TICKERS: VIT

Victoria Gold's Eagle Is Getting Ready to Soar

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Victoria Gold's Eagle project in the Yukon moved closer to production with the announcement of a debt facility to fund construction.

Victoria Gold Corp. (VIT:TSX.V) announced on Jan. 24 that BNP Paribas has been appointed to arrange up to US$220 million of senior, secured project debt for the Eagle gold project. John McConnell, Victoria's president and CEO, stated, "This facility is expected to be the foundation of the financing package that will fund the Eagle Project through construction and into production."

Chris Thompson, an analyst with Raymond James, noted in a Jan. 25 report that the financing "satisfies ~80% of the estimated C$370 mln initial Capex required to build Eagle. Whilst VIT has ~C$66 mln in cash on its balance sheet, we see additional funds being raised via equity financing." He also stated that "Eagle is shovel-ready, fully permitted and enjoys the support of local First Nations. Further, while located in Yukon (some view as infrastructural challenged), we see Eagle as being well served by current (camp, road, water) and future (power) infrastructure."

"'With a global resource of 4.4 mln in-situ oz (2.7 mln oz in reserve), Eagle is capable of delivering a +200 koz/year production profile + 11 year mineóattractive to potential acquirers (we think) looking to add low cost North American production ounces," stated Thompson.

That positive sentiment was echoed by Richard Gray of Cormark Securities, who noted in a Jan. 26 report that the appointment of the lead arranger is a "good first step for Victoria in its efforts to fully fund the construction costs of the C$370 MM Eagle project. . .we expect the remaining C$60-100 MM of financing required will likely be some combination of equity and/or stream."

Gray also wrote that Eagle "continues to be well advanced with an invaluable suite of infrastructure already in place (or easily completed). The project is accessed via an existing year-round road connecting to the Silver Trail Highway. Grid power currently runs along the highway to support grid power via a spur line to be constructed along the existing access road. Access is further improved with a 1,400m airstrip located in Mayo approximately 85km by road from the project site and there is an existing 100-person camp is at site."

Victoria also announced on Jan. 19 a $6.2 million exploration program in 2017 on the Dublin Gulch property. Gray commented that "several high priority exploration targets have been identified on the large Dublin Gulch Block that show potential to add to the current 4.0 MM resource at Eagle and could demonstrate to investors, and possible acquirers, that there is upside beyond just what has been drilled at the Eagle and Olive-Shamrock zones."

Gray concluded that Victoria is an "ideal opportunity for risk tolerant, long-term gold investors looking for a de-risked gold developer with assets located Canada. The shares currently trade at only 0.60x NAV, indicating significant upside on a re-rating or a takeout."

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1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
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