Hey Fisher, It's a good genuine question. The answer is that...

Hey Fisher, It's a good genuine question. The answer is that astute gold index watchers are aware of these upcoming index rebalances. In the case of Emerald it was an initiation into the index, hence a substantial number of shares were needed. In anticipation there had been accumulation of shares in the 6 weeks or so leading up to the balance date with the express purpose of selling into the GDX purchase. Check out the charts pushing the share price from circa $1.40 to +$2.00 since early April on elevated volumes. There was also significant purchases on the 2 days prior to the auction, some 13 million shares. Basically it was these purchases that provided the majority of the liquidity and why the order was able to be filled without significantly elevating the price on the day. Van Eck will pay whatever price the market makes, they don't care, its an index fund.

Be aware that there is a GDX re-balance every 3 months. Some times the fund will need to sell shares in the rebalance, sometimes it will need to buy shares. If the company no longer meets the criteria for inclusion then all the shares may need to be sold in the same manner.