Reply to mbgold,

Your math is interesting....however, I think the PP was fairly priced.  Although the SP on the open market was higher for the last couple of days, it has been around the $1.40 mark for awhile now, and this arrangement was probably drawn up oiver the past week - not just at the last minute this morning, so it is in line.  The previous flow-through offering was priced quite a bit higher than the market price as it had the tax benefits that go along with flow-throws (although I was surprised that it was set as much higher than it was at the time).  I do not think that the price set on these PP shares reflects the full value of the mine, or is intended to - it does reflect what the market value of the shares has been.

What I get from the news today are these points:  1.  They were in need of additional working capital.  I have posted on this point earlier - the burn rate is high and thre is not enough money coming back from gold sales to keep the bank account from diminishing yet.  There is talk about cash-flow positive happening soon, but these things usually take longer than desired -- thus they needed more working capital to get it up to full speed.  2.  They are keeping the details of the arrangement purposefully flexible so that they can react according to the response and circumstances over the next couple of weeks.  That is wise, I think, from the company's viewpoint - better to have flexibility than to hem yourself in with restrictions through setting the details too tightly in advance.   3.  I am not sure why they wanted that extra option for $15,000,000 more dollars at the end - I wonder if there might be a possible acquisition in mind as I do not think they would need that now considering the size of the main part of the PP; at least not for the regular business-expansion plan considering we are approaching a cash-flow positive situation soon (we are told).  However, considering the escalating price of gold and more favourable environment for gold production these days, I am wondering about whether SGR is looking at adding to their land holdings.  This is personal speculation only on my part.   

At the end of the process, while dilution is not nice for the immediate short-term pciture, if it can speed up the timetable for higher production (which should help us get to a better share price sooner), then I am okay with it.  I am not looking to sell out next month - but this move may help the share price be higher next fall than it otherwise would have been becasue production will be higher as a result.  As well, if they do add more land to their holdings, I would see that as also increasing the potential reserves of the company and that would also be a positive in my mind.   

I also find the timing of this news interesting, with it coming out now and expected to be completed just before the AGM - makes me wonder whether there will be some further good news connected with it that we may hear about at the AGM.  Again, just speculation on my part. 

Lion