Warrants On Maple Gold Mines – Worth A Shot?

By Dudley Pierce Baker

Bob Moriarty , 321Gold.com, has written about Maple Gold Mines, TSXV:MGM on several occasions:

Maple Gold for $6 an Ounce US and I was wrong about an Oct crash (October 31, 2019)
Bob Moriarty Talks Gold, Irving, Novo, Maple Gold and More (October 8, 2019)
Maple Gold for $3.02 an Ounce US (October 1, 2019)

The share price is been really strong lately and the company just announced more advanced activity at their Douay property.

“Maple Gold Mines Ltd. has engaged Computational Geosciences Inc. (CGI) to complete a new and expanded artificial intelligence study for targeting high-grade gold at Douay.”

The question now, is it time to buy the shares or perhaps the stock warrants?

Frequently overlooked by investors are stock warrants trading, if any, on their favorite companies. In this case, Maple Gold Mines does have stock warrants trading, TSXV:MGM.WT

The exercise price is C$0.40 and the warrants will expire on June 27, 2022.

If the shares continue to trade below C$0.40 through the expiration date the warrants are and will be worthless.

However, what if, in the next two years Maple Gold has some great drill results and the shares skyrocket. This brings in the potential for outrageous gains with the additional leverage with the stock warrants.


A few projections for you:

Projections for Common shares                   
.50             .60         .75          1.00         1.50
As of July 9, 2020 – C$0.17

Gain on shares                                                .33             .43         .58            .83         1.33
Percentage gain                                             194%        253%      341%       488%       782%

Warrant Estimated Values                             .10              .20         .35           .60           1.10

Today’s price of warrants   C$0.07

Gain on warrants                                           .03             .13         .28            .53            1.03

Percentage gains                                           43%           186%     400%       757%         1471%


I suggest there are three (3) ways to play an investment of $5,000 or more in MGM and MGM.WT

1. Buy $5,000 worth of the common shares (conservative)
2. Buy $5,000 worth of the stock warrants (risky)
3. Hedge your investment of $5,000 by allocating 60% to the common shares and 40% to the stock warrants. In this case, a move in the common shares to .40 or above you will be a winner even if the warrants expire worthless, but a move in the common shares over 1.25 or more you will be taking home a 10 bagger. (hedge)

In full disclosure, I own the common shares and stock warrants in approximately the same ratio as above.

Cautionary Note: When placing orders for stock warrants or the mining shares, I always suggest using LIMIT ORDERS and GOOD Til Canceled. Don’t chase the prices higher and use common sense when placing your orders.

There are many great opportunities with stock warrants currently trading and included in my stock warrant databases.  If you would like more information on stock warrants, I encourage you to visit my website and pick up your free copy of The Stock Warrant Handbook: Your Personal Guide To Trading Stock Warrants.