In a June 26 research note, Andrew Mikitchook, a BMO Capital Markets analyst, indicated that Victoria Gold Corp. (VIT:TSX.V) continues construction at its Eagle gold project in the Yukon. "We are encouraged by construction progress to date, which is primarily advancing major earthworks."
Since mid-March, when Victoria began the work, "detailed engineering has progressed to approximately 71% including leach pad to 85%, crusher facility to 75% and the recovery plant to 55%," noted Mikitchook. Victoria aims to take advantage of the summer season to get the earthworks and building foundations done.
The analyst further reported he witnessed Victoria concentrating on the crusher recovery plant sites. Once the cement trucks arrive, which is expected on July 15, the company will pour the foundations for the crusher facility using material from previously excavated areas. Completion of these foundations will constitute a near-term, construction milestone.
As for the project's capital component, Victoria's "commitments currently total CA$200 million out of the total CA$505 million development budget," Mikitchook relayed.
He pointed out that Victoria is studying the already identified "potential satellite zones that could be added into a future mine plan." Development of any such satellite would complement the heap-leach plant that is being built for a 75–80 million ton capacity, enough to cover total production outlined in the plan. The company intends to follow up on targets at the Nugget, Spinach and Bluto zones in the next few weeks.
Upcoming potential catalysts for Victoria's Eagle, Mikitchook wrote, are construction updates, expected in 2018 and 2019, and first gold pour, slated for the second half of 2019.
BMO has an Outperform rating and a CA$0.80 per share price target on Victoria, whose shares are trading at around CA$0.35.
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1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from BMO Capital Markets, Victoria Gold, June 26, 2018
I, Andrew Mikitchook, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Company Specific Disclosures
Disclosure 1: BMO Capital Markets has undertaken an underwriting liability with respect to Victoria Gold within the past 12 months.
Disclosure 2: BMO Capital Markets has provided investment banking services with respect to Victoria Gold within the past 12 months.
Disclosure 3: BMO Capital Markets has managed or co-managed a public offering of securities with respect to Victoria Gold within the past 12 months.
Disclosure 4: BMO Capital Markets or an affiliate has received compensation for investment banking services from Victoria Gold within the past 12 months.
Disclosure 6A: Victoria Gold is a client (or was a client) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate within the past 12 months: A) Investment Banking Services
Disclosure 16: A research analyst has extensively viewed the material operations of Victoria Gold.
Disclosure 17: Victoria Gold has paid or reimbursed some or all of the research analyst's travel expenses.
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