SGR – AGM December 3, 2007

The AGM was held at the Victoria Inn in Winnipeg.  There was a good number in attendance – same room as last year, most seats filled, some standing at the side and the back.  The business meeting began at 10:12 and was chaired by Hugh Wynne, the Executive Chairman of San Gold.  Cathy from CIBC Mellon was the scrutineer on hand, and she reported 132 shareholders present at the meeting. 

First, the December 2006 Financial Statement was brought before the meeting.  There was no discussion or questions related to them. 

Next, the number of directors to be elected was set at 6, and the slate of 6 names put forward by the company were all elected (Hugh Wynne, Dale Ginn, Richard Boulay, David Filmon, Courtney Shearer and Ben Hubert).  There were no nominations from the floor.

The auditors, Scarrow and Donald, were reappointed for another year,

There was some discussion on the Stock Option Plan put forward by the company.  There was concern raised about issuing shares to management and other insiders which results in further dilution of stock.  Dale Ginn pointed out that it is hard to attract qualified, professional people to work in the mining industry, and that salary alone would not hold them.  It is really the options that are made available that provide motivation to come and to stay with the company.  A question was raised as to who gets the options.  It has been mine management (although Dale and Hugh have not had any for a couple of years) including engineers and mine supervisors, down to the front-line managers.  Some have gone to PR people as well.  The proposal put forward allows the company to issue options equal to up to 10% of the issued and outstanding common shares of the company.  In practice,  have not gone that high – usually bewteen 4 and 5%.  A motion from the floor was then made to amend the proposal to allow only up to 8% of the issued and outstanding shares, with a view of trying to limit the potential dilution through options.  However, there was no seconder for the proposed amendment, so the original proposal allowing 10% stood and was passed by the meeting.  [Options are usually issued at or very near market price at the time of issue.  When options are exercised by the holder, they immediately are liable for taxes on them, so they create complexities with CRA for those who hold them.  Net result is that options will not get exercised if there is not a good gain to be had by doing so.  So while there is some dilution, the offset is that SGR could not attract the best-qualified people without offering options, and options will only be exercised if the share price has gone up from time of issue – a good sign for all shareholders].

Someone enquired as to why the AGM was so late when the 2006 financials were already completed in May.  Management agreed that the AGM should be earlier and that they would make note of this point for 2008.  Hugh Wynne suggested that he would like to see the AGM be held in Bissett and that a tour of the facilities could be arranged to coincide with it. 

That concluded the formal business part of the meeting at 10:37.  That was followed by a powerpoint presentation and a question and answer session.  (posted separately).