The Warrant Report
A Crazy Warrant Transaction & Junior Mining News
In this issue:
New Twitter Account – Junior Mining News
Northern Miner Article on Soltoro Ltd.
Best we can figure, with the warrants trading at around C$0.15, this represents a total expenditure of $10.5 million.
What do they see?
They, in my personal opinion, are totally insane on this transaction and this is NOT an investment but a total worthless expenditure, barring an unbelievable miracle. Allow me to explain.
The common shares of Gran Colombia Gold, TSX: GCM closed Friday at C$0.335.
The warrants trading under the symbol, TSX:GCM.wt, closed at C$0.14
Subscribers know from our detail provided in our Warrant Database, that the warrants will expire on 24 August 2015 and have an exercise price of C$2.60.
The common shares currently at C$0.335 and the warrants with an exercise price of C$2.60. Hello, what do they see, or rather, what have those highly paid analysts for Sprott overlooked?
They may have overlooked the fact that effective on 11 November 2010, the common shares of GCM and the warrants were adjusted to reflect a reverse split/rollback of 1 for 4. The initial exercise price of the GCM warrants was C$0.65 but now the adjusted exercise price of the warrant is C$2.60 which can be verified by the company’s website. In addition, with the reverse split the number of warrants outstanding did not change, but rather it now takes 4 warrants to buy 1 share of GCM at C$2.60.
The share price would have to increase around 800% just to get to the exercise price. This is a game that we do not want to play.
The bottom line to us is that this outlay of $10.5 million by the big boys makes absolutely no since. They must have other places to ‘throw away’ $10 million but they could start by subscribing to my services.
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