By Correspondence Folder:
September 1, 2010
U.S. Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D. C. 20549
Attention:
Re: Paramount Gold and Silver Corp. (the “Company”)
Form 10-K for the Fiscal Year Ended June 30, 2009 filed September 28, 2009
Form 10-Q for the Fiscal Quarters Ended September 30, 2009 and December 31,2009filed November 16, 2009 and February 12, 2010
File No. 001-33630
Dear Ms. Gallagher:
The following response is filed in connection with the Commission’s comment letter dated February 26, 2010 and May 24, 2010.
Financial Statements
Note 5 – Capital Stock (Item 10 from February 26, 2010 letter and Item 3 from May 24, 2010 letter)
We have reviewed FASB ASC 815-40 (Derivatives and Hedging – Contracts in Entity’s Own Equity) in greater detail and its applicability to the Company’s warrants with exercise prices denominated in Canadian dollars and provide the following comments:
| 1. | We have prepared all relevant entries for Fiscal Quarters ended September 30, 2009, December 31, 2009, and March 31, 2010 and Fiscal Year ended June 30, 2010 as per FASB ASC 815-40 to assess its impact to our financial statements (Appendix 1). |
| 2. | In reviewing the adjusting entries and impacts to the Company’s Financial Statements, we believe a reasonable person would conclude the following: |
| i. | As a result of the opening period adjustment, the Company has incurred a material obligation of $16,250,740. The corresponding note to the financial statements would explain that under US GAAP and more specifically FASB ASC 815-40 the liability is due to warrant contracts that have exercise prices in currencies other than the Company’s functional currency of U.S. Dollars. If the warrant contracts had exercise prices in U.S. Dollars then the transaction would be recorded as permanent equity. The exposure to the Canadian Dollar Index adds an external variable that could ultimately change the value of the warrant contract expected by the Company. |
| ii. | For the Company to actually incur the entire obligation the Canadian Dollar would have to depreciate to zero value versus the US Dollar. In the case of an exercise of a stock purchase warrant, the Company would receive cash that would be worthless in functional currency terms and thus obligated to settle by issuing shares in the Company’s Stock. For the Company to incur any part of the obligation or in other terms receive less than what is expected, the USD/CAD exchange rate would have to fall below the USD/CAD exchange rate at issue date of the warrant contract. |
Paramount Gold Mining Corp346 Waverley Street., Suite 110 Ottawa, ON K2P 0W5 Phone: (613) 226-9881 www.paramountgold.com
| 3. | We believe a reasonable person, in reviewing the Company’s Financial Statements and disclosures for the quarters ending December 31, 2009 and March 31, 2010 and for the year-ended June 30, 2010 would continue to conclude the Company has materially misstated its obligations as the exposure to the Canadian Dollar has favoured the Company and therefore must be an asset. |
| 4. | We believe the decision to record the Company’s warrant contracts with exercise prices in Canadian Dollars either as equity or asset/liability ultimately rests with the determination of the currency index that it is linked to. We believe that the exposure to the Canadian Dollar index is not sufficiently material to justify liability derivative accounting as per FASB 815-40. We provide the following: |
| a. | The historical 5 year average U.S. Dollar to Canadian Dollar exchange rate is $1 USD = $1.11 CAD (June 2005 to June 2010), with a high rate of $1USD = $1.26 CAD and a low rate of $1USD = $0.97 CAD (Appendix 2). |
| b. | The weighted average exchange rate at issue date for the Company’s warrants issued in Canadian Dollars is $1 USD = $1.245 CAD (Appendix 3), with a high exchange rate of $1 USD = $1.27 CAD and a low exchange rate of $1 USD = $1.01 CAD. The weighted average exchange at issue is 12% higher than the historical 5 year average exchange rate. |
The historical 5 year average USD/CAD exchange rate is below the USD/CAD weighted average exchange rate at issue date of warrants. The Company believes there is no material exposure to the Canadian Dollar Index that would justify the recording of a liability. The U.S. Dollar will have to appreciate 19% versus the Canadian Dollar from its June 2010 close to equal the weighted average exchange rate at issue date for warrant contracts with exercise prices in Canadian Dollars.
