Merrill Lynch World Mining Share Discussion Threads

[arja] 01/6/2007 07:40

archie.
thanks . certainly warrants not worth trading with wide spread BUT maybe worth taking a position . have a nice weekend.

[jumbo66] 31/5/2007 19:56

only one way at the moment nice[hd]

[archieandrews] 31/5/2007 17:06

for the avoidance of doubt:

29,814,855 warrants remain unexercised. The remaining warrants will be
exercisable on 29 February 2008 at a price of 478p per warrant, or 565p per
warrant if exercised on 27 February 2009.

so there is only a few pence time value in the warrants right now.

[arja] 31/5/2007 15:47

thanks again. Sorry to be so thick and I now see that the exercise price is 110% of the NAV in March 2006 which must have been about 443p as 487p is exercise price ! looks interesting for sure . I sometimes hold MLW with CFD but finance charges are high if I keep for a while! good luck .

[archieandrews] 31/5/2007 15:21

as posted above from rns, the holder has the choice of exercising at the lower price of 478p next february making the warrant price mostly intrinsic value. anyone who doesn't exercise then or sell beforehand needs their brain tested if current levels are maintained.

big price lag today:

ftse 350 mining index +2.5%
mlw +1.9%
mlwt +1%

with 5.5 times gearing it would not be unreasonable to expect the warrants to increase 10% on a day like today.

CORRECTED: exercise price is 478 not 487.

[arja] 31/5/2007 13:19

archieandrews ,
the text hereunder from Trustnet says exercise price is 565p. If so , the warrants have a lot of time value and hence reason they do not move with the physical . the warrents are almost wholly time value . can you comment please? thanks .

Warrant Type (Click for performance) Warrant Price Exercise Date Share Ratio Exercise Price Issued
MERRILL LYNCH WORLD MINING IT 100.0 (p)
(30-May-07) Feb-2009 1.0 (ORD) 565.0 (p) 29,803,000
Share Identifiers TIDM : MLWT, SEDOL : B0XHT00

[arja] 30/5/2007 07:47

thanks a lot for clarification- much appreciated. Certainly worth keeping an eye on because of lack of TV as you say . have a good day .

[archieandrews] 29/5/2007 17:23

no conflict. the earlier post details the basis on which the exercise prices were to be determined. the actual prices in my post were set in stone at close of business on 16th march 2006. there are no other warrants.

i agree the warrant price isn't reacting much at all to swings in the mlw price and has a marked tendency to lag, but i'm certain it will if the mlw price should move decisively in either direction. the warrant price is driven by warrant supply and demand, so being thinly traded and markets being what they are it will find its own level which may sometimes look strange.

if the spread was narrower and the warrant therefore more tradeable things might look a bit different, but it doesn't alter the fact that the warrants have quite high intrisic value and modest time value at current prices.

[arja] 29/5/2007 11:08

archieandrews,
thanks for information. But I wonder if you are correct about exercise price as it conflicts with the poster just before you ? Also, the warrant quote is not reacting to the share price of the stock as it should if you are correct . Maybe there are two types of warrant ?

[gurp] 25/5/2007 14:05

sp sitting at the base of the rising trend, but waiting for indicators to turn

[arja] 25/5/2007 13:41

surprisingly weak today as base metal stocks recover and now in the black?! not sure why it is struggling !!

[archieandrews] 23/5/2007 10:09

as mentioned above, 29,814,855 warrants remain unexercised. The remaining warrants will be exercisable on 29 February 2008 at a price of 478p per warrant, or 565p per warrant if exercised on 27 February 2009.

at current prices, anybody holding the warrants on 29th feb 2008 would be foolish to not exercise them as their intrinsic value will drop from 80p-odd to a few pennies overnight. whilst they will still have time value from there on, the price would be nothing like it is today. that would be an appropriate time to buy some if there are any left.

anybody who doesn't exercise in feb 2008 will do us all a favour as the up to 87p of intrinsic value they have thrown away will swell the nav per share (the diluted nav quoted daily assumes all warrants exercised). all this changes of course if things fall between now and 2008 and the intrinsic value shrivels to little or nothing. holders might then prefer not to exercise in 2008.

if any of the continuing m&a rumours do actually come to anything, these warrants will be a good place to be.

[coincall] 23/5/2007 09:48

arja,

Details in this RNS...

[arja] 23/5/2007 09:20

am still puzzled about warrant terms as there used to be a LOT of time value in them and it always made a spreadbet better proposition. I notice that there was a new issue of warrants about a year ago so are you certain about the terms ? sorry to bother you again on this matter .

[arja] 23/5/2007 07:53

thanks for further interesting comments . spread is often the killer to trading ! I was disappointed at yesterday's fall in share price but maybe better today with RIO well up in OZ and BHP holding up !

[archieandrews] 22/5/2007 18:30

mlw has performed extremely well over the last two or three years. see the manager's comments in today's portfolio update rns for an assessment of where we are in the cycle. they will be awash with cash (c 140m) if most of the warrants are converted in february, which they should be if they are still deeply in the money at that time.

given that mlw are already buying back shares and were granted permission at the agm to buy back 25 million, it seems possible that a fair amount of this cash will be used for that purpose. in theory such a large buy-back should act to reduce the discount to nav (currently around 10%) or if not, it should at least improve the nav per remaining share noticeably. either way the remaining mlw shares should benefit. unexercised warrants (if in the money) will also improve the nav.

the mlwt warrants are fairly liquid but the spread is not over-generous.

[arja] 22/5/2007 14:17

thanks so much for all the up to date information. As now very little time value, it seems odd if not moving in line with the physical . But markets always surprise us although the punters may be wary of warrants if they feel it is top of commodity cycle . worth watching closely for sure if not too illiquid . I usually play it through a CFD or spreadbet . thanks again

[archieandrews] 22/5/2007 11:23

02 March 2007

The Board of Merrill Lynch World Mining Trust plc announces that, following the
warrant exercise date on 28 February 2007, 3,844,373 new ordinary shares of 5p
each have been allotted with effect from 2 March 2007.

Following this exercise the total issued share capital has increased to
172,143,279 ordinary shares. Application has been made for 3,844,373 ordinary
shares to be admitted to the Official List in due course and dealings on the
London Stock Exchange are expected to commence on 14 March 2007.

29,814,855 warrants remain unexercised. The remaining warrants will be
exercisable on 29 February 2008 at a price of 478p per warrant, or 565p per
warrant if exercised on 27 February 2009.

-------

since then, the company has bought back 12m MLW shares. the warrants are MLWT and given the warrant terms it is likely that most will be converted next february. technically, they are cheaper now than they have ever been and should be moving virtually p for p with the shares, but aren't.

[arja] 22/5/2007 10:39

unless the chart you show is for a new warrant ? Could you tell me the epic code please and the exercise price and expiry date please?

[arja] 22/5/2007 09:49

but warrants are particularly dangerous if commodities turn south as so much time value !! It could happen sometime !

[james 2] 21/5/2007 23:40

Warrants chart ;

[nephin] 21/5/2007 16:27

Trade 22:

If you fancy this one have a look at the warrants.

[trade22] 21/5/2007 15:33

I reckon the stock looks good. I'm going in. Breaking out nicely, makes me think that we haven't heard the end for commodities. I reckon other commidity shares could be on the move again soon.

[bionicdog] 21/5/2007 12:20

I did. :o(

[james 2] 21/5/2007 12:14

I hope you didn't.........