Eagle Gold Project
The Eagle Gold Project shows the ideal combination of significant mineral endowment, a desirable location with existing infrastructure and a strong, experienced management team. Historically, the Yukon has been a productive region for gold and this property contains a constrained in-pit resource of Measured and Indicated Mineral Resource 3,6 million ounces of gold (180 million tonnes grading 0.63 g/t) with an industry low waste-to-ore ratio of < 1:1 and metallurgical characteristics favourable to lower-cost heap leach processing. The project has good road access, is near to hydroelectric power and is in a progressive mining friendly jurisdiction.
In September 2016Victoria Gold Corp released the results of a National Instrument 43-101 feasibility study for its 100% owned Eagle Gold Project.
Probable Mineral Reserves are the economically minable portions of the Indicated in-pit Mineral Reserves as demonstrated by the feasibility study.
|Type||Ore (M/t)||Diluted Grade (g/t)||Contained Gold (K oz)||Contained Gold % of Total|
Location & Infrastructure
The Eagle Gold Project is situated within Victoria's Dublin Gulch property, located in the Mayo Mining District of Central Yukon Territory, Canada. It is located approximately 85 kilometres (km) north-northeast of the village of Mayo and is centered at latitude 64º 2' N and longitude 135º 50' W.
The Dublin Gulch property is accessible by a government maintained road. There is also an airstrip located just north of the community of Mayo providing additional means of accessibility. Hydroelectric power is located within 25 km of the property.
2016 Feasibility Study
In February, 2012 Victoria released the results of a National Instrument 43-101 definitive feasibility study for the Eagle Gold Project. Completion of this definitive feasibility study is a significant milestone for development of the Eagle Gold Project. The project is economically robust with several years of 200,000 ounces per year of gold production at an operating cost of US$539 per ounce.
The Feasibility Study was prepared under the direction of JDS Energy & Mining, an industry leading, international engineering firm, with extensive experience in both the construction and operation of mining projects in Canada's north. The study was supported by a team of internationally recognized firms, all of whom are independent of the Company, including:
- Merit Consultants International;
- Allan Moran Geology Services;
- Dowl Engineering;
- Kappes, Cassiday & Associates;
- AllNorth Consultants; and
- SRK Consulting.
The Feasibility Study confirms the technical and financial viability of constructing and operating a 33,700 tonne/day ("tpd") mine encompassing 2 open pits, a three-stage crushing circuit, 2 in-valley leach pads and an adsorption desorption gold recovery plant ("ADR plant").
|Highlights of the Feasibility Study|
|Proven and Probable Reserves (gold oz)||2,663,000|
|Average annual gold production (oz, 1st 4 full years)||210,000|
|Average annualized gold production (oz, LOM approximately 10 years)||190,000|
|Initial capital expenditure (C$ millions)||370|
|Initial capital expenditure (US$ millions)||289|
|Operating cost (C$/tonne processed)||10.54|
|Operating cost (US$/oz)||539|
|All-in sustaining cost (US$/oz)||638|
The Feasibility Study includes 1 year of construction followed by 10 years of mine operations.
In-Pit Mineral Resource Estimate
The Eagle Resource used a total of 38,370 assay intervals with gold assays in 370 drill holes were used to define a wireframe with assays capped at 16.0 g/t Au. The capped gold assays were composited into 2.5 m intervals from the top of the drill hole with breaks at the wireframe boundary. Composite intervals less than 0.5 m in length were added to the composite immediately above. A block model with a cell size of 10 m x 10 m x 5 m was used for the grade estimation.
|Eagle Constrained In-Pit Mineral Resource|
|Meas. + Ind.||0.15||181||0.63||3,631|
Notes to Table:
The Olive Resource estimation used a total of 8,216 assay intervals with gold assays in 91 drill holes to define a wireframe with assays capped at 25 g/t Au. The capped gold assays were composited into 2.5 m intervals from the top of the drill hole with breaks at the wireframe boundary. Composite intervals less than 0.5 m in length were added to the composite immediately above. A block model with a cell size of 10 m x 10 m x 5 m was used for the grade estimation.
|Olive Constrained In-Pit Mineral Resource|
|Meas. + Ind.||0.4||10||1.07||329|
Notes to Table:
The Proven and Probable Mineral Reserve is the economically minable portions of the Measured and Indicated in-pit Mineral Resource as demonstrated by this feasibility study.
