Long Run Explor Ltd Ord WFREF

RE:What is the appeal of the debentures?

[aaaaaargh]

I am not positive, but I think you are saying that there is now a guarantee that LRE will have a share price of $7.40 by the time the debenture matures.   The buyers of the debentures will only convert at $7.40 if the share price of LRE is naturally higher than that, making them an instant virtual profit.  If the share price of LRE is still around $5 at maturity of these debentures, the owners will simply get the face value of the bonds back plus any accrued interest and will not convert them to shares.  If you buy LRE here, you will get the dividend as you stated, but there will be no guarantee as to what happens to the share price in the future.  

The appeal of the debentures to LRE is that they secured more debt facility and that they want the security of knowing what the interest rate will be on a portion of their debt.  (part of this will be going to reduce the amount of the revolving line of credit- which has a rate based on prime + ...- in a now rising rate environment.).   The average rate LRE paid on the current lines of credit was 4.4% for the first 9 months of 2013.   Yes, this means that they are going to replace 4.4% and pay it off with 6.4% debt.....   This is only a good idea if rates rise fairly rapidly from this point on.

I hope that this cleared up some of what you may be "missing".   If anyone noticed I missed anything important, please add on......