Ann: Bonanza intersection 206m at 10% Graphite at Leliyn, page-24

Hey mate.

The option is "the option to buy" KNG shares at 25c at any point in the future before they expire.

For every option you hold you can pay the company directly 25c per share and they will transfer your option into a KNG share.

It does not cost any additional money over the 25c.

The company then keeps the 25c per share, think of it like a 25c capital raise for the company.

The advantage is the leverage, for the same outlay you can get more options than shares.

As a basic example. You have $27k to spend, you can either buy 100k shares at 27c or 300k options at 9c.

In 3 years time, if you think KNG can tick some boxes and have a $2 share price, 100k heads @ $2 = $200k and the options will be trading around $1.75 ($2 - 25c) = $525k.

Big difference in profit there.

Disadvantage - they expire worthless in 3 years time if the KNG share price is less than 25c, which means it's a dud and the heads and options are both bad investments.

DYOR