|Eagle and Olive Mineral Reserve|
|Total Olive + Eagle||123||0.67||2,663|
Notes to Table:
|Eagle and Olive Mineral Reserve|
|Eagle Crushed Ore||101||0.72||2,330|
|Olive Crushed Ore||7||0.95||200|
|Total Crushed Ore||108||0.73||2,530|
|Eagle Run of Mine Ore||15||0.27||133|
Notes to Table:
Eagle and Olive are open pit mines and will operate as a drill, blast, shovel and haul operations with a combined nominal rate of 33,700 tpd ore and mine life of 10 years. Ore to be crushed will be 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 will be 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 0.95 to 1 and total waste material is 116 million tonnes.
Material above the crushed ore cut-off grades will be hauled from the open-pits to the primary crusher. Ore will be crushed at a nominal rate of 30,100 tpd. Following primary crushing, ore will be conveyed through a secondary and tertiary crushing circuit to a final crush size of P80 6.5 mm. Crushed ore will be conveyed to one of the two in-valley heap leach pads.
Ore will be stacked in 10m high lifts using a mobile conveying and stacking system then primary leached for 90 days. The pregnant solution, laden with gold once leaching is complete, will be pumped to an ADR plant where gold will be stripped from the solution and poured into doré bars. Life of mine recovery is estimated at 70.8%, including ROM ore.
Ore will be mined and primary crushed 365 days per year. Ore will be 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 123 million tonnes of ore will be processed, including 108 million tonnes of crushed ore and 15 million tonnes of ROM ore. The primary heap leach pad will hold 77 million tonnes while the secondary heap leach pad will hold 46 million tonnes. The secondary heap leach pad has potential excess capacity of approximately 50 million tonnes should it be required for mine expansion.
The project is well supported by local infrastructure. Eagle is accessed via an existing year-round road connecting to the Silver Trail Highway. Grid power currently runs along the highway to support grid power via a spur line to be constructed along the existing access road. A 1,400m airstrip is located in Mayo approximately 85km by road from the project site. An existing construction-ready 100-person camp is currently operational at site. A further 100-person camp recently purchased by the Company, is located in Mayo and is expected to be shipped and erected at site prior to construction. All mine site infrastructure to be built for Eagle is located within a few kilometers of the open pits.
The initial capital cost for Eagle is estimated (in 2016 dollars) at C$370 million with an accuracy of +/-15%, includes contingency of C$35.2 million and all pre-stripping. The contingency allowance was calculated on a risk-adjusted basis for each of the major capital cost categories. Indirect costs include initial fills, spares, commissioning and start-up, engineering and procurement, construction management and freight and logistics.
Initial Capital Cost Estimate (C$ millions)
|Mine Equip. & Development||34.5|
|Power Supply & Distribution||15.1|
|Heap Leach Pads||56.4|
Life of mine sustaining capital costs are estimated at C$183 million and closure costs are C$35 million. Working capital costs are estimated at C$26 million.
Sustaining Capital Cost Estimate (C$ millions)
|Mine Equip. & Development||45.6|
|Power Supply & Distribution||0.8|
|Heap Leach Pads||81.5|
LOM site operating costs, are C$10.54 per tonne processed, as summarized below:
|C$/t mined||C$/t leached||US$/oz payable|
All-in sustaining costs, not including corporate costs, are US$638/oz of payable gold.
Base case: consensus based long-term gold price US$1,250/ounce gold and US$/C$ exchange rate of 0.78:
- Net Present Value discounted at 5% is C$778 million
- Internal Rate of Return (IRR) is 37.1%
- Payback is 2.6 years
- Net Present Value discounted at 5% is $508 million
- Internal Rate of Return (IRR) is 29.5%
- Payback is 2.8 years
There are numerous initiatives currently underway which the Company suspects may further enhance project economics, including:
- year-round stacking as is currently practiced at other northern heap leach operations;
- continued near mine exploration with a focus on the Potato Hills Trend which hosts the Olive, Shamrock and other targets;
- conversion of Inferred Mineral Resources to Indicated Mineral Resources, particularly at depth, to increase reserve potential and decrease waste; and
- further refinement of water management and water treatment to reduce potential closure costs.
Technical Report - Feasibility Study - Pending posting to SEDAR by October 26, 2016.
