Another value comparison
Say MAO's comparable high grade is similiar to the below, and it definitely has this potential given grades, new drilling to depth, etc. So what would $420US millions be.
$420 /12 million fully diluted is $35 per share.
Still a long way to go but upside/blue sky is exciting and I believe will attract major interest yet there are virtually no shares available given close holding. Hence, absolute minimum expectation for me is $10. Best of luck.
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Goldcorp To Acquire Éléonore Gold Project From Virginia Gold
December 5, 2005
Vancouver, BC, December 5, 2005 – Goldcorp Inc. (“Goldcorp”) (GG:NYSE; G:TSX) today announced that it has entered into an agreement with Virginia Gold Mines Inc. (“Virginia”) (VIA:TSX) to acquire Virginia’s Éléonore gold project pursuant to a plan of arrangement involving Virginia. The transaction will combine Goldcorp’s operational and financial strength with Virginia’s world class exploration asset, the Éléonore gold project in James Bay, Québec.
“Éléonore is a unique and significant property located in the core of what Goldcorp believes is one of the most promising new gold districts in North America,” said Ian Telfer, President and Chief Executive Officer of Goldcorp. “The incredible success that Virginia has had in the short time since discovery in late 2004, when combined with accessible infrastructure and a mining friendly regulatory environment, reinforce the quality of this asset. Of the 212 drill holes completed to date on the entire property, over 70% have reported assays greater than 10 grams of gold per tonne, and the principal Roberto deposit remains open in both strike and depth. Goldcorp plans to continue aggressive exploration and development on Éléonore, with resource and scoping studies to be initiated early in 2006.”
“All of us at Virginia wanted to see Éléonore developed by a qualified and experienced mine development team and Goldcorp with their Canadian expertise is without any doubt one of the best in the industry,” said André Gaumond, President of Virginia.
Based on the 10 day weighted average trading price for Goldcorp’s common shares on the Toronto Stock Exchange of Cdn$24.70, the transaction values the Éléonore gold project at approximately US$420 million. Goldcorp will issue 19.6 million common shares pursuant to the transaction, representing approximately 5% of the 359.5 million common shares outstanding after giving effect to this transaction.
Completion of the transaction is subject to entering into definitive agreements, approval by Virginia shareholders and the receipt of regulatory approvals, including the approval of the Toronto Stock Exchange. Goldcorp expects that the transaction will close in the first quarter of 2006.
The Board of Directors of each company have unanimously approved the transaction. The Board of Directors of Virginia has received an opinion from Orion Securities Inc. that the transaction is fair, from a financial point of view, to Virginia shareholders. Officers and directors of Virginia have entered into lock-up and support arrangements with Goldcorp under which they have agreed to vote in favour of the transaction. Virginia has agreed to pay Goldcorp a break fee equal to 4% of Virginia’s market capitalization, calculated on a fully-diluted basis, in the event that the transaction is not completed in certain circumstances.
Under the agreement, shareholders of Virginia will receive 0.4 of a Goldcorp common share and 0.5 of a share in a new public exploration company (“New Virginia”) for each issued and outstanding Virginia share. Virginia will be acquired by Goldcorp and will retain the Éléonore project. New Virginia will hold all other assets of Virginia, including net working capital, cash to be received prior to closing from the exercise of Virginia options and warrants, its non-Éléonore exploration assets and a sliding scale 2% net smelter return royalty on the Éléonore project.
In addition, the holders of Virginia warrants will receive warrants of Goldcorp and New Virginia, based on applicable exchange ratios, in exchange for such Virginia warrants, and all stock options or other rights to subscribe for unissued securities of Virginia will either be exercised or terminated.
In connection with this transaction, Goldcorp also has the right to subscribe for up to 5% of New Virginia’s common shares with warrants to enable Goldcorp to acquire up to an additional 2%. Pricing of the shares and the warrants will be determined in the context of the market.
Goldcorp is the world’s lowest cost and fastest growing million ounce gold producer. Gold production in 2006 is expected to exceed 1.4 million ounces at a cash cost of less than US$100 per ounce. Goldcorp has approximately US$400 million in cash and equivalents, no debt and no hedging.