The Yukon’s only Fully Permitted Shovel Ready Multi-Million Ounce Gold Project

POSTED ON September 01, 2015 BY Andrew Nelson
CATEGORY Gold, Kinross Gold, Site visits, Stories, Victoria Gold, Yukon,

Our final site visit in this whirlwind tour of the Yukon was to the most advanced and fully permitted development stage project in the Territory, Victoria Gold’s (TSX.V : VIT) Eagle Project, which is well supported by both Government and First Nations. The Eagle project has completed a Feasibility Study and finalized an Environmental Assessment. Just as important, VIT has received the quartz mining license and construction license necessary to proceed with building the mine.

Victoria Gold Map and Eagle Project (Source: Victoria Gold)

Detailed Yukon Map (Source: Victoria Gold)

The Eagle Gold Project is situated on the Traditional Territory of the Na-Cho Nyak Dun (NND) First Nation. In 2011 a Comprehensive Cooperation Benefits Agreement (CCBA) was signed between the two parties providing transparency around the responsible and environmentally conscious advancement of the Eagle project. It also details employment, business opportunities, and a scholarship program for the NND First Nation.

Driving on the government maintained Forest Service Road to access Victoria's Eagle Project

We drove the 85 km road from Mayo which was partially paved highway and forest service roads. The infrastructure for the project is solid: there is year round access by all-weather roads to and on the project, the project is near the Yukon electric grid to tap into power, and there is an existing 100 person camp already on site that will be expanded prior to construction of the Eagle project.

Victoria Gold Camp (Source: CEO.ca)

Dining hall of the 100-person camp (Source: CEO.ca)

In the May 2015 re-issued feasibility study done by Tetra Tech it was noted initial construction and pre-stripping costs are estimated at $400M. Construction of the mine will take approximately 18 months. During operations the mine will be a significant economic contributor to the Yukon employing up to 400 individuals. The throughput of the mine will be 29,000 TPD (tonnes per day) equating to 10.4Mt/yr. Production will be 212,000 Oz Au/yr and 1.7M Oz Au for LOM at an AISC of $729/Oz. The economics show after-tax NPV of $227 and IRR 18% with payback of 3 years at $1325/Oz Au.

Eagle Gold Project view from camp (Source: CEO.ca)

Mr. Mcconnell, President & CEO, of Victoria Gold discussed the financing options and noted they are reviewing multiple possibilities. The company may use a traditional debt financing from a syndicate of banks or look to complete a portion through a royalty or streaming deal. Mcconnell confirmed he would not raise capital through equity at such low prices as Victoria is currently experiencing. There is also the possibility of a joint venture with majors in North America, China, or Japan. As of the date of our visit, 12 confidentiality agreements have been signed.

The Eagle gold resource runs in an east-west direction for 1050 metres and to a depth of 500 metres. The reserve is 2.3M Oz Au (P&P, 91.6 Mt @ 0.78 g/t Au). The resource is 4.8M Oz Au (Ind., 222 Mt @ 0.68 g/t Au) and 1.5M Oz Au (Inf., 78 Mt @ 0.59 g/t Au). The mineralization is still open at depth and along strike noting room for growth in reserves and resources.

When in production the Eagle gold mine will be a conventional low cost open pit mine with a 3 stage crush, in-valley heap leach along with a gold recovery plant with a 10 year mine life. When fully built the open pit will be nearly 1.46Km long, 0.78Km wide and 0.56Km deep.

When blasting the open pit, waste rock will be hauled to a waste rock storage facility. The mine has a 1.45:1 strip ratio which is favourable. The gold bearing ore will be taken to the 3 stage crushing circuit to go through the primary crusher, secondary crusher, and tertiary crusher. This will reduce the ore down to 7mm rubble ready to be heap leached.

Mobile stackers will stack the ore in 10metre lifts in the in-valley heap leach pad. Solution emitters are installed 1 metre below the surface to protect the lines from frost. As the heap leach pad will be on a downward sloping valley, gravity will draw the leaching solution downwards which will absorb the gold from the ore. The pregnant gold solution is then pumped to the gold recovery plant where it is separated and prepared for smelting where gold dore is produced.

Visual Animation of Proposed Mine Plan (Source: Victoria Gold)

Extensive diamond drilling and core storage (Source: CEO.ca)

According to the May 31, 2015 financials the company has $14.12M in cash and a positive working capital of $10.54M. Management noted they spend approximately $2.4M/yr on general and administrative expenses. As of August 18, 2015 directors and officers of Victoria owned in aggregate 3,868,223 or approximately 1.1% of the outstanding shares. Notable shareholders are Sun Valley Gold owning 48,265,570 shares or 14.2%, and Kinross Gold owning 55,886,628 shares or 16.4%. Exploration in 2015 is budgeted at approximately $3.5M. The remaining cash could last up to 3 years until market conditions improve without performing any further financings.

Overall, Victoria’s Eagle project is situated in mining-friendly Yukon with good infrastructure and evident approval from the Government and Na-Cho Nyak Dun. With all the construction, mining, and water permits in place it’s full steam ahead on the $400M financing front either through debt, equity, joint venture, royalty/stream, or a combination of the aforementioned. Like all the other Yukon gold projects we’ve discussed Victoria is highly leveraged to the gold price which will cause movement in the share price.

John Mcconnell, P.Eng, CEO & President and myself atop the Eagle Gold Project. Victoria Gold camp is to the left on the valley floor.

