PRECIOUS METALS

Teething issues trim Eagle guidance

Victoria Gold reports on first quarter of commercial production

Staff reporter
 Victoria Gold’s Eagle mine in the Yukon

Victoria Gold’s Eagle mine in the Yukon

Victoria Gold produced 35,312 ounces of gold in the September quarter at its mine in Canada's Yukon, which had achieved commercial production on July 1.

All-in sustaining costs were US$1,315 an ounce, against a realised gold price of $1,886/oz for the 32,029oz sold.

The company's inaugural guidance for the second half was 85,000-100,000oz with AISC between $950-$1,100/oz. 

This was revised on Friday to 72,000-77,000oz and $1,175-$1,275/oz respectively.

"Aside from the usual teething issues and learning curve experiences common to all start-ups, we are very pleased with our progress as we have moved in to and beyond commercial production and remain highly confident the best is yet to come over a very long mine life," president and CEO John McConnell said.

Victoria Gold said a comprehensive "operations reliability enhancement phase" was well underway, to address issues including the initial feeder and feed chute designs proving to be overly complex, the ore proving more abrasive than assumed and a bottleneck in the mobile conveyor stacking system.

It also said COVID-19 restrictions had a "manageable but significant impact" on employee turnover, on site vendor support, supply chain operations and costs.

The 10-year mine is expected to produce about 210,000oz annually at an AISC below $800/oz, according to a 2016 feasibility study.

Victoria Gold described itself as being an attractive takeover target in a recent presentation. 

The company reported having C$40 million in cash and equivalents at September 30 and a working capital deficit of $6.5 million.

Net income for the quarter was $20 million, compared with a net loss for the nine months to September 30 2019 of about $40 million, and basic earnings per share were 32.8c.

Its shares (TSX: VGCX), which have ranged from $4.02-$21.04 over the past year, closed down 15.9% on Friday to $13.29 to capitalise it about $822 million (US$627 million).

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Journal Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Journal Intelligence team.

editions

ESG Mining Company Index: Benchmarking the Future of Sustainable Mining

The ESG Mining Company Index report provides an in-depth evaluation of ESG performance of 61 of the world's largest mining companies. Using a robust framework, it assesses each company across 9 meticulously weighted indicators within 6 essential pillars.

editions

Mining Journal Intelligence Global Leadership Report 2024: Net Zero

Gain insights into decarbonisation trends and strategies from interviews with 20+ top mining executives and experts plus an industrywide survey.

editions

Mining Journal Intelligence Project Pipeline Handbook 2024

View our 50 top mining projects, handpicked using a unique, objective selection process from a database of 450+ global assets.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.