Skip to main content

The Globe and Mail

Victoria Gold has a deposit but market for miners is soft

Hi Lou,

Could you take a look at Victoria Gold?

Thanks,

Markus

----------------------

Hey Markus,

Thanks for the assignment. Victoria Gold Corp. (VIT TSXV) is a junior miner with a shovel-ready gold project in the Yukon. The Eagle Gold Project has an estimated 2.3 million ounces of gold with a forecast cash cost per ounce of US $614. The Eagle deposit is part of the company's Dublin Gulch property which covers 555 square kilometres and that has other interesting targets that VIT plans to drill in 2016.

VIT has a market capitalization of $57.77 million and average daily volume over the last three months of 207,059 shares. These factors would put the shares into the speculative portion of your portfolio.

What also needs to be considered is the ability of the company to raise close to $400 million to begin construction of a mine at the Dublin Gulch.

A review of the charts will provide additional information that you can add to your evaluation.

Desktop users click on image to enlarge

The three-year chart indicates that VIT is a choppy trader with big swings on a daily basis. The average daily value of trades is approximately $33,129. In the grand scheme of things, that's not much and could lead to liquidity issues. What is also evident is that the shares have been meeting resistance at $0.16.

Desktop users click on image to enlarge

The six-month chart pulls into focus the wide daily swings and the resistance at $0.16, which has been in play since the middle of December of 2015. VIT, like all the junior gold miners, needs a jump in gold prices to reignite interest in the sector. The company raised some funds through a private placement of flow through shares that they will be using to drill up the Olive and Shamrock targets on their Dublin Gulch property.

When the drill results are reported, they will certainly stimulate a reaction. The only question is whether the results will prove good or bad for the stock.

Next time I will take a look at Shore Gold Inc. (SGF TSX) for Bob.

Make it a profitable day and happy capitalism!

Story continues below advertisement

Report an error
Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Please note that our commenting partner Civil Comments is closing down. As such we will be implementing a new commenting partner in the coming weeks. As of December 20th, 2017 we will be shutting down commenting on all article pages across our site while we do the maintenance and updates. We understand that commenting is important to our audience and hope to have a technical solution in place January 2018.

Discussion loading… ✨