Update from BMO Sorry for my lack of teckie knowledge:
October 29, 2012
Brief Research Note
Victoria Gold
Mining Exploration
(VIT-TSXV)
Stock Rating:
Stock Price:
Target Price:
Market Perform(S)
$0.29
na
John Hayes, P.Geo.
BMO Nesbitt Burns Inc.
(416) 359-6189
johnp.hayes@bmo.com
Assoc: Peter Lam, CA, CFA
BMO Nesbitt Burns Inc.
Olive Target Drilling Results
Impact
Potentially Positive
Details & Analysis
Victoria Gold released drill results from its exploration drilling program at
the Olive target. The Olive target is located 2.5km northeast of the
company’s flagship Eagle gold project in Yukon and is part of the Potato
Hills trend. Results from seven intercepts in five holes returned a
weighted average grade of 2.15g/t gold over an average intercept of 6.6m.
One drill hole returned no significant intercepts. Assay results from an
additional five holes are pending. The 11 holes were drilled in September
2012 and totalled 2,996m. While the exploration program remains very
early stage, the results underscore the potential for the Olive target to
contribute resources to compliment the Eagle project. Given that Eagle is
a low-grade deposit, any incremental improvement in grade would help
project economics. Metallurgical work is ongoing, as mineralization in
the district is often associated with arsenopyrite. No value is assigned to
exploration upside at Dublin Gulch in BMO Research’s estimates. Using
spot metal prices, Victoria’s shares are trading at a 49% discount to our
10% NAV estimate of US$0.57/share, below the junior and emerging
producers in BMO Research’s coverage universe, which trade, on average,
at a 27% discount.
This report was prepared by an analyst(s) employed by BMO Nesbitt Burns Inc., and who is (are) not registered as a
research analyst(s) under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to
pages 2 to 5.
Brief Research Note . Page 1
Victoria Gold Corp. (VIT)
Share Price
Quarterly Price 1.6
1) Mkt(S)
1.6
1.4
1.4
2.0
2.0
1.2
1.2
1.0
1.0
1.5
1.5
0.8
0.8
1.0
1.0
0.6
0.6
0.4
0.4
0.5
0.5
0.2
0.2
2) R3) Mkt(S)
0.0
0.0
VIT Relative to S&P/TSX Comp. VIT Relative to S&P/TSX Comp.
400
VIT Relative to Gold
400 250
VIT Relative to Gold
250
200
300
200
300
100
150
200
100
150
200
100 100 50
50
1990 1995 2000 2005 2010
0
2010 2011 2012
0
Revenue / Share VIT Relative to S&P/TSX Comp.
2
Price / Revenue
2
VIT Relative to Gold
1 1
0
20
0
20
0
0 -20
-20
EPS (4 Qtr Trailing) - (US$)VIT Relative to S&P/TSX Comp.
2
Price / Earnings
0.01
VIT Relative to Gold
0
0
1990 1995 2000 2005 2010
-0.01 -50
2010 2011 2012
FYE
(Feb.)
EPS
US$
P/E DPS
$
Yield
%
Payout%
BV
$
P/B ROE
% VIT - Rating as of 16-Nov-09 = NR
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Current* NC
nmnmnmnmnmnmnmnmnmnmnmnmnmnmnmnmnmnmnmnm
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
nmnmnmnmnmnmnmnmnmnmnmnmnmnmnmnmnmnmnmnm
ND
ND
ND
ND
ND
ND
ND
ND
ND
ND
ND
ND
ND
ND
ND
ND
ND
ND
ND
ND
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
nm
1
2
3
Date
31-May-11
20-Oct-11
14-Nov-11
Rating Change
NR to Mkt(S)
Mkt(S) to R
R to Mkt(S)
Share Price
$0.71
$0.52
$0.45
Average: 0.0
Growth(%):
5 Year:
10 Year:
nm
nm
nm
nm
nm
nm
* Current EPS is the 4 Quarter Trailing to Q3/2012.
-50
0
Last Price ( October 26, 2012): $0.29
Sources: IHS Global Insight, Thomson Reuters, BMO Capital Markets.
Brief Research Note . Page 2
IMPORTANT DISCLOSURES
Analyst's Certification
I, John Hayes, P.Geo., hereby certify that the views expressed in this report accurately reflect my personal views
about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or
indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of
BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services.
Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to
clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Ltd. are not registered as research
analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore
may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject
company, public appearances and trading securities held by a research analyst account.
Methodology and Risks to Price Target/Valuation
Methodology: NAV estimates are based on the discounted value of estimated future cash flows of the company's
main asset(s), plus additional value, where applicable, for non-DCF assets and net debt.
Risks: Changes in government regulations; permit receipt and/or renewals; fluctuations in metals prices; fluctuations
in foreign currency exchange rates; unexpected geological conditions; pit failures; unusual mining conditions;
unexpected processing problems; equipment breakdowns; unexpected metallurgical problems; shortages in skilled
workforce; a lack of availability of support infrastructure; reliance on third parties.
Distribution of Ratings (September 30, 2012)
Rating
Category BMO Rating
BMOCM US
Universe*
BMOCM US
IB Clients**
BMOCM US
IB Clients***
BMOCM
Universe****
BMOCM
IB Clients*****
Starmine
Universe
Buy Outperform 38.3% 17.9% 57.8% 39.0% 49.5% 54.3%
Hold Market Perform 58.5% 7.9% 39.1% 56.4% 48.5% 40.3%
Sell Underperform 3.1% 11.8% 3.1% 4.6% 2.0% 5.3%
*
Reflects rating distribution of all companies covered by BMO Capital Markets Corp. equity research
analysts.
** Reflects rating distribution of all companies from which BMO Capital Markets Corp. has received
compensation for Investment Banking services as percentage within ratings category.
*** Reflects rating distribution of all companies from which BMO Capital Markets Corp. has received
compensation for Investment Banking services as percentage of Investment Banking clients.
**** Reflects rating distribution of all companies covered by BMO Capital Markets equity research analysts.
***** Reflects rating distribution of all companies from which BMO Capital Markets has received
compensation for Investment Banking services as percentage of Investment Banking clients.
Ratings and Sector Key
We use the following ratings system definitions:
OP = Outperform - Forecast to outperform the market;
Mkt = Market Perform - Forecast to perform roughly in line with the market;
Und = Underperform - Forecast to underperform the market;
(S) = speculative investment;
NR = No rating at this time;
R = Restricted – Dissemination of research is currently restricted.
Market performance is measured by a benchmark index such as the S&P/TSX Composite Index, S&P 500, Nasdaq
Composite, as appropriate for each company. BMO Capital Markets' seven Top 15 lists guide investors to our best
Brief Research Note . Page 3
ideas according to different objectives (CDN Large Cap, CDN Small Cap, US Large Cap, US Small cap, Income,
CDN Quant, and US Quant) have replaced the Top Pick rating.
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https://researchglobal.bmocapitalmarkets.com/Public/Company_Disclosure_Public.aspx or write to Editorial
Department, BMO Capital Markets, 3 Times Square, New York, NY 10036 or Editorial Department, BMO Capital
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Prior BMO Capital Markets Ratings Systems
https://researchglobal.bmocapitalmarkets.com/documents/2009/prior_rating_systems.pdf
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Brief Research Note . Page 5