http://newsblaze.com/story/20110201070132zzzz.nb/topstory.html
Wellington West Senior Analyst
Paolo Lostritto: I've only submitted one pick this year, and it's a company that exited 2010 with some challenges. And it's in light of those challenges that I think there's tremendous value and opportunity going forward. My top pick was Victoria Gold Corp. (TSX.V:VIT). At the tail end of last year, Victoria had to retract a portion of its resource statement in Nevada. Data was incorrectly entered into the database by their consultants. Unfortunately, the error was caught after it was published. It was a bit embarrassing, but we are not too concerned.

We think there's an opportunity because the drilling at the Cove Project in Nevada was never tight enough to suggest that we had a great understanding of the mineralized system at depth. Victoria really had only enough information to justify constructing an exploration ramp. Victoria Gold's plan of operations has been approved by the Bureau of Land Management. Consequently, the company is now in the short strokes of finalizing their required permits before driving the ramp in the first quarter of this year, with the hope of getting first pre-production by the third quarter.

In addition to that, there is Victoria's Eagle Project in the Yukon. The prefeasibility study on Eagle was less than well received, but what most people don't realize is that the pit walls were designed using a 30-degree slope. The rock qualities have since been tested and may justify using a pit slope of 40 or maybe even 50 degrees. Under that scenario, significantly more mineralization would fall in the pit design, and that would have a huge positive impact on the project's internal rate of return.

Those are two big value drivers and there are several "blue sky" exploration targets that are not priced into the stock.

The Gold Report: You're saying Victoria is going to build this underground ramp at Cove to get to the mineralized ore at depth and that we could see some gold production in the third quarter?

Paolo Lostritto: It will take roughly six months to get there, and the company will do two things once it gets underground. One, it will conduct advanced exploration drilling in order to understand the deposit dimensions and ideally expand the resource. Secondly, it will be able to "teaspoon" some of that material, roughly 400 tons per day, and ship it to one of the local smelters. There are three smelters in the area; one is owned by Barrick Gold Corporation (NYSE:ABX; TSX:ABX), one by Newmont Mining Corp. (NYSE:NEM), and another by Yukon-Nevada Gold Corp. (TSX:YNG). I think there's enough competition there for 19-gram gold material to suggest that Victoria has a pretty good chance of securing an off-take agreement. As a result, we believe Victoria Gold should be ready to snap back in 2011.