Virginia Mines Inc VGMNF

Partners and update

[greenandgold]

While I'm optimistic about the future of VGQ I wonder about their status as a prospect generator. Right now VGQ has very few partners helping advance their properties by sharing costs. VGQ is high on Coulon and a couple of their gold properties and is spending over $10 million on them this year. This is a more aggresssive approach than what we'd expect from other prospect generators like Altius or Millrock, who each have numerous partners. Then again, perhaps VGQ is just very confident that these properties will prove up, and they'd like to sell them at a very high price instead of just taking a net smelter royalty.

Coulon looks ripe for sale after another season of drilling to grow the resource. Zinc and lead prices have been solid, and copper is breaking past 5-year highs.

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Eleonore update

I'm looking forward to another resource update from Goldcorp on Eleonore this month. There was 9.4 million ounces at the end of 2009. Could there be 12 or 13 million ounces at the end of 2010?  13 million ounces X $1300 per ounce X 3%NSR = $507 million, undiscounted cash flow. I think the management at VGQ stated at a conference that their private estimate is that Eleonore will turn into 15 million ounces by the time it goes into production.

Right now I don't think VGQ management would sell the Eleonore NSR for less than VGQ's current market cap of $220 million.