Pilgrim,

Agree with most of what you said except the part about timing...the shareprice does not have to exceed strikeprice before expiry...Frank can still exercise the warrant (buy the stock) before expiry if he thinks it will exceed the strikeprice in the future (after expiry date)...he just has to wait for it...the key in a transaction of such a large a mount of warrants (10 million) is to have the disposal cash (1 to 1.2 million dollars) and have the luxury of time to be able to wait for the shareprice to go up...most people don't and most people don't have direct access to the original warrant holder who is willing to transfer the warrants at such a low price ($0.005) in a private transaction. Frank was very smart to do this, given that it was a zero sum transaction (he also sold 1 million shares into the market at $0.05), so he gained 9 million shares without having to dish out a penny...talk about averaging down...great if you can do it.

The other side of the argument is that Frank could have let them expire and thus reduced the overall liability of the large float plus warrants which still hang over our heads when we talk about the overall value of the company. This has to be said in opposition to the possible value that these 10 million shares might be worth when it comes to a vote...which is more valuable: reducing the float or increasing the number of votes held in the right hands? Depending on what Frank currently knows or reasonably expects, these speculative arguments may become moot in time. Let's all hope that it ends up with a reasonable offer for a take-over or a deep pocketed partner who is willing to front the development capital in exchange for a percentage of production...after the govs have announced their respective support for the infrastructure required, of course.

Cheers...good luck to all KWG longs

Le Penseur