| 5. | Furthermore, excluding the exposure to the Canadian Dollar currency, which the Company believes is not material or a material risk based on the analysis in note 4, the warrant contracts meet all the conditions in 815-40-25-10 to classify the contract as equity which are as follows: |
| i. | Settlement is in unregistered shares only; |
| ii. | The Company has sufficient authorized and unissued shares available to settle the warrant contract during the maximum period the contract could remain outstanding; |
| iii. | The number of shares and therefore share limit is fixed and unchangeable; |
| iv. | No cash payment is required to the warrant holders if the Company fails to make timely filings with the SEC; |
| v. | There are no cash settled top-off or make whole provisions; |
| vi. | No warrant holder ranks higher than those of a shareholder of the stock underlying the warrant contract; |
| vii. | No collateral is required in the contract at any point for any reason. |
In summary the Company concludes the following:
| i. | It is unlikely that the average 5 year or 3 year rolling USD/CAD exchange rate will trade above $1USD = $1.24CAD or above the weighted average USD/CAD exchange rate at original issue date of the warrant contracts. |
| ii. | To record a liability for warrants contracts with strike prices in Canadian Dollars will materially misstate the Company’s obligations. |
| iii. | The exposure to the Canadian Dollar Index favours the Company and therefore the FV of warrant contracts should be recorded as an asset, however the Company believes for conservative purposes the existing classification as equity should remain. |
Should you have further questions or comments, please do not hesitate to contact the undersigned.
Sincerely,
Carlo Buffone
Chief Financial Officer
Paramount Gold and Silver Corp.
Encls:
Appendix 1
Appendix 2
Appendix 2a
Appendix 3
Paramount Gold Mining Corp346 Waverley Street., Suite 110 Ottawa, ON K2P 0W5 Phone: (613) 226-9881 www.paramountgold.com
APPENDIX 1
Paramount Gold and Silver Corp.
Entries as per FASB ASC 815-40
July 1, 2009 - CDN Warrants Outstanding
Total 18,584,832 warrants outstanding at July 1, 2009, 1,000,000 are with an exercise price denominated in USD and as such
are not required to be accounted for as liabilities
| Exercise | Exchange | Exercise | Recorded | Fair value | |||||||||||||||||||||||
| Grant Date | Warrants | Price (CDN) | Rate | Price (USD) | Expiry | Value in Equity | at July 1, 2009 | ||||||||||||||||||||
| March 18, 2009 | 12,000,000 | 1.05 | 0.86 | 0.90 | 3/18/2013 | 3,363,000 | 11,736,000 | Expires March 18, 2013 | |||||||||||||||||||
| March 18, 2009 | 840,000 | 1.05 | 0.86 | 0.90 | 3/18/2013 | - | 821,520 | Expires March 18, 2013 | |||||||||||||||||||
| December 31, 2008 | 4,209,117 | 1.00 | 0.86 | 0.86 | 12/30/2010 | 218,237 | 3,651,409 | Expires December 30, 2010 | |||||||||||||||||||
