On the ‘Corporate Structure’ slide (see contents pasted below) of the recent SGX presentation it was great to see ‘cash from options and warrants’ included (i.e. $17.9 million). For those who don’t know… this would be the total amount of cash SGX would receive if all options and warrants outstanding were exercised. If all options and warrants were exercised there would be 191.6 million shares outstanding (i.e. on a fully-diluted basis).

Therefore, cash on hand (i.e. $6 million) plus cash on a fully-diluted basis (i.e. $17.9 million) would give SGX a total cash position of $23.9 million on a fully-diluted basis. This is significant. As we have already been told, the $6 million cash on hand is enough to fully-fund current 32,000 m drilling program for 2008… therefore, an additional $17.9 million would likely be enough to fund 2 additional years of comparable drilling programs… likely part of a 3rd… without further dilution beyond the current level of 191.6 million shares outstanding on a fully-diluted basis. Imagine at least 2 more years of drilling at Jacobus, Onaman, Kerrs, Gold Hill, Pony Spur. Sugarloaf… w/out further dilution beyond 191.6 million?!?

OF COURSE… this analysis assumes all options and warrants outstanding are exercised. According to latest MD&A (p. 10-12)… “As at March 31, 2008, there were 30,211,065 warrants outstanding with a weighted average exercise price of $0.57”… and the 13M options outstanding have a weighted average exercise price of approximately $0.29. So at current price levels, SGX if far from having all of these options and warrants exercised as none of them are currently ‘in-the-money’. BUT… IMO share price can and will get back to levels that ensure all options and warrants outstanding are fully exercised (i.e. +$17.9 million cash for SGX).

FYI… who owns these shares is also very important… based on my calculations and what I can find publicly available online… on a fully-diluted basis 30.5% of SGX is held by insiders/institutions/funds (see below). Like I said this is only based what I can find publicly available online… IMO if this number is 30% based on what I can find, the actual number is probably more like 40%, 50%, or even higher… especially given trading activity during the first half of 2008. Sounds like a good question for SGX management.... “On a fully-diluted basis what percentage of SGX would be owned by insiders, funds, and institutions?”

red911

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SGX Corporate Presentation, June 24, 2008, Slide 9:

Outstanding Shares: 148,754,383

Options: 13,600,000

Warrants: 29,314,540

F/D Shares: 191,669,323

Cash on Hand: (as of 3/31) $6.0 million

Cash from O/W: $17.9 million

Market Cap: $30 million

Shares Traded (6 months): 151,803,013

Daily Average (119 days): 1,275,656

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SGX Corporate Structure, July 7, 2008, red911: