a financing at $0.30. The financing resulted in the issuance of the C warrants at a price of $0.38. Market price at closing was about $0.27.
The financing closed in November before the Amalgamation took place. As a result of the amalgamation, the special warrant holders suffered 20% dilution and the share price went to about $1.10, from their subscription price of $1.50 and $1.55.
Of particular importance, the purchasers' shares and warrant shares were subject to a hold period expiring at the end of this month. The company had intended to file a prospectus to qualify the shares for resale, but could not do so due to budgetary constraints. Therefore, the purchasers of these warrants could not sell their shares or warrants at any time until now.
They had no opportunity at any time to recoup their costs, cut their
losses, or do anything else with their investment.
In contrast, the rights holders got free-trading shares at a discount to market and the warrant was also trading. In a sense, because exercising the rights (for which they got a share and half a warrant) cost the same amount as purchasing a share, the warrant was a "bonus." There was no hold period so the holders could have sold their shares if they chose to do so. They could have sold the warrant too.
Carina |
