Molecule Holdings Inc C.MLCL

RE:Small chance for huge gain. Think Virginia Mines.

[aknahow]

History seldom repeats but and even if it did would 5 holes find the repetition?

Expresses

Tue Dec 6, 2005 Express 2005-16: Goldcorp to acquire Virginia's Eleonore gold discovery Publisher: Kaiser Research Online Author: Copyright 2005 John A Kaiser

Express 2005-16 December 6, 2005 Goldcorp to acquire Virginia's Eleonore gold discovery Virginia Gold Mines Inc (VIA-T: $10.30) announced on December 5, 2005 that Goldcorp Inc (G-T: $23.58) would acquire its 100% owned Eleonore gold project in central Quebec through a plan of arrangement that will result in the issue of 0.4 shares of Goldcorp and 0.5 shares of "New Virginia" for each share of Virginia. Based on the $23.58 closing price of Goldcorp this represents a value of $9.43 plus half the price that "New Virginia" can be expected to be worth when it starts trading after the plan of arrangement is consummated. Based on Virginia's $10.30 closing price the market is saying that "New Virginia" is worth about $1.74. "New Virginia" will retain all of Virginia's properties except the 24,000 hectare property defined as the "Eleonore project", plus $31 million in cash and securities. In addition "New Virginia" will retain a 2% sliding royalty on future Eleonore gold production. This friendly buyout scenario is pretty much along the lines I outlined on October 25 in Express 2005-14 when Virginia was trading at $6.35. While the deal does eliminate the possibility that Virginia turns into a Hemlo-style Cinderella story which gets taken out 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, vindicates the old-fashioned exploration strategy of Andre Gaumond and his Virginia exploration team, and sets the stage for a Great Canadian Area Play in the James Bay region of Quebec. This deal is rich with complex implications which I elaborate in this Express. The plan of arrangement eliminates the risk to Virginia that 3-5 million ounces is all that will ever be found on the Eleonore property. Based on 407 million shares fully diluted Goldcorp presently has a market capitalization of about $10 billion supported by the Red Lake Mine and the various mines acquired through the merger with Wheaton River. The 20 million shares Goldcorp will have to issue represent only a 5% dilution; a final resource calculation that is plus or minus a million ounces will not affect Goldcorp's stock price. Should Goldcorp's exploration efforts subsequently demonstrate that the Eleonore gold system hosts a world-class "Hemlo style" gold resource in the 10-20 million ounce range, one could expect such a development to add 20-40% to Goldcorp's stock price. Admittedly, had Virginia scaled Eleonore into the 10-20 million ounce range on its own over the next year or so Virginia's stock price would have gone up an extra 200-300%. The loss of upside, however, is offset by the gain potential inherent in Goldcorp's stock price if the gold uptrend continues.