Victoria Gold (VIT.V) has provided an updated resource estimate on its Eagle Gold mine in the Yukon Territory. The new technical report, which has a feasibility study level reliability, shows the reserves have increased from 2.7 million ounces of gold to 3.3 million ounces of gold and the average annual production rate is expected to increase by 10% from 200,000 ounces of gold to 220,000 ounces of gold at an all-in sustaining cost of just US$774 per ounce, resulting in an after-tax NPV5% of C$1.03B using a gold price of $1300/oz.
If a gold price of$1500/oz would be used, the after-tax NPV5% would increase to C$1.33B, but the AISC would obviously also increase as well as the US$774/oz includes the royalties payable on the production, and if the gold price moves up, so will the royalty payment per produced ounce.
The new resource estimate now contains 4.85 million ounces of gold at an average grade of 0.63 g/t in the measured and indicated categories (for almost 4.4 million ounces in 217 million tonnes of rock) while the average grade of the inferred resource is a bit lower at 0.52 g/t but the 362,000 ounces in this inferred category honestly don’t really matter. The cutoff grade of the new resource estimate was 0.15 g/t, which is unchanged compared to the original reserve estimate.
Disclosure: The author has no position in Victoria Gold.
