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Virginia Mines Inc.

TICKER: VGQ:TSX

Virginia Mines Inc. is a mining exploration company with a royalty of 2.2% on the world-class Eleonore gold deposit, which is in a new district that is now considered a new mining camp. Virginia works relentlessly on many projects in various stages of growth to develop mineral resources. Many of the company's projects involve partnerships and these exploration partners contribute to Virginia's annual exploration budget. Strengthened by the discovery of the Eleonore project and 20 years expertise on the territory, Virginia's team is recognized as being one of the best in Canada.


The information provided below is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.

Expert Comments:

Haywood Securities (4/11/14) "Virginia Mines Inc. announced that it entered into an agreement with Alto Ventures Ltd., whereby Virginia will acquire Alto's underlying 0.5% net smelter return royalty on the Windfall and Arcane properties. Virginia will subscribe to a $250K private placement in Alto at $0.15/share on signing and a $750K share payment at $13/share on signing."

Brent Cook, Exploration Insights (4/6/14) "Virginia Mines Inc.'s Éléonore royalty is by far the best royalty I am aware of still in the hands of a junior company. Quality in this sector is expensive because it is so rare; the company is quality for sure."

Brent Cook, Exploration Insights (2/9/14) "A new deal effectively means Virginia Gold Inc. is selling 29% of the Coulon deposit for $20M in expenditures. This is a very intelligent deal that puts ~$7M into the ground annually, thereby advancing the project much faster than Virginia could have otherwise. It also brings some important Quebecoise groups into the project that will be managed by Virginia (with associated management fees, etc., going to Virginia Gold). The idea is to further delineate the current resource and to test a number of strong targets in the belt in anticipation of increased zinc and copper metal prices a few years out."

The Gold Report Interview with Adrian Day (1/31/14) "I also like Virginia Mines Inc., which, like Altius, has grown largely with JVs. It has a royalty on Éléonore in Quebec, which is Goldcorp's next major mine to come onstream, in Q4/14. Production is estimated at 600,000 oz annually after ramp up. . .it amazed me that Virginia was still so inexpensive even as Éléonore's NPV continued to grow and Virginia's royalty came ever closer to fruition. The explanation is that investors are short-term oriented. Virginia is arguably a little ahead of itself after the recent run, given today's gold price, but it is still one of the top companies I would want to hold long term." More >

The Gold Report Interview with Eric Lemieux (1/22/14) "Our top pick remains Virginia Mines because the company has an exceptionally well-managed team and a focused business model. CEO André Gaumond has said he wants to be at the beginning of the food chain and the end of the food chain with a royalty portfolio. I think he is adamant about applying what he's good at and that's being a top explorer and being able to decipher royalty portfolio opportunities. He has always said he is not a producer and I respect that. So far he has been proven right. That should remain the same in 2014. . .the key catalysts for the Éléonore royalty in 2014 are 1) new reserve and resource numbers that most likely will be disclosed by Goldcorp in February and 2) the start of production by the end of the year. There could be a major rerating of the value of Virginia's royalty. It is tremendous. I think it is going to be a world-class operation soon." More >

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The Gold Report Interview with Ralph Aldis (12/18/13) "Virginia Mines Inc. has a great management team. André Gaumond found the Éléonore mine, sold it to Goldcorp and maintained a royalty on it. He even managed to negotiate preproduction royalties before the project is in production. One of our people visited recently and learned from Goldcorp that there may be another parallel ore shoot running right next to the deposit that is already outlined. That could double the size of the resource. . .the share price is over $10 and André could do a flow-through financing at $20. . .here's how [flow-through financings] work using Virginia, whose benchmark share price is $10, as an example. The company issues flow-through shares at $20. Investors who buy at $20 don't intend to hold on to the shares. Rather, they sell them that same day, at $9. This crystallizes a loss for the initial buyers, which helps them manage their tax situation. This benefits Virginia because it can issue shares at a premium and get less dilution. It's a win-win-win. The company gets money. The initial investors get tax relief. The company working in that province gets money to explore for new mines. It's a great way for the province to encourage development of its resource base." More >

Eric Lemieux, Laurentian Bank Securities (12/17/13) "Our top pick for 2014 is Virginia Mines Inc. We continue to believe that the company is a focused explorer and may potentially emerge as a dividend-paying exploration company. . .the quality of Virginia’s portfolio of properties, the strength of its management and technical team and the Éléonore royalty make it a very compelling investment."

Eric Lemieux, Laurentian Bank Securities (12/11/13) "We reiterate that Virginia Mines Inc. is our top pick. . .the company's hybrid prospector-generator/royalty-holder model has allowed it to perform well, providing limited downside risk. . .the quality of Virginia's portfolio of properties, the strength of its management and technical team, and the Éléonore royalty make the company a convincing investment."

Eric Lemieux, Laurentian Bank Securities (12/2/13) "Goldcorp held a site tour of its Éléonore mine in the James Bay region of Québec. . .Virginia Mines Inc. has a 2.2% to 3.5% royalty on production from the mine, as well as any future production from the rest of the Éléonore property. . .Goldcorp appears to have had some exploration success, with the deposit open at depth and delineation of new zones such as Zone 494. . .we maintain our Top Pick rating. . .we continue to highlight Virginia's model of project generator and royalty holder and financial flexibility (~$40M in cash and equivalents and short-term investments)."

