Victoria Gold Corp. (TSX:VGCX) is pleased to announce its fourth quarter and year ended December 31, 2023 summary financial and operating results.

“Gold production in 2023 of 166,730 ounces is a record for the Eagle Gold Mine, an 11% year over year increase,” noted Mr. John McConnell, President and CEO. Mr. McConnell continued, “Both production and costs were well within our Guidance ranges during 2023. Although we have seen a reduction from peak inflation levels, operating costs continue to be pressured by increasing input costs from labour to parts and consumables. Despite this inflationary backdrop, the Eagle Gold Mine is expected to increase gold production levels through 2024 and 2025 which will lead to lower unit costs.”

This release should be read in conjunction with the Company’s Financial Statements and Management’s Discussion and Analysis for the years ended December 31, 2023 and 2022, available on the Company’s website or on SedarPlus.

Operational highlights – Fourth Quarter and Year Ended 2023

• Mine production was 2.0 million tonnes of ore in the quarter. Mine production for the year was 8.5 million t of ore.
• Ore stacked on the heap leach facility in the quarter was 2.1 million t at an average grade of 0.65 grams per tonne. Ore stacked for the year was 9.0 million t at an average grade of 0.72 g/t.
• Gold production was 41,982 ounces in the quarter. Gold production for the year was 166,730 oz.

Financial highlights – Fourth Quarter and Year Ended 2023

• Gold sold in the quarter was 36,601 oz, at an average realized price¹ of $2,636 (US$1,936) per oz. Gold sold for the year was 160,135 oz, at an average realized price¹ of $2,603 (US$1,929) per oz.
• Recognized revenue was $96.4 million based on sales of 36,601 oz of gold in the quarter. Recognized revenue was $416.9 million based on sales of 160,135 oz of gold for the year.
• Operating earnings were $12.0 million in the quarter. Operating earnings were $70.4 million for the year.
• Income before tax was $4.2 million in the quarter. Income before tax was $43.4 million for the year.
• Net income was $2.6 million, or $0.04 per share on a basic basis and $0.04 per share on a diluted basis for the quarter. Net income was $25.1 million, or $0.38 per share on a basic basis and $0.38 per share on a diluted basis for the year.
• Cash costs¹ were $1,738 (US$1,277) per oz and all-in sustaining costs (“AISC“)¹ were $2,167 (US$1,592) per oz of gold sold in the quarter. Cash costs¹ were $1,643 (US$1,218) per oz and AISC¹ of $2,008 (US$1,488) per oz of gold sold for the year.
• EBITDA¹ were $28.3 million in the quarter. EBITDA¹ were $141.7 million for the year.
• Free cash flow¹ before working capital was $0.4 million in the quarter. Free cash flow¹ before working capital was $31.5 million for the year.
• Free cash flow¹ after working capital was $5.8 million in the quarter. Free cash flow¹ after working capital was $4.9 million for the year.
• Total debt decreased by $14.6 million in the quarter. Total debt decreased by $10.8 million during the year.
• Cash and cash equivalents were $15.0 million at December 31, 2023.

2023 Actual Results vs. Guidance

The Company has achieved its 2023 Guidance.

2024 Outlook

Note that cost information, including AISC¹ and capital, within this press release are generally in Canadian currency. However, in this Outlook section, costs, including AISC¹ and capital, are in US currency to allow for ease of comparison with the Company’s peers, who often report in US currency.

Production at the Eagle Gold Mine for 2024 is estimated to be between 165,000 and 185,000 ozs.

Although seasonal production fluctuations were reduced in 2023 due to year-round stacking, some production seasonality is expected to continue. Stacking is generally strongest during Q2 and Q3 due to higher temperatures during the summer months. Gold production is also generally strongest in Q2 and Q3 as certain heap leach field activities such as side slope leaching and usage of surface sprinklers only occur during the warmer months.

AISC¹ for 2024 are expected to be between US$1,450 and US$1,650 per oz of gold sold.

Sustaining capital, not including waste stripping, is estimated at C$30 million (US$23 million) for 2024. Major items included in 2024 sustaining capital include mobile equipment rebuilds and fixed maintenance rebuilds.

Capitalized waste stripping is estimated at C$35 million (US$26 million) and is included in AISC¹ but is not included in the sustaining capital above. Waste stripping will be expensed or capitalized based on the actual quarterly stripping ratio versus the expected life of mine stripping ratio and may be quite variable quarter over quarter and year over year. Waste stripping in 2024 is expected to be higher than the life of mine average annual waste stripping. This accounting treatment for waste stripping will affect earnings and capital but will not affect AISC¹ or cash flow.

Growth capital related to Eagle Gold Mine expansion initiatives is estimated at C$15 million (US$11 million) for 2024 and includes heap leach pad expansion. In addition, growth exploration spending in 2024 is estimated to be C$10 million (US$8 million).

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¹ Refer to the “Non-IFRS Performance Measures” section.

