(Edit - this is in reply to WinkyDinky16 above, HC dropped my...

(Edit - this is in reply to WinkyDinky16 above, HC dropped my 'quote').

Winks, I was just going to ignore this, but think it would help you to understand.

In your example you have:

200k shares @ 10c = $20k
200k shares @ $10 (event "X" happens) = $2mil

After 4:1 consolidation you would have

50k shares @ 40c = $20k
50k shares @ $40 (event "X" happens) = $2mil (not 50k shares @ $10 = $500k)

They are exactly the same, even after the shares jump up. The reason is because the "event" that sent the shares to $10 (before consolidation) has a fixed dollar value that, fundamentally, increases the share price by that value divided by the number of shares. So if that same event that would send the shares to $10 pre-consolidation were to happen post-consolidation, the $value of that event (discovery etc.) would still be the same but would be divided by 1/4 the number of shares and therefore the shares would jump to $40 instead of $10.

When some sort of catalyst occurs that increases the price, you can't simplify this as an event that "adds 10% to shares", or "sends the shares to $10 event". The event adds a fixed $X dollar-value to the market-cap (the $X is what the market tries to work out, by doing things like trying to calculate the resource value, understand the grade etc. etc.). If you spread $X out across the number of shares there's a resultant rise in share-price. It's why the $53m-odd discovery that WA1 had can send their share price from $0.17 to $2, whereas if DRE made the same $53m discovery it would send DRE shares up 17.5 cents.

So there's no difference to your future outcome if there's a consolidation or not - they're the same! The SOI doesn't matter, other than there's some psychological price points where perhaps a company may look like a penny-stock if too low SP, etc., or if the price-stops of a SP aren't satisfactory to how a stock is traded.

I hope that helps, if would do you well to understand it.