Victoria Gold Corp T.VGCX

Convertible Debt Presentation - German Gold Show

[HoneyBadger77]

CEO - Warren Gilman - Queen's Road Capital (QRC) presenting.  An interesting career story regarding his career with the richest man in Hong Kong.

Low-Risk Investments in the Resource Space | Warren Gilman - YouTube

CEO Gilman mentions at the start of video that he and JM go back a long way.

So .....since JM was present at this show an received an honorable mention from Gilman....Is JM perhaps considering a Convertible Debt deal with QRC to replace existing debt obligations or for a 2024 Raven Drill Program?  Would making an annual 10% interest payment to QRC, payment of a 3% deal fee, and QRC having the choice to take final payment in cash or VGCX shares 3 years of 5 years from now be good for VGCX shareholders?  Should VGCX even consider such an alternative or just stick to the existing plan of paying down debt in 2024?  If gold was to spike to $3000 in 2024 and beyond how much profit would VGCX be giving up?  With the existing 2024 hedging and forward gold sales in place to mitigate debt repayment risk, does VGCX need to further reduce risk but in return give up more potential future profits?  

I have no idea if JM is even considering such a deal but the recent increase in daily share volume activity might be an idication something is in the works.

Thoughts anyone?

HB77

[HoneyBadger77]

Further to my initiial post I see that Queen's Road Capital (QRC - TSX) spiked ~ 15% today on nearly 200K volume.  Something obviously going on. Likely about to announce a Convertible debt deal.  Could it be a deal with VGCX and if it is what effect might that have on VGCX share price in 2024? JM has mentioned that more drilling is needed at Raven in 2024 to fully understand what

[barringtondolby]

HB, if convertible debt is on the cards, is this what is holding back the SP. I would think any price to be struck for coversion should be in the $9-10 range. I base this on what is influencing the gold price, which I see going higher than it is now. Certainly in the medium term.

[kegman]

Why would you not just do a PP at $10 for 10 Million shares then...flowthrough.  Wipe out a big chunk of the debt and get past this?  Remember the $20 flowthrough placement?  

[HoneyBadger77]

My thoughts exactly Kegman!   The problem is we need to get to $10 first and that could take another quarter or two yet of positive production and earnings results, and if they're looking to commence a spring 2024 Drill Program (given the mild winter conditions) maybe they feel they need to do something sooner.  Who knows? Of course there's also the possibility that JM sees

[kegman]

Flowthroughs have tax advantages and are usually done at a premium to SP.  Let's wait for 4thq results.  I would think if good we pop to mid $8 to $9 range.

[MVargas]

I wouldn't expect Q4 production to be much different than Q3, based on JM comments where he has said that 2023 production will be near the mid-point of guidance and Q4 grade would be about 0.72/g.t. I expect that tonnes stacked will be no more than 2,600,000 tonnes vs 2,300,000 in Q3 and 2,500,000 in Q2. Ounces stacked would therefore be 2,600,000 x 0.72 / 31.1 g/oz x 76% recovery = 45,747

[phoenix_trader]

I believe scheduled debt payments in 2024 are less than $50 mill. Note 13, the revolver was extended. Raven and other exploration updates are catalysts you have not considered. Nor any value from the Banyan equity position.

[kegman]

Q4 results should be better than you expect.  Mine life has been extended as well.  I would hope we are looking at 170,000+ for the year as that would be in line with expactations.  My understanding is that the mine is running much better than (Would not take much) previous years. I have no issue with a PP in the $10 range to Raise $100 million.  Would shine a spotlight on VGCX

[HoneyBadger77]

Thank you for your detailed analysis MVargas. I see you are using a 76% recovery rate for Q4 production yet on Page 40 of the VGCX November Investor Presentation the listed 'Plant Recovery' rates haven't been at that level since 2019 and have increased anually with the latest recovery listed for 2022 at a 96% recovery rate.  The recovery rate has consistently improved since 2019

[HoneyBadger77]

It looks like the 76% recovery rate you're using for Q4 MVargas is a LOM Recovery Rate.  I suspect you arrived at 76% based on this excerpt from the 2023 Technical Report Victoria Gold Corp. | Victoria Gold: Eagle Gold Mine Updated Technical Report (vgcx.com): "Gold Recovery Reconciliation: Project to date, gold recovery has trended in line with modelled estimates utilized in

[MVargas]

HB77, I think you are confusing Plant Recovery Rates with HLP recovery rates.  The amount of gold that enters the cyanide laced gold solution recovered at the HLP stage is in the order of 76%.  Plant recovery of 96% is probably the percentage of gold recovered from the solution at the gold recovery plant. For the first 9 months of 2023 Victoria reported 6,929,257 tonnes stacked on the

[HoneyBadger77]

So in more simple terms MVargus, I think you're saying that the cyanide laced solution dripped onto the stacked ore on the Heap Leach Pad is extracting (on average) about 76% of the gold from the stacked ore and then when that solution is pumped to and reaches the Recovery Plant, the Recovery Plant process is able to extract 96% (at least in 2022) of that 76% of gold that was extracted in the

[MVargas]

HB, don't you remember that the Q3 gold production numbers were distorted by the fact that about 8,000 ounces came from inventory.  JM claimed that they were recovering 500 oz per day during the time the mine was shut down.   H1 production (from July 5 NR) was 83,188 oz from 4.6 million tonnes stacked at a grade of 0.81. 4,600,000 x 0.81 /31.1 = 119,807 contained ounces. H1

[HoneyBadger77]

In rechecking my earlier calcluations, I see I mistakenly used the 2022 Q1 stacked ore grade of .72 gpt with 2023 Q1 production of 37,619 ozs. instead of the 2023 Q1 stacked ore grade of .86 gpt which actually takes the Q1 2023 recovery rate down to 65% from the incorrect 77.4% rate I used. Using the correct 2023 Q1 figures with 2,094,741 tons of stacked ore x .86 gpt divided by 31.1 grams = 57

[HoneyBadger77]

My guess as to what's holding VGCX share price back right now is mainly short selling, tax loss selling, investors waiting for Q4 production results, Q4 earnings uncertainty, price of gold uncertainty, and concern with the current debt and if they can trust VGCX management to follow through with serious debt repayment in 2024. Regarding a theoretical convertible debt deal with QRC (and I