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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: Elizabeth Andrews who wrote (2475)	3/16/2002 8:04:06 PM
From: tyc:>	Respond to of 39344

The rights are trading.. NGX.rt-T. If you buy the rights, short sell the stock and then exercise the rights (in the correct proportions), you end up just owning the warrants. But I am not suggesting anyone should do this. I'm just suggesting that that is what the hedgers and/or arbitrageurs may be doing. There is no fundamental reason for the drop in the price of the stock (that I can see ). IF I am right, the rights should be bought and exercised. ( IF I am right !!)

To: Elizabeth Andrews who wrote (2475)	3/16/2002 8:53:47 PM
From: tyc:>	Read Replies (2) \| Respond to 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 !