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MML - MEDUSA MINING LIMITED


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In reply to: hayboys on Sunday 06/02/05 11:24am

cheers hayboys,

 

You had me a bit worried for a sec, thinking i had read it wrong before i bought options.

 

Ive been buying the options with patient bids, which at 20c ex price, seems to be significantly undervalued. Of course given the illiquidity of the shares, this can change very quickly.

 

As i undertand it, the Bactech technology is a JV between the two in the Phillipines, so I would assume MML is getting access to it at attractive rates.

 

I dont ascribe much value to Dizon personally, but the company does...

 

Im more interested in the potential mine extensions at Co-O and the prospectivity of Saugon.

 

Dizon is just an aside imo.

 

In terms of MML stretching themselves a bit thin...possibly...an equity raising is very likely I would think though knowing Geoff Davis, a proponent of tight capital structures, I would hope debt will be primarily used...particularly as with the cashflow expected from Co-O the debt can be paid off quickly, so minimising the impact of interest.

 

I also hold Magnum Gold which now has one of Philsaga's exploration assets (with an interesting arrangement) and none other than Jeff Schiller as a director (formerly IGO director prior to listing).

 

Cdchi1

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In reply to: cdchi1 on Sunday 06/02/05 03:04pm

cd could you please explain your statement

"which at 20c ex price seem to be significantly under valued"

 

Excuse my ignorance I dont know anything about options per se when I checked under options through my online broker website for MML I couldnt see any so where are they?

 

From the little i know a call option is 100 shares which would come in the money at a future date and I am going out on a limb thinking any further than that, have always wanted to buy some options but never had the confidance untill now.

 

I am set up with my broker for option trading though and this company could be good from an option perspective since I see a lag of 3 months before this heads upwards in a parabolic fashion.

 

SO cd could you please answer the mechanics of call option trading ?

 

 

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In reply to: hayboys on Sunday 06/02/05 01:05pm

Hi hayboys,

 

They're not the options trading you're registered for, they're just listed options that can be traded like normal shares without any special registration. You're registered for option contracts which is restricted to the larger capitalisation shares and for which you can buy puts or calls. A very dangerous game for the inexperienced and I would recommend paper trading them for a while first to see how you go! These call options may NOT come into the money at a future date or ever...to be in the money, the price you pay for the premium plus the exercise price, needs to be lower than the market price.

 

With Medusa optoins the code is MMLO. They have an exercise price of 20c and expiry of January 2007. The current MML last price is 71c and the price of the options are 49c.

 

I can pay 20c per option to exercise them and in return receive a ordinary share for each option exercised.

 

So fair value for the options is 51c...ie I can exercise them for 20c each and get a share with a current market price of 71c.

 

Usually, there is a premium attached to an option for time value...the greater the time to expiry, the greater the premium to the shareprice, particualrly if the options are already in the money.

 

In the case of MMLO there is no premium currently ascribed to the option...but this is probably due to the high illiquidity of the shares, which means the SP can vary greatly if a large seller or buyer comes in.

 

Where the option is under fair value, then there is an arbitrage opportunity...for example I bought MMLO at 42c when MML was 69c...an arbitrage of 7c, though of course, the price can fluctuate by the time the options are exercised. So there is an obvious risk.

 

There's a lot more to it with options trading obviously, stuff way beyond me (but will learn hopefully when I finally jump ship to a broker).

 

For the record I've never option traded, ie option contracts, I just invest in a few listed small mining company options.

 

Cdchi1

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  • 1 month later...

Hey all.

 

MML seems to have broken its nice uptrend, when the price broke below .75.

Currently sitting at .72.

 

Anyone have any comments to share?

 

regards

Andrew

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  • 1 year later...

http://www.brr.com.au/site/images/partners/sharescene-logo.jpg

 

Recent ShareScene.com Radio Broadcast (Mon, 26 Jun 2006 11:00AM):

 

MML - Exciting opportunities in the Philippines - Mr Geoff Davis, MD

 

N.B. ShareScene.com Radio can normally be accessed by the 'RADIO' link, top of every page.

 

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ShareScene.com Radio delivers investor presentations from ASX listed companies. Keep up to date with the latest corporate dealings of the shares you follow. Hear news direct from the source. Listen to directors and investor relations mangers discuss their company, give investor updates and brief on current results. ShareScene.com Radio keeps you informed about company announcements and events, and provides you daily market wraps and industry discussions.

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  • 11 months later...

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