The options mean you pay the money to the company when you wish to exercise them and they convert them into shares. These options mean you will pay 12 cents per option you wish to convert into a share. Generally you would do this once the share price gets above the strike price of 12 cents, but you have the right to do it at any stage in the next 3 years (until expiry date).
You aren't obligated to convert them if the share price isn't advantageous to do so. The advantage is you have something that should increase in value but you don't have to convert them (i.e tie up your capital in them) until you are ready, that's why they are sought after as the potential return is significant especially if the options are free.
You can also sell them directly as an option to other buyers the value will reflect the value of the underlying share and the potential or time to expiry. For example I think these will start at around 3-4 cents but if the share price gets to say 20 cents they will increase to maybe 12-13 cents so the value of the difference plus some time value till expiry.
Hope that helps
RML Price at posting:
7.9¢ Sentiment: Buy Disclosure: Held
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