Victoria Gold says it is steadily adding value to its key assets

In an operational update, Victoria Gold Corp (TSX-V:VIT) told investors that it has evolved considerably and it continues to steadily add value to its key gold assets - the Cove and the Santa Fe projects in Nevada, and the Eagle gold project in the Yukon.

"Exploration drilling is in full operation at both the Santa Fe and Eagle Gold Projects plus design and permitting is advancing on schedule at the Cove Gold Project”, Victoria Gold president and chief executive commented. “The rest of 2010 promises to yield exciting results on many fronts especially since the bulk of the company's 2010 exploration expenditures are planned for the second half of the year. Victoria has approximately $20 million in cash."

In March, Victoria filed a NI43-101 preliminary assessment for the Cove gold project, which demonstrated that ‘the Helen Zone has positive economics’, evidenced by a robust internal rate of return (IRR) of 48%, at a gold price of US$900/oz or 75% at US$1,100/oz.

According to Victoria, the Helen Zone's exploration potential remains excellent, and the property hosts 13 other drill-ready exploration targets.

Additionally, at Cove, Victoria has completed all work commitments required to earn a 100% interest in the project from Newmont Mining Corporation (NYSE:NEM), and the major mining group has not triggered its earn-in (back-in) rights over 51% of the property, under the ‘90 Day Decision Period’. Victoria maintains its 100% stake in Cove, and control of the advancement of the project. Newmont can still earn-in to the project, and the consideration required will continue to increase by 2.5 times Victoria’s spend on the property, which currently stands at approximately C$13m.

The company highlighted that current work at Cove is focused on the design and permitting of an adit (tunnel) into the Helen Zone for Stage 1 of the mine development process. The permitting remains on schedule, in order for construction to commence in early 2011.

Elsewhere in Nevada, at the Santa Fe gold project, the first hole in the Phase 2 drilling program, BH-7, is almost complete. According to Victoria, BH-7 is intended to better define the orientation of gold mineralized structures so that future drill holes will be optimally located.
 
The company noted that C$4m will be spent at Santa Fe in the remainder of 2010.

The objective at Santa Fe is the potential definition of a large Carlin-type disseminated gold system that may contain higher-grade gold zones. Victoria said it remains excited about the exploration potential at the project, where positive drill results over the past few months have including 309m grading 2.25 grams per tonne (g/t) gold and 154m grading 3.94g/t gold.

The company has appointed Marcus Johnston as the manager of Nevada Exploration. Johnston has served as a part of Victoria’s geologic team member since 2004, and he succeeds Raul Madrid, who has stepped down from his full-time duties as Exploration VP. In relation to the appointment, Williams commented: "We look forward to Dr. Johnston's positive impact as the new exploration leader in Nevada ... He and the rest of the Reno-based team have been instrumental in Victoria's gold exploration successes including generating the recent promising Santa Fe results."

At the Eagle gold project, in the Yukon, exploration drilling re-started recently, following the winter break.  Victoria is currently utilizing two core drills to evaluate the extent of mineralization approximately 500m west of the existing main Eagle ore body. The company believes that, if successful, this could represent a roughly 25% extension to the known strike length of the Eagle resource.

The other targets, Olive and Shamrock, will then be drilled in an attempt to define new zones of gold mineralization, which could be incorporated into an expanded mine production scenario. The summer work program also includes environmental baseline data collection, as well as geotechnical and condemnation drilling.

Victoria highlighted that it will be spending about C$5 million in exploration at Eagle in 2010, which is the largest amount ever spent on this property in a single field season. A feasibility study on the Eagle deposit will get underway in Q4 2010.