| July 23, 2008 | 500,000 | 2.10 | 0.86 | 1.81 | 8/7/2009 | 28,445 | 30,250 | Expires August 7, 2009 | |||||||||||||||||||
| July 23, 2008 | 35,715 | 2.50 | 0.86 | 2.15 | 8/7/2010 | 3,183 | 11,561 | Expires August 7, 2010 | |||||||||||||||||||
| Total | 17,584,832 | 3,612,865 | 16,250,740 | ||||||||||||||||||||||||
| Adjusting entry | |||||||||||||||||||||||||||
| Dr Contributed surplus - warrants | 3,612,865 | ||||||||||||||||||||||||||
| Dr Deficit - transition adjustment | 12,637,875 | ||||||||||||||||||||||||||
| Cr Warrants liability | (16,250,740 | ) | |||||||||||||||||||||||||
September 30, 2009 - CDN Warrants Outstanding
| Total 17,084,832 warrants outstanding at Sep. 30, 2009 |
| Exercise | Exchange | Exercise | Opening | Fair value at | |||||||||||||||||||||||
| Grant Date | Warrants | Price (CDN) | Rate | Price (USD) | Expiry | Liability Value | Sep. 30, 2009 | ||||||||||||||||||||
| March 18, 2009 | 12,000,000 | 1.05 | 0.93 | 0.98 | 3/18/2013 | 11,736,000 | 9,850,800 | Expires March 18, 2013 | |||||||||||||||||||
| March 18, 2009 | 840,000 | 1.05 | 0.93 | 0.98 | 3/18/2013 | 821,520 | 689,556 | Expires March 18, 2013 | |||||||||||||||||||
| December 31, 2008 | 4,209,117 | 1.00 | 0.93 | 0.93 | 12/30/2010 | 3,651,409 | 2,619,754 | Expires December 30, 2010 | |||||||||||||||||||
| July 23, 2008 | 2.10 | 0.93 | 1.96 | 8/7/2009 | 30,250 | - | Expires August 7, 2009 | ||||||||||||||||||||
| July 23, 2008 | 35,715 | 2.50 | 0.93 | 2.33 | 8/7/2010 | 11,561 | 2,343 | Expires August 7, 2010 | |||||||||||||||||||
| Total | 17,084,832 | 16,250,740 | 13,162,453 | ||||||||||||||||||||||||
| �� | |||||||||||||||||||||||||||
| Adjusting entry | |||||||||||||||||||||||||||
| Dr Warrants Liabilitiy | 3,088,287 | ||||||||||||||||||||||||||
| Cr Fair Value Gain on Warrants | (3,088,287 | ) | |||||||||||||||||||||||||
APPENDIX 1
Paramount Gold and Silver Corp.
Entries as per FASB ASC 815-40
December 31, 2009 - CDN Warrants Outstanding
Total 16,512,077 warrants outstanding at Dec. 31, 2009
| Exercise | Exchange | Exercise | Opening | Fair Value at | |||||||||||||||||||||||
| Grant Date | Warrants | Price (CDN) | Rate | Price (USD) | Expiry | Liability Value | Dec. 31, 2009 | ||||||||||||||||||||
| March 18, 2009 | 12,000,000 | 1.05 | 0.96 | 1.00 | 3/18/2013 | 9,850,800 | 10,602,000 | Expires March 18, 2013 | |||||||||||||||||||
| March 18, 2009 | 840,000 | 1.05 | 0.96 | 1.00 | 3/18/2013 | 689,556 | 742,140 | Expires March 18, 2013 | |||||||||||||||||||
| December 31, 2008 | 3,636,362 | 1.00 | 0.96 | 0.96 | 12/30/2010 | 2,619,754 | 1,988,363 | Expires December 30, 2010 | |||||||||||||||||||
| July 23, 2008 | 2.10 | 0.96 | 2.01 | 9/8/2009 | - | - | Expires August 7, 2009 | ||||||||||||||||||||
| July 23, 2008 | 35,715 | 2.50 | 0.96 | 2.39 | 9/8/2010 | 2,343 | 625 | Expires August 7, 2010 | |||||||||||||||||||
