here is a site that has a spreadsheet program that will assign values to warrants. you have to plug in numbers for the exercise price, expiration date, and so on. it's probably more trouble than it's worth, as these things don't always work out the way they're supposed to. as examples, long term capital management blew up, and now when banks try to place values on their assets, they are finding that mark-to-market and mark-to-model can be very different.

in practice, i doubt that many of us will actually exercise those kinross warrants, or if we do, we would simultaneously sell the same number of shares. that's why it's easier just to sell the warrant when the time comes. as we have seen, a warrant with almost five years to run is much more volatile than the underlying stock. just as a 30-year t-bond reacts to a change in interest rates, while a 30-day t-bill wouldn't move at all. a lot can happen in five years, and if the market gets a whiff of zimbabwe-style hyperinflation with kinross trading at 32 million in 2012, our warrants will appreciate.

even after kinross reaches $32, the warrants will still offer some leverage. after that the stock and warrant will trade closely, but not dollar for dollar, and even then if the warrant is at 14 and the stock is at 32, a $1 move for both would be a much greater percentage for the warrant.

fwiw, i always expected the warrant would have some value, but it was less than 10% of the total transaction. my guess is that it was probably included to get the institutions to go along. i think patrick anderson was actually telling the truth when he said the warrant was to provide exposure to long term growth, assuming kinross could bring fruta del norte into production within five years.

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