Definition Of A Stock Warrant

Several years ago in New York at a Hard Assets Investment Conference, a newsletter writer with over 30 years in the business, asked me, “Dudley, what is a stock warrant?” After regaining my composure, I responded just like I am addressing you, by defining a warrant and why you should be interested. By definition, a warrant is a security, issued by a company, giving the holder the right, but not the obligation, to acquire the underlying shares, at a specific price and expiring on a specific date in the future. This definition is very similar to stock options or LEAPS, (Long-Term Equity Anticipation Securities) except that warrants are actually issued by a company, whereas options and LEAPS are created/written by investors. Warrants are traditionally issued in connection with a company’s private placement or equity offering as additional incentive to get the deal done. Warrants are mostly a matter of common sense and arithmetic, so let’s not make this complicated. Stock warrants can be issued by companies for as little as 1 year or for 5 years or more. Obviously, the longer the term of the warrant (time until expiration) the better your chances of great success. However, just because a stock warrant has a 5 year life does not mean that you must hold the warrant for 5 years. With trading warrants you can buy the warrants one day and sell them the next day. Exercising a warrant should never be one of your considerations, as it makes no sense … Continue reading

The History Of Stock Warrants

Warrants have literally been available for investors for many decades but yet are very under appreciated and overlooked by most investors. As far back as the 1920s many large companies have had stock warrants trading, AT&T, Goldcorp, Bank of America, General Motors, Ford Motors and Agnico-Eagle Mines, among hundreds and hundreds of others. My extensive knowledge of warrants goes back to the 1970’s and my fascination with the writings of Sidney Fried and The R.H.M. Warrant Survey, a hard copy newsletter and a popular financial newsletter during the 1950s, 60s and 70s. (Fried, 1949) Sidney Fried passed away in 1991 at the age of 72 and to the best of my knowledge, his service stopped in the late 1970s or early 1980s around the time that options began to trade on the CBOE. Sidney Fried’s first book, ‘The Speculative Merits of Common Stock Warrants’ (1949) is a rare and timeless educational tool for warrants and is the core of knowledge used by me in my service. Since 2005 I have used this cumulative knowledge of warrants which I learned from the ‘master’ to educate and assist investors around the world and I have collected all of the writings of Sidney Fried. Even though these works are old, the information is timeless and only the examples used are out of date. One quote from Sidney Fried which I have used many times at investment conferences is very appropriate here: “With potential profits and losses so great it a source of wonder that so little understanding … Continue reading

Miner Accelerates Utah Vanadium Production, Begins Shipments

Source: Streetwise Reports 02/14/2019 This company is now producing the metal at increasingly higher rates and purities. Energy Fuels Inc. (EFR:TSX; UUUU:NYSE.American) is now producing vanadium at commercial levels and is shipping it for sale to customers, the company announced in a news release. Specifically, the company is producing about 175,000–200,000 pounds of vanadium pentoxide (V2O5) a month. With ramp-up continuing, Energy Fuels expects to reach full production by the end of Q1/19 of 200,000–225,000 pounds of high-purity V2O5. During January, Energy Fuels continued increasing production, attained greater purity levels of the product and finished tinkering with its process, the company reported. As for vanadium shipments, initial amounts are “being allocated for conversion to ferrovanadium that will be sold into spot metallurgical markets,” the release explained. The company expects to also sell finished vanadium to diverse customers in various industries that require a higher-purity product. Those end users are in the metallurgy, aerospace, chemical and battery spaces, among others. Energy Fuels reported the current midpoint spot price of V2O5 in Europe is $17.25 per pound, up 11% from year-end 2018, when it was $15.50 per pound, according to Metal Bulletin. “We are extremely pleased with Energy Fuels’ vanadium production to date. We believe our methodical ramp-up is paying dividends, as we are now producing an excellent vanadium product at increasingly higher rates and purities. The Company has discussed vanadium sales with potential buyers for the past several months, and now that we are producing commercial quantities of finished product, we … Continue reading