Victoria holds 100% interest in the 1,914 quartz claims, 10 quartz leases and a 7/8th interest in the Olive crown grant collectively covering 350 km2.
The Dublin Gulch property is located within the Traditional Territory of the First Nation of Nacho Nyak Dun.
Exploration and placer mining began on the Dublin Gulch property in 1895 with the first gold production reported in 1898. In 1904, tungsten was identified in placer concentrates. The Geological Survey of Canada (GSC) discovered in situ scheelite in Dublin Gulch in 1916. Subsequent exploration led to the discovery of lode gold deposits at the Eagle Gold Project.
The Project area has a long history of placer gold mining, starting in 1895, and exploration drilling by several companies, starting in 1972.
Environmental Assessment & Regulatory Review
The Eagle Gold Project has received all major regulatory approvals required for the construction, operation and closure of the Project.
Victoria received the final Water Use Licence from the Yukon Water Board in December 2015. The Water Use Licence is the conclusion of five years of permitting and engineering work on the Project that resulted in a Project design that is both low cost and protective of the environment.
The final Water Use License application process culminated in a weeklong public hearing in June 2015. During the hearing the Water Board Chair stated, "... out of many of the companies or applicants that come before this Board, I think you [Victoria] are remarkable for having had with you -- for the duration so far -- virtually the same team. You've put together an 'A' team, and that, in turn, has led to your preparation of what -- in our opinion -- is a very, very good submission, and that goes a long way to assisting the entire application process. It also goes a long way to giving evidence of the trust that exists between yourselves -- as the applicant -- and the people in this community, and larger, the people in the Yukon Territory. So, congratulations, you've done a remarkably good job in bringing your team together and providing a good application. That's going to stand you well as you move forward."
In September 2013, Victoria received a Quartz Mining Licence for the Project that, in conjunction with the Water Use Licence, allows all phases of the Eagle Gold Project to be undertaken. The Quartz Mining Licence was amended in March 2016 to include minor modification to the design of Project features and to align with certain terms and conditions of the Water Use Licence.
On February 19, 2013, the Yukon Environmental and Socio-Economic Assessment Board (YESAB) issued its Final Screen Report recommending that the Government of Canada and Yukon Government allow the Eagle Gold Project to proceed. On April 9, 2013, the Yukon Government filed their Decision Document approving the Project to proceed, and on April 16, 2013, the Federal Government similarly filed their respective Decision Document approving the Project move forward. Completion of the Decision Documents allowed Victoria to apply for the Water Use Licence from the Yukon Water Board and the Quartz Mining License from the Department of Energy, Mines and Resources.
Victoria also holds licenses and permits to support ongoing exploration efforts.
Community Overview & Comprehensive Cooperation and Benefits Agreement (CBA)
The Eagle Gold Project is located within the Traditional Territory of the First Nation of Nacho Nyak Dun. Victoria has worked with community representatives, the First Nation of Nacho Nyak Dun and other interested parties to consult and keep people informed.
Victoria has held various community meetings, workshops, and open houses with the First Nation of Nacho Nyak Dun leadership, staff, and citizens as well as the Village of Mayo leadership and residents, and other interested parties. These sessions provided Eagle Gold Project updates as well as specific presentations on key aspects of the proposed operation. Victoria also publishes the Potato Hills Press newsletter quarterly and continues to meet on a regular basis with the First Nation and the community.
Victoria and the First Nation of Nacho Nyak Dun (FNNND) signed a Comprehensive Cooperation and Benefits Agreement (CBA) on October 17, 2011. The CBA replaced an earlier Exploration Cooperation Agreement, and applies to the proposed Eagle Gold mine development and all exploration activities conducted by Victoria anywhere in FNNND Traditional Territory south of the Werneke mountains which includes all of Victoria's existing mineral exploration properties. The CBA does not apply to any exploration or mining activities on FNNND Settlement Lands or within FNNND Traditional Territory that are north of the Wernecke Mountains, unless FNNND provides its prior consent.
The objectives of the CBA are to:
- Provide certainty for development of the Eagle Gold Project and on-going exploration;
- Provide the FNNND with employment and economic development opportunities while respecting and promoting FNNND's desired environmental protection objectives;
- Establish a process for ongoing communication between Victoria and the FNNND so both parties can identify and pursue contracting and partnering opportunities;
- Provide the FNNND with employment and training opportunities; and
- Provide financial support and profit sharing opportunities that may result from a successful project.
