The Eagle Gold Project is an advanced stage gold exploration project in the Yukon Territory of Canada and the flagship project of Victoria Gold Corp [TSX-V: VIT]. The project is located within their larger 646km2 Dublin Gulch property, an area which has seen small-scale mining activity for more than a century, mainly focused on placer gold deposits but also silver from high-grade vein systems. The company completed a Feasibility Study on the project in February 2012.
As of writing (December 2014), Victoria Gold has received their mining license from the Yukon Territory, completed their Environmental Assessment process and has signed as Comprehensive Cooperation and Benefits Agreement with the local Nacho Nyak Dun First Nation.
Location & Access
The Dublin Gulch property is located approximately 85km by an all year road from the village of Mayo in the central Yukon, and is about a 6 hour drive north of Whitehorse, the Yukon’s only city.
There is also an airport at Mayo which can significantly reduce travel times and will likely be used in the future for crew rotations, along with their operating neighbors Alexco Resources [NYSE-MKT: AXU, TSX-V: AXR]. The town of Mayo has healthcare facilities, local government offices, fuel depots, groceries and accommodation, although Victoria Gold has an established 100-person camp already built on the property.
Dublin Gulch lies within the Tintina Gold Belt, which extends for 1,200km from Alaska and into British Columbia. The property lies along a series of geologic structures known as thrust faults which acted as conduits for rising magma and the eventual emplacement of granite-like igneous rocks known as granodiorites. This took place during a Late Cretaceous (~94 million years ago) period of tectonic activity along the west cost of North America.
The Eagle Gold Project is located along an elongated intrusion about 6km long and 2km wide, and conforms to the Reduced Intrusion Related Gold System (RIRGS) ore model. These are a more recently understood type of gold deposit and are associated with a number of gold systems in the Yukon and Alaska.
The strain from the thrust faults opened up a wider area for mineralisation, which has been dubbed the ‘Potato Hills Trend’ (PHT). This is a 13km long belt of gold-bismuth-antimony and silver-lead-zinc mineralisation that extends along the edge of the Dublin Gulch stock to the northeast and the southwest. The PHT hosts several other mineralized targets that are in various stages of exploration. The Olive, Shamrock and Popeye Zones are in close proximity to the Eagle Project and also have gold, whereas the more distal Rex-Peso Zone is known historically for its silver mines.
Exploration History & Near Future Development
Some of the Yukon’s earliest mining activity took place in the Dublin Gulch area with the first recorded gold in 1898, but it was not until the 1980’s that geologists started to pursue the source of the gold and explore the area accordingly. The site has changed hands several times in its history, but it has been with Victoria Gold Corp. that the biggest advancements have been made since they acquired it from the now defunct Strata Gold Corp.
Exploration of satellite deposits continues in order to create ‘upside’ to the property as a whole, although the focus remains on bringing the Eagle Gold Project online.
The Water License is due to be granted in the first quarter of 2015 and represents the final piece before construction can start later in the same year. Initial construction is expected to take two years, which includes pre-stripping at a cost of $430 million.
The mine will be open pit and be a ‘drill, blast, shovel and haul’ operation. Ore will be processed through a series of three crushing mills, to a final size of 6.3mm and then conveyed to an in-valley heap leach, where it will be stacked in 10m benches and leached for 150 days. The ‘pregnant’ leachate will then be pumped to a plant where the gold will be stripped from solution and poured into bars.
Victoria Gold Corp. has significantly advanced the project, but as with all things, money will be the issue going forward. The initial capital cost of $430 million is lofty, especially in the current markets. Victoria has offloaded some of its other Yukon and Nevada based assets in order to reduce expenditures and to raise cash and according to the company, the remaining balance will need to be raised through loans. Let’s hope they don’t give in to the dark side and start endlessly diluting shareholder value through public and private offerings.
While many projects in the far north get bogged down by the high costs of operating, the Victoria Gold has an advantages over other remote projects: The area hosts a nearby mining operation (Alexco) and benefits from all of it’s pre-existing infrastructure including an all-season road and facilities in the mining-friendly town of Mayo. The recent drop in oil prices also can’t hurt and may actually help prop up the mining industry as a whole since so many operations have fixed fuel needs.
The satellite deposits may also add value to the project as a whole. Some of these could well be mined and processed at the same facility, although the silver deposits would likely need a different approach, possibly shipping with the ore concentrate Alexco Resources send out of their mines.
The Eagle Gold Project, and the larger Dublin Gulch Property, will be interesting to watch over the next few years, either as a study in mine permitting and construction, or as an investment opportunity. At the time of writing, Victoria is trading at $0.11 and so is relatively cheap for such an advanced staged project.