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Gold/Mining/Energy : Diamonds in Alberta, Ashton, Pure Gold, Montello, New Cla -- Ignore unavailable to you. Want to Upgrade?

To: Jesse who wrote (436)	2/5/1998 10:01:00 AM
From: Famularo	Respond to of 822

Financing agreement entered into Vulcan Minerals Inc VUL Shares issued 8,639,500 Feb 3 close $0.33 Thu 5 Feb 98 News Release Mr Patrick Laracy reports The company has negotiated a financing agreement with Yorkton Securities whereby Yorkton will seek to raise by way of exchange offering prospectus $1,050,000 with an option to raise up to $1,207,500. It is anticipated that the EOP will be filed by March 31 1998 and will offer units consisting of one share and one series A warrant. Each series A warrant would be exercisable for 12 months from date of issue at a price equal to the offering price of the units. The price of the units will be in the context of the market at the time of filing. The agent will be entitled to a commission of 7.5% of gross proceeds and be entitled to warrants equal to 15% of the units sold. The broker warrants would have the same terms as the series A warrants. Proceeds are to be used for diamond exploration in Alberta and petroleum exploration onshore western Newfoundland.

To: Jesse who wrote (436)	2/5/1998 2:34:00 PM
From: Bruce Lock	Read Replies (1) \| Respond to 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.