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San Gold Corporation - Stock Options and Warrants Analysis

San Gold Corporation - Stock Options and Warrants Analysis

Stock Options and Warrants Analysis as of July 12, 2014

To inform yourself why you should pay attention to the exercise prices of stock options and warrants, you can click on the link provided.

In the following tables you will find all the outstanding in-the-money and - when applicable - also all the near-the-money employee stock options and stock warrants for the company. All the outstanding stock options and stock warrants which are not in-the-money or near-the-money are excluded from these tables. This data has been obtained from the company's latest financial report for the quarter ended March 31, 2014.

Overview of In-The-Money and Near-The-Money Employee Stock Options

  Amount  Exercise Price  Dilutive Proceeds  Expiry Date 
Options, beginning of the period  NA  NA  NA  NA 
New options granted during the quarter ended March 31, 2014  7,000,000  0.20  1,400,000  NA1 

In order to see the effect on the corporate insider ownership when these new stock options are converted into common shares, please see the table below:

  Total Shares Outstanding  Shares Held by Corporate Insiders  Insider Ownership % 
Situation before Conversion of Options2  373,390,981  1,807,864  0.5% 
Situation after Conversion of Options  380,390,981  8,807,864  2.3% 

Overview of In-The-Money and Near-The-Money Stock Warrants

According to the latest financial statements the current outstanding stock warrants are as follows:

  Amount  Exercise Price  Dilutive Proceeds  Expiry Date 
Warrants, beginning of the period  16,800,000  0.18  3,024,000  September 12, 2015 
New warrants granted during the quarter ended March 31, 2014  NA  NA  NA  NA 

For details regarding the issuing of these stock warrants, please read the company's press release of September 12, 2013. In this press release you can read that 16,000,000 warrants are owned by Sprott Asset Management and 800,000 warrants are owned by Primary Capital. Thus, none of these stock warrants are owned by the company's management.

If all the stock warrants are converted into common shares, the effect on the insider ownership is as follows:

  Total Shares Outstanding  Shares Held by Corporate Insiders  Insider Ownership % 
Situation before Conversion of Warrants2  373,390,981  1,807,864  0.5% 
Situation after Conversion of Warrants  390,190,981  1,807,864  0.5% 

My Commentary and Conclusion Regarding this Stock Options and Warrants Analysis

In the following table you see the effect on the total amount of shares outstanding and the insider ownership percentage, when all the relevant employee stock options and stock warrants are converted into common shares:

  Total Shares Outstanding  Shares Held by Corporate Insiders  Insider Ownership %  Dilutive Proceeds 
Situation before Conversion of Options and Warrants2  373,390,981  1,807,864  0.5%  NA 
Situation after Conversion of Options and Warrants  397,160,981  8,807,864  2.2%  4,424,000 

Thus, based on the stock options and warrants analysis, the company does not comply with my minimum share ownership percentage by corporate insiders - even if all the relevant in-the-money and near-the-money stocks options and warrants are converted into common shares. I consider this as a negative sign.

 

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1 As I was not able to find this specific expiry date in the latest financial statements, I must conclude that the company didn't disclose the expiry date. However, the company did disclose the weighted average remaining contractual life of 4.69 years for all the 7,550,000 employee stock options with an exercise price between 0 and 1. This suggests an expiry date of approximately 4 to 5 years after granting these employee stock options.

2 For the current total shares outstanding, I refer you to the Share Statistics, which you can find on the Stock Chart and Share Statistics page by clicking the link provided. For the current shares owned by corporate insiders, I refer you to the following page: San Gold Corporation - Insider Ownership Assessment.

About Jeroen Snoeks

Jeroen Snoeks - UndervaluedEquity.com

Jeroen Snoeks is the founder of UndervaluedEquity.com, a website for investors passionate about investing in undervalued stocks. Through UndervaluedEquity.com, he shares his experience and knowledge and will soon reveal his personal stock portfolio.


 
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