VIT could have a good future despite KGC stake (IMO)
from an interview with two of their geologists:
<Q: You mean Victoria is on the radar for most investors, so there is no excitement?
A: Not yet! I think we generated some very good excitement in 2004, but we never materialized on a follow-up after the initial good drill hole. So many investors are perhaps afraid for another one-hole-wonder. The plan is to drill it this year. Mill Canyon, Black Canyon, Relief Canyon, Cove Mc Coy and Summit might all be drilled this year. These are all very high quality projects.
Q: Can you get enough drills?
A: Yes, we will have at least four here shortly. We are not a land holding company, we are an exploration company.
Q: The grades of hole NW 1 and 3 were the best in years in Nevada.
A: Oh yes absolutely. I expect to see equally impressive mineralization on all of our properties.>
And the entire interview:
<Interview Victoria Resources geologists
Welcome again,
In my mail yesterday I promised to send the Victoria interviews today. And I made the following remarks about the reason for the long delay;
“The secretive way Victoria Resources buried the deep gold discovery in Nevada in their press release of January 9th of this year, urged me to start a journey for the truth.
In researching this story I came in contact with two Victoria geologist involved. A transcript of the interview was send to Victoria’s management and caused trouble for one of them. The company shared all information about their discovery with their 30% stakeholder (Kinross/Bema Gold) but others were kept in the dark.
A situation totally unacceptable for investors in a public company. Victoria still hopes to put their new website online soon, but until now, no map or pictures of their findings has been made public. Eric and I had a difference of opinion about the publication of the Victoria geologists interviews. We decided to postpone publication of the interviews, on request of Victoria, several times. But, three months after the discovery the company still hasn’t told the whole Victoria story.
So I decided to start my own service and to publish the interviews tomorrow without disclosing the name of one of my sources. You will receive the exclusive interview before market open Tuesday.”
Well finally here are the transcripts of the interviews. Some small parts are kept out to protect one of my sources.
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Interview with Victoria geologist Dr. Raul Madrid;
Q: Did the good results of hole NW-1 and NW-3, which were reported on January 9, 2007, surprise you?
A: Our exploration method is different from other companies. So we knew that we would hit our target, but what we didn’t know was to what degree it would be gold mineralized. We knew from the previous work done by Newmont that there was a good change that we would hit gold, how much is always a surprise. I’ve been doing this for about 30 years now, it’s routine. So we were not surprised when we hit the mineralised structures, but we were grateful that we had gold as well.
Q: How important were these results to prove that your concept is right?
A: Obviously, if you have gold combined with the structures, that proves a lot about the method that we are using.
Q: What is the plan? Can you reveal anything about that?
A: No I cannot, that is the unfortunate thing. I made the deal with Tom Garrigan long ago that I would not provide a lot of information.
Q: Why are you being so secretive?
A: I’ve been ordered not to provide this information.
Q: But shareholders have the right to know.
A:That’s right, but I don’t run this company.
Q: When will Kinross, which just completed their take-over of Bema Gold and holds a 30% stake, decide on their position in Victoria?
A: I expect a decision to be made by Kinross in three months time.
Q: How many rigs are drilling at the Cove-McCoy area at this moment?
A: Two.
Q: And you will add some more soon?
A: That depends on permitting, the weather and availability of the rigs themselves. But we have been promised a third rig for quite some time, which we will be acquiring fairly soon.
Q: And you are looking for a fourth?
A: Yes we are.
Q: And a fifth?
A: Well, we have to work within the budget and that’s also depending on what will be happening with the Kinross management.
Q: It won’t be difficult to do a financing after this press release.
A: Of course, of course... I’ve had other companies before. In my opinion we better would do a financing at higher levels than we are now.
Q: What is the distance between the two successful holes NW-1 and NW-3?
A: That is 800 feet. Hole NW-2 was drilled from the same location as NW-1, but from a different angle. Hole NW-4 is 800 feet west of the position of Hole NW-1 and 2.
Q: You are drilling the holes NW-2A and NW-4 now. How long do these deep holes take, weeks?
A: They take a long time, weeks, but sometimes it can even take months. A deep hole is 3000 ft deep and it will drill 125 ft a day and the last part will be only 60 ft. So it will take a month and maybe more, because the best rock you can hit is the worst rock to drill. Hole NW-2A for example, caused quite a lot of problems, but we are finally at the point that we can start looking at the results. And the management will basically like to finish their program before they provide any new information.
Q: So investors might need some patience.
A: That is basically it. For the last press release I was pretty specific to the management about the need to get it out. It finally got out and the results speak for themselves.
Q: Aren’t you surprised that the stock is not up more?
A: Well, institutional investors are involved and they have their own modus operandi. There has been a lot more institutional trading since the PR of January 9 then retail trading.
Q: Why is there so little interest in retail?
A: Well, Victoria has hardly done any marketing. We don’t visit gold shows. Our website hasn’t been updated since May 2005.
Q: Can you say anything about the interest of Rob McEwen in Victoria?
A: No, I can’t at this point in time.
Q: Has there been contact with him?
A: I have met him in the past to talk about various topics, not the least of which were his coming in to Nevada, so there is not much I can say whether or not he is involved in any level.
Q: Can you say something on the structure you are drilling now?
A: Most of the systems in Nevada have a very long length and narrow width. For example in Deep Star they found 2.7 million ounces in a vein of only 700 ft wide.
Q: The last results show this is not small system you are drilling.
A: Well, I will caution you about that. What we are looking at this depth is high grade systems, but it may not be mineable with the grades found in hole 3. On the other hand, the stuff found in hole 1 is easily mineable.
