Re: Private Placement Shares - Hold Expiry

I was asked my opinion on another board re: PP shares coming due for trading in January, thought I would post here as well...

In summary, IMO PP shares whose hold period has expired or is to expire in January will have little if any downward effect on share price given placees of these PPs, the dramatic increase in share price since these PPs, and the volume of positive news expected in the very-short-term.

On Jan 1, 2008, the hold period expired on shares contained in PP
announced and closed on Sep 7, 2007, approved on Sep 13, 2007 AND on Jan 16, 2008 the hold period expires on shares contained in PP announced and closed on Sep 19, 2007, approved on Sep 25, 2007. The shares coming due by date are as follows:

Jan 1, 2008: 6.25 million FT @ 16 cents AND 1.786 million NFT @ 14 cents

Jan 16, 2008: 1.875 million FT @ 16 cents (MineralFields Group)

Key point here is to notice these PPs were announced and closed on the same day (i.e. they were pre-arranged). Typically, pre-arranged PPs are subscribed to by institutions/funds/'strong hands'. This fact is further re-enforced by the fact that we are told in TSX PP acceptance bulletin both PPs had 3 and 2 hidden placees, respectively, we are told Mineral Fields Group was a subscriber to Sep 7 PP, AND according to stockwatch 'holders' list, Canadian Small Cap Resource 2007 No 1 fund no has 1.875 million shares of SGX as of Sep 30, 2007.

Typically, these 'strong-hands' are not very likely to liquidate
their entire holdings given rapid appreciation in share price. They are more likely to sell just enough to get their initial investment back and ride the free shares. We witnessed this with a PP earlier in the year that went entirely to Anglo Pacific. Anglo Pacific subscribed fully to Apr 2, 2007 5 million share PP at 10 cents. This PP cost Anglo Pacific $500k. In the subsequent 2 months Anglo Pacific sold just enough to recoup their initial investment. Anglo Pacific now holds ~7 million shares (and 5 million warrants) as they also subscribed to other earlier SGX PPs.

SGX is expecting an abundance of news in the very short term. I won't go into that as people here are well aware of what's coming. The subscribers to these PPs also know this and probably have a few more 'connections' than we have. There is a reason(s) they subscribed and there is a reason(s) they will likely hold.

Don't forget as well that these PPs also have warrants attached that are in the money bigtime. When these warrants are exercised SGX will get an additional ~$1.2 million.

Also, on a more personal note, I have a wack of shares at 14-15 cents (non-PP) and NOBODY is getting them anytime soon.

Here's to 2008 and ANOTHER breakout year for SGX. Just my humble opinion.

Cheers and Happy New Year,

red911

P.S. On Feb 16, 2008, hold period on ~5.4 million NFT shares @ 14 cents will expire AND on Mar 15, 2008, hold period on ~10.9 million.