| Total | 16,512,077 | 13,162,453 | 13,333,128 | ||||||||||||||||||||||||
| Adjusting entry | |||||||||||||||||||||||||||
| Dr Fair Value Loss on Warrants | 170,674 | ||||||||||||||||||||||||||
| Cr Warrants Liability | (170,674 | ) | |||||||||||||||||||||||||
March 31, 2010 - CDN Warrants Outstanding
Total 12,875,715 warrants outstanding at March 31, 2010
| Exercise | Exchange | Exercise | Opening | Fair Value at | |||||||||||||||||||||||
| Grant Date | Warrants | Price (CDN) | Rate | Price (USD) | Expiry | Liability Value | Dec. 31, 2009 | ||||||||||||||||||||
| March 18, 2009 | 12,000,000 | 1.05 | 0.98 | 1.03 | 3/18/2013 | 10,602,000 | 8,551,200 | Expires March 18, 2013 | |||||||||||||||||||
| March 18, 2009 | 840,000 | 1.05 | 0.98 | 1.03 | 3/18/2013 | 742,140 | 598,584 | Expires March 18, 2013 | |||||||||||||||||||
| December 31, 2008 | - | 1.00 | 0.98 | 0.98 | 12/30/2010 | 1,988,363 | - | Expires December 30, 2010 | |||||||||||||||||||
| July 23, 2008 | 2.10 | 0.98 | 2.07 | 9/8/2009 | - | - | Expires August 7, 2009 | ||||||||||||||||||||
| July 23, 2008 | 35,715 | 2.50 | 0.98 | 2.46 | 9/8/2010 | 625 | 643 | Expires August 7, 2010 | |||||||||||||||||||
| Total | 12,875,715 | 13,333,128 | 9,150,427 | ||||||||||||||||||||||||
| Adjusting entry | |||||||||||||||||||||||||||
| Dr Warrants Liabilitiy | 2,194,338 | ||||||||||||||||||||||||||
| Cr Fair Value Gain on Warrants | (2,194,338 | ) | |||||||||||||||||||||||||
| Dr Warrants Liability | 1,988,363 | ||||||||||||||||||||||||||
| Cr Deficit - Transition Adjustment | (1,988,363 | ) | |||||||||||||||||||||||||
June 30, 2010 - CDN Warrants Outstanding
Total 9,875,715 warrants outstanding at June 30, 2010
| Exercise | Exchange | Exercise | Opening | Fair Value at | |||||||||||||||||||||||
| Grant Date | Warrants | Price (CDN) | Rate | Price (USD) | Expiry | Liability Value | Dec. 31, 2009 | ||||||||||||||||||||
| March 18, 2009 | 9,000,000 | 1.05 | 0.94 | 0.99 | 3/18/2013 | 8,551,200 | 5,469,300 | Expires March 18, 2013 | |||||||||||||||||||
| March 18, 2009 | 840,000 | 1.05 | 0.94 | 0.99 | 3/18/2013 | 598,584 | 510,468 | Expires March 18, 2013 | |||||||||||||||||||
| December 31, 2008 | - | 1.00 | 0.94 | 0.94 | 12/30/2010 | - | - | Expires December 30, 2010 | |||||||||||||||||||
| July 23, 2008 | 2.10 | 0.94 | 1.98 | 9/8/2009 | - | - | Expires August 7, 2009 | ||||||||||||||||||||
| July 23, 2008 | 35,715 | 2.50 | 0.94 | 2.36 | 9/8/2010 | 643 | - | Expires August 7, 2010 | |||||||||||||||||||
| Total | 9,875,715 | 9,150,427 | 5,979,768 | ||||||||||||||||||||||||
| Adjusting entry | |||||||||||||||||||||||||||
| Dr Warrants Liabilitiy | (5,979,768 | ) | |||||||||||||||||||||||||
| Cr Fair Value Gain on Warrants | 5,979,768 | ||||||||||||||||||||||||||
| Dr Warrants Liability | - | ||||||||||||||||||||||||||
| Cr Deficit - Transition Adjustment | - | ||||||||||||||||||||||||||
APPENDIX 2
Paramount Gold and Silver Corp.
