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Gold/Mining/Energy : Corner Bay Silver (BAY.T) -- Ignore unavailable to you. Want to Upgrade?

To: Claude Cormier who wrote (4324)	6/20/2002 6:29:18 PM
From: Canuck Dave	Respond to of 4409

I have come to a similar point of reasoning (not a conclusion, LOL). I looked at how the Black-Scholes (BS) formula works and it basically scales the future values of option price by the square root of time. As an aside, the BS formulation looks a lot like something I used to deal with in oceanography called turbulent diffusion of passive scalars (i.e. how fast would two surface drifters separate?). Not surprising, since both regimes are considered to obey Normal distributions, with the 'volatility' a close proxy to a diffusion constant. The 'separation distance' becomes the difference of the future price of the equity relative to its current price. The other factor in BS is the 'risk free' interest rate, which inflates all prices over time..... Kind of esoteric, but fun to speculate. US dollar still sinking. CD

To: Claude Cormier who wrote (4324)	6/20/2002 10:54:35 PM
From: Silver Super Bull	Read Replies (2) \| Respond to of 4409

As some may recall I thought the original deal between PAA and BAY was a poor deal for BAY, all things considered. Now, with this mystery "amended" deal, I am really wondering what is going on. If PAA discovered something they really didn't like, they would probably have walked. On the other hand, what is BAY's motivation to accept this "amended" deal? Sure, the warrants will be nice...the only problem is it takes more than 5 to buy 1 share of PAA!! And with them out-of-the-money, it is even less desirable. In my opinion BAY should have never agreed to this "amended" deal, and their lack of communication as to what has caused this situation is not reassuring. DB

To: Claude Cormier who wrote (4324)	6/20/2002 11:09:28 PM
From: stuffbug	Read Replies (1) \| Respond to of 4409

Claude, I have a great deal of respect for your work and that of others on this board but I think that recent posters are trying to spin a positive out of a negative. Based on some very rough ballpark calculations, it appears that, at today's stock price, Pan American has lopped about 20% off their bid price. However, should Pan American stock appreciate greatly from here, the discount will eventually disappear. Please note that, in my opinion, the best case scenario is that the new deal eventually reaches parity with the old deal. By my rough calculation, the two deals would be equivalent at a PAA price of $50 CDN. I have not been able to think of a situation where the new deal is superior. Assumptions Original Deal .54 Share of PAA for each BAY share .25 share of Exploreco for each BAY share (guesstimate its current worth at 0.25 per BAY share - i.e Exploreco trades at $1) Bid Value with PAA = $12: $6.73 New Deal .385 Share of PAA for each BAY share .1925 warrant for each BAY share (guesstimate its current worth at 0.60 per BAY share - i.e. Warrant trades around $3, given a PAA stock price of ~$12) Bid Value with PAA = $12: $5.22 Caveats: Unless PAA issues more warrants, the market will be extremely small (4 million outstanding). Thus, there could be a wide differential between the BID and ASK. Maybe someone else steps up to the plate to bid for BAY or shareholders vote this New Deal down.