Equity Research




Victoria Gold Corp.

VITFF / Other OTC / $3.97

March 23, 2020


Business Overview



Victoria Gold Corp. (the Company) owns 100% of the Eagle Gold Mine (the Mine) in central Yukon, Canada. It is approximately 375 kilometers north of Whitehorse, accessible by road year-round, and connected to Yukon Energy�s electrical grid. This open pit Mine poured its first gold in September 2019 and is expected to be in commercial production by mid-year 2020. Pre-production capital cost was $487.2 million.


Full production is estimated to be 210,000 ounces per year at an all-in sustaining cost (AISC) of US$774 per ounce Au. The estimated mineral reserve for the property is 3.3 million ounces of gold (0.65 g/t), the waste-to-ore ratio is less than 1:1, and the metallurgical characteristics are favorable to heap leach processing. The mine life is 11 years, which can be significantly extended by higher gold prices.


The Mine is located within the traditional territory of the First Nation of Na-Cho Nyak Dun (FNNND), with which the Company has a long-standing Comprehensive Cooperation and Benefits Agreement. At full production, the Mine will employ 350-400 people.


The 100%-owned Dublin Gulch property (approximately 35,000 hectares) within which the Mine is located, contains other areas of gold occurrence. The Olive Zone (approximately 2.5 km northeast of the Eagle Zone) has had sufficient drilling to be defined as a mineral reserve showing an estimated 200,000 ounces of gold (0.67 g/t) using an assumed gold price of US$1,275 per ounce. Production (open pit) is planned to commence in 2028.


The Company has staked 1,012 quartz mining claims covering 20,500 hectares of FNNND lands immediately to the west of the Dublin Gulch Property. Victoria holds an agreement with FNNND to conduct



2020 Focus



With commercial production planned by mid-year, management hopes to scale up to a rate of more than 200,000 ounces by year end.


Management will strive to achieve year-round stacking, a reduction or elimination of re-handling of ore on the leach pad, refinement of water management and water treatment, reduction of other operating costs, and improvement upon production targets.


The exploration program for 2020 has a $10.3 million budget, including 26,000m DDH, 10,000 soil samples, 7,500 trenches, and more than 8 kilometers of access trails.



Management and Directors



The backgrounds of the management and directors are outlined on the Victoria website and investor deck. John McConnell, President, CEO & a Director, has 35 years in the mining industry, including operations, permitting, engineering, project management, and executive positions. Other executives have extensive backgrounds in the mining industry.


The six BoD members have a broad range of relevant experience, including mining, permitting, Aboriginal law in northern Canada, and investment banking.






Income Statement (6 months through 08/31/19 vs. 08/31/18) (C$)


Operating income (expense): (883,387) vs. 1,303,542

Change in fair value of derivative instruments: (23,306,786) vs 6,649,372

Other finance income (expense): 215,875 vs. (337,885)

Pretax income (loss): (22,207,524) vs. 5,683,715

Net income (loss): (21,463,642) vs. 5,683,715

Comprehensive income (loss): (21,381,664) vs. 5,665,878

Earnings (loss) per diluted common share: (0.025) vs. 0.007



Balance Sheet (08/31/19) (C$)


Cash & equivalents: 45,590,097

Other current assets: 4,334,758

Total current assets: 49,924,855

Property, plant, & equipment: 575,460,931

Other non-current assets: 94,194,129

Total assets: 669,655,060

Current liabilities: 67,374,250

Long-term debt: 251,381,791

Other long-term liabilities: 48,455,247

Stockholders equity: 302,443,772

Number of common shares outstanding: 858,394,437

Number of options outstanding (01/25/19): 29,140,000

Number of warrants outstanding (08/31/19): 25,000,000



On February 27, 2020, the Company completed a $7 million flow-through financing, issuing 801,822 common shares at a price of C$8.73 per share. Gross proceeds were approximately C$6,999,900. These shares are subject to a statutory four-month hold.


On August 31, 2019, the Company had a working capital deficit of $17,449,395, and its debt facilities were fully drawn. These considerations make it imperative that the Company recover mineral reserves economically and ramp up production on time and on budget.



Valuation Considerations



The Eagle Gold Mine is a sizable, high-margin project in a favorable jurisdiction, and higher gold prices would extend the mine life significantly.


Management estimates that commercial production will be achieved by mid-year 2020. Production data to date is in excellent agreement with the reserve block model. The grade mined (0.79 g/t) is 3% higher than the expected grade.


The post-tax NPV (5%) of the Mine is estimated to be $1.0 billion, and the large land package offers additional upside potential.


A recent up-listing to the Toronto Stock Exchange (TSE) should help broaden the investor audience.


The impact from COVID-19 remains an uncertainly. In addition, the Company website and SEDAR filings list a number of risks and are hereby incorporated by reference.






Executive offices: 80 Richmond Street West, Suite 303, Toronto, ON M5H 2A4; 416.866.8800


Investor contact: John McConnell, President & CEO; president@vitgoldcorp.com; 604.696.6605


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TickerBuzz, LLC ("TickerBuzz"), a Florida limited liability company is the author of this Profile. TickerBuzz is not and does not act as a broker-dealer, investment advisor, placement agent, or crowdfunding portal. Furthermore, it does not offer any securities, nor does it provide any investment advice or analysis. The source material for this Profile is the Company presentation materials. Certain information, particularly information relating to future performance and other business matters, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. TickerBuzz cautions that these forward-looking statements are subject to numerous assumptions, risks, and uncertainties that may change over time and cause actual results to differ materially from the results discussed herein. The forward-looking statements are neither predictions nor guarantees of future events or performance. TickerBuzz has no obligation to update any forward-looking statements after they are made, except as required by applicable law. All of this information is intended for discussion purposes only, is not a solicitation to buy or sell any security, and must not be relied upon for financial, legal, tax, or any other professional advice. This company has not paid TickerBuzz any compensation for publication of this Profile. Analyst: William J. Ritger.



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