The Eagle and the Olive branch
Victoria Gold Corp (TO:VIT) aims to be in commercial production at its 100%-owned Eagle Gold project in the Yukon, Canada, by 2017. The project benefits from year-round, all-weather roads and plans to tie in to nearby grid power. Significant milestones have already been completed, notably the feasibility study, the environmental assessment process, a favourable agreement signed with its First Nation partners in October 2011 and receipt of a construction licence in September 2013. With continuing uncertainty surrounding Chinese and global economic growth, Victoria Gold provides an enticing opportunity to invest in a sizeable low-cost gold project, with robust economics geared to a recovering gold price.
Sizeable 10-year mine life
The Eagle Gold project has an NI43-101 probable reserve of 2.3Moz Au (92Mt at 0.78g/t Au). A feasibility study (FS) completed in April 2012 outlines an open pit, heap leach pad, gold recovery plant and associated infrastructure costing US$430m (including construction and working capital). Eagle is projected to produce 212koz gold pa at US$542/oz (based on a Q411 cost basis) in its first five (of a total of 10) years of operation.
Olive could supply higher-grade ore to Eagle
While the Eagle project will be the base of future gold processing operations for Victoria and has a sizeable gold reserve already in place, the Olive project, 2km to the east, indicates a considerably higher-grade resource could be present than that delineated at Eagle. Olive could provide the future Eagle Mine with extra ore feed (thereby markedly improving Eagle’s economics), in addition to Eagle’s existing reserve base. Gold assay results from exploration drilling undertaken so far show grades ranging from 1.4g/t Au to 8.9g/t Au. The current mineralized zone at Olive has been delineated with 35 holes and 10 trenches. A new 2014 30-hole programme is underway with results due in H214.
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