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

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To: tyc:> who wrote (58206)	4/6/2008 6:14:17 PM
From: onepath	Read Replies (2) of 78408

Glad you jumped in here because I like and use your method of figuring out the intrinsic value of the WT. based on a doubling of the share price. But it is only one piece of the overall picture and every picture is different.If we are talking a doubling of share price over 2 years which is reasonable with your model(I would not buy any resource stock that I could not potentially see a double over 1 year) then what is the value of the warrant after 2 years and that double of the common? Intrinsic value is nil but the WT. is now just about to start being in the money with better than 7 years time left and now a lot better quality WT.(much larger less risky co.)Running a few models a fair price would be somewhere between a low of $5 and high of $7.50. So based on a double of NGD over 2 years. the WT. holder will be up between 3x to 4x compared to the common holders 2x. The quality of this potential merger is the key.A 10 year WT. on a mining co. with no growth upside would be a pass but so would be the common.

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