Wescan Goldfields Grants Options: A Boost for Shareholders?

Wescan Goldfields Inc. (WGF: TSX-V) has announced the grant of an aggregate of 2,400,000 options to acquire common shares in the capital of the Company. This move, which includes 1,900,000 options for directors and officers and 500,000 options for consultants, has the potential to impact the company's shareholder equity and long-term compensation strategy. Let's delve into the implications of this announcement.

Potential Dilution Effect on Existing Shareholders

The grant of 2,400,000 options could lead to the issuance of new shares, potentially diluting the value of existing shares. If all options are exercised, the total number of shares outstanding would increase by approximately 4.46%. This dilution effect is a result of the new shares issued at a price lower than the current market value ($0.05 per share compared to the current price of $0.04).



Alignment with Long-Term Compensation Strategy

The grant of options aligns with Wescan Goldfields' long-term compensation strategy in several ways:

1. Retention and Alignment of Interests: By granting options to key personnel, Wescan aligns their interests with those of shareholders. This encourages long-term thinking and helps retain talent.
2. Cost-Effective Compensation: Options are a cost-effective form of compensation, as they only incur a cost if the option is exercised and the share price is above the exercise price.
3. Long-Term Incentive: The 7-year vesting period encourages a long-term perspective, aligning with Wescan's long-term strategy.
4. Flexibility: Options provide flexibility in compensation, allowing Wescan to adjust its strategy as needed.



In conclusion, Wescan Goldfields' grant of options has the potential to impact shareholder equity through dilution and aligns with the company's long-term compensation strategy. While the dilution effect is a consideration, the alignment of interests and cost-effective nature of options make this a strategic move for Wescan. As always, investors should monitor the situation and consider the potential impacts on their portfolios.