**Delivering warrant education to expand**

THE KNOWLEDGE OF INVESTORS

Defining Over Valued, Fair Value and Under Valued

We determine current warrant valuations as follows:

After updating all prices and calculations, we review the leverage calculations once a week on all of the warrants. We are looking at many factors, including the bottom-line leverage and the remaining life of the warrant.

Basically:

Undervalued = a current leverage of 1:7 to 1 or higher (this is correct, anything over 1.7 is great leverage)

Fair Value = a current leverage of 1:1 to 1:6 to 1 (this is similar to a neutral leverage/perhaps buy the common sh.

Overvalued = a current leverage of less than 1:1 to 1 (should normally be avoided)

A warrant trading with a very short remaining life and out of the money will also get our Overvalued Rating.

Also, remember, the valuations will change as the price of the common shares and the warrants fluctuate. In fact, it is possible for the rating to get a better as the price of the common shares and warrants increase and the warrants to be a ‘better buy’ even though at a higher price due to the relationship of the prices of each. We realize you may be surprised that one warrant at C$.85 is perhaps a ‘better value’ than when the warrant was selling for C$.45.

Some readers may be familiar with the Black-Scholes formula for valuing options. This formula takes into consideration, the current price of the common shares, the exercise price of the options or warrants, the remaining life, a volatility factor and an assumed interest rate. Currently, we feel our valuation ratings are very accurate but we are also considering including the Black-Scholes pricing valuation in the future.

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