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Victoria Gold: 2024 First Quarter Results

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Victoria Gold: 2024 First Quarter Results

 

 

 

 

 

Victoria Gold Corp. (TSX:VGCX) herein provides its first quarter 2024 summary financial and operating results.

 

Highlights First Quarter
Gold produced (ounces) 29,580
Average gold price realized (per ounce) C$ 2,724
Revenue (000s) C$ 82,982
Gross profit (000s) C$ 8,977
Loss before taxes (000s) C$ 12,149
Net loss (000s) C$ 8,971
Net loss per share – Basic C$ 0.13
Adjusted net income (000s)* C$ 3,631
Adjusted net income per share – Basic C$ 0.05
EBITDA (000s) C$ 12,217
Operating cash flow before working capital (000s) C$ 23,712
Operating cash flow after working capital (000s) C$ 30,019
Free cash flow before working capital (000s) C$ 7,122
Free cash flow after working capital (000s) C$ 13,429

 

*Adjusted net income is Net loss less Loss on marketable securities, Loss from equity investment, Loss on derivatives and Foreign exchange loss

 

Mr. John McConnell, President and CEO commented, “While gold production during the first quarter was lower than target, we still managed to generate positive free cash flow before and after working capital adjustments. Higher gold grade and stacked ore tonnage are expected to lead to elevated gold production, revenues, profits and cash flows through the remainder of 2024.”

 

This release should be read in conjunction with the Company’s Financial Statements and Management’s Discussion and Analysis for the three months ended March 31, 2024 and 2023, available on the Company’s website or on Sedar+.

 

Operational highlights – First Quarter 2024

  • Mine production was 1.9 million tonnes of ore in the quarter.
  • Ore stacked on the heap leach facility in the quarter was 2.0 million t at an average grade of 0.63 grams per tonne.
  • Gold production was 29,580 ounces in the quarter.

 

Financial highlights – First Quarter 2024

  • Gold sold in the quarter was 30,491 oz, at an average realized price1 of $2,724 (US$2,019) per oz.
  • Recognized revenue was $83.0 million based on sales of 30,491 oz of gold in the quarter.
  • Operating earnings were $5.9 million in the quarter.
  • Loss before tax was $12.1 million in the quarter.
  • Net loss was $9.0 million, or $0.13 per share on a basic basis for the quarter.
  • Adjusted net income (net loss less loss on marketable securities, loss from equity investment, loss on derivatives and foreign exchange loss) was $3.6 million, or $0.05 per share on a basic basis.
  • Cash costs1 were $1,845 (US$1,368) per oz and all-in sustaining costs1 were $2,304 (US$1,708) per oz of gold sold in the quarter.
  • EBITDA1 was $12.2 million in the quarter.
  • Operating cash flow before working capital was $23.7 million in the quarter.
  • Operating cash flow after working capital was $30.0 million in the quarter.
  • Free cash flow1 before working capital was $7.1 million in the quarter.
  • Free cash flow1 after working capital was $13.4 million in the quarter.
  • Total debt decreased by $3.6 million in the quarter.
  • Cash and cash equivalents were $28.5 million at March 31, 2024.

 

First Quarter 2024 Operating Results

 

      THREE MONTHS ENDED
      March 31,
2024
  March 31,
2023
Operating data          
Ore mined t   1,929,936   2,151,804
Waste mined t   2,940,217   3,073,222
Total mined t   4,870,153   5,225,026
Strip ratio w:o   1.52   1.43
Mining rate tpd   53,518   58,056
Ore stacked on pad t   1,994,482   2,094,741
Ore stacked grade g/t Au   0.63   0.86
Throughput (stacked) tpd   21,917   23,275
Gold ounces produced oz   29,580   37,619
Gold ounces sold oz   30,491   38,201

Notes:
Strip ratio: waste to ore (“w:o”)

Mining rate: tonnes per day (“tpd”)

 

Operations Discussion

 

Gold production and sales

During the three months ended March 31, 2024, the Eagle Gold Mine produced 29,580 ozs of gold, compared to the 37,619 ozs of gold production in Q1 2023. The 21% decrease in gold production is attributed to lower grades related to mine sequencing of the Eagle orebody, the timing of placing stacked tonnes under leach, and lower than planned stacking rates.

 

During the three months ended March 31, 2024, the Company sold 30,491 ozs of gold, compared to the 38,201 ozs of gold sold in Q1 2023. The 20% decrease in gold sold is the result of decreased gold production.

 

Mining

During the three months ended March 31, 2024, a total of 1.9 million tonnes of ore was mined, at a strip ratio of 1.52:1 with a total of 4.9 million tonnes of material mined. In comparison, a total of 2.2 million tonnes of ore was mined, at a strip ratio of 1.43:1 with a total of 5.2 million tonnes of material mined for the prior comparable period in 2023.

