John McConnell's Victoria Gold Corp. (VGCX), last at 48 cents when it fell into receivership and a delisting review a week ago, is still mum about the day-to-day developments at its now shuttered Eagle mine in central Yukon. The mine has been closed since a major slide at its heap leach pad late in June allowed toxic material to escape containment. Still, the mood may be ever so slightly brighter today than last week. (The only market hint comes from the bids and asks, which slumped to a 10-cent low last week, but which stood at 40 cents today.)
The logic of that optimism may stem from reports that the Yukon government is hopeful that the mine can be remediated sufficiently to allow a restart of operations. That will be no easy feat, given that about half of the four million tonnes of cyanide-drenched rock that slid from the pad managed to break through into the open environment. The Yukon government, which pushed Victoria into receivership, is now paying the bills, which are estimated to be as high as $150-million. Even so, given the cost and financial state of Victoria, the expectation is that should Eagle fly again, it would do so under a new owner. And so, stay tuned.
The Eagle catastrophe has also spilled across to other explorers operating in Yukon. Scott Berdahl's Snowline Gold Corp. (SGD), which has been drilling and promoting its Rogue project in east-central Yukon, about 250 kilometres east of Eagle, had been trading above $6 in May. Victoria's initial bad news sent it briefly below $5, and while it recovered, the continuing gloom pushed Snowline below $4 earlier this month. Again, there was a bounce-back -- great assays will do that -- but the downward pressure still looms. Snowline fell eight cents to $5.40 on 231,000 shares today.
Snowline has a maiden resource estimate for the Valley deposit at Rogue, where it lists 75.8 million tonnes indicated at 1.66 grams per tonne and 81 million tonnes inferred at 1.25 grams per tonne, a total of 7.3 million ounces of gold. (Remember that Eagle hosts 270 million tonnes grading just 0.6 gram of gold per tonne, about 5.1 million ounces of gold.)
Further, Snowline's latest assays from Valley have frequently been topping its resource grades significantly. Two weeks ago, the company applauded a 472-metre hit that graded 2.38 grams of gold per tonne, a hit that started at surface and which averaged 3.2 grams per tonne over the top 302 metres. That was not an outlier: A second hole in that batch ran 2.57 grams per tonne across 325 metres and again, a 136-metre surface-based subinterval graded 4.84 grams per tonne. And so, the Yukon government's optimism for mining Eagle appears encouraging for Snowline.