Opinion Independent Reports Analyst: 'Impressive Summer of Development&...

Analyst: 'Impressive Summer of Development' as the Yukon's Next Gold Mine Takes Shape

Streetwise Reports, Streetwise Reports

0 Comments| October 23, 2018

With construction 40% completed, this gold explorer/developer is well on the way to getting the Yukon's next gold mine up and running.

Construction crews are racing against Mother Nature, pouring concrete and erecting steel at Victoria Gold Corp.'s (VIT:TSX.V) Eagle Gold Project in the Yukon, in order to continue interior construction once the Yukon winter sets in. Concrete for the crushing plants should be completed by the end of October and steel is currently being erected at the gold plant.

Construction has come a long way since March, Victoria CEO John McConnell told Streetwise Reports. "Once we had the financing in place in March, we immediately mobilized. In the spring we focused on earthworks, got roads in, worked on the heap-leach pad and leveled out areas for the crushing system."

"Concrete works should be done by the end of October. The goal now is to erect steel and have the buildings clad by the end of November so we can be working indoors through the coldest months, doing the electrical and mechanical work. We are right on schedule," McConnell added.

Primary Crusher Under Construction

Victoria closed a comprehensive CA$505 million financing package in March with Orion Mine Finance, Osisko Gold Royalties Ltd. and Caterpillar Financial Services Ltd. that fully funds the Eagle Gold Project to commercial production.

The financing included:

two credit facilities totaling US$175 million (approximately C$219 million);
an equipment financing facility for up to US$50 million (C$63 million);
a C$98 million royalty financing; and,
a private placement of Victoria common shares to two separate subscribers for a total of C$125 million.

The Eagle Gold Project is part of Victoria's 100%-owned Dublin Gulch property, located in central Yukon Territory, about 375 miles north of Whitehorse. The roughly 555-square-meter property is accessible all year by road and is tying into Yukon Energy's electrical grid only 45km from site. A comprehensive cooperation benefits agreement with the First Nation of Na-cho Nyak Dun is in place, signed in 2011.

The feasibility study for Eagle and Olive deposits estimates Proven and Probable reserves of 2.7 million ounces of gold, and if all goes according to plan, Victoria should produce its first gold in the second half of 2019. Eagle is projected to produce approximately 200,000 ounces of gold per year at the cash cost of US$550 per ounce. Permits are in place for construction and operations.

The feasibility study, using a $1,250/oz gold price, projects an after-tax Net Present Value (5%) of $508 million, with an internal rate of return of 29.5%.

With an eye on adding to the resource, exploration is continuing at Dublin Gulch. McConnell noted, "We spent $2 million this year on exploration, drilled 5,000 meters and conducted 8,000 meters of surface trenching. We've had far bigger programs the last two or three years, but have scaled back because our focus is on construction this year."

Industry analysts have been closely following Victoria's progress.

Richard Gray, an analyst with Cormark Securities, was impressed with Victoria's progress. On September 20 he wrote, "Victoria has delivered an impressive summer of development at its Eagle gold project, de-risking its expectation for first pour in H2/19 and putting it well on track to become Canada's next gold mine. Despite a fully financed project that is already 1/3rd through its expected total build hours, Victoria continues to trade at just 0.36x NAV and should re-rate as it closes in on production." Cormark has a Buy recommendation and target price of C$0.70 on Victoria's shares.

Gary Sidhu of PI Financial found Victoria's September construction update. He wrote on September 19, Victoria "has provided an update outlining the progress of development since commencing construction on March 15, 2015. Impact: Positive: Construction is proceeding on schedule. The majority of the earthworks is complete and critical path items are on schedule to be completed before the end of October (within the weather window.) The first gold pour is expected in H219." PI Financial has a Buy rating on Victoria and a price target of C$0.80.

Read what other experts are saying about:

Victoria Gold Corp.

Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Victoria Gold. Click here for important disclosures about sponsor fees.
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Disclosures from Cormark Securities, Victoria Gold Corp., Morning Meeting Notes, September 20, 2018

Analyst Certification: We, Richard Gray and Alex Hunchak, hereby certify that the views expressed in this research report accurately reflect our personal views about the subject company(ies) and its (their) securities. We also certify that we have not been, and will not be receiving direct or indirect compensation in exchange for expressing the specific recommendation(s) in this report.

During the last 24 months, has Cormark provided financial advice to and/or, either on its own or as a syndicate member, participated in a public offering, or provided private placement of securities of this issuer? Yes.

During the last 24 months, has Cormark received or is expected to receive compensation for having provided investment banking services to this issuer? Yes.

During the last 24 months, has the analyst of this company received compensation from a pool that included investment banking revenue from this issuer earned by Cormark or entities affiliated with it? Yes.

Does the analyst, associate or any individual responsible for the preparation of this research, or a member of that person's household, have a financial interest in the securities of this company? Yes. RG-Long position, Common shares.

Disclosure Statements and Dissemination Policies: A full list of our disclosure statements as well as our research dissemination policies and procedures can be found on our website.

Disclosures from PI Financial, Victoria Gold Corp., Research Flash, September 19, 2018

Analyst Certification: I, Gary Sidhu, hereby certify that all of 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. I am the research analyst primarily responsible for preparing this report.

Research Disclosures:

Victoria Gold:

PI Financial Corp. and/or its affiliates expect to receive or intend to seek compensation for investment banking services from the subject company.

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