RE: POGHey Sunshine:
I agree with your reasoning re: accelerated appreciation of the warrants, but I think that your calculations might need a slight adjustment. When YRI hits $13, the warrants should be around $1.50 or so, as each warrant only gets you .543 of a share of YRI. In other words, for every 1000 warrants you hold, you can convert to 543 shares.
If this seems a little complicated, it is because of the terms of the company's takeover of Northern Orion a few years back. These warrants used to be NNO warrants. Each warrant was converted at .543 into YRi. Therefore, If I had 1000 wt.c's, I could pay $6000 and receive 1000 shares of NNO (before the TO), which would convert to 543 YRI after the merger. ($6000/543 shares = $11.05/share). So at $11.05 SP, the warrant price would be entirely "time premium," which is about 50cents. Now that the SP is around $12, the warrant is expected to be around 12*.543= $6.52, minus $6 to exercise the warrant, plus the time premium (6.52-6.00+.50 TP=) $1.02.
At $13, I'd expect 13*.543=7.06 - 6 +.50 = 1.56, give or take a little.
BTW, I've held the warrants for quite some time, and have seen major fluctuations. I'm holding out for a SP spike to the upper teens (wishful thinking?), which should push the warrants up to $4 or 5. Having said that, the warrants expire in early 2010, so if the spike doesn't happen before that, the warrants could expire worthless. IMO, it's a gamble well worth taking.
Does this help?
Cheers,
mas75