You are right K.

Corporate laws required that any distribution to shareholders have to be taken out of accrued profit or out of capital (capital reduction). And even if capital is OK, it also m,ust comply to accounting and solvency tests which an exploration company are almost never able to meet. And often amendment of Statutes are required to reduce capital... So this is not that easy. One just have to give a quick look to the bottom of the Balance Sheet ("Deficit")and one gets the idea instantly.

And some more help...

Excerpt from the filed Feb. 12, 2009, Prospectus (interesting, isn't it?):

(Note that "Investors" is defined as "certain institutional investors", ie, they don't want to be identified...)

PURCHASE AND SETTLEMENT AGREEMENT

Pursuant to the terms of the Purchase and Settlement Agreement, the Investors have agreed to purchase from the Corporation, and the Corporation has agreed to sell to the Investors, the Offered Shares at the Issue Price. The Purchase and Settlement Agreement was entered into as part of a settlement of a dispute related to the tendering by the Investors of Freewest common shares to the Offer pursuant to notices of guaranteed delivery (the “Dispute”).

The Investors have waived any and all statutory rights of withdrawal or rescission with respect to the purchase of the Offered Shares. Both the Corporation and the Investors have made appropriate representations and warranties. Standard conditions of closing will apply to the Offering, including the entering into by the Corporation and the Investors of a full and final mutual release discharging each other and their respective affiliates from any and all claims arising from or relating to the Dispute.

The Investors have paid the Corporation an aggregate of $50,000 for expenses incurred by the Corporation in connection with the Dispute and the Offering. The Corporation and the Investors have also entered into a nondisclosure agreement which remains in full force and effect, in accordance with its terms.

The Investors have been granted a one year right of participation whereby the Investors have the pro rata right to participate for an aggregate of up to 25% of any public offering by the Corporation pursuant to a prospectus filed with a securities regulatory authority in Canada, the United States or elsewhere.

The Corporation has received the conditional approval of the TSXV to list the Offered Shares. Listing is subject to the Corporation fulfilling all of the listing requirements of the TSXV. The Offered Shares have not been, and will not be, registered under the 1933 Act, as amended or any state securities laws and may not be offered or delivered, directly or indirectly, or sold in the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) or persons in the United States.

The Offered Shares will be issued directly by the Corporation to the Investors. No underwriters, dealers or agents will be involved in this issuance. No underwriter has been involved in the preparation of this short form prospectus or performed any review of the contents of this short form prospectus.

GLTA.

BB.