Explorer Drills Thickest Intercepts to Date at Carlin Trend Deposit

Source: Streetwise Reports 02/14/2019 The gold mineralization at the Nevada deposit remains open in all directions. Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE) reported in a news release phase 2 results from 18 reverse circulation (RC) drill holes and one core hole from the Dixie deposit and the Arcturus target to the west, both at the Railroad-Pinion project in Nevada. “Two RC holes at Dixie intersected thick, vertically continuous zones of gold mineralization hosted in pervasively altered and variably oxidized Pennsylvanian-Permian debris flow conglomerate and calcarenite, the same host section as the Dark Star deposit approximately 4 kilometers (4 km) to the north,” the release described. As for highlight holes, DX18-19 demonstrated 118.9 meters (118.9m) of 0.61 grams per ton (0.61 g/t) gold (Au), including two higher-grade zones of 10.7m of 1.49 g/t and 15.2m of 1.32 g/t Au. DX18-26 intersected 137.2m of 0.53 g/t Au including 9.1m of 1.26 g/t Au, and mineralization there remains open along strike. Assays from these two holes represent the thickest intercepts drilled at Dixie so far. “Dixie is beginning to take shape as another valuable discovery by Gold Standard,” CEO and Director Jonathan Awde commented in the release. “Although more work needs to be done, the Dixie deposit is growing in size and grades appear to be improving to the north. Historically, the more we learn about deposits like Dixie, the more we find and the better they get. We also expect to make additional new discoveries in this year’s program.” As for Arcturus, … Continue reading

Texas-Based Limited Partnership's 'Future Looks Bright on Robust Activity'

Source: Streetwise Reports 02/14/2019 A Raymond James report outlined the reasons for the solid 2019 growth outlook. In a Feb. 6 research note, analyst John Freeman reported that Raymond James increased its target price on Viper Energy Partners LP (VNOM:NASDAQ) to $53 per share from $52 after accounting for newly released 2019 guidance and an updated number of undrilled locations. Freeman highlighted that activity on Viper’s acreage has increased. Currently, 40 rigs are at work versus 24 in November 2018. Further, 619 active drilling permits were filed in the last six months. The number of Viper’s undeveloped net revenue interest (NRI) locations also rose, and now is an estimated 140 in the Midland Basin and 180 in the Delaware Basin. That total of 320 compares to Raymond James’ estimated 270 NRI locations. The robust activity is expected to continue, Freeman noted. Management of the limited partnership (LP) guided to production of 20,500–22,000 barrels of oil equivalent per day (Mboe/d) in H1/19 and initiated full-year 2019 guidance at 20–23 Mboe/d. There also remains potential for the dropdown of additional acreage to Viper from, for instance, Diamondback and Brigham Resources, Freeman pointed out. “We conservatively model ~$200 million of annual acquisitions through 2025, which comprises ~$9 per unit of our full company net asset value.” Absent any acquisitions, Viper “likely has over 15 years of drilling inventory on its acreage,” the analyst added. In light of that acquisition potential, along with the LP’s “attractive and extensive asset base and extremely low financial … Continue reading

Skyharbour Resources: In the Right Place at the Right Time?

Source: Peter Epstein for Streetwise Reports 02/14/2019 Sector expert Peter Epstein describes how the confluence of changing conditions in the uranium market and promising company assets could make this player in the Athabascan Basin an attractive investment opportunity. I could have written this article in 2016, or 2017, or 2018. I’m glad I didn’t. Why? The article is partly about uranium fundamentals and pricing. It’s February 2019, spot uranium prices are up from US$17.75/pound ($17.75/lb) in November, 2016 to ~US$29/lb today (+63%). But even a 63% move has done nothing for most uranium juniors. Perhaps investors have been fooled one too many times before? Is this time different? No really, this time really could be different. 2019 truly could be the year that uranium prices blast through $30/lb and perhaps hit US$40/lb. Before Japan’s Fukushima Daiichi disaster, the price was ~US$70/lb. Analysts point out that the all-in cost of uranium production is ~US$40/lb. And, the incentive price to get a major uranium project off the ground is closer to US$60/lb. Over the past two to three years, everything on the supply and demand sides of the equation has moved in favor of higher uranium prices. Below is a chart showing supply cuts totaling 30-33 million pounds per year (Mlbs/year), and more cuts are coming. Both KazAtomProm’s and Cameco Corp.’s (CCO:TSX; CCJ:NYSE) cuts extend into 2020 (unless the uranium price rebounds significantly). On the demand side, China is building new reactors at a frenzied pace. Japan is returning, slowly but surely. … Continue reading

'Initial Recovery Tests Encouraging' from Metals Project in Bolivia

Source: Streetwise Reports 02/14/2019 A ROTH Capital Partners report presented and commented on the Canadian company’s early-stage metallurgical findings. In a Feb. 7 research note, Joe Reagor, a ROTH Capital Partners analyst, reported that New Pacific Metals Corp.’s (NUAG:TSX.V; NUPMF:OTCQX) initial metallurgical test results from its flagship Silver Sand project in Bolivia are “positive.” Specifically, Reagor indicated, recovery rates came in as high as 96.7% for sulphide material and 97.0% for transition material. The material was shown to be nonrefractory. “The grind requirements imply capital and operating costs on the lower end of the potential spectrum,” he added. Reagor pointed out that New Pacific Metals should be commended for conducting early-stage metallurgical testing, which helps derisk a project. The fact it did so when so many exploration companies opt not to also is “encouraging.” Looking forward, Reagor expects release of the subsequent set of drill results will be the next major catalyst for New Pacific Metals. Those data could help better determine Silver Sand’s potential. Results from 97 holes from its 2018 drill program are pending. ROTH has a Buy rating and a CA$3 per share price target on New Pacific Metals, whose stock is currently trading at around CA$1.97 per share. Sign up for our FREE newsletter at: Disclosure: 1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or … Continue reading

