The target at Eagle Gold is to be pouring gold in Q3 2019. The mine will produce approximately 200,000 oz/y starting in 2020, operating year-round, at an all-in sustaining cost (AISC), including financing, of less than C$750/oz.”

John McConnell

PRESIDENT AND CEO, VICTORIA GOLD CORP

November 27, 2018

Could you describe the latest milestones achieved by Victoria Gold Corp?

Victoria Gold Corp conducted a C$12.5 million exploration program in 2017 to look at all identified targets on the Dublin Gulch property. In 2018, we have followed up on three of those targets with a smaller exploration program. In terms of work on the Eagle Gold Project, we completed a C$30 million program last fall, on earth-works, expanding the camp, upgrading roads, and all pre-construction work to minimize any construction risks. At the moment, we are about 50% through construction and aim to complete the build by mid-2019. The mine will produce approximately 200,000 ounces of gold per annum (oz/y) starting in 2020, operating year-round, at an all-in sustaining cost (AISC), including financing, of less than C$750/oz. The Eagle Gold Mine will be the largest gold mine in Yukon’s history and the company is set to be cash-flowing C$100 million per year.

What is the capital cost for the Eagle Gold mine, and how are you financing the project moving forward?

The capital cost is C$440 million. Back in 2017, we spent most of the C$40 million that we had in treasury by Q4. However, in April 2018 we signed a construction financing package for just over C$500 million in aggregate with Orion Mine Finance, Osisko Gold Royalties Ltd, and Caterpillar Financial Services Limited. This means that we are funded through development and into commercial production. The reason we raised more money was to have additional working capital, finance the sustaining capital, and pay for the costs of financing, including legal fees. We received C$87.2 million of the financing package in September 2018 from funding partners.

How well positioned is the project in terms of infrastructure?

Considering we are operating in Canada's North, we are very well connected. The Eagle Gold Project is about 50km from a paved highway and we have built an all-weather road to the site, which means we have year-round road access. We are currently building a power line from site that will tie into Yukon Energy's power grid, accessing reasonable cost hydroelectric power. The community of Mayo is about 85km to the south and holds a full-service airport with five flights a week from Whitehorse. We can leave Vancouver at 6pm and be on-site by midnight.

Which are the greatest challenges and advantages of operating in the Yukon?

Certainly, mother nature always affects projects, so we have always assumed lower productivity during the cold weather. The flip side of this is that we have daylight 24/7 during the summer months, so productivity rises considerably. In terms of financing, the Yukon has the same federal program for flow-through financing, however certain provinces have an add-on to this, which BC, Ontario and Quebec have. The Yukon has a very small tax base with only 37,000 people in the whole territory which does not provide the territorial government the same opportunities as more densely populated provinces. The Yukon does have the lowest corporate tax rates in Canada though, which is an advantage.

Have you been able to source all your skilled labour needs within the Yukon?

Although we have had to turn to other provinces, we have far exceeded our expectations of hiring from within the Yukon, including from local First Nations communities. Trades people with large scale industrial experience  are particularly challenging to find across the country – electricians, welders, mechanics. The Yukon has apprenticeship programs supported by government.  There are many Yukoners who have left to work in other provinces because they could not find a job locally. We are starting a campaign to attract and recruit Yukoners across Canada, and give them an opportunity to come back home to work.

Could you describe the ‘Every Student Every Day’ program and in what way Victoria Gold Corp is involved in mining education within the Yukon?

‘Every Student Every Day’ is a charity we run to raise awareness and funds to support increasing student attendance in schools throughout the Yukon. Guided by the volunteer, not-for-profit Victoria Gold Yukon Student Encouragement Society, which was created in Q4 2012, we have raised over C$300,000 to aid over 70 projects across the Yukon, from Whitehorse to Mayo, and Watson Lake to Old Crow. This initiative was created because most students, on average, miss a full year of school between grades one through six, and two years between grades eight to twelve due to absences. It is our target to change this and encourage improved school attendance, in order to keep the minds of tomorrow in the classroom and help them succeed.

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