Warrants in gold and silver mining companies give the holder the right, but not the obligation, to purchase the common shares of the company at a specific price within a specific time period after which, if not exercised, they expire worthless. As such, long term warrants are imperative these days given the current fiscal and economic environment, the considerable amount of time needed for a company to benefit from an improved credit environment, a higher stock market, an increase in the price of zinc, copper, gold bullion, silver and lead and renewed strength in the Canadian dollar. All these conditions are necessary to ensure that a gold or silver company has a good chance of a profitable future and, as such, a much higher stock price and warrant price.

It is very important that a warrant is priced such that it has a high probability of achieving its exercise price.

The specific risk factors which relate to a companies warrants includes:

• the company’s financial condition
• its’ ability to renew existing concentrate contracts or secure new contracts
• its’ counter-party credit risk in its’ concentrate sales contracts
• the fluctuation in the price of the metals it mines
• the impact the current global economic conditions might have on its’ financial condition, results of operations, working capital, ability to borrow, and share price
• its’ potential need to raise more capital thereby diluting share value
• the possible need to write down the carrying value of its’ properties and fixed assets if commodity prices do not improve
• the funding of any defined benefit pension plan shortfalls that might occur
• its’ ability to retain key personnel and management for the success of its’ operations and activities
• the extent of obstacles, if any, to its’ mining operations via legal action or worker/populace disruption
• the degree of volatility in the price of the shares/warrants
• the extent of liquidity of the warrants on the TSX
• the extent to which the underwriters might exercise their right to purchase additional warrants