In this issue
Subject to market conditions on Monday, we are
prepared to issue a BUY ALERT on two new recommendations
based solely upon insiders buying habits. Those having access to our
InsidersInsights.com data will get an email as to the details.
One pick is an oil and gas company trading on
the NYSE as well as the TSX. The other is a gold company trading on
the TSX.
Terrane Metals
Terrane Metals is developing into a very
interesting situation requiring the attention of current
shareholders and warrantholders.
Below we will present some of the fundamentals
of Terrane but even more important, in my opinion, is the current
pricing of the common shares and warrants.
An unnamed source has speculated on the
possibility of a decision by Goldcorp, the JV partner to takeover
the entire company. Their estimated takeout price per share would be
between $0.85 and $1.50. If this would happen, where does this leave
those holding the warrants.
Let's take a good look at the situation. The
current exercise price of the warrants is $0.85 and the common
shares are at $0.77, thus the warrants have no current intrinsic
value but yet are trading at $0.35. What if the a merger bid is made
in the next few weeks or months?
Possible Takeout Prices
$0.85 $1.00 $1.25 $1.50
Exercise Price of Wt
$0.85 $0.85
$0.85 $0.85
Value of warrant on takeout
-0- $0.15 $0.40
$0.65
It is difficult for me to imagine that the
warrant holders would be left out of the deal but this is a
possibility if the takeout is at $1.25 or less. The warrants have
been very active lately suggesting to me that 'smart money' is
buying the warrants. Just a guess on my part.
For those owning the warrants this can be a
difficult decision but the good news is that all of you should have
profits on the warrants. Some warrantholders should be very happy if
you picked up the warrants around the low last year of $0.01. That's
right 1 penny and they are now at $0.35 and probably going higher, a
3,500% gain is not to bad.
If you do not own the shares or the warrants,
the best thing for you to do is to buy the common shares thus being
assured of a nice profit if a takeout occurs and taking the risk out
of the game.
For some good fundamentals on the company check
out this article last week from our friends at ResourceInvestor.com:
B.C. Largest Precious Metals Mine One Stop Closer to
Development
For those
readers and
subscribers
unfamiliar with
all of our
services:
•
PreciousMetalsWarrants.com
provides an
online database
for all warrants
trading on the
natural resource
companies in the
United States
and Canada.
•
InsidersInsights.com
tracks the
buying and
selling of
corporate
insiders with a
focus on the
junior mining
and natural
resource
sectors. Buy and
Sell Alerts are
issued as deemed
relevant based
upon our
analysis.
There are many
great
opportunities
presented in
each of these
services and we
encourage you to
get on board
with us soon.
Dudley
Dudley Pierce Baker - Owner/Editor - Guadalajara/Ajijic, Mexico
Lorimer Wilson - Director of Marketing and Contributing Editor - Toronto, Canada
Bruce Ross - Webmaster and Administrative Assistant - Phoenix, USA