Operations Discussion

Fourth Quarter and Year Ended December 31 Operating Results

Gold production and sales

During the three months ended December 31, 2023, the Eagle Gold Mine produced 41,982 ozs of gold, compared to the 43,741 ozs of gold production in Q4 2022. The 4% decrease in gold production is attributed to interruptions to stacking related to evacuations for wildfires in the months of July and August. During the year ended December 31, 2023, the Eagle Gold Mine produced 166,730 ounces of gold, compared to the 150,182 ozs of gold production in Q4 2022. The 11% increase in gold production is attributed to year-round stacking and improved heap leach pad performance during 2023.

During the three months ended December 31, 2023, the Company sold 36,601 ozs of gold, compared to the 40,573 ozs of gold sold in Q4 2022. The 10% decrease in gold sold is the result of decreased gold production as a result of wildfire impacts and timing of gold shipments. During the year ended December 31, 2023, the Company sold 160,135 ounces of gold, compared to the 139,596 gold ozs sold in the prior comparable period. The 15% increase in gold sold is the result of higher gold production.

Mining

During the three months ended December 31, 2023, a total of 2.0 million tonnes of ore was mined, at a strip ratio of 1.66:1 with a total of 5.4 million tonnes of material mined. In comparison, a total of 1.6 million tonnes of ore was mined, at a strip ratio of 1.88:1 with a total of 4.5 million tonnes of material mined for the prior comparable period in 2022.

Total tonnes mined were 20% higher during the three months ended December 31, 2023 due to increased ore stacking rates as commented on in the Processing section below. In addition, shorter hauls have allowed for increased waste mining productivities.

During the year ended December 31, 2023, a total of 8.5 million tonnes of ore were mined, at a strip ratio of 1.37:1 with a total of 20.2 million tonnes of material mined. In comparison, a total of 7.1 million tonnes of ore were mined, at a strip ratio of 1.46:1 with a total of 17.5 million tonnes of material mined for the prior comparable period in 2022.

Total tonnes mined were 15% higher during the year ended December 31, 2023 due to increased ore mined related to year-round stacking, improved crusher reliability as well as better waste haul productivities.

Processing

During the three months ended December 31, 2023, a total of 2.1 million tonnes of ore was stacked on the HLF at a throughput rate of 22.3 k tpd. A total of 1.4 million tonnes of ore was stacked on the HLF at a throughput rate of 14.8 k tpd for the prior comparable period in 2022.

Ore stacked on the HLF increased by 51% for the three months ended December 31, 2023. In Q4 of 2022, the operations experienced a belt splice failure resulting in approximately 18 days of lost production. In addition, there was a period of extreme cold temperatures where operations were curtailed for 6 days (see 2022 Q4 MD&A). During the most recent period, these challenges were not encountered, and coupled with reliability improvements seen over 2023, resulted in stacking rate improvements.

Ore stacked for the quarter had an average grade of 0.65 g/t Au, compared to 0.90 g/t Au in the prior comparable period in 2022. Although grade was expected to be lower due to mine sequencing, the grade was also impacted by the stacking of lower grade bonus ore (material outside of the mine plan above cut off grade) and the processing of lower grade stockpiles.

During the year ended December 31, 2023, a total of 9.0 million tonnes of ore was stacked on the HLF at a throughput rate of 24.6 k tpd. A total of 6.6 million tonnes of ore was stacked on the HLF at a throughput rate of 18.1 k tpd for the prior comparable period in 2022.

Ore stacked on the HLF increased by 36% for year ended December 31, 2023 primarily due to successful implementation of year-round stacking as well as the above noted challenges in 2022 that did not impact 2023. Crusher utilization in 2023 improved by 30% over 2022.

Ore stacked for the year ended December 31, 2023 had an average grade of 0.72 g/t Au, compared to 0.85 g/t Au in the prior comparable period in 2022. The grade difference is primarily due to mine sequencing coupled with the stacking of lower grade bonus ore and stockpile material.

As at December 31, 2023, the Company estimates there are 86,073 recoverable oz within mineral inventory.

Capital

The capital outlined in this section is based on incurred capital and does not include certain working capital adjustments, specifically, changes to accounts payable relating to capital assets. Capital shown within Investing activities on the Consolidated Statements of Cash Flows includes changes in accounts payable relating to capital assets. Note that the Company’s forward Guidance with respect to capital is based on incurred capital.

The Company incurred a total of $16.1 million in capital expenditures during the three months ended December 31, 2023:

1. sustaining capital of $3.8 million, including:
   1. scheduled capital component rebuilds on mobile mining fleet of $2.3 million,
   2. upgrades and capital component rebuilds of the material handling system of $0.9 million, and
   3. other ongoing sustaining capital initiatives of $0.6 million;
2. capitalized stripping activities of $10.9 million, and;
3. $1.4 million spend on growth capital expenditures including growth exploration.

