I guess the flip side of the cash preservation strategy is suffering through the eventual sell off of "shares for cash".
Capital Management
When managing capital, the Company's objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management adjusts the capital structure as necessary, in order to support the acquisition, exploration and development of its projects. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to sustain future development of the business. The Company considers its capital to be equity, which is comprised of share capital, contributed surplus, shares to be cancelled and deficit which at December 31, 2008 totaled $43,682,099 (September 30, 2008 - $42,128,462).
The properties in which the Company currently has an interest are in the exploration stage. As such the Company is dependent on external financing to fund its activities. In order to carry out the planned exploration programs and pay for
administrative costs, the Company will spend its existing working capital and raise additional amounts when economic conditions permit it to do so.
Management has chosen to mitigate the risk and uncertainty associated with raising additional capital within the current economic environment by:
• minimizing discretionary disbursements of cash reserves;
• reducing or eliminating exploration expenditures which have limited strategic value;
• issuance of stock, options or warrants in lieu of cash, where possible; and
• exploring alternate sources of liquidity.
In light of the above, the Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient potential and if it has adequate financial resources to do so.
Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is appropriate.
The Company is not subject to externally imposed capital requirements.
