options, page-7

re: options/ 2 discoveryman Wouldn't have a clue! Speculating, I would assume that they would value the options using the Black Schole Options calculations. In this instance, MMN options would be valued at approximately 18.5c at the current SP of 38.5c.

I know that when I held SBM (St Barbara) oppies and they were looking to do a 3 way merger with two Canadian companies, the options conversion to the new shares were at a better value in comparison to the shares! I have appended the transcript of the merger below.

At the time the SBM shares were trading at 13.5c and the SBM options around 4c (25c conversion). The proposed conversion of options which were out of the money was very attractive! In the below scenario, If you invested $21K in SBM you would have received 155K shares. The merger conditions were approx 4 for 1 which gave you 38000 shares in the new company. At the time just prior to the merger, if you purchased $21K of the oppies you would have received 525K of oppies. The conversion was 12.3 for 1 so you would have received approx 43K worth of new shares! In the above instance, the oppies would have realised a 13% increase in value.

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Under the transaction it is proposed:

* ordinary shareholders of St Barbara will receive 0.226 Defiance
common shares for every one ordinary share of St Barbara;

* listed optionholders of St Barbara will receive 0.081 Defiance
common shares for every one listed option of St Barbara;

* common shareholders of Geomaque will receive 0.125 Defiance common
shares for every one common share of Geomaque; and

* ordinary shareholders of Midas Gold will receive 0.440 Defiance
common shares for every one ordinary share of Midas Gold.

In negotiating the share exchange ratios, the various parties agreed
that the transaction value per Geomaque share was C$0.10, per St
Barbara share was A$0.21 and per Midas share was A$0.41. The share
exchange ratio was determined by reference to, amongst other things,
enterprise value and contribution to resulting future growth.