With construction 40% completed, this gold
explorer/developer is well on the way to getting the Yukon's next gold mine
up and running.
Construction crews are racing against Mother Nature, pouring concrete and
erecting steel at Victoria Gold Corp.'s (VIT:TSX.V) Eagle Gold Project in
the Yukon, in order to continue interior construction once the Yukon winter
sets in. Concrete for the crushing plants should be completed by the end of
October and steel is currently being erected at the gold plant.
Construction has come a long way since March, Victoria CEO John McConnell
told Streetwise Reports. "Once we had the financing in place in March,
we immediately mobilized. In the spring we focused on earthworks, got roads
in, worked on the heap-leach pad and leveled out areas for the crushing
system."
"Concrete works should be done by the end of October. The goal now is
to erect steel and have the buildings clad by the end of November so we can
be working indoors through the coldest months, doing the electrical and
mechanical work. We are right on schedule," McConnell added.


Primary Crusher Under Construction
Victoria closed a comprehensive CA$505 million financing package
in March with Orion Mine Finance, Osisko Gold Royalties Ltd. and Caterpillar
Financial Services Ltd. that fully funds the Eagle Gold Project to commercial
production.
The financing included:
- two credit facilities totaling US$175 million
(approximately C$219 million);
- an equipment financing facility for up to US$50 million
(C$63 million);
- a C$98 million royalty financing; and,
- a private placement of Victoria common shares to two
separate subscribers for a total of C$125 million.
The Eagle Gold Project is part of Victoria's 100%-owned Dublin Gulch
property, located in central Yukon Territory, about 375 miles north of
Whitehorse. The roughly 555-square-meter property is accessible all year by
road and is tying into Yukon Energy's electrical grid only 45km from site. A
comprehensive cooperation benefits agreement with the First Nation of Na-cho
Nyak Dun is in place, signed in 2011.
The feasibility study for Eagle and Olive deposits estimates Proven and
Probable reserves of 2.7 million ounces of gold, and if all goes according to
plan, Victoria should produce its first gold in the second half of 2019.
Eagle is projected to produce approximately 200,000 ounces of gold per year
at the cash cost of US$550 per ounce. Permits are in place for construction
and operations.
The feasibility study, using a $1,250/oz gold price, projects an after-tax
Net Present Value (5%) of $508 million, with an internal rate of return of
29.5%.
With an eye on adding to the resource, exploration is continuing at Dublin
Gulch. McConnell noted, "We spent $2 million this year on exploration,
drilled 5,000 meters and conducted 8,000 meters of surface trenching. We've
had far bigger programs the last two or three years, but have scaled back
because our focus is on construction this year."
Industry analysts have been closely following Victoria's progress.
Richard Gray, an analyst with Cormark Securities, was impressed with
Victoria's progress. On September 20 he wrote, "Victoria has delivered
an impressive summer of development at its Eagle gold project, de-risking its
expectation for first pour in H2/19 and putting it well on track to become
Canada's next gold mine. Despite a fully financed project that is already
1/3rd through its expected total build hours, Victoria continues to trade at
just 0.36x NAV and should re-rate as it closes in on production."
Cormark has a Buy recommendation and target price of C$0.70 on Victoria's
shares.
Gary Sidhu of PI Financial found Victoria's September construction update.
He wrote on September 19, Victoria "has provided an update outlining the
progress of development since commencing construction on March 15, 2015.
Impact: Positive: Construction is proceeding on schedule. The majority of the
earthworks is complete and critical path items are on schedule to be
completed before the end of October (within the weather window.) The first
gold pour is expected in H219." PI Financial has a Buy rating on
Victoria and a price target of C$0.80.
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