Mining Explorers 2016: Victoria Gold Corp.

With a goal of bringing more gold into the mine plan for its Eagle Gold project, Victoria Gold Corp. ratcheted up exploration at its Dublin Gulch property in central Yukon Territory. This work focused on Olive-Shamrock, a pair of zones about 2,500 meters northeast of the main Eagle Gold deposit that had no resource estimate going into 2016.

The company said Olive and the adjacent Shamrock deposit have the potential to enrich Eagle project economics by adding higher-grade ore, increasing flexibility in mine planning and lowering capital intensity from shared infrastructure.

Olive and Shamrock were two separate zones about 300 meters apart. Linking and expanding these zones was the primary focus of a 12,000-meter phase-1 program launched in March.

Highlights from the phase-1 program at Olive include: 45.8 meters of 2.48 grams per metric ton gold; 144.5 meters of 1.16 g/t gold; and 38.1 meters of 2.1 g/t gold.

A maiden resource calculated for Olive was incorporated into an updated feasibility study that outlines a technically viable and financially robust mine for Eagle Gold.Completed in September, this study envisions a 33,700-metric-tons-per-day mine encompassing two open pits, Eagle and Olive; a three-stage crushing circuit; two in-valley leach pads; and a gold recovery plant. This operation is anticipated to produce 190,000 ounces of gold annually over 10 years of mine life, based on 116 million metric tons of reserves averaging 0.67 grams per metric ton (2.66 million oz.) gold.

:The results from this feasibility study highlight the exceptional quality of the Eagle Gold project," said Victoria President and CEO John McConnell.

In May, Victoria Gold got a C$24 million boost in cash and two significant new shareholders. Electrum Strategic Opportunities Fund L.P. subscribed to 60 million units offered by Victoria and Sun Valley Gold LLC to another 20 million units.

Upon closing of the private placement, Electrum owns 13.5 percent of Victoria Gold's issued and outstanding shares while Sun Valley, already a significant shareholder, increased its ownership to around 17.9 percent.

Kinross Gold Corp., Victoria's third-largest shareholder, holds about 12.5 percent of Victoria's shares.

At the end of August, Victoria raised another C$28.8 million in an offering underwritten by a syndicate of underwriters led by Raymond James Ltd. In addition to the major financings, Victoria raised C$2.85 million specifically for funding a second phase of exploration focused on the Olive-Shamrock zone.

"Eagle is a fully permitted project in a premier jurisdiction that can produce 200,000 oz. annually with high margins and a very attractive valuation. We also believe the current and future Olive-Shamrock drilling will continue to add to this valuation," McConnell said.

The feasibility study anticipates one year of construction.

-SHANE LASLEY