Spiny, I have botched this explanation of Virginia Gold-Goldcorp, even though I was a VIA owner up to the end. I should also have said that Virginia did receive a royalty. It was/is a 2 percent net smelter royalty on the quebec property that virginia surrendered to goldcorp. That is going to start paying off fairly soon.

Adrian Day, an Annapolis money manager and publisher of "Adrian Day's Investment Analyst" was onto this stock and stayed with it all the way.

Since Adrian did a pretty good job explaining the whole deal back when it was happening, I understood in advance the procedure of taking my stock away and waiting for new Virginia to be issued. even so, it was a bit nerve-wracking. plus it dragged out longer than expected. We learned of a deal in early December 05 and the thing didn't really wrap up until March 06.

Here is what Adrian said in "Adrian Day's Investment Analyst" back on Dec. 6, 2005.

"Virginia has agreed to sell its Eleonore gold property to Goldcorp for 0.4 shares of Goldcorp, valued at C$9.87. This is a fair price for the highly prospective deposit, though one still without a resource estimate. We like Goldcorp, though it does not have as much leverage as Virginia.

In addition, Virginia shareholders will receive half a share in “New Virginia” which will keep all of the company’s other assets, including C$31 million in cash; other exploration projects and joint ventures; the management; plus s 2% New Smelter Royalty on Eleonore. This is valued at C$1.23, though we would have been happy to pay well above that for Virginia before Eleonore was discovered, so we think this stub is well worth keeping.

So given a generally favorably attitude to Goldcorp and the gold market, and thinking the New Virginia will be very attractive once it starts trading, we would generally continue to hold Virginia (though not because we are expecting another bid). Given the enormous gains we have in the stock, however, if you are overweight, you could reduce your position to lock in some gains. (To the extent you sell now, you will not receive the New Virginia stub.)"

Looking back at the history on this, I see that the deal was unexpectedly delayed and did not go through until March!

On the plus side, Goldcorp stock went up and the deal became worth more money. In the week of Dec. 5 2005 G.TO closed at c$24.05. By the week of March 6 the stock was c$30.62.

Here is what Adrian was saying on Jan. 31, 2006.

"Virginia Gold (VIA.Toronto, 13.85) has been one of our biggest winners, but the amazing thing is this: there’s more to come! The sale of the company’s main property, Eleonore, to Goldcorp is proceeding, though slightly delayed due to the latter’s involvement in Barrick’s acquisition of Placer Dome. It is hoped that the Virginia sale will be concluded by early March.

As part of that transaction, shareholders will receive half a share in “New Virginia”, which will own everything the old Virginia had prior to the Eleonore discovery 18 months ago: the properties, the joint ventures, the management, the cash, plus it will own an attractive royalty on Eleonore, and it will have an enhanced following. So we feel investors will be fortunate if they have the opportunity to buy “New Virginia” at the pro-forma value of C$2.46 per share.

Virginia has some attractive prospects with several drill programs planned for the coming year,
including some ground close to Eleonore. These had been on the back burner while Eleonore was
pursued aggressively. We will definitely be holding the New Virginia and looking to add to positions.

Stephen Halpern, editor of the Money Show’s newsletter, noted that my choice of Virginia Gold
for last year’s “Top Picks” edition, had gains “very far ahead of 75 other advisors who
participated”. Thank you, Virginia!