Victoria Gold Corp T.VGCX

Cove results the best possible!

[4fun]

Cove met the trigger to force Newmount to make a decision. This required a minimum of 500,000 ozs. This was met. There were very few holes drilled in establishing this resource (very efficient). Not only is this high grade but the potential to increase the size of the deposit is certain. Who knows how big the deposit might become? Even more exciting is the fact that the capital cost to start the mine is very low. In fact, bulk sample mining, which can be done with minimal permiting, can generate cash to VIT while development continues. Development is incremental, which means all the cost does not have to be incurred at the front end. Since there is milling available nearby on a custom basis the company does not have to incur the cost of a mill, tailings pond and permitting for same.

No matter which way the decision goes it will be positive for VIT.

I beleive it would be more positive if Newmount declines. Under this senario, VIT would own 100% of a rich and growing resource that can quickly and inexpensively be brought into production. If Newmount decides to back-in, they must spent about $25 million which would be enough to both expand the resource and bring it into production at NO cost to VIT. In my opinion, Newmount would not make this decision if they didn't think the resource could be expanded to at least 2 million ozs (one million net to Newmount). Otherwise it would be just to small for such a large company to bother. Either way this removes an uncertainty which the market never likes.

The next big news release is the Eagle mine. Despite the ranting of BIGM27, the grade at Eagle is as good as many other open pit mines currently in production. Many of these mines were brought into production when the price of gold was far less than today. The Eagle property has already proven the deposit is larger than the present 2.7 million ozs resource calculation and WILL be expanded. Other potential deposits nearby have yet to be drilled. The grade of .85 g/t, although low, can be mined and very cheaply extracted. Fort Knox mine, although larger with a resource of 3.8 million ozs.,  has a grade of only .47 g/ ton. It is very likely Eagle can be expanded to a similar size in terms of ozs, yet much more economic to produce.

Why the stock is so cheap I still have not been able to understand but certainly the grade is probably the biggest reason. Hopefully Kinross or some other gold producer will buy this deposit allowing VIT to focus on its many other great assets it holds in Nevada with all the cash it needs to outline multiple mines with no farther need for dilution.