w6w: My thought re: outstanding shares… I don't think it is a problem either... here's why...

Just some background research for those new here: (taken from slide 6 of most recent April 2008 Corporate presentation)

Share Structure:

Shares outstanding: 144,972,175* (now 148,540,883, see below)

Options : 15,894,318 (now a little less a per note below)

Warrants: 30,424,552 (now a little less a per note below)

Fully-diluted shares outstanding: 191,291,045

Cash: $6 million

Market Cap: $40 million (now at 25 cents ~37 million)

* since this presentation 3,568,708 options and warrants have been exercised to bring this total to 148,540,883

Ownership structure is important. From a combination of sedi.ca and the ‘holders’ section of stockwatch.com… we can calculate that insiders own 17.9 million (12%) and other funds etc. own another 7.2 million shares (~5%). Key insiders include Anglo Pacific Group at 6.9 million, Guy Charette at 4.2 million, and Nigel Lees at 3.9 million shares. Key funds etc. include Canadian Small Cap Resource 2007 at 1.9 million, Mavrix Explore 2007 at 1.5 million, and many other funds with anywhere from 166k-800k shares. Therefore, IMO with 17% of total number of shares outstanding tightly held by insiders and other funds etc. the ownership structure of SGX is favorable. It could be a little higher but it is not bad. As most outstanding warrants and options are also held by the same group of insiders, on a fully-diluted basis, the insiders’ proportion would be much higher than 12%.

However, although ownership structure is important, unless the is number totally outrageous (i.e. 3,4,5 hundred million+), the total number of shares outstanding of any company is irrelevant as long as that particular company has ‘value’ (and in the case of a junior exploration company by ‘value’ we mean realistically working toward discovering economically viable mineral properties). Does SGX have ‘value’? IMO definitely yes and then some. Many have detailed here many times (i.e. Jacobus Cu-Ni + Au Golden Mile extension?; Onaman; Gold Hill; Nevada; etc. etc. etc.) so I will not bore you with the ‘details’ :D.

As with all junior exploration companies, SGX has had to issue shares to secure financing to, therefore, continue operations (i.e. acquire, explore, survey, drill, discover). SGX’s last financing was originally announced as $4 million w/ a $5 million over allotment option at 50 cents per share and 75 cent warrants w/ 95 cent early expiration provisions. Not bad for a company that only shot up to the 50 cents level 2 weeks previous. That financing closed just 16 days after being announced and actually raised $5.48 million, more than the original $5 million over allotment amount, with virtually no promotion or fanfare. Therefore, IMO SGX has done a very good job raising capital and if not for the unforeseen market meltdown in mid-Jan I am confident mgmt expected SGX to be trading in the 40-60+ cent range since.

Not that I think it is necessary at this stage but a reverse-split is also a viable option if mgmt desires a lower float. Although typically associated and utilized by companies who have no other option because their number of shares out has grown too high and/or their share price has dwindled so low they have no hope of attracting financing, reverse-splits can also be used by ‘good’ companies to reduce an undesirably high share float. For example, if SGX did a 4-1 reverse split right now they would have 37 million shares out and be trading at $1.00. Again, I am not suggesting this is necessary or even desirable, just throwing it out there as another way to think about/justify total float… it’s all relative IMO. A large float for a ‘good’ company (as stated previous) is irrelevant.

Just some of my thoughts on this. Got longer than expected rather quickly but oh well. Comments welcome.

red911