   |
|||
Desert Sun Mining - A Look at the WarrantsDudley Baker Desert Sun Mining (TSX: DSM and Amex: DEZ) is an emerging gold mining company focused on the re-development of the 100% owned Jacobina Mine and exploration of their 155 kilometre long Bahia gold Belt property in the state of Bahia in northeastern Brazil. The Jacobina Mine was commissioned in the first quarter of 2005 and commercial production has been declared effective July 1, 2005. The Company expects to produce at 80% of capacity in the third quarter, reaching its full rate of production of 100,000 ounces per annum by the end of the third quarter of 2005. The Company had $15.9 million cash on hand at June 30, 2005. I would encourage you to visit the Desert Sun Mining website, for all the details. Also, Desert Sun will be represented at the upcoming Gold & Precious Metals Investment Conference in Las Vegas, Sept 7 & 8th at the Mirage Hotel. A perfect time to visit and meet the company representatives. The decision is always with the investor as to which investments to make but assuming that you like the Desert Sun Mining story and are considering buying the common stock we would like to take this decision one step further. Since warrants are our business and knowing that Desert Sun has a warrant currently trading on the TSX, we thought we would share our analysis with you. Terms of Warrant: Symbol: TO.DSM.wt So, what this means to investors is that we have the right, not the obligation, to purchase the common stock of Desert Sun at C$2.50 until 20-November-2008. Is this a good deal? If investors are expecting a significant rise in the price of the common stock, what will happen to the warrants? Let's take a look using our summary analysis as of Tuesday's close.
Conclusion: We would have to conclude that if an investor is considering the purchase of the common share they should take a serious look at the warrant in lieu thereof. There is sufficient time remaining on the life of the warrants (20-Nov-2008) and there is good leverage over the common shares. Remember, warrants are about leverage and we are trying to increase our return on investment. Also something to remember is that warrants are risky, if the price of the common stock is below the exercise price of the warrant on the expiration date, the warrant will expire worthless. Dudley Baker Dudley Baker is the owner/editor of Precious Metals Warrants, a market data service which provides you with the details on all mining & energy companies with warrants trading on the U.S. and Canadian Exchanges. As new warrants are listed for trading they alert you via an e-mail blast. You are provided with links to the companies' websites, links to quotes and charts, tips for placing orders and much more. Precious Metals Warrants do not make any specific recommendations in their service. They do the work for you and provide you with the knowledge, trading tips and the confidence in placing your orders. For those investors seeking more knowledge on warrants do visit the Learning Center at Precious Metals Warrants, where you will find much more information and examples to enhance your learning experience. You may also sign up for The Warrant Report free weekly email. Disclaimer/Disclosure |
