kha341 wrote: TORONTO, Dec. 17, 2020 /CNW/ - Arias Resource Capital Fund L.P. ("ARCF I") announced that it made a distribution in kind of an aggregate of 24,065,457 common shares ("Common Shares") of Largo Resources Ltd. ("Largo") from ARCF I to its underlying limited partners (the "Distribution in Kind"). These Common Shares include 10,488,564 Common Shares received on the cashless exercise of 13,156,707 Common Share purchase warrants ("Warrants"). The Common Shares distributed pursuant to the Distribution in Kind are subject to a hold period of four months and one day.
What is the value of each of the shares acquired by Arias from the conversion of ~13.2M warrants (strike price = C$0.29)? The answer is C$1.43, as explained below:
Arias got 10,488,564 common shares out of the conversion of 13,156,707 warrants via the cashless option. So instead of paying C$3,815,445 (= strike price C$0.29 x 13,156,707 warrants) to Largo for the exercise of the 13,156,707 warrants, Arias choose to receive 2,668,143 (= 13,156,707 - 10,448,564) less shares from the company via the cashless option. Meaning that in this case the value of each share newly acquired by Arias turns out to be C$1.43 or C$3,815,445 / 2,668,143.