Cylinder;

"As the Company relies on equity markets for capitalization, management is of the view that the proposed Consolidation addresses the dilutive consequences of a large outstanding number of Common Shares."

This is a complete and total "RED HEARING". If the company desires to raise cash via a new share issue the dilutive effect will be equal regardless of the present number of shares outstanding. What will be dilutive is if they DO NOT GET THE SP UP TO AN ACCEPTABLE PRICE! It is that simple. Now just look at the net effect the proposition has had on the SP to date. Its existance is making the company and all current share holders subject to much increased dilution if needing to raise cash is expected soon. Good thing we can catually go longer than a couple of years now with a minimum if furure expendatures. Past spending will allow all claims and JV expendatures well intact and in very good standing for that long, no problem! And UC Resources will be taking on the line share of Exploration spending in the next two to three years on most of the Mc Fauld's Lake area claim properties. Thus, funding need not be a worry for a good long time, and thankfully so under current conditions.

However, if we desire SPQ to keep up a strong rate of accelerated exploration to assist in realizing the true value of the many very good claim blocks in SPQ possession, then all the Board of Directors need do is make any new Stock Issue be open to purchase by EXISTING Share Holders. nO PROBLEM IN RAISING THE DESIRED FUNDS NOW, IS THERE!

Now for the latter Excuse for making the proposition:

Management is also of the view that the Consolidation would address the concern that low prices create larger bid / ask spreads which encourages non-synergistic, low value speculative trading and volatility which is unrelated to news and developments within the Company."

When is it the responsibility of the Board of Directors to be concerned with increased "Speculative trading". Isn't this exactly what a company in SPQ's present situation always seeks to accomplish - increasing Speculative Trading which converts to increased Lequidity. Lequidity - what is that? ANSWER: The STYFF Every Company clamours for and is reqiured to ensure to some significant degree if they want to attract Investors and also "Remain Listed on the Exchange. It is ,afterall a key requirement for listing and continued listed Status, is it NOT!

Old Joe

PS: Now I can not even give the "Speculative trading" excuse any merit what so ever. That leaves absolutely NO Merit what so ever for any of the excuses for supporting the proposition. New Directors PLEASE!