5 year Average USD/CAD Exchange Rate
| Daily Exchange Rate Series: Low/High/Average | ( Bank of Canada 5 year average exchange rate | ||||||||||||
| Date Range: 2005/06 - 2010/06 | |||||||||||||
| USD=U.S. dollar (close) | |||||||||||||
| Summary | Date | USD | |||||||||||
| Low | 2007/11 | 0.97 | 1.03 | ||||||||||
| High | 2009/03 | 1.26 | 0.79 | ||||||||||
| Avg. | 1.11 | 0.90 | |||||||||||
| Daily Exchange Rates | |||||||||||||
| Date | USD | ||||||||||||
| 2005/06 | 1.24 | ||||||||||||
| 2005/07 | 1.22 | ||||||||||||
| 2005/08 | 1.20 | ||||||||||||
| 2005/09 | 1.18 | ||||||||||||
| 2005/10 | 1.18 | ||||||||||||
| 2005/11 | 1.18 | ||||||||||||
| 2005/12 | 1.16 | ||||||||||||
| 2006/01 | 1.16 | ||||||||||||
| 2006/02 | 1.15 | ||||||||||||
| 2006/03 | 1.16 | ||||||||||||
| 2006/04 | 1.14 | ||||||||||||
| 2006/05 | 1.11 | ||||||||||||
| 2006/06 | 1.11 | ||||||||||||
| 2006/07 | 1.13 | ||||||||||||
| 2006/08 | 1.12 | ||||||||||||
| 2006/09 | 1.12 | ||||||||||||
| 2006/10 | 1.13 | ||||||||||||
| 2006/11 | 1.14 | ||||||||||||
| 2006/12 | 1.15 | ||||||||||||
| 2007/01 | 1.18 | ||||||||||||
| 2007/02 | 1.17 | ||||||||||||
| 2007/03 | 1.17 | ||||||||||||
| 2007/04 | 1.13 | ||||||||||||
| 2007/05 | 1.10 | ||||||||||||
| 2007/06 | 1.07 | ||||||||||||
| 2007/07 | 1.05 | ||||||||||||
| 2007/08 | 1.06 | ||||||||||||
| 2007/09 | 1.02 | ||||||||||||
| 2007/10 | 0.97 | ||||||||||||
| 2007/11 | 0.97 | ||||||||||||
| 2007/12 | 1.00 | ||||||||||||
| 2008/01 | 1.01 | ||||||||||||
| 2008/02 | 1.00 | ||||||||||||
| 2008/03 | 1.00 | ||||||||||||
| 2008/04 | 1.01 | ||||||||||||
| 2008/05 | 1.00 | ||||||||||||
| 2008/06 | 1.02 | ||||||||||||
| 2008/07 | 1.01 | ||||||||||||
| 2008/08 | 1.05 | ||||||||||||
| 2008/09 | 1.06 | ||||||||||||
| 2008/10 | 1.18 | ||||||||||||
| 2008/11 | 1.22 | ||||||||||||
| 2008/12 | 1.23 | ||||||||||||
| 2009/01 | 1.22 | ||||||||||||
| 2009/02 | 1.24 | ||||||||||||
| 2009/03 | 1.26 | ||||||||||||
| 2009/04 | 1.22 | ||||||||||||
| 2009/05 | 1.15 | ||||||||||||
| 2009/06 | 1.13 | ||||||||||||
| 2009/07 | 1.12 | ||||||||||||
| 2009/08 | 1.09 | ||||||||||||
| 2009/09 | 1.08 | ||||||||||||
| 2009/10 | 1.06 | ||||||||||||
| 2009/11 | 1.06 | ||||||||||||
| 2009/12 | 1.06 | ||||||||||||
| 2010/01 | 1.04 | ||||||||||||
| 2010/02 | 1.06 | ||||||||||||
| 2010/03 | 1.02 | ||||||||||||
| 2010/04 | 1.01 | ||||||||||||
| 2010/05 | 1.04 | ||||||||||||
| 2010/06 | 1.04 | ||||||||||||
APPENDIX 2
3 year Average USD/CAD Exchange Rate
(June 2007 to June 2010)
| Daily Exchange Rate Series: Low/High/Average (source: Bank of Canada) | |||||||||
| Date Range: 2007/06 - 2010/06 | |||||||||
| USD=U.S. dollar (noon) | |||||||||
| Summary | Date | USD | |||||||
| Low | 2007/11 | 0.97 | |||||||
| High | 2009/03 | 1.26 | |||||||
| Avg. | 1.08 | ||||||||
| Daily Exchange Rates | |||||||||
| Date | USD | ||||||||
| 2007/06 | 1.07 | ||||||||
