Victoria Gold Corp
CEO and President: John McConnell
Podcast: Play in new window
WSA: Good day from Wall Street, this is Juan Costello, Senior Analyst with the Wall Street Analyzer. Joining us today is John McConnell, CEO and President for Victoria Gold Corp.. The company trades on the TSX Venture, ticker symbol VIT. Thanks for joining us today there John.
John McConnell: My pleasure.
WSA: So, starting off, please give us a history and overview of the company?
John McConnell: Sure, you know, the company goes back I think to about 2004, but a group of us took over the company in 2007 including our current Chairman, Sean Harvey. He and I joined the Board in 2007 at the request of Kinross Gold. And we operated as a greenfields exploration company in Nevada for a few years. And then 2008 we saw as an opportunity with the financial crisis to make some acquisitions. So we acquired two companies, one called Gateway Gold, which gave us more Nevada assets and a company called StrataGold, which gave us the Eagle asset in the Yukon.
I became the CEO in 2011 and after review we decided to focus on the Yukon. So over the next year we sold off our Nevada assets and our timing was perfect. We realized probably in the order of $65 million for those assets, which allowed us to further explore and develop Eagle in the Yukon. And we’re now at the point where we’re fully permitted, fully financed and we’re in construction and we’ll be in production late next year.
WSA: Great, so yeah, bring us up to speed on some of the progress there at the Eagle Gold Project and some of the other activity here over the last months or so?
John McConnell: Yeah, I think the key milestone over the last few months was becoming fully funded. It took us more than a year to get everything in place. And a couple of weeks ago, we announced a fully financed solution that included debt and equity with Orion Mine Finance, equity and a royalty with Osisko Gold Royalties and an equipment lease with Cat Finance.
So we’re fully funded. Construction started at beginning of April. We now have over 150 men and women on-site and the focus is earth works right now. But by the end of September we’ll be up to over 400 people on-site and in full construction mode. We expect that work to go well. This will have us starting production midyear 2019 and as I said first gold pour late in 2019.
WSA: Certainly, so yeah, we met back in 2008 and I’ve done some interviews with you along the way since, and last time we met it was a few years back. And so we’ve spoken during different cycles in the gold sector. What is your take on it right now, and what do you think is the next cycle?
John McConnell: I always tell people I’m a mining engineer I’m not an economist. But I’m bullish on gold. It’s the way governments around the world are printing money that eventually it’s going to catch up with them and it’ll be good for the price of gold. So I think our timing of construction and production 18 months from now is perfect.
WSA: Right, so you’re positioning the company to be able to capitalize on some of the trends, what else makes you unique from some of the other players in the sector?
John McConnell: Well I think the fact that we’re in a good safe jurisdiction. We’re not in the a foreign country where somebody, the government is going to either take the mine away from you or put-in exorbitant mining taxes. We’re in a good stable jurisdiction in Canada and in particular Canada’s Yukon Territory.
WSA: Right and what about from a mining point of view, what makes it interesting?
John McConnell: Well, obviously the Eagle is a very simple mining operation. It’s an open pit with a very low strip ratio of less than one to one. We crush the ore and then we convey it over to a heap leach pad, its stacked on the heap leach pad, we apply cyanide solution. We recover the solution via gravity out the bottom, it’s absorbed – the gold. And then we go into a gold recovery plant where we strip the gold using carbon and produce doré bars. So it couldn’t be much simpler.
WSA: Great, so what are the main goals that you’re hoping to accomplish over the course of the next six to 12 months?
John McConnell: Well, I guess, the big thing is construction and there is a couple of key milestones there, some boring stuff like pouring concrete by the 1st of July, first erection of steel by the 1st of October. Those are things for project managers types like me that are important. But I’m sure for shareholders it’s a bit boring. But also we do intend to carry out the exploration program this year. It won’t be focused immediately on Eagle, but we’ll be looking at some of the satellite deposits certainly to the east of Eagle and the two top priorities are an area called Bluto and an area called Nugget. So not only will there be construction updates and milestones, but you’ll see some exploration results midyear of this year.
WSA: Sounds good. And can you talk a little bit about your background experience John and who the key management team there is.
John McConnell: Yeah, my background I always tell people I’m a miner because I started in this business as a miner, I was working in an underground mine in Southern BC. But eventually my father convinced me I didn’t want to be a miner for the rest of my life and convinced me to go back to university and I went to the Colorado School of Mines, graduated as a mining engineer that goes back to 1979. Since then I’ve been working in Canada’s north. First, the Nanisivik Lead zinc mine on the north tip of Baffin Island where I worked my way up to a general manager. And then I went to work for a little company called Winspear Diamonds, we were exploring a Snap Lake Diamond project in the Northwest Territories and eventually we were taken out by De Beers. And I stayed on with De Beers and they gave me the opportunity to take Snap Lake through permitting, feasibility study, construction and into operations. And then as I said in 2009, I was with Victoria and we acquired the Eagle deposit. And since for the past 10 years that’s been my main focus is getting it through permitting, feasibility studies, and now we’re in construction.
WSA: Certainly, and so in terms of investors in the financial community what are some of the drivers that you wish perhaps they better understood about you guys?
John McConnell: Well, you know, if you look at our top 10 shareholders it’s quite a Blue Chip Group with Orion Mine Finance, Osisko Gold Royalties, Sun Valley Gold, The Electrum Fund, Kinross, Oppenheimer Fund, Investech, RBC Global Asset Management and Gabelli. So a real blue chip shareholder list.
Juan Costello:Yeah, great. So once again joining us today is John McConnell, CEO and President of Victoria Gold Corp., which trades on the TSX Venture, ticker symbol VIT, currently trading at $0.33 a share, market cap is about $250 million and Canadian. And before we conclude John to recap some of your key points, why do you believe investors should consider the company as a good investment opportunity today?
John McConnell: Yeah, I think the number one is that our shares have traded down lately like most gold stocks. However, you’re getting a very valuable asset that will produce gold – 200,000 ounces of gold per year at less than $600 all-in cash cost. And as we move through construction into operations, history tells us that companies get rerated, and I would expect Victoria Gold to do the same.
WSA: Well, we certainly look forward to continue and track the company’s growth and report on your upcoming progress. And we like to thank you for taking the time to join us today John and update our investor audience on Victoria Gold Corp. It’s always great talking to you.
John McConnell: Great, thank you.