Mining News: News Nuggets: Victoria expects big upgrades at Eagle Gold in 2016

Victoria Gold Corp. Feb. 23 said 2016 will be a busy and transformative year at its Dublin Gulch gold project in the Yukon Territory. The work planned for this year includes a C$3.6 million exploration program designed to result in a maiden resource estimate for the Olive-Shamrock zone, a near-surface mineralized target situated roughly 2,000 meters from the fully-permitted Eagle Gold project. Victoria said Olive-Shamrock has the potential to enrich Eagle project economics through the addition of higher-grade ore, increased flexibility in mine planning and lowering capital intensity from shared infrastructure. “Victoria will utilize the recently closed C$3.6 million flow-through financing to advance the Olive-Shamrock target, while preserving the hard dollars in the company treasury,” explained Victoria President and CEO John McConnell. “Company management firmly believes that the near-surface, high-grade gold mineralization identified at the Olive-Shamrock target will enhance the now fully-permitted Eagle project.” The definition and exploration program and is slated to begin in April and is expected to take four months to complete. Several large chargeability anomalies were defined during a three-dimensional induced polarization geophysical survey completed in 2014. This year’s work will include diamond drilling, surface trenching and geophysical surveys over the Olive-Shamrock zone. The program will concentrate on expanding the strike length of confirmed near-surface, high-grade gold mineralization within the Olive-Shamrock shear zone trend and target the previously un-tested 300-meter zone between the Olive and Shamrock targets. In addition to exploration, Victoria plans to update the feasibility study for the Eagle Gold Project. According to a feasibility study last updated in 2012, an open-pit mine and valley heap leach operation at Eagle would produce 192,000 ounces of gold annually for roughly nine years, based on probable reserves of 92 million metric tons averaging 0.78 grams per metric ton (2.3 million ounces) gold. A significant number of parameters have materially changed since. Most importantly, Eagle now has all the major permits in hand to build and operate Eagle, making it a unique asset in Canada. Secondly, despite softening of the gold price, the project economics are poised to meaningfully improve due to a significant devaluation of the Canadian dollar. A number of input parameters also are believed to be materially improved in the current environment from fuel and mobile equipment prices to attracting top quality operations personnel. In addition to updates on capital and operating costs, Victoria said it will be undertaking trade-off studies aimed at reducing capital intensity, reducing operating costs, and optimizing annual throughput. The company expects to have the updated feasibility study finished this fall.

- Shane Lasley