There is actually no real risk in subscribing to Virgin Gold Convertible Preferred Stocks (CPS).
First of all, CPS can be unsubscribed by giving the company prior notice for a full refund. If any shareholder is dissatisfied with how the company is being run, they may take back their capital investment; thus eliminating any further risk. In any case, CPS holders receive guaranteed monthly dividend payments and provided platinum remains at around $1,000/oz, are expected to recover their investment within 1 year.
Secondly, even if the gold price plummets, Virgin Gold will not face any difficulty in fulfilling its dividend payment obligation to CPS holders as the dividend is paid in platinum. The only difference is that CPS holders might have to wait longer to recover their initial investment because when the platinum price is low, the monetary value equivalent is also lower.
The only possible risk is of Virgin Gold going bankrupt. However, a company the size of Virgin Gold involved in precious metal exploration and mining has never been liquidated unless there is massive mismanagement. Our corporate values, governance policy and structure ensure that decisions are evaluated and monitored at almost every level of this corporation. Thus the risk of Virgin Gold ceasing operations can be ruled out. Moreover, Virgin Gold in particular has not been known for taking unnecessary risks. In fact we have proved ourselves to be a rigorous and financially disciplined corporation over the past decade. This corporation has never over-committed itself to projects that might not be profitable or dependent on a high precious metal price.
In the worst scenario of liquidation, CPS holders enjoy priority distribution of the company's assets over common share holders. So the risk of investors losing their investment is seriously negligible.
Nevertheless, it is still advisable for any potential investors to take advice from their qualified local financial and legal advisors before subscribing to Virgin Gold Convertible Preferred Stocks.