Victoria Gold issues new mine plan for Eagle, adds to resource

Victoria Gold (TSX: VGCX) has issued an updated life-of-mine plan for the Eagle gold mine in central Yukon, and posted an increase in resources.

The Eagle mine is part of Victoria’s 100%-owned Dublin Gulch property, consisting of two pits (Eagle and Olive) that will be mined over a period of 10 years, with processing of stockpiled adding another 1.5 years to the operation. It entered commercial production in July 2020.

The updated Eagle technical report is highlighted by an increased gold production profile, showing an average annual gold production of 202,000 oz. over the first eight years, with peak production of 219,000 oz. in 2025. Total gold production would reach 2.1 million oz. over an estimated mine life of 12 years.

The mine produced 150,182 oz. gold last year at an all-in sustaining cost (AISC) of US$1,141 per oz.

“This increased production is achievable utilizing our existing crushing and conveying circuit and mining fleet,” said John McConnell, president and CEO, in a release. “The Eagle orebody continues to reconcile extremely well with our reserve model and gold production is in line with original recovery expectations.”

The update also showed robust project economics, headlined by an after-tax net present value (at a 5% discount) of $954 million, based on a gold price of US$1,700 per oz. Life-of-mine capital costs are projected to be $292 million, while the AISC is pegged at US$1,114 per oz.

Victoria Gold recently made a $25-million all-share takeover offer for Yukon-focused gold junior ATAC Resources (TSXV: ATC). ATAC rejected the bid and instead made an arrangement to be acquired by Hecla Mining (NYSE: HL) in a deal valued at $31 million.

Resource growth

In addition to confirming the strong production growth, the 2023 technical report also updated resources, incorporating an additional 35 drill holes that were drilled close to the Eagle deposit since 2019.

Resources in the measured and indicated category total 245 million tonnes at 0.59 gram gold per tonne for 4.7 million gold ounces. Another 36 million tonnes at 0.63 gram gold for 704,000 oz. were included in the inferred category. These represent an addition of 629,000 measured and indicated oz. and 136,000 inferred oz. over the 2019 estimates.

However, proven and probable reserves declined in terms of tonnage to 124 million tonnes at 0.65 gram gold for 2.6 million contained gold ounces. This was due to depletion from mining and minor differences from cut-off grade adjustments, Victoria said. Through the end of 2022, a total of 4.4 million tonnes of additional mineralized material were mined beyond what was predicted in 2019.