Post by
lhynes on Dec 15, 2005 7:56pm
Kaiser sees "Great Canadian Area Play"
Kaiser says Virginia finds love with rich old Goldcorp
2005-12-15 19:48 ET - In the News
John Kaiser, writing in a Dec. 6, 2005, Express, says Goldcorp Inc. ($23.58) plans to acquire the 100-per-cent-owned Eleonore gold project from Virginia Gold Mines Inc. ($10.30) in central Quebec. Mr. Kaiser has never recommended buying either Virginia or Goldcorp. The letter writer says, modestly, the friendly buyout is pretty much along the lines he outlined in an Oct. 25, 2005, Express when Virginia was $6.35. While there will not be a Hemlo-style Cinderella story in which Virginia gets bought in the $20-$40 range in a takeover battle among the world's biggest gold producers, it does turn the $500-million market capitalization achieved by Virginia into hard value. It also sets the stage for a "Great Canadian Area Play" in the James Bay region of Quebec. Mr. Kaiser muses that had Virginia scaled Eleonore into the 10-million- to 20-million-ounce range on its own, Virginia's stock price would have gone up an extra 200 to 300 per cent. The loss of upside, however, is offset by the gain potential inherent in Goldcorp's stock price if the gold uptrend continues. Mr. Kaiser also comments the royalty from the "New Virginia" -- Virginia minus Eleonore -- could be worth tens of millions of dollars.