Victoria Gold's Eagle project in the Yukon moved closer to production with
the announcement of a debt facility to fund construction.
Victoria
Gold Corp. (VIT:TSX.V) announced on Jan. 24 that BNP Paribas has been appointed to arrange up
to US$220 million of senior, secured project debt for the Eagle gold project.
John McConnell, Victoria's president and CEO, stated, "This facility is
expected to be the foundation of the financing package that will fund the
Eagle Project through construction and into production."
Chris Thompson, an analyst with Raymond James, noted in a Jan. 25 report
that the financing "satisfies ~80% of the estimated C$370 mln initial
Capex required to build Eagle. Whilst VIT has ~C$66 mln in cash on its
balance sheet, we see additional funds being raised via equity
financing." He also stated that "Eagle is shovel-ready, fully
permitted and enjoys the support of local First Nations. Further, while
located in Yukon (some view as infrastructural challenged), we see Eagle as
being well served by current (camp, road, water) and future (power)
infrastructure."
"'With a global resource of 4.4 mln in-situ oz (2.7 mln oz in
reserve), Eagle is capable of delivering a +200 koz/year production profile +
11 year mine �attractive to potential acquirers (we think) looking to add low
cost North American production ounces," stated Thompson.
That positive sentiment was echoed by Richard Gray of Cormark Securities,
who noted in a Jan. 26 report that the appointment of the lead arranger is a
"good first step for Victoria in its efforts to fully fund the
construction costs of the C$370 MM Eagle project. . .we expect the remaining
C$60-100 MM of financing required will likely be some combination of equity
and/or stream."
Gray also wrote that Eagle "continues to be well advanced with an
invaluable suite of infrastructure already in place (or easily completed).
The project is accessed via an existing year-round road connecting to the
Silver Trail Highway. Grid power currently runs along the highway to support
grid power via a spur line to be constructed along the existing access road.
Access is further improved with a 1,400m airstrip located in Mayo
approximately 85km by road from the project site and there is an existing
100-person camp is at site."
Victoria also announced on Jan. 19 a $6.2 million exploration program
in 2017 on the Dublin Gulch property. Gray commented that "several high
priority exploration targets have been identified on the large Dublin Gulch
Block that show potential to add to the current 4.0 MM resource at Eagle and
could demonstrate to investors, and possible acquirers, that there is upside
beyond just what has been drilled at the Eagle and Olive-Shamrock
zones."
Gray concluded that Victoria is an "ideal opportunity for risk
tolerant, long-term gold investors looking for a de-risked gold developer
with assets located Canada. The shares currently trade at only 0.60x NAV,
indicating significant upside on a re-rating or a takeout."
