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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: tyc:> who wrote (58206)	4/6/2008 4:15:22 PM
From: marcos	Read Replies (1) \| Respond to of 78408

Buying an income stream you're accepting delay for payment back to you, so you want a proportionate discount on payments in the future, the longer you have to wait to get paid a dollar the less you're willing to pay for it today, stands to reason because underlying all this you have the option of refraining from wasting it and instead employ it directly to provide you now with superior quality and quantity of wine women and song Buying a warrant is the opposite - you're accepting delay for what you have to pay out, to get possession of whatever the warrant controls ... for a small down today, you're putting off your own payment, which is generally considered a Good Thing ... close friday for ngd was 7.41, ngd.wt.a 1.75, so with strike 15.00 the warrant is ITM by a penny at 16.76, 2.26 times common shareprice du jour ... makes no sense Except you get nine years three months time value, during which you're only out 1.75 ... what are the chances ngd prints 16.76 to make you that penny in integral value inside of nine years three months - pretty good i'd say, they could be well set on the road to doing so by the end of this year, never mind 2017 ... i don't understand how those B-S models and their variations work either, but can sure see how time has a value when you come to holding rights that are not obligations Just a rough uneducated guess - as common moves through 10.00ish and 12.00ish areas, warrants see 5.00ish?

To: tyc:> who wrote (58206)	4/6/2008 6:14:17 PM
From: onepath	Read Replies (2) \| Respond to 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.