| 2007/07 | 1.05 | ||||||||
| 2007/08 | 1.06 | ||||||||
| 2007/09 | 1.03 | ||||||||
| 2007/10 | 0.98 | ||||||||
| 2007/11 | 0.97 | ||||||||
| 2007/12 | 1.00 | ||||||||
| 2008/01 | 1.01 | ||||||||
| 2008/02 | 1.00 | ||||||||
| 2008/03 | 1.00 | ||||||||
| 2008/04 | 1.01 | ||||||||
| 2008/05 | 1.00 | ||||||||
| 2008/06 | 1.02 | ||||||||
| 2008/07 | 1.01 | ||||||||
| 2008/08 | 1.05 | ||||||||
| 2008/09 | 1.06 | ||||||||
| 2008/10 | 1.18 | ||||||||
| 2008/11 | 1.22 | ||||||||
| 2008/12 | 1.23 | ||||||||
| 2009/01 | 1.23 | ||||||||
| 2009/02 | 1.25 | ||||||||
| 2009/03 | 1.26 | ||||||||
| 2009/04 | 1.22 | ||||||||
| 2009/05 | 1.15 | ||||||||
| 2009/06 | 1.13 | ||||||||
| 2009/07 | 1.12 | ||||||||
| 2009/08 | 1.09 | ||||||||
| 2009/09 | 1.08 | ||||||||
| 2009/10 | 1.05 | ||||||||
| 2009/11 | 1.06 | ||||||||
| 2009/12 | 1.05 | ||||||||
| 2010/01 | 1.04 | ||||||||
| 2010/02 | 1.06 | ||||||||
| 2010/03 | 1.02 | ||||||||
| 2010/04 | 1.01 | ||||||||
| 2010/05 | 1.04 | ||||||||
| 2010/06 | 1.04 | ||||||||
APPENDIX 3
Paramount Gold and Silver Corp.
Expected, Actual and Fair Value Calculations
| July 01, 2009 - Adoption Date of ASC815-40 | ||||||||||||||||||||||||||||
| Grant Date | Warrants | Strike in CAD | Exchange at Issue | Exchange at Date | EV at Issue | AV at Date | FV Date | |||||||||||||||||||||
| March 18, 2009 | 12,000,000 | 1.05 | 0.79 | 0.86 | 9,906,120 | 10,836,000 | 11,736,000 | |||||||||||||||||||||
| March 18, 2009 | 840,000 | 1.05 | 0.79 | 0.86 | 693,428 | 758,520 | 821,520 | |||||||||||||||||||||
| December 31, 2008 | 4,209,117 | 1.00 | 0.82 | 0.86 | 3,437,165 | 3,619,841 | 3,651,409 | |||||||||||||||||||||
| July 23, 2008 | 500,000 | 2.10 | 0.99 | 0.86 | 1,040,865 | 30,250 | ||||||||||||||||||||||
| July 23, 2008 | 35,715 | 2.50 | 0.99 | 0.86 | 88,511 | 11,561 | ||||||||||||||||||||||
| 1.16 | 15,166,089 | 15,214,361 | 16,250,740 | |||||||||||||||||||||||||
Difference between AV and EV | 48,272 | 0.318 | % | |||||||||||||||||||||||||
| September 30, 2009 | ||||||||||||||||||||||||||||
| Grant Date | Warrants | Strike in CAD | Exchange at Issue | Exchange at Date | EV at Issue | AV at Date | FV Date | |||||||||||||||||||||
| March 18, 2009 | 12,000,000 | 1.05 | 0.79 | 0.93 | 9,906,120 | 11,752,020 | 9,850,800 | |||||||||||||||||||||
| March 18, 2009 | 840,000 | 1.05 | 0.79 | 0.93 | 693,428 | 822,641 | 689,556 | |||||||||||||||||||||
| December 31, 2008 | 4,209,117 | 1.00 | 0.82 | 0.93 | 3,437,165 | 3,925,843 | 2,619,754 | |||||||||||||||||||||
| July 23, 2008 | - | 2.10 | 0.99 | 0.93 | - | |||||||||||||||||||||||
| July 23, 2008 | 35,715 | 2.50 | 0.99 | 0.93 | 88,511 | 2,343 | ||||||||||||||||||||||
| 1.07 | 14,125,224 | 16,500,505 | 13,162,453 | |||||||||||||||||||||||||
Difference between AV and EV | 2,375,281 | 16.816 | % | |||||||||||||||||||||||||
| December 31, 2009 | ||||||||||||||||||||||||||||
