Victoria Gold: Eagle Gold Mine Reserves Increase by 20% to 3.3 Million Ounces Gold

TORONTO, Dec. 04, 2019 (GLOBE NEWSWIRE) — Victoria Gold Corp. (TSX.V-VIT) (“Victoria” or the “Company”) is excited to announce a new Technical Report, prepared to a Feasibility Study level, for the Eagle Gold Mine. This release reflects Canadian currency unless noted otherwise.
Reserves increase from 2.7 Million to 3.3 Million ozs AuAnnual production increases from 200,000 ozs to 220,000 ozs AuCash Cost1 per Au ounce: US$577All-in Sustaining Cost (“AISC”)2 per Au ounce: US$774Post tax Net Present Value @ 5% discount = $1,034 million
1.Cash Cost include: mining, processing and general & administrative costs.
2.AISC include: Cash Costs plus refining, royalties, sustaining capital, reclamation, corporate and sustaining exploration costs.
3. See Non-IFRS Measures disclosure at the end of this press release.
“The results of this updated Technical Report demonstrate the value and continual growth of the Eagle Gold Mine. Reserves have increased by over 20% from the drilling of 58 holes completed post-2016 Feasibility Study and we continue to see meaningful upside potential at the Eagle and Olive pits as well as across the Dublin Gulch property,” stated John McConnell, President & CEO. “I remind the reader that we continue to ramp up operations at the Eagle Gold Mine and anticipate commercial production achievement during the 2nd quarter, 2020.”In-Pit Mineral Resource Estimate
The Eagle Mineral Resource update within an updated resource pit constraint resulted in a 21.1% increase in Measured and Indicated (“M+I”) gold ounces as well as a 0.6% increase in gold grade. This Resource update includes all Eagle and Eagle proximal drilling completed post the 2016 Feasibility Study (“FS”), 58 new core holes.This first principles re-estimation of the Eagle gold domain and grade further validates the Eagle model and results in increased gold grade, tonnage and total gold ounces. The Mineral Resource increased 766,000 oz Au in the M+I categories.Notes to Table 2:The effective date for the Mineral Resource is July 1, 2019.Mineral Resources which are not mineral reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.The quantity and grade of reported Inferred Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category.This resource has not been depleted for production in 2019. Pre-Production Resource based on original topo with no depletion from preproduction/ramp up period up. A total of 2.44 Mt at 0.82 g/t Au for 64,500 ounces of gold were extracted from the Eagle Mine as of 15 November 2019.The mineral resource estimate is constrained by a Lerchs-Grossman pit shell using a gold price of US$1,700/ozNotes to Table 3:The effective date for the Mineral Resource is September 12, 2016.Mineral Resources which are not mineral reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.The quantity and grade of reported Inferred Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category.Gold price used for this estimate was US$1,700/ozUpdated Eagle Resource Model Discussion
The Eagle Resource was updated with the additional drilling performed post the 2016 Eagle Feasibility Study, see Company News release of December 5, 2018 for full details of updated resource.The drillhole database of the Eagle Gold Mine used for this Resource update has a cut-off date of October 8, 2017. It is comprised of 1,078 holes with 178,490m of drilling and 112,949 assays for gold.The geology model of the Eagle Zone was built as a mineralized envelope with a cut-off grade of 0.15 g/t Au. This model was built from first principles without influence of previous modelling, and utilized the drillhole database of gold grades. Interpretations of gold mineralization limits were performed on north-south sections spaced at 25m intervals. From the interpretation and the modelling of the mineralized zone, it was observed that the orebody has a consistent geometry that is continuous from one section to the next.The estimation of gold grades was performed with the ordinary kriging technique on capped composites. The block model structure consists of an orthogonal model (no rotation) with block dimensions of 10m (X) x 10m (Y) x 5m (Z) with specific gravity (SG) values based on lithology, and reduced oxidation state. A minimum of 2 and maximum of 12 samples were required to calculate a block estimate. The search ellipsoid was dimensioned and oriented according to the variogram models. The grade estimation process consisted of a 3-pass approach with the parameters of the first pass (long axis 80°/0° at 56.0m; short axis 170°/0° at 25.0m; vertical axis 80°/-90° at 75.0m). The estimation parameters of the second and third passes are the same with the exception of an enlarged search ellipsoid by 1.5 times and 3 times the dimensions from the first pass, respectively. Only blocks within the modeled mineralized zone were estimated.The mineral resource was classified as Measured, Indicated, and Inferred based on the variogram ranges of the second structures. The average distance of