I recently had a chat with Victoria Gold's President and CEO, Chad Williams. I asked him a number of questions, and based on his answers, I have put my OWN spin/interpretation on what catalyst may move our stock higher in the coming months.
Catalysts That Could Increase the Value of our Company, etc.:
Newmont Mining Back-In Rights: Early last year, VIT completed a Preliminary Assessment (PA) for the “Helen Zone” at our Cove property. According to Newmont Mining, our company did not meet the criteria required to force them to exercise their back-in rights, which would have required Newmont Mining to reimburse our company for 2 ½ times the money they had spent on developing the Cove property (which is now over $32 million and counting). Since then, our company has continued a discourse with Newmont to resolve the back-in rights issue. It is my belief that Newmont Mining may be interested in settling the back-in rights via our company issuing them shares and giving them a royalty. Newmont Mining already owns approximately 1.4% of our stock. According my sources, if this stock offering comes to fruition, stock holder dilution will be minimal – with Newmont ending up with less than 5% of our stock. I personally believe that the back-in rights issue will be resolved within the next couple of months/or sooner – and my reasons, are as follows: I expect that the our company, before the end of March, will obtain all the permits required to build the adit for “Helen Zone”, and I also expect that by the end of February, our company will report drilling results on several holes at Wendy Point – our second target for our Cove property. Positive drilling results, increases in expenditures on Cove property, and approval of permits, in my opinion, will reduce Newmont Mining’s bargaining power – also I would expect our stock to be higher, which would require even less stockholder dilution.
Anticipated Drilling Activity for 2011: I am expecting Victoria will soon unveil their drilling plans for 2011. I expect that they will be spending approximately $15 million on exploration activity – a new yearly record for our company – approximately $10 million will be spent at Dublin Gulch and the other $5 million on our Nevada properties. Therefore, we should have no shortage of drilling news throughout the year; however, I do not expect our company will be reporting drilling results hole by hole – it has become apparent that our company has chosen a new path for reporting drilling results i.e., lumping the results of several holes drilled at onetime - unless results are truly extraordinary. For example, I do not expect to see drilling results from Wendy Point until mid to late February and when the results of drilling activity are announced, the results are likely to include the results of several holes. By the way, drilling holes at Wendy Point should be less expensive and quicker than what occurred with the drilling that occurred at the “Helen Zone” – we have a new premiere drilling crew, and the type of drilling mechanics will be different. I expect to see the same thing to happen with drilling results from Dublin Gulch – drilling to commence before the end of February – two months earlier than last year – drilling results should be lumped together for several holes at one time.
Raul Madrid (prior VP of exploration): Our company still corresponds with him on a limited consulting arrangement. I believe this arrangement will eventually be phased out altogether, and rely exclusively on our new chief geologist and supporting geologists.
Keep in mind the comments above represent my own personal interpretation of questions answered by our president.
Tom Smith