| Grant Date | Warrants | Strike in CAD | Exchange at Issue | Exchange at Date | EV at Issue | AV at Date | FV Date | |||||||||||||||||||||
| March 18, 2009 | 12,000,000 | 1.05 | 0.79 | 0.96 | 9,906,120 | 12,039,300 | 10,602,000 | |||||||||||||||||||||
| March 18, 2009 | 840,000 | 1.05 | 0.79 | 0.96 | 693,428 | 842,751 | 742,140 | |||||||||||||||||||||
| December 31, 2008 | 3,636,362 | 1.00 | 0.82 | 0.96 | 2,969,453 | 3,474,544 | 1,988,363 | |||||||||||||||||||||
| July 23, 2008 | - | 2.10 | 0.99 | 0.96 | - | |||||||||||||||||||||||
| July 23, 2008 | 35,715 | 2.50 | 0.99 | 0.96 | 88,511 | 625 | ||||||||||||||||||||||
| 1.05 | 13,657,512 | 16,356,595 | 13,333,128 | |||||||||||||||||||||||||
Difference between AV and EV | 2,699,083 | 19.763 | % | |||||||||||||||||||||||||
| March 31, 2010 | ||||||||||||||||||||||||||||
| Grant Date | Warrants | Strike in CAD | Exchange at Issue | Exchange at Date | EV at Issue | AV at Date | FV Date | |||||||||||||||||||||
| March 18, 2009 | 12,000,000 | 1.05 | 0.79 | 0.98 | 9,906,120 | 12,405,960 | 8,551,200 | |||||||||||||||||||||
| March 18, 2009 | 840,000 | 1.05 | 0.79 | 0.98 | 693,428 | 868,417 | 598,584 | |||||||||||||||||||||
| December 31, 2008 | - | 1.00 | 0.82 | 0.98 | - | - | ||||||||||||||||||||||
| July 23, 2008 | - | 2.10 | 0.99 | 0.98 | - | |||||||||||||||||||||||
| July 23, 2008 | 35,715 | 2.50 | 0.99 | 0.98 | 88,511 | 643 | ||||||||||||||||||||||
| 1.02 | 10,688,059 | 13,274,377 | 9,150,427 | |||||||||||||||||||||||||
| Difference between AV and EV | 2,586,318 | 24.198 | % | |||||||||||||||||||||||||
| June 30, 2010 | ||||||||||||||||||||||||||||
| Grant Date | Warrants | Strike in CAD | Exchange at Issue | Exchange at Date | EV at Issue | AV at Date | FV Date | |||||||||||||||||||||
| March 18, 2009 | 9,000,000 | 1.05 | 0.79 | 0.94 | 7,429,590 | 8,910,405 | 5,469,300 | |||||||||||||||||||||
| March 18, 2009 | 840,000 | 1.05 | 0.79 | 0.94 | 693,428 | 831,638 | 510,468 | |||||||||||||||||||||
| December 31, 2008 | - | 1.00 | 0.82 | 0.94 | - | - | ||||||||||||||||||||||
| July 23, 2008 | - | 2.10 | 0.99 | 0.94 | - | |||||||||||||||||||||||
| July 23, 2008 | 35,715 | 2.50 | 0.99 | 0.94 | 88,511 | - | ||||||||||||||||||||||
| 1.06 | 8,211,529 | 9,742,043 | 5,979,768 | |||||||||||||||||||||||||
Difference between AV and EV | 1,530,514 | 18.639 | % | |||||||||||||||||||||||||
| Weighted Average Exchange at Issue Date | |||||||||||||||
| A | B | C | |||||||||||||
| Number of Warrants | % of Outstanding | Exchange at Issue | Prorated Exchange at Issue | ||||||||||||
| 12,600,000 | 67 | % | 1.27 | 0.85 | |||||||||||
| 882,000 | 5 | % | 1.27 | 0.06 | |||||||||||
| 4,209,117 | 22 | % | 1.22 | 0.27 | |||||||||||
| 1,050,000 | 6 | % | 1.01 | 0.06 | |||||||||||
| 89,286 | 0 | % | 1.01 | 0.00 | |||||||||||
| 18,830,403 | 100 | % | 1.245 | Weighted Average USD/CAD Exchange at Issue | |||||||||||