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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Jon Tara who wrote (11021)	6/11/1999 9:47:00 PM
From: burner	Respond to of 14162

Thanks, Actually I will post the followin news release and this will explain my question better: Twin Gold Corp - Twin Gold completes gold option financing Twin Gold Corp TWG Shares issued 43,581,572 1999-06-10 close $0.11 Thursday Jun 10 1999 Mr. Hermann Derbuch reports Twin Gold has completed a gold call option financing with net proceeds of $156,000. The overseas arm of a major U.S. commodity trading house provided Twin Gold a $500,000 (U.S.) line of credit to carry out a strategy of selling and buying gold call options in June of 2001 at $290 (U.S.) and $320 (U.S.) per ounce respectively. Proceeds will be used for general corporate purposes including the continued exploration and development of its mineral interests. Twin Gold is the owner of the Atlanta gold project, with site cash costs estimated at $160 (U.S.) and proven ore reserves of one million ounces of gold and 3.2 million ounces of silver, in Idaho. -------------------------------------------------------------------- I used to own shares in this company but sold after the CEO depleted the treasury with his 250,000 annual salary!! In the above scenario how does the company end up with proceeds of 156,000 and what are the mechanics and logic of the option strategy? An acqauaintance of mine is owed money by the company and has asked me to explain this to him. When I tried I found out I really didn't know the explanation so I am asking the experts. Thanks for your time, Dan Byrne