RE:RE:Aris Charts The terms are 2 Warrants plus C$5.50 = 1 share. When I calculate fair value using the Black-Scholes model, I divide the value by 2 to get a number per warrant.
For example, Aris.TO closed today at C$5.38. The warrants expire July 29, 2025 that is 15.3 months from now. I could use the volatility of 50% ++ but I use a conservative value of 40%. The risk free interest rate is 5.25% and strike price is 5.50. The Call Value = 1.06, therefore the fair value per warrant is 0.53.
Today's value is entirely time premium as the stock is not above the strike price of 5.50.
There is an acceleration clause of the A series warrants. If the stock trades above 5.50 for 20 consecutive days, Aris management can issue an Acceleration Notice. Once the notice is given, the warrants exercise date is 30 days after the notice. The A series warrants were issued in 2020 when Aris was just a pup. I believe the Acceleration Clause was applied to the warrants as the Company had big dreams and very little capital.
I believe Aris will not issue an Accleration Notice as cash is not needed for their planned processing upgrade at Segovia ($15 million) and the underground operations at Marmato. Quite frankly at $2400 Gold, they have tremendous cash flow right now.