I looked up the old Goldcorp-Virginia deal, in which I was a fortunate recipient of shares. Since I now hold Kodiak KXL, I sincerely hope this one goes the same way.

In March 2006, Goldcorp completed the acquisition of Virginia Gold Mines’ Eleonore project in Quebec, Canada. Goldcorp issued 19.3 million common shares valued at $406 million. There was some grumbling at first, since this might not have looked very lucrative on paper.

However, the deal worked out very well for Virginia shareholders.

The reason was that they received BOTH Goldcorp stock and stock in the new Virginia -- which held all the original properties minus Eleonore.

Goldcorp agreed to acquire Virginia Gold, keep Eleonore and spit out the rest in a newly capitalized Virginia Gold.

Virginia shareholders received 0.4 of a share in Goldcorp common plus 1/2 share in the newly capitalized Virginia Mines, which again was all the original properties in Quebec, minus the Eleonore prospect, which Goldcorp is turning into a gold mine. Also, Goldcorp became a stockholder in the new Virginia, and the new Virginia retains a royalty on the future Eleonore mine.

Here is how it looked to a Virginia shareholder. Goldcorp was selling at C33.51 on March 31, 2006, when the deal closed. For one Virginia share, you received Goldcorp stock was worth c$13.40 plus a half share in the new Virginia.

Right before the new shares were issued, Virginia was trading at c$15.75. I think mine cost me $6.00.

The new stock without Eleonore began trading April 5, 2006 at c$4.10 and hung around in the low c$4.00s, upper c$3.00s for a while. It is now closing in on C$7.00.

The best payoff was for those who stuck it out, took both the Goldcorp and the Virginia shares, and kept both!

Michael