Successful Six Months Of Production At Eagle Gold Mine
Victoria Gold Corp. (TSX:VGCX) has achieved positive results for the fourth quarter and year ended December 31, 2020 on the back of its Eagle Gold Mine in the Yukon achieving commercial production on July 1, 2020.
As a result, financial results highlighted for the year ended December 31, 2020 are based on the six months from the declaration of commercial production through to December 31, 2020. Prior to achievement of commercial production, operational revenues and expenses were capitalised to long-term assets.
The company’s gold sales were 40,023 ounces at an average realized price of US$1,883/oz during the fourth quarter and 72,052 ounces at an average realised price of US$1,882/oz, over the inaugural two quarters of commercial production.
President and CEO, John McConnell, said gold production in the second half of 2020 was 77,748 ounces, which exceeded the top end of guidance.
“All in sustaining costs were US$1,206 over the second half of 2020, which was below the mid-point of guidance,” Mr McConnell said.
“Compared to the third quarter, the fourth quarter of 2020 achieved a 20% increase in gold production coupled with a 15% decrease in all in sustaining costs per ounce.
“We expect material improvements in production and unit costs to continue in 2021 as the company benefits from recently completed operational improvements and the increasing inventory of recoverable gold on the heap leach pad.
“Note that due to the company’s seasonal stacking plan, 2021 production will be weighted toward the second half of the year, as it was in 2020.”
Operational Highlights
- Mine production in the fourth quarter was 2.2 million tonnes of ore. Mine production for the twelve months was 7.5 million tonnes of ore.
- Ore stacked on the heap leach pad in the fourth quarter was 2.3 million tonnes at an average grade of 0.81 grams per tonne (g/t). Ore stacked for the twelve months, was 7.3 million tonnes at an average grade of 0.84 g/t.
- Gold production was 42,436 ounces in the fourth quarter. Gold production for the twelve months was 116,644 ounces.
Financial Highlights
Gold sold in the fourth quarter was 40,023 ounces, at an average realized price of C$2,453 (US$1,883) per ounce. Gold sold since declaration of commercial production was 72,052 ounces, at an average realized price of C$2,480 (US$1,882) per ounce.
Recognised revenue was C$98.2 million based on sales of 40,023 ounces of gold in the fourth quarter. Recognised annual revenue since declaring commercial production was $178.7 million based on sales of 72,052 ounces of gold.
Operating earnings were $39.8 million for the fourth quarter. Annual operating earnings were $66.9 million.
Cash costs were C$1,013 (US$777) per ounce and all-in sustaining costs (AISC) were C$1,459 (US$1,120) per ounce of gold sold for the fourth quarter. Cash costs were C$1,039 (US$788) per oz and all-in sustaining costs (AISC) were C$1,589 (US$1,206) per ounce of gold sold since declaring commercial production.
Gold production at the Eagle Gold Mine for 2021 is estimated to be between 180,000 to 200,000 ounces. Mining, crushing and ore stacking on the heap leach pad are all expected to operate at full capacity during 2021 while gold production, which lags mining and stacking activities in heap leach operations, will continue to build up through the first half of 2021 reaching full capacity in the second half of 2021.
Gold production will be strongly weighted to the second half of the year due to seasonal stacking of ore on the Eagle leach pad, which is curtailed for the 90 coldest days of the year, January through March. During this no stacking period, mining operations, primary crushing and stockpiling of ore continues with ongoing leaching and gold production. Subject to favourable weather conditions, ore stacking may be resumed ahead of schedule.
