Sandstorm Metals & Energy Ltd STTYF

warrants expire Dec.23, 2012

[eswiles]

The AGM is on Friday May 4 and I want to start a campaign to have the expiration date of the warrants extended beyond December 23, 2012.  The underlying stock may languish for the next year or so because the next great news may not come until the first quarter of 2013 (Thunderbird).

From the viewpoint of original investors, the warrants have tanked a lot more than the stock.

From the perspective of the company, more equity capital can be well deployed, and we the shareholders have gained confidence in the management.

At PDAC in March, CEO Nolan Watson stated that SND has 10 times more deal flow than SSL which is self-restricted to gold.

Consider that the exercising of warrants by the shareholders is an answer to the financing challenge for junior resource companies.

Company executives get their stock options for free.  Investors have paid for their warrants.

[picklyp]

Question: why wouldn't they extend them?  I believe management is looking at long-term growth, even if it is at the expense of a short term drop in share price.  Extending the expiry date would be the cheapest access to more $ to do more deals.

[jsbarnby]

Can someone explain this to me? I have never purchased warrants in my life and am trying to understand all of the dynamics.

[picklyp]

They are simply the option to purchase a particular stock at a particular price. Check out canadianwarrants.com. I guess they are like stock options for non-employees.  I feel the main advantage is the additional leverage you get, whereas the main disadvantage is the fact that they expire and sometimes things might not pan out the way you'd hope over that period of time and things take a

[denisonod]

Eswiles,  I beg to disagree with extending the current warrants.  This gives increased value to only the current warrant holders.  These may be the original stock/warrant purchasers or simply individuals who later purchased the warrants in the open market.  Instead, i offer an idea.  How about (after the warrants expire, assuming they do expire), issuing all

[picklyp]

Very interesting idea.  The stock would get an immediate boost from doing this, have you heard of any other companies that have raised additional money in this way?  I think the costs involved in doing this may be higher than extending the already issued warrants? The major drawback of this would be the timing compared to just issuing more shares in which the money would be received

[denisonod]

Picklyp,  Extending the warrants are not a good idea.  That is not shareholder friendly.  At the current depressed pice, SND does not want to simply sell new shares.  Not sure about free warrants; however, a number of times I have seen companies issue rights to current shareholders. The cost of new warrants or rights is minimul compared to the potential cash generated

[picklyp]

I would be interested in you elaborating on why this isn't 'shareholder friendly'.  As a current shareholder I would be happy to raise more money at 70 cents. The only way that it's not shareholder friendly is the amount that is built into the current share price that presumes the warrants will expire worthless.  How much is this?  Personally I don't care because

[denisonod]

Picklyp,  My point is that extending the current warrants for another 1 or 2 years does nothing for current shareholders (unless they own warrants, too) and simply rewards current warrant holders (whether they bought them or received then with the share offering).  Why reward warrant holders when you could create virtually the same warrants (or rights) by giving them to shareholders (or

[bob4977]

I can see some of the benefit on extending warrants but I can also see that the benefits favour certain groups over others. If I had both warrants and shares, and the warrants were extended to December 2014, I might be tempted to just sell my shares ( to the detriment of current shareholders because I am selling shares) and decide that if SND  goes much above 70c in that time period that

[denisonod]

Bob,  I agree.  If SND is warm to the possibility of raising money at a higher price per share than the current stock price then new warrants or rights to current shareholders at the time could be a viable option.  I like it because it is fair to shareholders and does no cause dilution because shareholder will initally have the opportunity to keep the same percentage ownership and

[eswiles]

I do not know if most of the original investors still have their warrants. I also do not know the number of American and other foreign shareholders. Apparently there is some regulation that prevents U.S. citizens from exercising their warrants so they need to sell into the open market. This being the case, a rights issue is fairer in future when the decision is made to raise more equity capital.

[Kewl2]

eswiles -- following is a post that I added to the SSL BB last week -- should answer your last question............https://www.stockhouse.com/Bullboards/MessageDetail.aspx?p=0&m=30977980&l=0&r=0&s=SSL&t=LIST

[Thundersole]

Can warrants be legally extended?  Has any other company done this before? Is a warrant like a call, but without a contract backing it or is there a contract backing it? There are terms and conditions that are known before you buy a warrant, the terms and conditions should be fixed and unchangable. Could the company cancel a warrant, that would not be right.  What some a re suggesting is

[Thundersole]

I did a few searches and apparantly warrants can be extended with board approval.

[eswiles]

Hi Kewl2, Thanks for pointing me to Silver Wheaton's inducement in 2008 for existing warrant holders to exercise.  This was an intriguing procedure whereby participants could exchange existing warrants for new warrants that were 'deep in the money' to be exercised immediately. I am guessing that Sandstorm Metals could easily extend the expiration date of the existing warrants

[picklyp]

If you search on google you can see a handful of situations where warrants have been extended.  Usually like share consolidations it's because a stock price is plummeting and they want to retain some hope of getting the warrant money in the future (I guess).  Doing stuff like that does upset shareholders, similar to if a company has a bunch of under water employee stock options and