Victoria Gold announces US$220 million in financing

The CEO of Victoria Gold Corp. says its Eagle Gold mining project near Mayo will be up and running next year.

The CEO of Victoria Gold Corp. says its Eagle Gold mining project near Mayo will be up and running next year.

The company is set to receive a US$220-million loan from French multinational bank BNP Paribas, which brings it within arm’s reach of the US$300 million it needs to start construction. The announcement came during the Mineral Exploration Roundup in Vancouver last week.

“The nice thing about this project is that it’s one year of construction and then we start pouring gold,” John McConnell told the News. “So I am very confident that we’ll start pouring gold in 2018.”

Victoria Gold can’t start spending the money from BNP Paribas until it has its full financing in place. But McConnell said the company already has another US$40 million on hand.

He’s confident the company could raise the remaining US$40 million “tomorrow” if it wanted to, but he wants to see an increase in the share price before issuing more.

“In the perfect world, we would have everything in place within the next eight weeks, and start construction.”

The Eagle Gold project, located 85 kilometres northeast of Mayo, is shovel-ready and has an estimated 2.7 million ounces of gold.

It has an estimated mine life of 10 years, though McConnell suspects that additional development could extend that mine life by up to 15 years.

McConnell said Victoria Gold also plans to spend $6.2 million on exploration this year.

The agreement with BNP Paribas is set to close in the second quarter of 2017.

“It’s just one of many things that are happening this week that I think are really going to restore the overall confidence… in the mining sector in the Yukon,” Energy, Mines and Resources Minister Ranj Pillai told the News from Vancouver last week.

Victoria Gold wasn’t the only Yukon mining player with announcements at Roundup last week.

BMC Minerals also revealed that it has purchased an option over the Fyre Lake property, about 20 kilometres south of its Kudz Ze Kayah project in southeast Yukon.

BMC has optioned the property for $375,000 from Pacific Ridge Exploration Ltd. It may choose to purchase the property in the next couple of years.

The Fyre Lake deposit was previously optioned by Australian junior MinQuest, but that agreement ended last July.

CEO Scott Donaldson said BMC has the advantage of having a number of properties in the same area, including Kudz Ze Kayah, which he called “the jewel in our crown.” He said Fyre Lake would be a satellite project that would feed the Kudz Ze Kayah mill, if it were ever developed.

The company has also released a preliminary estimate of three million tonnes of ore from its Wolf deposit, 40 kilometres west of Kudz Ze Kayah. Donaldson said the total resource base for BMC’s various deposits is now around 33 million tonnes.

BMC plans to submit a proposal for the Kudz Ze Kayah project to the Yukon Environmental and Socio-economic Assessment Board within the next 30 days.

If the process goes smoothly, Donaldson said, the mine could be in production by 2021.

“We’ve had a very good two years,” he said. “Everything’s proceeding roughly according to plan.”

Capstone Mining Corp.’s Minto copper mine is currently the only operating hard-rock mine in the territory. It is expected to go into temporary closure by the end of 2017.

Contact Maura Forrest at maura.forrest@yukon-news.com

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