May 7 2013
Victoria Gold Corp. ("Victoria" or the "Company") is pleased to provide an update on progress at its Eagle Gold Project.
Permitting
As recently announced on February 19, 2013, the Yukon Environmental and Socio-Economic Assessment Board has concluded its environmental assessment and issued a Final Screening Report. The Final Screening Report recommends that the Government of Canada and Yukon Government allow the Eagle Gold Project to proceed. On April 9, 2013 the Yukon government issued a press release announcing the filing of the Decision Document for their approval and on April 16, 2013, the Federal Government similarly filed their respective Decision Document approving the project move forward. Completion of the decision documents allow Victoria to apply for the necessary licenses, namely: a Water License from the Yukon Water Board and a Quartz Mining License from the Department of Energy, Mines and Resources. In the Yukon government's press release Premier Pasloski stated, "The Eagle Gold project promises to become one of the largest gold mines in Yukon history. This would provide significant economic benefits for Yukon citizens."
Engineering
M3 Engineering has been selected and retained to complete the detailed design work for the Eagle Gold project. M3 has relevant experience in the Yukon having recently completed a feasibility study for the Casino copper and gold project and has considerable experience on large mining projects such as Penasquito and Refugio.
Detailed engineering started early in 2013 and remains underway with a current focus on heap leach design, site earthworks and civils and procurement of crushers and other site infrastructure.
Project Financing
Non-equity project financing has progressed well. Management believes the project has the capacity for non-equity financing to make up a majority of the funding requirements to build Eagle. Debt discussions with respect to traditional project financing are well advanced. The potential syndicate of funding partners have performed site visits, received a technical review of the Eagle project from an independent engineer and started term sheet negotiations.
However, equity markets remain seriously challenged and have resulted in a severely undervalued share price relative to the project value. This is particularly evident when considering the project is technically sound, with an approved environmental assessment, in a safe mining-friendly jurisdiction, capable of producing 200,000 ozs gold/year with a reasonable projected capital cost for its size as well as attractive expected operating margins.
In light of the prevailing equity market conditions, Victoria's board of directors and management have determined that an equity raise to support major on-site construction activity in 2013 is not in the best interest of shareholders.
Working Capital
The Company currently has approximately $35 million in cash, marketable securities and accounts receivable. This will allow Victoria to focus on current permitting and engineering efforts while continuing to de-risk and optimize the project.
Next Steps
Victoria plans on undertaking the following:
- Upgrade of the access road and bridges;
- Earthworks to prepare the leach pad foundation berm;
- Permitting activities for the Quartz Mining License and Water Use License;
- Detailed engineering to support permitting requirements;
- Detailed engineering to support 2014 construction; and
- Engineering trade-off studies aimed to further improve the project or the Company's ability to finance the project.
"We are disappointed equity markets are unsupportive to begin construction this season. However, Eagle is a rare shovel-ready project and the ore body does not go away. We will continue to de-risk and enhance the overall project to facilitate a quick and efficient site mobilization in 2014," noted John McConnell, President & CEO. Mr. McConnell commented further, "We would like to take an opportunity to thank the many people who have had a hand in advancing Eagle to date. Rest assured we will continue to take the right steps, however hard they may be, to best ensure Eagle is an economic and socially responsible success for our shareholders and Yukoners alike."
Source: http://www.vitgoldcorp.com/