Thank you all for reading the Yukon Mining Investor Guide. I hope throughout the 8 part series you learned about some new projects and enjoyed the update on the companies you already follow. It’s been an incredible journey for me, visiting so many promising projects. I would once again like to extend my thanks to Corey Kanzig, Senior Business Dev. Advisor, Government of Yukon and Anne Lewis, Executive Director, Yukon Mining Alliance for making this all possible. For any readers just joining in now, see here for previous parts: Part 1, ATC, AXR, WG, KAM, RK, WRN.

What's a trip to the Yukon without a shot of a family of bears. Mama was waiting in the bushes while her 3 cubs scampered back in for protection after assessing who we were. (Source: CEO.ca)

What's a trip to the Yukon without a shot of a family of bears. Mama was waiting in the bushes while her 3 cubs scampered back in after assessing who we were. Click for better view. (Source: CEO.ca)

I fell in love with the Yukon and already I am planning for my return. To that end, I have entered into a contest to win round trip airfare to Whitehorse, and I need your help. CEO.ca readers, if you have enjoyed my Yukon Mining Investor Guide series please take 5 seconds to like my video here: https://www.facebook.com/OurYukon?pnref=story. If I get the most ‘likes’, there will be more site visits and reports on your favorite Yukon projects.

Symbol: TSX.V – VIT
Price: $0.12
Market Cap: $40.81M
Shares Outstanding: 340.07M

DISCLAIMER: The work included in this publication is based on SEDAR filings, current events, interviews, and corporate press releases. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the CEO.CA website do not necessarily reflect the views of Pacific Website Company Inc. or the author. The author holds no shares in Victoria Gold and has received no compensation for this article. This publication is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Resource companies such as Victoria Gold can easily lose 100% of their value so read Victoria’s profile on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.

Andrew Nelson

Andrew Nelson is pursuing the CPA designation as an auditor at Davidson & Co., the leading service provider for junior mining clients globally. Mr. Nelson has experience working with TSX venture listed explorers in Kazakhstan, Paraguay, Peru, Namibia, Madagascar, West Africa, United States, and Canada reporting under IFRS framework. He is an Executive Officer with Young Mining Professionals a not-for-profit which holds networking events for young professionals in Vancouver's resource sector. His interests are reporting on Canadian precious metal explorers and holding informative interviews with accomplished mining professionals. If involved in junior mining he would love to hear from you at Andrew.GM.Nelson@Gmail.com. More →

Twitter: @https://twitter.com/ANelsonMining

andrew.gm.nelson@gmail.com

Andrew Nelson

Twitter: @https://twitter.com/ANelsonMining

andrew.gm.nelson@gmail.com

Disclaimer:

Readers are advised that the material contained herein is solely for information purposes. Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice. Nothing contained herein constitutes a representation by the publisher, nor a solicitation for the purchase or sale of securities. The information contained herein is based on sources which the publisher believes to be reliable, but is not guaranteed to be accurate, and does not purport to be a complete statement or summary of the available data. Any opinions expressed are subject to change without notice. The owner, editor, writer and publisher and their associates are not responsible for errors or omissions. They may from time to time have a position in the securities of the companies mentioned herein, and may change their positions without notice. (Any significant positions will be disclosed explicitly. This article is not intended to meet your specific individual investment needs and it is not tailored to your personal financial situation. Nothing contained herein constitutes, is intended, or deemed to be — either implied or otherwise — investment advice. Thomas Humphreys, Pacific Website Company Inc., and other entities in which he has an interest, employees, officers, family, and associates may from time to time have positions in the securities or commodities covered in these publications or web site. We reserve the right to buy and sell such securities or commodities without notice to readers. While the information herein is believed to be accurate and reliable it is not guaranteed or implied to be so. The information herein may not be complete or correct; it is provided in good faith but without any legal responsibility or obligation to provide future updates. Neither Thomas Humphreys, nor anyone else, accepts any responsibility, or assumes any liability, whatsoever, for any direct, indirect or consequential loss arising from the use of the information in these publications or web site.

Forward-Looking Statements: This article may include certain "forward-looking information" within the meaning of Canadian securities legislation. Forward-looking statements include predictions, projections and forecasts and are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "forecast", "expect", "potential", "project", "target", "schedule", budget" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions and includes the negatives thereof. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the potential of the Company's properties are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are based on a number of material factors and assumptions. Important factors that could cause actual results to differ materially from Company's expectations include actual exploration results, changes in project parameters as plans continue to be refined, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, uninsured risks, regulatory changes, delays or inability to receive required approvals, and other exploration or other risks detailed herein and from time to time in the filings made by the Company with securities regulators. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ from those described in forward-looking statements, there may be other factors that cause such actions, events or results to differ materially from those anticipated. There can be no assurance that forward-looking statements will prove to be accurate and accordingly readers are cautioned not to place undue reliance on forward-looking statements which speak only as of the date of this article. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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One thought on “The Yukon’s only Fully Permitted Shovel Ready Multi-Million Ounce Gold Project – YMIG Part 8”

stockhouse ekim says:

September 1, 2015 at 9:02 am

Using financial numbers several times in the article…where is the CAD$ or US$. Easier for the reader to translate numbers to real time gold price, etc.

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The Yukon’s only Fully Permitted Shovel Ready Multi-Million Ounce Gold Project – YMIG Part 8

One thought on “The Yukon’s only Fully Permitted Shovel Ready Multi-Million Ounce Gold Project – YMIG Part 8”

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