Reducing bloated derivatives - have to start somewhereOne year anniversary of the $20 million debenture issue is almost here.
These are converitible at $4.75.
The company can redeem 10% on each anniversary.
They are already deep in the money and the debenture holders will probably be making
a 20% extra profit on top of their 8% if they convert and sell at the current share price of $5.40.
28% in one year is more than enough for a securty that ranks higher than the common shares.
This company is still leveraged with debt although not a high amount given that their cash flow was and should be very good. Debt can always turn around and BITE you. If you invest in this company you should make yourself very familiar with the various strike prices of the various warrants , options etc.
Funny Bone points are $2,20, $4.75, $5.40 and $6.50 to name a few.
The share price will stay with this range until all this is sorted out - subject to the gold price.
They are going to have a lot internal demands on that cash flow - pay dow debt, buy back warrants and debentures , invest in their startups etc. Should be a fair investment but I would not
expect a multi bagger at $5.40 a share.
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