The Company incurred a total of $70.2 million in capital expenditures during the year ended December 31, 2023:

1. sustaining capital of $25.5 million, including:
   1. scheduled capital component rebuilds on mobile mining fleet of $14.3 million,
   2. upgrades and capital component rebuilds of the material handling system of $6.6 million,
   3. purchases of additional mining fleet equipment of $2.1 million,
   4. construction of the water treatment facility of $1.3 million, and
   5. other ongoing sustaining capital initiatives of $1.2 million;
2. capitalized stripping activities of $27.6 million, and;
3. $17.1 million spend on growth capital expenditures including growth exploration expenditures.

Fourth Quarter and Full Year 2023 Financial Results

Revenue

For the three months ended December 31, 2023, the Company recognized revenue of $96.4 million compared to $92.3 million for the previous year’s comparable period. The increase in revenue is attributed to a higher average realized price and a higher C$/US$ exchange rate, partially offset by the lower number of gold oz sold. Revenue is net of treatment and refining charges, which were $0.4 million for the three months ended December 31, 2023. The Company sold 36,601 oz of gold at an average realized price of $2,636 (US$1,936) (see “Non-IFRS Performance Measures” section), compared to 40,573 oz at an average realized price of $2,278 (US$1,678) (see “Non-IFRS Performance Measures” section), in the fourth quarter of 2022.

For the year ended December 31, 2023, the Company recognized revenue of $416.9 million compared to $321.8 million for the previous year’s comparable period. The increase in revenue is attributed to a higher average realized price, higher number of gold oz sold and higher C$/US$ exchange rate. Revenue is net of treatment and refining charges, which were $1.3 million for the year ended December 31, 2023. The Company sold 160,135 oz of gold at an average realized price of $2,603 (US$1,929) (see “Non-IFRS Performance Measures” section), compared to 139,596 oz at an average realized price of $2,306 (US$1,772) (see “Non-IFRS Performance Measures” section) for the year ended December 31, 2022.

Cost of goods sold

Cost of goods sold was $63.8 million for the three months ended December 31, 2023 compared to $50.6 million for the previous year’s comparable period. The increase in cost of goods sold is attributed to higher costs due to inflation and change in inventory.

Cost of goods sold was $263.9 million for the year ended December 31, 2023 compared to $166.4 million for the previous year’s comparable period. The increase in cost of goods sold is attributed to the higher number of gold ozs sold combined with a higher average cost per oz of gold within inventory. The average cost per oz of gold in inventory is higher year over year due to inflation combined with higher production costs per oz compared to the prior year. During the previous year, there was a significant build in gold ozs within inventory leading to a significant portion of production costs being assigned to inventory on the Statements of Financial Position rather than expensed as cost of goods sold.

Depreciation and depletion

Depreciation and depletion was $17.9 million for the three months ended December 31, 2023, compared to $18.8 million for the previous year’s comparable period.

Depreciation and depletion was $72.7 million for the year ended December 31, 2023, compared to $67.7 million for the previous year’s comparable period.

Assets are depreciated on a straight-line basis over their useful life, or depleted on a units-of-production basis over the reserves to which they relate.

Liquidity and Capital Resources

At December 31, 2023, the Company had cash and cash equivalents of $15.0 million (December 31, 2022 – $20.6 million) and a working capital surplus of $147.0 million (December 31, 2022 – $94.7 million surplus). The decrease in cash and cash equivalents of $5.6 million over the year ended December 31, 2022 was due to financing activities ($9.2 million decrease in cash) from interest paid and debt repayments, and investing activities ($110.2 million decrease in cash) from the purchase of property, plant and equipment and settlement of gold call options. This is partially offset by operating activities ($114.1 million increase in cash) primarily from operating cash flow before working capital adjustments.

Qualified Person

The technical content of this news release has been reviewed and approved by Paul D. Gray, P.Geo, as the “Qualified Person” as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

About the Dublin Gulch Property

Victoria Gold’s 100%-owned Dublin Gulch gold property (the “Property”) is situated in central Yukon Territory, Canada, approximately 375 kilometers north of the capital city of Whitehorse, and approximately 85 kilometers from the town of Mayo. The Property is accessible by road year round, and is located within Yukon Energy’s electrical grid.

The Property covers an area of approximately 555 square kilometers, and is the site of the Company’s Eagle and Olive Gold Deposits. As at December 31, 2023, and adjusting for mining depletion through this date, the Eagle and Olive Deposits include Proven and Probable Reserves of 2.3 million ounces of gold from 114 million tonnes of ore with a grade of 0.63 grams of gold per tonne. As at December 31, 2023, and adjusting for mining depletion through this date, the Mineral Resource for the Eagle and Olive Gold Deposits are estimated to host 234 million tonnes averaging 0.59 grams of gold per tonne, containing 4.4 million ounces of gold in the “Measured and Indicated” category, inclusive of Proven and Probable Reserves, and a further 36 million tonnes averaging 0.63 grams of gold per tonne, containing 0.7 million ounces of gold in the “Inferred” category.