Victoria Gold Announces Updated Cove Resource Estimate
TORONTO, ONTARIO -- (Marketwire) -- 05/12/11 -- Victoria Gold Corp. (TSX VENTURE: VIT) ('Victoria' or the 'Company') announces the results of a Preliminary Assessment ('PA') and National Instrument 43-101 gold resource estimate on the Helen Zone located at the Cove Gold Project in Nevada.
Preliminary Assessment and NI 43-101 Resource Estimate
A Preliminary Assessment ('PA'), dated May 5, 2011, including a Mineral Resource estimate, was prepared by Roscoe Postle Associates Inc. ('RPA'). The Mineral Resource estimate was based on Victoria's exploration program plus a compilation of drill assay data from previous operators of the property. Victoria's exploration drilling program was completed in May 2009 and included 18 diamond drill holes. The historic geological data was derived from 36 reverse circulation drill holes completed by former operators of the project between 1985 and 2005.
All measurements within this press release use the system of imperial units.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Table 1: Helen Zone - Inferred Mineral Resource Estimate - May 2011
----------------------------------------------------------------------------
Gold Grade Ounces of
Tons (oz Au/st) Gold
----------------------------------------------------------------------------
Helen Zone -- Upper 48,500 0.66 32,000
----------------------------------------------------------------------------
Helen Zone -- Lower 343,100 0.58 199,300
----------------------------------------------------------------------------
Helen Zone -- Total 391,600 0.59 231,300
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:
1. The Mineral Resource estimate follows CIM definitions and conforms to
NI 43-101.
2. A minimum mining width of 8 ft and a minimum grade of approximately
0.25 oz/st Au were used to build mineralization wireframes.
3. Gold assays were capped at 2.5 oz Au/st. Assays were capped prior to
compositing.
4. Mineral Resources are estimated using a gold price of US$950 per ounce.
5. Block sizes are 10 ft x 10 ft x 10 ft.
6. Inverse distance squared was used to interpolate block grades.
7. The resources were reported at a block grade cut-off of 0.3 oz Au/st.
8. A 0.067 st/ft(3) tonnage factor was used.
9. The Qualified Person for this Mineral Resource estimate is Luke Evans,
M.Sc., P.Eng.
10. Summation differences are due to rounding.
The Mineral Resource estimate for the Upper and Lower Helen Zone deposits was prepared by RPA using a block model approach, constrained by 3D mineralization wireframes. Zone intersections were based on a minimum of 0.25 oz Au/st over an eight foot true width. High assay values were capped at 2.5 oz/st. Gold grades were estimated into the blocks using inverse distance squared interpolation.
The PA is based on a small-scale mining operation and contract milling of the ore at a processing facility within the region. The PA economic assumptions and results are summarized in Table 2.
Table 2: Helen Zone Economics
Throughput: 300 st/day
Diluted gold head grade: 0.5 oz/st (life-of-mine ('LOM')
average)
Gold recovery: 90%
Total operating cost per short ton: US$248/st
Total operating cost per ounce: US$620/oz (LOM average)
Annual gold production: 49,000 ozs (LOM average)
Post exploration pre-production
capital: US$ 44.1 million
Total LOM capital cost: US$ 53.6 million
Capital cost contingency: 25% included above
Internal Rate of Return ('IRR'; pre-
tax)
@ $1,200/oz flat gold price: 42%
Net Present Value (pre-tax)
@ 10% discount rate, $1,200/oz flat
Au: US$ 30.8 million
Notes:
1. The NPV and IRR are net of Nevada Net Proceeds Tax.
2. The PA excludes the sunk cost of a planned $40.7 million underground
exploration program.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Table 3: Sensitivity to Gold Price
----------------------------------------------------------------------------
Pre-tax NPV @ 10%
discount
US$/oz Pre-tax IRR (US$ millions)
----------------------------------------------------------------------------
900 3% -$5.9
----------------------------------------------------------------------------
1,000 17% $6.3
----------------------------------------------------------------------------
1,100 30% $18.6
----------------------------------------------------------------------------
1,200 42% $30.8
----------------------------------------------------------------------------
1,300 54% $43.1
----------------------------------------------------------------------------
1,400 65% $55.3
----------------------------------------------------------------------------
1,500 76% $67.5
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Key Observations Regarding the PA and Mineral Resource estimate:
-- Since gold mineralization has been defined by a relatively small number
of drill holes to date, the Helen Zone is considered by RPA to have good
exploration potential.
-- Readers are cautioned that the Preliminary Assessment is preliminary in
nature. It includes 'inferred' Mineral Resources that are considered too
speculative geologically to have the economic and physical
considerations applied to them that would enable them to be categorized
as 'measured' or 'indicated' mineral resources or as mineral reserves.
There is no certainty that the results of the PA will be realized.
Mineral Resources that are not Mineral Reserves do not demonstrate
economic viability.
Luke Evans, P.Geo., Principal Geologist, and R. Dennis Bergen, P.Eng., Associate Principal Mining Engineer with RPA, are the Qualified Persons responsible for the preparation of the Mineral Resource estimates and the Preliminary Assessment, and they have reviewed and approved the technical information within this news release. The complete PA will be filed on SEDAR today.
Cove Permitting
-- The environmental assessment process with the Bureau of Land Management
is well underway and authorizations which will allow the construction of
an underground decline into the Helen deposit and subsequent bulk
sampling are expected to be in hand this year.
-- A Water Pollution Control Permit, valid for five years and allowing an
annual extraction rate of 100,000 tons, has been received.
-- The required Air Quality Permits are in hand and applications for other
minor permits have been submitted.
Cove, Helen Zone Drill Program
The Company has developed a surface drill program to test the extent of the bedding parallel ('BP') mineralized zones of the Helen deposit. The program, scheduled to begin in late May upon receipt of surface drilling permits, will use reverse circulation drilling with core tails to test the lateral extent of the BP zones. The program is expected to include 9,000 metres of drilling over 12 holes.
The technical content of this Press Release was reviewed by Dean T. Wilton; PG, CPG, Vice President of Exploration for Victoria Gold Corporation.
About Victoria
Victoria's strategy is to maximize the reward of share price appreciation while minimizing risk. Victoria is focused on adding value per share by advancing its Eagle Gold Deposit toward production while continuing to explore its key projects in Yukon and Nevada. Maintaining a low risk profile through project diversification, sound financial management, and operating in secure jurisdictions are key priorities for Victoria's management team.
On Behalf of Victoria Gold Corp.
John McConnell, CEO, President & Director
Cautionary Language and Forward-Looking Statements
This press release includes certain statements that may be deemed 'forward-looking statements'. All statements in this discussion, other than statements of historical facts, that address future exploration drilling, exploration activities and events or developments that the Company expects, are forward looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include metal prices, exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Accordingly, readers should not place undue reliance on forward-looking statements.
This news release and the information contained herein does not constitute an offer of securities for sale in the United States and securities may not be offered or sold in the United States absent registration or exemption from registration.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Victoria Gold Corp.
Katie Fedorowicz, MBA
Investor Relations Coordinator
416.866.8800 Ext. 226
416.866.8801 (FAX)
kfedorowicz@vitgoldcorp.com
www.vitgoldcorp.com