The Ellis Martin Report: Interview with Victoria Gold's John McConnell

The Ellis Martin Report: Interview with John McConnell

March 3, 2017 Los Angeles, CA

TEMR: I’m Ellis Martin. Join me for a conversation with John McConnell, President and CEO of Victoria Gold Corp., trading as VIT on the TSX Venture Exchange and VITFF in the U.S.  Victoria Gold Corp. is a leading gold exploration and development company. The company’s Eagle Gold Project in Yukon, Canada hosts a 43-101 compliant reserve of 2.7 million ounces of gold. The Eagle Gold Project is shovel-ready and when in production will produce 200,000 ounces of gold annually at an operational cost of approximately $550.00 per ounce. The project is permitted for construction and operations. Victoria shareholders are well positioned to participate in a highly leveraged gold play and construction of the largest gold mine in Yukon history. If you wouldn’t mind John, give us an overview of the company. 

 

John McConnell: We’re what you call a senior junior. We have a market cap of just over $300 million. We’re focused on building the Eagle Gold Mine in the Yukon. What sets us apart from many other juniors out there is we have a very large asset in the Yukon, 2.7 million ounces, fully permitted for construction and operations and the Yukon’s a very good, safe jurisdiction. The second thing that separates us is we have a very healthy treasury with over $40 million U.S. so we’re in good shape to move the development of Eagle forward over the next 18 months.  

 

TEMR: Now it’s my estimation, correct me if I’m wrong, that this is probably going to be the largest mine operation in the Yukon. Is that true?  

 

John McConnell: Yeah, it’s certainly a goal. The Faro Mine was a very large lead-zinc operation, but this will be the largest gold mine ever in the Yukon.

  

TEMR: According to your website, the project will employ 350 to 400 people, which is a very significant economic contributor to the Yukon. We very seldom come across anything like that in any jurisdiction, although they do exist for the majors around the world. How are you going to find the people to fill that large employ? 

 

John McConnell: We’re pretty realistic. We think probably 30% will be Yukoners or First Nations from the Yukon and the rest will fly in, fly out in our budget estimates chosen hiring points like Vancouver, Calgary, Winnipeg, those areas. We know over time people will move to the Yukon, but to get started we’re going to have to fly people in.

 

TEMR: Interesting. That’s a question I’ve had for quite a while with an operation that’s going to be the size of your Eagle Gold Project. You’re fully permitted. When are you going to be going into production?

 

John McConnell: In an ideal world we start construction later this spring. It’s about 12 months to build so we’d be in full production midyear 2018. That’s in a perfect world. We still have some work to do on the financing. Capital costs of the project are $300 million U.S. We just announced a debt facility of $220 million U.S. We have $40 million U.S. in the treasury currently so there’s still a gap of $40 million dollars. Traditionally it would come from the equity markets. The issue is we’re not happy with where our share price is right now and we obviously want to minimize dilution to our current shareholders. We probably won’t be financing until we see a better gold price, a better Victoria share price or we look at the alternatives. We’re looking at all options right now.  

 

TEMR: It’s interesting. You’re just $40 million dollars shy of your goal now. Ordinarily that would be a big number, but not with the total outlay that you need. As you’ve said, you’ve secured most of that through debt financing so you’re working it there on the ground and you’ll begin construction within the next 12 months, right?

 

John McConnell: Well, this will be a heap leach operation. We simply crush the material. It gets stacked in a lined valley and then the material is treated with cyanide. Cyanide dissolves the gold. Then we extract the gold from the solution.  

 

TEMR: Those that are listening to the program they hear a chemical like cyanide and they wonder, well, isn’t that bad for the environment?

 

John McConnell: Everything is controlled. The pad that the rock goes on is completely lined. There’s leak protection systems in there. We’ll be very careful. It’s not new technology. There are literally hundreds of cyanide heap leach operations around the world. 

 

TEMR: John, this is an investment based program. Let’s talk about the potential upside for any shareholders that are considering becoming an investor with Victoria Gold.  

 

John McConnell: There’s a number of metrics you can look at. One that a lot of people use is P/NAV comparisons. We traded a P/NAV of about .56. Fully financed developers trade at about .7. Single asset producers trade at about .9. Some of the seniors trade as high as 2.4. There’s lots of room for upside on our share price currently.

 

TEMR:  I’ve been speaking with John McConnell, President and CEO of Victoria Gold, trading as VIT on the TSX Venture Exchange and VITFF in the U.S. Listen to this segment again on our website, EllisMartinReport.com.

 

Victoria Gold Corp is a paid sponsor of The Ellis Martin Report   Copyright 2017 Ellis Martin Report  all rights reserved. This transcript may be republished with a reference to The Ellis Martin Report.  

 

Contact: martinreports@gmail.com   

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