Aris Mining Corp (ARMN)

[baystock1]

My thinking is that most of the 2018 and 2020 debentures will end up getting converted into common shares. The company needs time (ie. couple of years) to accumulate enough "excess cashflow" to make a significant dent in reducing the outstanding debentures thru buybacks.

But what I see happening is that there will be periodic spikes in the share price above US 13 cents as gold stock buyers rush into the stock during rallies in the gold mining stocks sector. This will fuel the conversions firstly of all the silver debentures by arbitrageurs who will buy the debs at a discount to what they would get if they were to convert to shares and then immediately sell for a risk free arbitrage profit.

Once all the silver debs are out of the way, the arbs will move on to doing he same thing with the 2020 gold debs. This will require a higher share price, say above US 17 cents, to compensate the holders for the 6% coupon rate of the gold debs.

Also I understand that the company is not allowed to buy back debs at prices over face value, so if the share price rises enough so that the debs trade over face value, the company buybacks will come to a halt I think.

Since we are in a extremely bullish rising gold stock environment, most of the debs will end up getting converted and probably long before 2020, IMO.