it is not as simple as that. Options (Warrants type) will nearly always trade at less than the head share and most of them at much less than the head share.
The traps are several and remember that we are dealing with human beings and half of them are honest. There is a common tendency to use the warrants for leveraging of head shares and then accumulate and multiply and then sell out for a profit and we call this sledging.
There is also another mechanism of lodging a pretend bid and then pulling it or reducing it and the chinese are well known for this and this practice is supposed to be illegal but it is commonly used to force gold and silver prices lower. JPM do this nearly every day. The wonderful market managers encourage them. Some call this ooomphing. The Australians are also well known for this and particularly gazoomphing with the property market which is illegal.
The other thing to be aware of is that often shares with low capitalisation will be required to raise funds on regular basis and this will force them to require consolidation for example one for five and get back from 1000 million to about 200 million shares and this is very likely to happen.
For your peace of mind the best thing to say is that Eric Sprott is now a shareholder and he will force them to be straight and honest because his reputation will doom them if they play around. He will simply stop being a source of funds to bank roll the money needed for annual drilling programmes.
In my view keep one head share for every warrant. Keep on balancing your portfolio. Watch the prices and look to see when to buy head shares and when to buy warrants. Watch for trends and if they are low then it may be a buying opportunity. Never stake your life on one stock as you will lose your shirt and then your shoes.
If you have a good advisor then you are likely to get regular warnings about what to do. I always try to follow my advisor as he is always right every time without any failures.
Never buy any warrants that are less than 6 months to run and in this case you are extremely lucky with this choice. My view would be to get out of all warrants when you get to 6 months to run.
Dudley is well known as an expert for warrants and he has warrants service. You can also google warrants for canada and the are 90% bad but 10% good which is about the ratio I am warning you of.
Paul is alive and well so is the Lord the top advisor. Most people never take his advice. Spasibo Gospodum Thanks LJC
SVL Price at posting:
11.0¢ Sentiment: Hold Disclosure: Held
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