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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: onepath who wrote (26795)	12/1/2006 2:44:30 PM
From: hank2010	Read Replies (2) of 78421

Onepath: Is Howy wrong?? Hi Vet: Re the Iamgold Warrants... <<You need 2.381 warrants to buy one share for a strike price of $3.75 on or before August 2008. IMG closed today at $10.98. So simple maths shows you that (10.98-3.75)/2.381 = $3.03. That is what the warrant is worth in cash now, ignoring almost 2 years of time value.>> Sorry to disagree but I don't think this is correct. If you check the IMG PR from Nov 17th, it states: "Each IAMGOLD Warrant is exercisable, upon payment of $3.75CDN, for 0.42 of a common share of the Company". So IMO the math should be: 0.42 x current price = 0.42 x $10.98 = $4.61. Therefore, the intrinsic value of each warrant at today's close = [4.61 - 3.75] = $0.86. IMG.WT closed at $1.70 -- almost twice the intrinsic value. So it's fairly priced IMO. If you think that IMG will gain 50% say in the next year or so -- which is a good possibility -- then the warrants should do quite well... but I think there are better deals out there if you want even higher leverage. Please correct me if I've got this wrong. I hate these fractional warrant deals because they're so hard to keep track of! Best regards, Howy

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