samples from the block center was utilized as the classification criterion. Measured, Indicated, and Inferred Resources were assigned to the estimates of the Eagle Zone. The distances to categorize the resources into the different classes were Measured (≤ 17.0m), Indicated (> 17.0m and ≤ 52.0m) and Inferred (>52.0m).Mineral ReservesThe Proven and Probable Mineral Reserve Estimate is the economically minable portions of the Measured and Indicated in-pit Mineral Resource as demonstrated by the updated Technical Report.The Mineral Reserves were developed by examining each deposit to determine the optimal and practical mining method. Cut-off grades were then determined based on appropriate mine design criteria and the adopted mining method. A shovel and truck open pit mining method was selected for the two deposits.The mineral reserve estimations take into consideration on-site operating costs (mining, processing, site services, freight, general and administration), geotechnical analysis for open pit wall angles, metallurgical recoveries, and selling costs. In addition, the Mineral Reserves incorporate allowances for mining recovery and dilution and overall economic viability.The estimated Proven and Probable Mineral Reserves is shown in Table 4.Notes to Table 4:The effective date for the Mineral Reserve is July 1, 2019Mineral Reserves are included within Mineral ResourcesA gold price of US$1,275/oz is assumed.A US$:C$ exchange rate of 0.75Cut-off grades, dilution and recovery factors are applied as per open pit mining methodThis resource has not been depleted for production in 2019. Pre-Production Resource based on original topo with no depletion from preproduction/ramp up period up. A total of 2.44 Mt at 0.82 g/t Au for 64,500 ounces of gold were extracted from the Eagle Mine as of 15 November 2019. Notes to Table 5:The effective date for the Mineral Reserve is November 15, 2019Mineral Reserves are included within Mineral ResourcesA gold price of US$1,275/oz is assumed.A US$:C$ exchange rate of 0.75Cut-off grades, dilution and recovery factors are applied as per open pit mining methodThis resource has not been depleted for production in 2019. Pre-Production Resource based on original topo with no depletion from preproduction/ramp up period up. A total of 2.44 Mt at 0.82 g/t Au for 64,500 ounces of gold were extracted from the Eagle Mine as of 15 November 2019.Mining
Eagle and Olive are open pit mines and operate as drill, blast, shovel and haul operations with a mine life of 11 years. Crushed ore is hauled to the primary crusher located toward the north east side of the Eagle pit. Run of mine (“ROM”) ore will be hauled directly to the primary heap leach pad.Eagle waste rock is hauled to one of two waste rock storage areas immediately to the south and north of the open pit which results in short haul distances. Olive waste rock will be hauled to a waste rock storage area immediately south-west of the open pit. Waste rock storage will be managed to allow for future pit expansion. The ratio of waste to ore is 0.96 to 1 and total waste material is 149 million tonnes.ProcessingMaterial above crushed ore cut-off grades is hauled from the open-pits to the primary crusher. Ore is primary crushed at a nominal rate of 29,500 tpd. Following primary crushing, ore is conveyed through a secondary and tertiary crushing circuit to a final crush size of P80 6.5 mm. Crushed ore is conveyed to one of the two in-valley heap leach pads.Ore is stacked in 10m high lifts using a mobile conveying and stacking system then primary leached for 45 days. The pregnant solution, laden with gold once leaching is complete, is pumped to an Adsorption Desorption Recovery (“ADR”) plant where gold is stripped from the solution and poured into doré bars. Life of mine recovery is estimated at 76%.Ore will be mined and primary crushed 365 days per year. Ore is stacked on the heap leach pads 275 days per year. A primary crushed ore stockpile will be used during the coldest 90 days of the year and the stockpile will be reclaimed to the secondary crushing circuit and loaded onto the pads during the 275 day stacking period.A total of 155 million tonnes of ore will be mined, including 121 million tonnes of crushed ore and 35 million tonnes of ROM ore.InfrastructureThe project is well supported by local infrastructure. Eagle is accessed via an existing year-round road connecting to the Silver Trail Highway. The Eagle Gold Mine is connected to grid power with a long-term power purchase agreement with Yukon Energy Corp. A 1,400m airstrip is located in Mayo, approximately 85km by road from the project site, with daily scheduled commercial flights. An existing camp and all supporting infrastructure is in place and supporting mine and processing operations.Initial Capital CostThe initial capital cost for Eagle is sunk and more fully described in the Technical Report.Sustaining Capital Cost EstimateLife of Mine sustaining capital costs are estimated at $174.5 million and closure costs are $35 million.
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