Following the CBA Victoria and the FNNND entered into a further agreement. On November 20, 2011 Victoria and FNNND signed a Letter of Intent for the purposes of staking FNNND Category B Settlement Lands adjacent to Victoria's Dublin Gulch property, of which the Eagle Gold project is a part of. As Settlement Lands were not part of the CBA the Letter of Intent provided FNNND consent to Victoria to stake the FNNND Category B Lands to the west and south of the Dublin Gulch property. The Letter of Intent also establishes that Victoria and FNNND will negotiate an agreement for the purposes of carrying out exploration on these FNNND Category B Lands.
On September 12, 2012, the negotiations with respect to exploration activities on the FNNND Category B Lands culminated in the signing of an Access and Exploration Agreement. The key points of the Access and Exploration Agreement between Victoria and the FNNND include:
- providing certainty for on-going exploration;
- affording the FNNND with employment and economic opportunities while respecting and promoting FNNND’s desired environment protection objectives;
- establishing a process for ongoing communication between Victoria and the FNNND so both parties can identify and
- providing financial support.
The Eagle Zone Geology
The Eagle Gold deposit occurrence is localized at the narrowest portion of the stock, near its known western limit. The intrusive-meta-sedimentary contact is sharp but irregular and varies between steep attitudes that crosscut meta-sedimentary foliation, to shallow southwest dips parallel to foliation.
The zone is comprised of sub-parallel extensional quartz veins that are best developed within the granodiorite proximal to both the hanging wall and footwall intrusive-meta-sedimentary contacts. Veining is apparently best developed on the hanging wall contact, Veins are typically composed of white or grey quartz with subordinate potassium feldspar. They strike 060 to 085 azimuth, typically dipping at about 60 degrees to the south, and range in width from less than one millimetre to about 10 cm. Contacts are typically sharp. Vein densities range from less than one per metre to more than fifteen per metre, and average about three to five per metre. The greatest concentration of veins appears to coincide with both the narrowest constriction as well as the local apex of the intrusion (Rescan, 1997).
Sulphides account for less than five percent of vein material and occur in the center, on the margin, and disseminated throughout. The most common sulphide minerals are pyrrhotite, pyrite, arsenopyrite, sphalerite, bismuthinite and galena. Secondary potassium feldspar is the dominant mineral in alteration envelopes. Sericite-carbonate is generally restricted to narrow vein selvages, although alteration zones of this type also occur with no obvious relation to veins.
Vein formation can be attributed to contrasts in cohesion and tensile strength between the intrusion and enclosing meta-sedimentary rocks. Embayments and narrow portions of the stock represent stress shadows that constitute favourable areas for rheological failure and therefore for the formation of extensional quartz veins. Protrusions in the stock created favourable areas for the development of extensional shear-veining in the adjacent country rocks (Sieb, 1996).
Exploration Work Programs
Victoria has expanded the Eagle Gold Zone from 2.7 million ounces to 4.8 million Indicated resource ounces over the past two years. In January 2009 Wardrop Engineering Inc. completed an updated NI 43-101 Mineral Resource estimate on the Eagle Zone Deposit in adding 37% to the Indicated Resource for a total of 2.7 million ounces of gold averaging 0.849 g/t gold. The 2009 Mineral Resource estimate incorporated 13,057.65 m of drilling from 2006-2008 into a previously-stated resource estimate.
The 2010 field program undertook work for the many disciplines involved in developing the mine through Pre-Feasibility and the YESAB Environmental Assessment process as per the -Yukon Environmental and Socio-Economic Assessment Act (YESAA), as well as a continued exploration program. Engineering drilling guided by BGC Engineering drilled 350m of core to test conditions for the proposed infrastructure sites, as well as 1,350m of geotechnical drilling for the pit wall scenarios. Stantec drilled a total of 626m of holes to test ground water and to install monitoring wells. The exploration program saw 1,311m drilled in 5 holes to test a potential westerly extension to the mineralisation of the Eagle Zone.
In 2011, Victoria Gold drilled 25 diamond drill holes (5,750 aggregate metres). All holes (with the exception of metallurgical sample holes) were HQ in size and drilled with a triple core barrel to minimize disturbance of the core and to maintain its orientation. Many of the holes were drilled for alteration and in-fill exploration information, three for geotechnical purposes, and two PQ size holes were drilled for metallurgical sampling.