One of the advantages of the 300-to-1 is the potential for margin buys.

Let me be clear ... I would not recommend that any retail investor buy on margin. You have to be very careful, have backup capital to get you through a low period of a cycle or attempts to trigger stop-loss trades. You have to understand the markets, and be financially stable enough to be able to risk the loss of large amounts of money. I got margined out on a stock once to the tune of about $60k in the matter of a week. That was a bit of a hit to me, that was two thirds of my annual income at the time.

But let me use an example of where the ability to margin could come in handy.

Right now, I have 3m shares. Let's say that I feel comfortable in increasing my position to 4m shares, but I don't have the cash on hand right now. I have cheques for $15k coming in early September and early November, but I think the SP will appreciate before that time, and I'd like to take advantage of current prices. I have enough room on my credit cards to buy a million shares now, but I'm 100% opposed to the concept of getting a cash advance on a credit card to buy a penny stock.

At the moment, under the current share structure, I cannot margin. And I will not do a cash advance on my credit card or LOC.

If my KWG holdings were marginable, I'd be able to buy 1m shares right now. I know that if something happened to the stock I'd possibly get margined out, but I do have that cushion in my LOC that I could use in an emergency, rather than needing to sell my shares at a loss. If I'm confident that KWG will be worth at least 3 cents or more than 3 cents in November (which I am), then the margin would help me to buy another million shares.

Would this make a difference to the market? Hardly, as this is a fairly low amount of shares. But at least it would help put in a bit of support. I could probably put the buy order in at 2.5 cents, and then we wouldn't necessarily have a situation like we did a few days ago when the SP temporarily dropped to 2 cents.

While my own actions wouldn't make much of a difference, if you had a dozen people like me, all interested in picking up a million more shares in the open market, suddenly we're starting to get a bit more support.

And if Frank and his 24 million shares were interested in doing the same thing, suddenly we have real support.

Frankly, I feel that the current SP should be in the 5-6 cent range, and that if we hear anything on the Chinese deal, it could jump into the teens within the space of days. Of course there's also a downside risk. But I'd like to up the ante and pick up more shares before the fall.

I fully support Frank's idea.