A Vote for Virginia

01/07/2005 12:00 am EST


Adrian Day

Chairman and CEO, Adrian Day Asset Management

Virginia Gold has joined what Adrian Day calls his "100 Percent Club", comprised of stocks in his portfolio that that have doubled. Despite its gains, he still selects the issue as his Top Pick for 2005. Here, he explains his bullishness on the Canadian explorer.

"Virginia Gold (CA:VIA  Toronto) is an exploration firm with a low-risk business model: typically, it undertakes initial, low-cost exploration work on multiple projects, and then forms a joint venture for another company to earn into the project by spending the exploration dollars. Thus, Virginia can preserve its cash while exploring several projects, unusual for a junior company. Right now, the company has seven active programs, with an annual budget of around C$7 million, yet is spending less than C$3 million of its own money. It has C$19 million in cash.

"There are positive developments on several of these ventures, but the most exciting news is a new gold discovery on 100%-owned land, known as Eleonore, which holds out the promise of being a very large deposit, more than justifying the recent sharp increase in the stock price. Given the potential of the Eleonore discovery, the numerous positive projects, and the sound business model, there's plenty more upside in Virginia as Eleonore is flushed out with further drilling."

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