Here is why I was buying ECU wrts for the first time on Friday. Post merger, each wrt will buy a share of Newco for $19 anytime within the next 2 years. The cost of that wrt is about $8 at the current market price, and it has an intrinsic value of about $1. The reason I bought in is because I am looking down the road at what I think AUM should trade. I expect the price of silver will be well above $50 at that time, and I expect AUM should have accomplished enough work at both Velardean and El Quevar to justify a share price north of $50. The intrinsic value of that wrt should be more than $30 by then, depending on how fast this resurgence of the silver juniors happens and how much time value remains for the wrts before expiry. The bottom line for me is that the leverage in these wrts represents about a 4-bagger is AUM only doubles in the next 2 years.

Any silver junior with a legitimate project on the go should be able to double in 2 years from this current depressed market. A company with two world class development prospects and such a tight share structure like AUM should perform far better.

Last year I included SLW on my top-5 list, when it was trading around $15 a share. I was told a few people that the stock was a bad pick because a high value company would not increase in value as fast as a penny stock. SLW ran to $45 or so. I think SLW is going to $100 before this run peaks for good. And I have been buying the SLW wrts to capture that leverage and grab higher profits along the way. So to me the idea that AUM is fully valued in the $20 range is ridiculous. And I fully expect to make some money on these ECU wrts even though it looks like they are expensive today. I think people need to look further down the road than what the market says they are worth the day a big deal is announced.

cheers!

mike