Q: You don’t need a lot of tonnage to get a half a million ounces of gold with the grades from hole 1.
A: That is exactly right. So we are looking for the high grade stuff. And these are very good numbers. It is very typical for systems in Nevada, like Deep Star and Deep Post and Beikle. What most people don’t understand, the Beikle vein was only 82 feet wide, but at a grade of 0.6 ounce a ton and 644 feet long and 946 ft deep down the cylinder.
Interview with anonymous geologist B;
Q: How many geologists are working on the Victoria Projects?
A: We have ten geologists working on our projects, which is not that much if you look at the number of properties we have.
Q: When Kinross will offer their stake for sale many parties will be interested, Rob McEwen will be one of them.
A: If it’s not him, several other entities will be interested
Q: What changed after this hole NW-1, which showed he best grades in Nevada in years?
A: Not that much. To be totally honest, we expected intercepts like this. We believe in economic successes, not in technical successes. We spend a lot of money on these holes, so they better hit something good. We are happy with the success of course.
Q: How good were these grades?
A: Oh, very good, it’s a very good hole for a first hole to follow up on.
Q: You are drilling a few hundred feet deeper than all previous holes.
A: Yes, there was a specific target below that was very prospective.
Q: So the concept proved to be right?
A: Yes, that part of it was right. But there are always some complications, as there always are. It is more complicated than I first thought. There was an hole already drilled by Echo Bay into this structure which hit something 15-16 feet of my point where we found one, but which was never followed up on because there was no money. So the work was there. There were some indications already. That old hole supported the idea there could be some strong mineralization on this structure.
Q: Was the info (press release, January 9th, 225 meters of 2.72 g/ton gold) about the discovery buried in the press release so you could stake properties in the area.
A: It was more the result of the conservative approach. The final approval of the press releases was done by Bema.
Q: You staked quite a bit of land after the discovery.
A: That has been our typical approach for every property we picked up. We have a great land package, it’s big, but it’s also some of the most prospective ground in all of Nevada.
Q: You could be drilling for the next ten years.
A: We can drill for the next ten lifetimes. The geology is very complicated in Nevada. It will take a lifetime to figure it out anyway. My colleague Raul Madrid has an incredible amount of experience in Nevada.
Q: What does this discovery hole tell you about the concept?
A: It confirms to us what we already have known for years. The future of Nevada is going to be deeper, for higher grades and if you use the correct geological approaches, this is very predictable.
Q: Aurelian had the same approach. They studied the area for years and knew where to drill.
A: That’s exactly right. That’s exactly what our approach is. Before the first drill rig was bought we spent six months out there with 3-4 geologists, just mapping the area.
Q: When you say we are going to drill deeper in Nevada, will you also find higher grades and bigger or deposits?
A: The better host units for gold in Nevada in a lot of cases are to be found deeper.
Q: Because they are the feeders of the old mines?
A: Yes, in many cases they are the feeders.
Q: Is this structure you drill now the same as where the gold came from in the old Cove and Mc Coy Mines?
A: No, it is distinctly different. Mc Coy is a gold skarn and Cove was a composite or body. The system we are in now is almost exclusively Carlin style or body.
Q: Were did the gold came from in the old mines?
A: There is a large intrusive body at depth. Maybe ten square kilometres, maybe 100 square kilometres, I don’t know how deep it is, maybe 5 or 10 kilometres. That was the source of the fluids of all of these mines.
Q: Could it become a new open pit mine?
A: There is a possibility it could be a new open pit mine, but it all depends how big it gets, right now the grades and depths support more an underground concept.
Q: How deep can this cigar shape system continue?
A: We know these Carlin type structures, this is very similar and can continue for up to two kilometres.
Q: Sound to me like the Red Lake ore bodies.
A: It’s more similar like…let’s say on the Carlin Trend, the big open pit Post-Betze mine which is mined by Barrick.
Q: Will this be mined when you will find only one million ounces of gold?
A: We could have a mine with a lot less. 500.000 or 250.000 ounces of gold can be enough when it is very profitable. Infrastructure and processing possibilities in the area are great, you don’t need to build a mill and there are several mills nearby. Yes, the grades we see know is mine quality.
Q: You mean Victoria is on the radar for most investors, so there is no excitement?
A: Not yet! I think we generated some very good excitement in 2004, but we never materialized on a follow-up after the initial good drill hole. So many investors are perhaps afraid for another one-hole-wonder. The plan is to drill it this year. Mill Canyon, Black Canyon, Relief Canyon, Cove Mc Coy and Summit might all be drilled this year. These are all very high quality projects.
Q: Can you get enough drills?
A: Yes, we will have at least four here shortly. We are not a land holding company, we are an exploration company.
Q: The grades of hole NW 1 and 3 were the best in years in Nevada.
A: Oh yes absolutely. I expect to see equally impressive mineralization on all of our properties.
Q: Do the new holes NW2a and NW4, which you drill now, have the same mineralization?
A: Yes, NW-2a has the same mineralization, we lost hole NW-2 due to technical problems. NW-2a is drilled a little bit steeper, we don’t want to drill the same rock again. We see encouraging mineralization, we are still drilling right now. We are also currently drilling hole four now.
Q: The strike length of the gold mineralization is already 400-500 meters.
A: Yes, we are talking a couple of hundreds of meters. But we have indications, because of the old Newmont holes and of earlier drilling, that there is mineralization in a big area.
Q: When I count it on the back of an envelop I reach a few million ounces of gold quite easily.
A: And so have many other people, but I cannot comment on that.
Q: How big is the excitement?
A: I know Newmont is very excited.
The taped interviews were held in the third week of February 2007
Willem Middelkoop
April 17, 2007> |
