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Wednesday, 12/28/2011 8:01:46 PM

Wednesday, December 28, 2011 8:01:46 PM

Post# of 4094
This is the answer to my latest correspondence to Dr Owen.

Hello #####.

The news release, which is a formal announcement, states: "up to 20 times" or some lower level that the board decides. Consolidation is a common strategy under these circumstances.

The reason is as follows.

The minimum price at which any financing can occur is 5 cents. When trading fell below that level in May it was not possible to finance the company. To be reinstated by the Exchange, we need to demonstrate a plan whereby the company meets the Continuous Listing Requirements. Without a financing, it is unlikely that can be achieved. If the share roll back is accepted by the shareholders, it is more likely that financing can occur. If the roll back is not approved by the shareholders, the Company will likely end up on the NEX board from which it is much harder to be reinstated.

The AGM is scheduled for January 27 and the Information Circular will be distributed prior to that.

Management is recommending that the share consolidation be approved.

Regards,

Terry Owen

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