Oil & Gas Company Reveals 2019 Drill Plans for Southeast Asia Projects

Source: Streetwise Reports 02/14/2019 The first of the three scheduled programs launched on Feb. 11, 2019. Pan Orient Energy Corp. (POE:TSX.V) announced in a news release the 2019 schedule for drilling at its assets in Thailand and Indonesia. These programs “will be evaluating the largest prospective resource base that the company has ever targeted in any given year, and they will also be one of the most balanced from an overall risk perspective,” President and CEO Jeff Chisholm said in the release. Now underway is a drill program consisting of two appraisal wells in the L53-DD oil field in Thailand. The first well, L53-DD4, which was spud on Feb. 11, 2019, is targeting an undrilled fault compartment located to the north of the field’s Proven and Probable reserve area. In mid- to late Q2/19, drilling of the Anggun-1X exploration well in Indonesia will commence. Construction of the access road is a bit behind schedule due to rain. Rather than being 43% complete, which was estimated for this time, it is about 36% finished. Construction is expected to wrap up in April, with the start of drilling following in May to June 2019. Subsequently, in late Q3/19 to early Q4/19, a three- to four-well exploration drill program in Thailand will start. Three of the targeted prospects are “close in” to the L53-DD oil discovery, the release noted. The company will fund these drill programs with revenue from its Thailand production and its treasury that totaled CA$39.6 million as of Sept. 30, … Continue reading

Analyst Forecasts Cloudy 2019 Outlook for Energy Firm Despite Strong Q4/18

Source: Streetwise Reports 02/13/2019 A Stifel report reviewed Q4/18 and discussed factors affecting 2019 projections for this provider of equipment and components for oil and gas drilling and production. In a Feb. 7 research note, Stifel analyst Stephen Gengaro reported National Oilwell Varco (NOV:NYSE) ended 2018 solidly, but outlook for the company near term is “uncertain” and for the rest of 2019 is “cloudy.” Stifel reduced its estimates and lowered its target price on National Oilwell to $37 per share from $46. The stock is currently trading at around $29.79. Stifel’s concerns about National Oilwell are only short term, Gengaro asserted. In fact, the firm expects boosted revenue and cash flow in H2/19 and into 2020, and likely beyond. Those increases will come from undersupplied crude oil markets. The analyst provided numbers that depict the energy company’s growth during Q4/18. EBITDA in Q4/18 rose 14% from the previous quarter and exceeded Stifel’s forecast by 11%. The main driver was “upside in all three segments,” each of which “generated sequential revenue growth and margin improvement,” explained Gengaro. Revenue was $2.4 billion, an 11% increase over Q3/18, on more drill pipe deliveries, some accelerated, an expanding rig count, and increased coiled tubing and wireline sales. Drilling motors grew 60% year over year in Q4/18. The balance sheet “remains rock solid with a net-debt-to-total capitalization of less than 8%,” Gengaro pointed out. He noted that two current positive factors for the company are global interest for its coiled tubing and inquiries about land … Continue reading

A 'Promising and Inexpensive' Gold Stock in Arizona

Source: Clive Maund for Streetwise Reports 02/13/2019 Technical analyst Clive Maund charts a gold miner that is advancing its project to production. To look at the stock charts for Kerr Mines Inc. (KER:TSX; KERMF:OTC; 7AZ1:FRA) you would think that it owns nothing more than a moose pasture where wild-eyed geologists get out of helicopters in huge anoraks with hoods for photo ops, instead of which it owns a respectable gold mine in Arizona that is set to go into production later this year, and finished a financing late last year that apparently involved Eric Sprott, who is not known for “putting his foot in it.” The location of the company’s main asset in western Arizona, which is a gold mine despite having the somewhat misleading name of the Copperstone Mine, means that the company is likely to attract a higher caliber of employee since it is very close to Las Vegas, affording all employees, especially management (although they are unlikely to admit it in their annual report), the opportunity to leverage their gains by attending the various casinos during their time off. We’ll start by looking at the long-term 16-year chart, on which we see that the company’s stock is extraordinarily cheap, historically speaking, being less than 1% of its price at its peak at its spike high above C$17.00 back in 2007. It is so cheap now that even Ebenezer Scrooge might consider sticking his hand in his pocket to buy some. For those who might argue that “Oh … Continue reading