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Gold/Mining/Energy : Precious and Base Metal Investing
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To: Davy Crockett who wrote (18522)8/28/2003 4:08:33 PM
From: Tommaso  Read Replies (1) of 39344
 
It's really just arithmetic, though it gets especially confusing when you switch back and forth between U. S.
and Canadian dollars.

A few minutes ago the time premium of the warrant was in Canadian dollars, 34 cents, or about 35% of the cost of the warrant. Earlier this year the time premium was much larger--up to 70% of the cost of the warrant.

The cheapest you could buy the warrant six months ago was about 50 cents Canadian; so at 94 cents it has not quite doubled. The same is true of the share price itself--it has not quite doubled from its low of six months or so ago. But at that time it made more sense just to buy the stock, since it had no expiration date.

At this point, however, the warrant is priced much better in relation to the stock than it was months or even weeks ago, so it makes more sense to gamble on it, if you are a gambler, than it did. You are still much safer just buying the stock because if it drops 30% you still have 70% of your money at the time of the expiration of the warrant. If you buy the warrant, you would lose 100% in that case.

But if you want to gamble that Wheaton will double again from here, your payoff will be much higher with the warrant if that happens. I think it is a decent gamble myself and I have added to my warrant position, realizing that I may well lose it all.

Folks who bought the warrant at $1.00 are still under water.
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