RE: WARRANT TRIGGER EVENT - Banffstocker Hey people,
U have to do a little math to really see if this acceleration clause will come into effect on this first hole. REMEMBER the stock has to trade above $2 for 30 CONSECUTIVE trading days, even if it drops under $2 once in that 30 days thats it game over and u r back to start again. So anyone with reasonably deep pockets who didn't want the warrants triggered could short the stock on a day where its close to the $2 price at the end of a low volume day and boom all u have to have is a close at $1.99 and the 30 day clock starts all over again. Assuming they manage to get the price solidly above $2 by the end of March it will take until Monday May14th to get the 30 days in a row assuming no one scr*ws with it, and then it takes 20 days for the expiry. That means an investor has until Monday June 4th to exercise the warrant before it is cancelled out by the acceleration clause. I would think we would have results on the hole by then so the accelaration clause probably won't come into play on this first hole. On the other hand if they can get the price to run-up to the $3 range and absorb some new shares you may get people exercising and selling into the market for the easy double. Don't know how many they could get exercised but i am sure some people would make that move. Realistically I think most of those warrants are only gonna be accelerated if this first hole hits big and the stock heads way up. In that case they get @$70 million which is plenty to drill a few more holes at which time they could do another financing at much higher prices. Thats the way i see it unless this first hole is MASSIVELY delayed and results come after June 4th but if thats the case I think it would be very hard for the stock to trade over $2 for 30 CONSECUTIVE days. I think these warrants are an amazing deal and an awesome way to play this opportunity as long as u r willing to right off your investment should the first hole be a duster. But if it hits the payoff on the warrants will be absolutely phenomenal. On the 700million find that they claim they are after, 420million net to HRN, we can assume a conservative valuation of 1 billion or @$15 per share. Considering the warrants trade at 50 cents and would then be worth $13.50 minimum thats 27 times your money! Yup I will risk a little capital on a payoff like that! Well we will see in a few weeks what the outcome will be, all very exciting! GLTA longs in HRN and EOG!
Longrider