The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Miner makes early loan payment from Eagle Gold cash flow North of 60 Mining News – August 7, 2020
A stack of gold bars poured at Victoria Gold's newly constructed Eagle Mine in the Yukon.
Ore bound for the heap leach pad at the Eagle Gold Mine.
Strong gold prices and the smooth ramp up to commercial production at its Eagle Mine is allowing Victoria Gold Corp. to pay off the loans taken out to develop the Yukon operation quicker than scheduled.
On Aug. 5, the mineral explorer turned gold producer made an unscheduled US$10 million payment towards the interest and principal of its US$100 million senior secured credit facility.
Victoria made its first regularly scheduled payment of US$7,133,266 toward the principle of the senior loan on May 31. Scheduled to be paid quarterly, the next payment is not due until Aug. 31. The credit facilities taken out to develop a mine at Eagle Gold, however, are flexible when it comes to early repayment. Anticipating that the new operation would generate strong free cash flow, Victoria said at the time that reducing its debt would be a top priority.
With all facilities and operations at or near design capacity, along with "materially positive operating cash flow" from the newly established mine, Victoria declared commercial production at Eagle Gold Mine on July 1.
With gold prices surging from US$1,500 per ounce when Victoria poured the first bar of gold from Eagle Mine last September, to US$1,770/oz when commercial production declared, to the nearly US$2,100/oz current price, Victoria is well positioned to rapidly reduce its mine building debt.
"We are advantaged to be in the final stages of ramping up the Eagle Gold Mine to full production of over 200,000 oz of gold annually at a time of record breaking gold prices," said Victoria Gold CEO John McConnell. "The substantial free cash flow provided by the wide profit margins we are achieving has put us in a position to accelerate debt repayment."
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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