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Gold/Mining/Energy : Precious and Base Metal Investing
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To: Elizabeth Andrews who wrote (2475)3/16/2002 8:53:47 PM
From: tyc:>  Read Replies (2) of 39344
 
Final thoughts.

CIBC World Markets put out an interesting paper recently in which they "proved" that gold mining stocks trade at an approximation of Net Asset Value PLUS an option value calculable by Black-Scholes. And CIBC world markets are currently using this methodology in all their appraisals of the major gold stocks.

NGX is trading BELOW any option value that I can calculate, using Black Scholes and their methods. In other words, even if it has a ZERO NAV, it is still underpriced!

So the stock itself is like an underpriced option !. And the rights give you access to an underpriced option (warrant) on that underpriced option (the stock). Hohoho ! How boring !
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