re: pjo shares in escrow--misconception Dec 1, 2005: Shares:...

re: pjo shares in escrow--misconception Dec 1, 2005: Shares: 81.5 mill and 5.8 mill warrants and options. Cash: CAN$8-9 mill (The original amount of warrants in escrow were 12.5 mill-See below).

CEDAR document, dated 14 March 2005, pages 67,68:
A total of 53.75 ( 52.25 mill +1.5 mill) mill shares (66.95%) are in escrow as from March 14:

"Exchange Escrow Securities
In addition, 52,250,000 Resulting Issuer Shares and 12,500,000 Resulting Issuer Warrants to be
issued by the Resulting Issuer upon effecting the Business Combination will be placed in escrow on
terms to be set by the Exchange and agreed to by certain of the Palmarejo Acquireco shareholders
(the “Exchange Escrow”).

"The terms of the Exchange Escrow are such that the first release of escrowed securities issued in connection with the Business Combination will be on the Business Combination Date.

"For a Tier I Issuer, securities issued in conjunction with a Qualifying Transaction which are escrowed and viewed by the Exchange as “surplus securities” will be released as to 10% thereof following issuance by the
Exchange of the Final Exchange Notice, and as to 15% thereof on each of the 6, 12, 18, 24, 30 and 36
month anniversaries of the initial release.

"For Tier I Issuers (as defined by the policies of the Exchange – it is anticipated that the Resulting Issuer will be a Tier I Issuer), securities issued in conjunction with a Qualifying Transaction which are escrowed and viewed by the Exchange as “value securities” will be released as to 25% thereof following issuance by the Exchange of the Final Exchange Notice, and as to 25% thereof on each of the 6, 12 and 18 month anniversaries of the initial release".
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COMMENT: Except for 1.5 mill shares, the rest of the escrowed shares belong to BSG who won't be selling IMHO and are therefore tightly held.

Therefore, whether some of these shares are still in escrow or not, does'nt affect the market.

Some posters are keen to mention the word "escrow", however, in this case it is a "Clayton" concept.

Sofar, only 24.5 mill shares are tradeable on the Canadian market and some will be tightly held. This will remain so till PJO needs some shares for building the US60 mill plant and spends on mining equipment.

That won't take many shares and after the BSF is completed, many could be held tighter still.

Will Finance be a problem?

Don't think so, the share price is CAN$7.10 now and I expect it to be higher as the BFS has been completed. Some Plant equipment for Palmarejo has already been acquired.

To make their capital/shares work more efficiently, about CAN$40 mill could be borrowed and there wont be any hedging. This way, interest is tax deductable and BSG may issue say some 4 mill shares less. It is nice to have a higher share price!

Subject to audit,

Gerry
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks or metals/commodities.