 

Total tonnes mined were 7% lower during the three months ended March 31, 2024 primarily due to reduced heavy mobile equipment availability due to planned component replacements for mid-life rebuilds and unplanned maintenance requirements on certain equipment including production drills and loading units.

 

Processing

During the three months ended March 31, 2024, a total of 2.0 million tonnes of ore was stacked on the HLF at a throughput rate of 21.9 k tpd. This is in line with the 2.1 million tonnes of ore stacked on the HLF at a throughput rate of 23.3 k tpd for the prior comparable period in 2023.

 

Ore stacked for the quarter had an average grade of 0.63 g/t Au, compared to 0.86 g/t Au in the prior comparable period in 2023. The lower grade in the quarter was due to the sequencing of the mine plan.

 

As at March 31, 2024, the Company estimates there are 83,118 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 Condensed Consolidated Interim 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 $13.9 million in capital expenditures during the three months ended March 31, 2024:

  1. sustaining capital of $3.3 million, including:
    1. scheduled capital component rebuilds on mobile mining fleet of $2.5 million, and
    2. upgrades and capital component rebuilds on the material handling system of $0.8 million;
  2. capitalized stripping activities of $9.1 million, and
  3. $1.5 million spend on growth capital expenditures including growth exploration.

 

First Quarter 2024 Financial Results

 

Expressed in 000s, except per share amounts   THREE MONTHS ENDED
  March 31,
2024
March 31,
2023
Financial data      
Revenue $ 82,982 96,549
Gross profit $ 8,977 20,984
Net income (loss) $ (8,971) 983
Earnings (loss) per share – Basic $ (0.13) 0.02
Earnings (loss) per share – Diluted $ (0.13) 0.02

 

 

Expressed in 000s, except per share amounts   As at
March 31, 2024
As at
December 31, 2023
Financial position      
Cash and cash equivalents $ 28,495 14,971
Working capital $ 148,106 147,029
Property, plant and equipment $ 677,078 675,660
Total assets $ 1,035,157 1,016,886
Long-term debt $ 192,292 190,868

 

 

Revenue

For the three months ended March 31, 2024, the Company recognized revenue of $82.9 million compared to $96.5 million for the previous year’s comparable period. The decrease in revenue is attributed by the lower number of gold oz sold, partially offset by a higher average realized price. Revenue is net of treatment and refining charges, which were $0.3 million for the three months ended March 31, 2024. The Company sold 30,491 oz of gold at an average realized price of $2,724 (US$2,019) (see “Non-IFRS Performance Measures” section), compared to 38,201 oz at an average realized price of $2,526 (US$1,867) (see “Non-IFRS Performance Measures” section), in the first quarter of 2023.

 

Cost of goods sold

Cost of goods sold was $56.5 million for the three months ended March 31, 2024 compared to $57.9 million for the previous year’s comparable period. The decrease in cost of goods sold is attributed to lower gold oz sold, partially offset by higher costs due to inflation.

 

Depreciation and depletion

Depreciation and depletion was $17.5 million for the three months ended March 31, 2024, compared to $17.6 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 March 31, 2024, the Company had cash and cash equivalents of $28.5 million (December 31, 2023 – $15.0 million) and a working capital surplus of $148.1 million (December 31, 2023 – $147.0 million surplus). The increase in cash and cash equivalents of $13.5 million over the year ended December 31, 2023 was due to operating activities ($30.0 million increase in cash), primarily from operating cash flow before working capital adjustments. This is partially offset by investing activities ($11.9 million decrease in cash) from the purchase of property, plant and equipment and financing activities ($5.0 million decrease in cash) from interest paid and debt repayments partially offset by a flow-through equity issuance.

 

2024 Outlook

Note that cost information, including AISC1 and capital, within this MD&A 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 our peers, who often report in US currency.

 

2024 production and cost guidance is unchanged from when it was originally estimated and released in February 2024.

 

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 the summer months and higher gold production generally follows in the second half of the year.

 

AISC1 for 2024 are estimated 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).

 

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.

 

Non-IFRS Performance Measures

The Company has included certain non-IFRS measures in this new release. Refer to the Company’s MD&A for an explanation, discussion and reconciliation of non-IFRS measures. The Company believes that these measures, in addition to measures prepared in accordance with International Financial Reporting Standards (“IFRS”), provide readers with an improved ability to evaluate the underlying performance of the Company and to compare it to information reported by other companies. The non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures presented by other issuers.

 

Posted May 14, 2024

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