TORONTO, ONTARIO--(Marketwire - Jan. 26, 2009) - Victoria Gold Corp. (TSX VENTURE:VIT) ("Victoria" or "the Company") is pleased to announce that its Board of Directors has approved an immediate $2.5 million work plan budget for 2009 that will see the Company add a project development component to its already successful exploration strategy.
2008 was a very constructive year for Victoria notwithstanding the equity market turmoil. Significant achievements were:
- high grade results over significant widths were released for seven drill holes at the Cove project;
- earned a 100% interest in the Cove project by fulfilling work commitments under the Minerals Lease and Agreement with Newmont;
- acquired Gateway Gold Corp., adding the Big Springs project to our portfolio with a NI 43-101 compliant inferred resource of 15.4 million tons containing 1.2 million ounces of gold with an average grade of 2.67 g/t, as well as eight other high potential gold projects;
- completed a successful fundraising in a difficult market;
- increased the trading volume in Victoria's stock threefold;
- attracted coverage by three independent mining analysts;
- recruited a highly experienced mining engineer to advance our gold projects towards production;
- completed NI 43-101 compliant technical reports on the Cove and Mill Canyon projects;
- resolved technical issues related to deep drilling on our projects; and
- renegotiated several property contracts resulting in lower work and/or cash commitments.
"Victoria starts 2009 in a strong position and this promises to be a very busy year for the Company," said Chad Williams, President & CEO of Victoria Gold Corp. "Our 17 projects comprise one of the largest land positions held by a smaller-capitalization gold company in Nevada, a region recognized for its high gold production and potential with relatively lower risk. Creating this portfolio of promising, high-pedigree gold growth projects would be extremely difficult and certainly more expensive today because of the higher gold price environment. Victoria is unique amongst its peers because of its strong exploration, development, and financial capabilities which are needed to make a high-growth gold company."
2009 Work Plans
Victoria's primary focus in 2009 will be to advance its five core projects towards gold production through drilling, engineering work, and preliminary economic analyses while continuing to emphasize a rigorous cost-containment discipline. "We will examine the most efficient route to project development and ultimately, production," said Chad Williams. "Our budget for 2009 will go much further than it did in previous years as industry operating costs have decreased materially and the availability of quality service providers has increased significantly," he added.
The Company has recently evaluated its portfolio and identified five projects which will receive priority attention.
- The Cove project is the site of the Company's recent high-grade gold discovery at the Helen Zone. The Helen Zone is approximately 600 metres north-west of the previously mined Cove open pit which produced 2.3 million ounces of gold and 100 million ounces of silver. Work at Cove will include drilling holes NW-14 and NW-15, which are very important holes designed to test the depth extension of the Helen Zone. Deepening certain previously drilled holes using new techniques that were successfully employed for hole NW-13a at the end of 2008 is also planned. A drill is on site and drilling is expected to re-start shortly on schedule. Details on the Cove drill program will be provided in an upcoming press release. Victoria's new Executive Vice President, John McConnell, will oversee engineering designs and permitting of a decline into the Helen Zone to allow for underground work with the objective of assessing the economics of mining this area. The Company may also conduct exploration drilling on some of the other targets on the property in 2009.
- At Santa Fe, a former mine which produced 350,000 ounces of gold and 500,000 ounces of silver from several open pits, multiple wide zones of gold and silver mineralization were discovered by Gateway Gold Corp. (acquired by Victoria in December 2008) in the fall of 2008. Victoria will use its innovative exploration techniques (called "structural systematics") to identify high potential intersection zones for future drilling on this project.
- The Big Springs project is also the site of a former mine which produced 386,000 ounces of gold and currently holds a NI 43-101 compliant 1.2 million ounce inferred resource. The Company will carry out surface mapping on the property in the spring after the snow melts to identify high potential drill targets. Drilling will be conducted subject to the receipt of the necessary permits. Additional work will include a preliminary economic assessment to determine the viability of mining the resource and processing the ore at the nearby mills.
- Mill Canyon is adjacent to Barrick Gold Corporation's 15 million ounce Cortez Mine and Cortez Hills gold development project. Barrick was a 60% owner of the Cortez Joint Venture until March of 2008 when it purchased the remaining 40% for $1.695 billion from Rio Tinto. In 2009 Victoria plans to conduct a preliminary economic study on the Higher Open Cut target at Mill Canyon, where previous drilling by Victoria has returned high-grade results over large widths, and to identify additional targets for drilling.
- The Summit project, where 8,800 ounces were mined from a small open pit in the 1980s, has returned some high-grade drill results by previous owners and, more recently, encouraging surface samples taken by Victoria. The Company is still awaiting the necessary permits for drilling and hopes to commence work on this promising property in 2009.
Victoria has a highly experienced and well-rounded management team. Together they are well equipped to continue the Company's successful exploration track record, advance its existing projects, secure funding as necessary and evaluate acquisition opportunities as they arise.
The management of Victoria continues to believe in the positive prospects for gold. Management is of the view that there are three factors emerging which should result in an increase in the gold price; the current crisis in the US financial system, the expected weakening of the US dollar relative to certain hard assets and the onset of inflation, which management believes is the only manner in which the world economy will exit from the current deflationary environment. Victoria is designed to greatly benefit from this possible future rally in the price of gold.
Third Quarter 2008 Financial Statements
The Company intends to file, by the end of January 2009, its third quarter financial statements for the period ending November 30, 2008. The Company's working capital balance at that date was $3.9 million which does not include the net proceeds of $4.0 million from the equity issue that closed on December 18, 2008.
Share Issuance in respect of Property Payments
Victoria intends to issue 50,000 common shares of the Company to Genesis Gold Corporation in accordance with the Amendment to the Option Agreement regarding the Carlin East Property, 30,000 common shares of the Company to Taminco Inc. pursuant to the Amendment to the Option and Purchase Agreement regarding the Summit Property and 100,000 common shares of the Company to Sleeping Midas LLC. in terms of the Amendment to the Mining Lease with respect to the Black Canyon Property. The abovementioned share issuances are subject a four-month hold period.
Shares for Debt Arrangement
As previously reported on January 8, 2009, the Company has issued 83,833 common shares to a vendor as payment for services rendered.
Victoria aims to be a high growth, lower risk company focused on gold. The Company's strategy is to add value per share through efficient exploration, project development, accretive acquisitions, and effective marketing. Maintaining a low risk profile through project diversification, sound financial management, and operating in secure jurisdictions are key priorities for Victoria's management team.
On Behalf of Victoria Gold Corp.
Chad Williams, P. Eng, CEO, President & Director
Cautionary Language and Forward-Looking Statements
This press release includes certain statements that may be deemed "forward-looking statements". All statements in this discussion, other than statements of historical facts, that address future exploration drilling, exploration activities and events or developments that the Company expects, are forward looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include metal prices, exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Accordingly, readers should not place undue reliance on forward-looking statements.
This news release and the information contained herein does not constitute an offer of securities for sale in the United States and securities may not be offered or sold in the United States absent registration or exemption from registration.
FOR FURTHER INFORMATION PLEASE CONTACT:
Victoria Gold Corp.
President & CEO
(416) 866-8800 ext 230
Victoria Gold Corp.
Director Public & Corporate Affairs
(416) 866-8800 ext 226