Sprott InterviewHere is an interview with Eric Sprott: https://sprottglobal.com/thoughts/articles/eric-sprott-look-for-ways-to-survive-the-counterfeiting-of-money-fiasco/
Of particular note is the following question/answer. This could very well be VG he is talking about since many of the numbers are very similar. Even if it is another company he is talking about, it has a direct correlation with VG:
TD: Eric, as a matter of record, you sold some bullion recently from the Sprott funds and reallocated the proceeds into the producers. Can you explain that strategy? Why now?
ES: Well, I’ve always believed that the price was manipulated down. We know that the producers got massacred in 2013 and were already weak in 2012 as a result. In some cases their stocks fell to $.10 cents on the dollar or less from their highs. In fact I think I bought a stock at $.12 cents that had been as high as $5.00 when the price of gold was $1920. It’s a producer, and I have a simple formula.
Let’s assume the price of gold goes to $2000 and the average gold producer probably has a cost of production all-in of $1000. They’d be making roughly $1,000 per ounce.
So you take its production, and in the case of this $.12 cent company, it had about 85,000 ounces of production. Again, make $1000 an ounce. You would be making $85 million. I think the market cap at $.12 cents was something like $30 million.
Well, if you can make pretax $85 million, ($60 million after tax) and you trade at 10 times earnings, you become a $600 million market cap company that was trading for $30 million.
So that’s why I was a seller of metals to buy the stocks.