funding for up to $25m from pacific road capit, page-14

I don't think you will find any shareholder that is happy about a relatively large dilutive cap raising at .24, I know I was not.

I took a step back though and started to think about what this $10mm does for us especially given the large number of prospective targets we have --- additional HERA drilling, Nymagee North and Federation. We may be fully funded to production but we are not there yet and we don't have much extra funding for exploration. I think it was always a given that we were going to have to raise some additional $$$ to fund our exploration activities it was just a question of at what SP.

I was hoping that China growth would stay around 8% - It has not.

I was hoping that the market would reward us for strong progress on HERA development- they have not.

I was hoping that we would hit a big intercept at Nymagee North early on and get a jump in the stock price where we could raise those additional funds- we did not.

If all those things would have happened then I am sure we wouldnt have done this deal with Pacific Road at .24. I think we probably would have been raising the same amount at .50-60 to the general public. So that is the difference in terms of dilution IMHO…..we were never going to be able to grow organically through cash flow and debt (at least not in a way that would unlock the true potential of the ground).

So given that we are not in a Blue Sky environment (and it doesn't appear we will be for awhile when you look at commodity prices, China and the rest of the world) I think this is a very good move ….not an ideal move but a very good move given the world we are living in.

We have a very good management team and I am sure they weighed all the pros and cons before making this move. Let us not forget that a little over a year ago we were all talking about how much dilution we were going to have to suffer in order to raise $90mm to fund HERA. We not only ended up with A LOT less dilution than we were all expecting, we also ended up with A LOT more money. That deal went on to be named the Best Small Cap Deal of the Year.

If we are going to do a dilutive deal at .24 then I am glad that its a long term investor (3-5 yr time horizon), its a well respected one, its a well financed one, and it's one that has plenty of reach when it comes to global M&A. (giving us the opportunity to monetize our other assets)

I think that people will look at this deal and say how smart Pacific Road is and what a great deal it is for them (they said the same thing about Glencore) ….but they will also say "those guys see something that no one else is seeing right now' and they will begin to do their own research and next thing you know we will have a lot more smart money joining the share registry.

I can't wait to hear about the drilling campaign for 2014. Hopefully they are far enough along that they can start right away.