Hycroft Mining Holding Corp (HYMC)

[LouisDesyjr]

The value of the warrants.

This is the simple way to understand a warrant.

A warrant is the right to buy a share of common stock at the exercise price. In this case, it looks like the exercise (or strike) price will be $8.40 so; if I 'turn in' a warrant plus pay $8.40 you get a share of common stock.
(one Warrant + paying $8.40 gets you a common share of stock )

So, if the price per common share is below $8.40, the warrants have little value since if someone wanted to buy a common share, it would cost less to just buy the common share and not use the warrant.

If the price or value of the common shares are higher than the warrant exercise price, then the warrant is 'worth' the difference between the common share price and the warrant exercise price. As an example, assume the common shares are worth $10. The exercise price of the w )arrant $8.40, so the warrant itself is now worth $1.60 ($10 - $8.40 = $1.60 and people would be willing to pay as much as $1.60 to buy a warrant, that they then could pay the exercise price of $8.40 and exchange the warrant for a share of common.

That is the simple way to value a warrant. There is also a more complicated formula that takes into account the volatility (how much the price of a stock changes) of a stock and time left to expire.
( Warrant price calculator https://www.asx.com.au/prices/theoretical_price_calculators.htm )

In my estimates, if there are around 75 million shares of common, plus another 17.5% for warrants to be exercise, the total shares outstanding would end up around 100 million shares. So if the common shares are around $8.40, we are looking or hope for a company value of around $840 million or so. This is assuming my estimate of the number of common shares is correct.
we would also need to add the value of the debt if we were looking at the total company value.

Now some people have come across total project net present values as high as 1.5 billion; so if the price of gold goes up, then the warrant should have some value.

In addition, I do believe there is a possibility of hyperinflation in the United States, in which case the value of the project should go far beyond what anyone had thought or hoped for. In a hyperinflation situation while the price of gold will rise, what is really happening is that the value of the USD is falling, but it 'shows up' as the price of gold rising.

Louis J. Desy Jr.