RE: Goldcorp Buyout When Goldcorp took out Virginia Gold's Eleonore deposit, I was given .4 shares of Goldcorp and .5 shares in Newco (VGQ). This represented an approx 25% premium over the market value of Virginia the day prior to the announcement. But Viginia had risen approx 1000% in just over one year leading up to that friendly takeover. Here's the interesting part: Virginia mgnt structured Newco (VGQ) to include $30 Milion in cash, ALL of the assets outside of the Eleonore discovery area, + a royalty on Eleonore production that is worth approx $330 Million!
The day the takeover was announced, the Goldcorp board here on StockHouse was filled with negative posts declaring Goldcorp had waaaaaaay over-paid for the project. Virginia shareholder's were mostly elated, but many had mixed feelings about the deal too.
Here's how the deal played out for many of us: 1000 shares in Virginia Gold purchased just prior to the announcement of the Eleonore discovery were worth approx $1170.00. Today, had you held onto the .4 shares in Goldcorp and the .5 shares in Newco (VGQ), that $1170.00 investment would be worth approx $23,250.00.
The speculative dynamic underpinning PG at the moment is in the potentoial for a major discovery at Rahill-Bonanza.....it's possible that one has already been made. If (when) that happens, we'll have to wait and see what type of deal Ewan and co are able to structure......what type of royalty Ewan will be able to extract from future production. But make no mistake - Goldcorp needs 100% of Rahill-Bonanza and will pay dearly for it. My bet is that greedy Ewan (greed is good baby), will extract the fattest possible outcome for shareholders, of which he is one (his interests are most certainly aligned with ours....and vice versa).