Eric Lemieux, Laurentian Bank Securities (11/6/13) "Virginia Mines Inc. has announced exploration updates for the Wabamisk, Coulon and Ashuanipi projects in Quebec. . .results from surface work highlight new areas of mineralization and help to provide direction for future drilling in winter 2014. . .we maintain our Top Pick rating and $13.75 target price for the company."

Engineering and Mining Journal (11/5/13) "Virginia Mines Inc., the largest landowner in northern Quebec and the explorer that discovered Éléonore, has James Bay chiefly in its crosshairs. The explorer is now focused on advancing its Coulon discovery in James Bay, which is the largest undeveloped copper-zinc resource in the province."

Eric Lemieux, Laurentian Bank Securities (10/24/13) "We held institutional investor meetings in Montreal and Toronto with Virginia Mines Inc. . .following good results from Coulon's Lens 257 in winter 2013, additional drilling is planned for the region between the lenses to determine if structurally they can be united. . .the company is looking to add tonnage in order to grow this well-located base metals development project that is Quebec's largest undeveloped Cu-Zn mineral deposit. . .we maintain our Top Pick rating and $13.75 target price. . .we continue to highlight Virginia's model of project generator and royalty holder and financial flexibility."

The Gold Report Interview with Brent Cook (9/18/13) "I've owned Virginia Mines Inc. or its predecessor for 12 years. The company sold Éléonore, a very high-grade deposit, to Goldcorp, which is putting it into production. Virginia retained a 2.5–3.5% royalty on Éléonore. The mine will produce on the order of 600 Koz/year. That royalty—probably the best royalty held by a company that's not a major mining company—rolls straight back to Virginia. If you're positive on the gold price, this is the safest bet possible. Virginia is also moving forward on a number of other projects. Plus, Virginia's CEO, André Gaumond, is the most sincere, hardworking and honest guy around." More >

The Gold Report Interview with Adrian Day (9/11/13) "I also think there's a lot of value in some of the smaller royalty companies or companies that are morphing into royalty companies. Virginia Mines Inc. is one of my long-term favorite companies. It is still essentially an exploration company. It has used the prospect-generator model for many years, meaning it generates prospects and brings in joint venture partners, which is a low-risk exploration model. Then Virginia discovered the Eleonore deposit that it sold to Goldcorp, which is now building that mine. Eleonore will be producing in the last quarter of 2014. That's going to change Virginia from a pure exploration company to much more of a royalty model because for Virginia this means anywhere from $25–35M a year, for 17 years, in cash flow. That's a fairly wide range, but this is a complicated royalty where the maximum royalty doesn't kick in until about the third full year of production.

"As the aggregate production increases, the royalty moves up and revenue increases. If you look at the NPV of the Eleonore royalty, the discounted value of that future cash flow stream, you'll see that it's worth over $300M. That is the entire market cap of Virginia, so everything else you're getting for free. Virginia has $41M in cash. It has other deposits that are fairly advanced, including a base metal project called Coulon, which is continuing to advance." More >

Gary Bourgeult, Seeking Alpha (7/26/13) "There are a couple of things Virginia Mines Inc. has going for it: Geographic safety, as all its deals are located in Canada, and one of the best exploration teams in North America. . .if its exploration team continues to perform well, that could really be a competitive advantage that few companies could match. It would ensure solid revenue streams for decades."

The Gold Report Interview with Ralph Aldis (7/24/13) "Virginia Mines Inc. is up 11.9% [over the last three months]. . .it is a junior that has upside. Eleonore is being put into production by Goldcorp Inc. and Virginia is already getting paid a big royalty. Virginia CEO André Gaumond arranged to get preproduction royalties from that royalty agreement with Goldcorp and has been getting them on Eleonore for the last couple of years. This is one situation where if you look at the value of the royalty, or you look at the value of the assets that Virginia Mines has, you're either getting one or the other for free." More >

Eric Lemieux, Laurentian Bank Securities (7/9/13) "Virginia Mines Inc. has announced the signing of a strategic alliance with Altius Minerals Corp. for the exploration of mineralization in the Labrador Trough, Québec. . .it is a mutually beneficial arrangement that will allow the companies to share knowledge and attract eventual strategic partners. . .we maintain our Top Pick rating and $13.75 target price for Virginia Mines. . .the company's strong financial flexibility and key partnerships will allow it to remain active in exploration."

Brent Cook, Exploration Insights (5/11/13) "Virginia Mines Inc. released drill results from both its 100%-owned Wabamisk gold property and the Lac Pau property under option to IAMGOLD Corp.; Virginia completed 29 shallow holes into narrow vein and sheeted vein structures at Wabamisk that returned some high-grade intersections of up to 22.6 g/t gold. . .the net effect [of proposed tax increases in Québec] appears to be minor, with analysts estimating the new tax will add ~1% to the total Québec mining rate of 41%. This will have no effect on Virginia's royalty."

The Gold Report Interview with Adrian Day (4/5/13) "Virginia Mines Inc. is one of my favorite smaller, pure royalty companies. The company has a very attractive royalty on the Eleonore deposit that it discovered a few years ago and sold to Goldcorp Inc. When Virginia sold the project, it kept a royalty. That mine is Goldcorp's next flagship property, and it's on track for production last quarter of next year. At that point, that royalty will generate at today's price of gold around $30M a year for the next 17 years. The value of that royalty alone is worth more than Virginia's whole market cap." More >

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