RE:Is there any valid reason to expect $10/share?Well VF, our heads were above $7/share just a few weeks ago on Dec 22nd (but $7.33 was a technical support area) so the day traders and funds decided it was time to take some profits. My guess is that little run up in VGCX was likely manufactured to offset and curtail the impact of VGCX year end tax loss selling. Not enough new buyers coming in - YET - to keep the upward momentum moving, but I expect that will change in 2024 once there is solid evidence that productions results are back on track. The major expenditures were incurred in 2022 and 2023 and so now the focus needs to be on serious debt reduction.
With $1450 US AISC and a nearly $2100 US gold price, that's a $600 margin x 190K ounces (est 2024 production) = about $114 million US in net profit. VGCX management can pay down a lot of debt with this kind of profit. Add another $19 million US in profit for every $100 gold rises above $2100 US and things will be looking much better by year end (and yes I know that we've got forward gold sales at abour $2072 /ounce in 2024 so it's not exactly $19 million p/$100 increase in gold beyond $2100 but about 70% of it). Right now, interest is costing about $5 million per quarter and that's $20 million a year (or .30 cents a share that's not going to our bottom line).
By my caluclations, in 2024 if VGCX stacks their stated 11.5 million tons of ore on the pad at an average grade of .72 gpt, they will easily meet / exceed their 2024 porduction target of 190K ounces. In fact, 11.5 million tons stacked ore x .72 / 31.1 grams = 266,238 ounces at a recovery rate of 76.2% =
202,873 production ounces. So at a $600 margin and $2100 US gold, 190K = 114 million in net profit and 202,873 = 121.7 million. Should we be concerned with VGCX's ability to service their debt, I'm not. is 2024 a turnaround year for VGCX based on these numbers? It sure looks like it.
Q4 production results should be out either tomorrow or early next week and Q4 and year end earnings in Feb. A Q4 production results increase surprise will be needed and a Q4 positive earnings surprise for VGCX to see a meaningful breakout. A sudden drop in the US dollar and a sharp spike up in gold prices is another catalyst. A positive Raven report and announcement of more Raven drilling in 2024 another catalyst. Barring any more negative surprises with Operations, I'm expecting 2024 to be a turnaround year for VGCX. Patience is the key at this point.
Your question: Spot price is at around 2,035-2,045/oz USD, and we can't get our heads above $7/share. Is it likely to really get that much higher? My Answer: Go look at 2021 when VGCX was earning over $1.00 p/share and trading at a 20x PE multiple and then calculate where VGCX stock price will be when net earnings are back in that range (~ $20 a share that's where). VGCX is expected to earn a net profit of .11 cents p/share in Q4 2023 and .47 cents for 2023. Use a 20x PE ratio and VGCX should be trading at about $9.40 today yet here we are trading at a PE ratio of 13x at $6.50. The lower PE is because of the uncertainty around production and once normalized production is confirmed the buyers will be back with a vengence! (even MVargas...Lol).
My opinion only, please DYODD.
HB77
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EQUITY ALERT
| as of Friday, 22 December 2023 10:20am ET
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VICTORIA GOLD CORP (VGCX:TOR, CA)
7.26  0.48 (7.08%) Volume: Above Average |
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Today, Victoria Gold Corp changed +7.08% since the previous day's close with a trade of C$7.26 at 10:20 am. At last sale, VGCX was trading at C$7.26.
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| Open | 6.95 | | P / E Ratio (TTM) | 14.5x | |  | | Last Bid / Size | 7.25 / 3 | | Earnings Per Share (TTM) | 0.50 | | | Last Ask / Size | 7.26 / 11 | | Next Earnings | 9 Nov 2023 | | | Previous Close | 6.78 | | Beta | 1.9 | | | Volume | 77,614 | | Annual Dividend | -- | | | Average Volume | 312,533 | | Dividend Yield | -- | | | Day High | 7.26 | | Ex-Dividend Date | -- | | | Day Low | 6.95 | | Shares Outstanding | 66.53M | | | 52 Week High | 11.16 | | # of Floating Shares | -- | | | 52 Week Low | 5.35 | | Short Interest as % of Float | -- | | | | | | | | | | | |