You said,

"They want to reduce the number of shares from 113.1 million to 11.31 million? Why so few shares?"

So they can then do a financing and offer prospective investors the chance to get in on a company with only 11.31 million shares outstanding.

The effect of the consolidation (if completed) is that existing shareholders lose substantially.

Example: Let say you currently own 10% of the company, so about 11 million shares. Effectively, you own 10% of the company's assets. After the consolidation, you would have about 1.1 million shares out of 11 million, so still 10%. The shares would now trade around 25 to 30 cents (10 times the current price)

Then the company does a financing/PP. If the company wants to raise $1 million dollars, at around 25 cents, they would have to issue 4 million new shares........now you own 1.1 million shares out of 15.3 million, or only about 7% of the company and its assets...... a substantial reduction in your holding.

The next thing that usually happens, especially in a poor market, is that the share price continues to fall, now that it has more room to come down. At 2.5 cents, there isn't much room for the share price to fall any further, but after a consolidation, there is a lot more room to fall.

I have been involved in half a dozen share consolidations, or reverse splits, all with negative results.

In the last year, Murgor (v-mgr) did a 1 for 6 consolidation. The stock was trading around 11 cents, before the consolidation, then around 66 cents after. Now it trades around 6 to 8 cents. Like I said, the consolidation just gives more room for the price to drop.

These are tough times for junior exploration companies, so I don't know what else they can do, but a reverse split is bad news IMHO.

Canseco