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September 2, 2024

$VGCX.TO: PWC details Victoria Gold’s assets & debts

Assets stood at C$824.75 Million, the majority consisting of property, plant & equipment of C$442.6 million and inventory (on the pad?!) of C$224.7 million. Cash, just C$24 Million.



Debts stand at at least C$300 million owed to 424 creditors.



89 Yukon-based companies are owed just under $42 million, representing 50.7% of the total unsecured debt.


Victoria Gold Corporation, a mining company operating in Yukon, Canada, is facing significant financial and legal challenges following a major incident at its Eagle mine[1][8]. Here's a detailed summary of the company's financial situation and debts, as per the PWC statement[8]:


Financial Overview


Victoria Gold's assets totaled $824.75 million as of June 30, 2024, according to PricewaterhouseCoopers (PwC), the court-appointed receiver[8]. However, this value may not represent the actual liquidation value of the assets.


Creditor Breakdown


The company owes at least $300 million to 424 creditors, with a clear distinction between secured and unsecured creditors[2].


Secured Creditors


Victoria Gold owes a total of $233.14 million to secured creditors, broken down as follows:


- $185.3 million to various banks, including the National Bank of Canada

- $47.84 million to Caterpillar Financial Services[1]


The amounts owed to six additional secured creditors, including Finning International Inc. and Tutchone Air Leasing — a First Nations company—, are currently unknown[1].



Unsecured Creditors


There are 416 unsecured creditors, to whom Victoria Gold owes approximately $82 million[1]. Notable details include:


- 89 Yukon-based companies are owed just under $42 million, representing 50.7% of the total unsecured debt

- Largest outstanding debts:

  - $14 million to Finning (Whitehorse-based)

  - $9 million to Pelly Construction (Whitehorse-based)

  - $8 million to Mayo Fuel Supply (Mayo-based)[1]


Creditors had up to 45 days to file a miner's lien after the heap leach failure. The liens allow companies to file a claim against the physical value of the property, similar to a builders lien.


The companies then have up to 60 days after filing the lien to file a legal petition to the Yukon Supreme Court to have the lien formally recognized. 


However, it's not guaranteed that any of the unsecured creditors will ever receive their money back. 


"It really is going to come down to how much money there is and whether this mine either gets sold or whether it starts operations again.”[1]


First Nations 

The specific amount owed to First Nations is not detailed in the available information. However, Victoria Gold has a comprehensive Cooperation and Benefits Agreement with the First Nation of Na-Cho Nyäk Dun (FNNND), which outlines commitments and financial considerations related to their operations[1][4].


The financial challenges faced by Victoria Gold, including the heap leach facility failure and subsequent legal actions, have significantly impacted its ability to meet these financial obligations.


Background:


The financial troubles stem from a heap leach facility failure on June 24, 2024, which released cyanide into the environment and halted operations[1]. This incident led to:


1. A significant drop in Victoria Gold's stock price

2. A proposed class-action lawsuit by investors

3. Multiple charges against the company for water-related violations[1]


The situation remains complex, with ongoing legal proceedings and uncertainty about the company's future operations and ability to repay its debts.


Sources:

[1] https://www.cbc.ca/news/canada/north/victoria-gold-creditor-list-1.7307462 

[2] https://www.ckrw.com/2024/08/14/victoria-gold-corp-enters-receivership-follow/ 

[3] https://vgcx.com/news/victoria-gold-makes-debt-repayment-and-provides-operations-update/ 

[4] https://vgcx.com/production/eagle-gold-mine/first-nations-considerations/ 

[5] https://www.yukon-news.com/news/victoria-gold-enters-receivership-plans-made-for-key-phase-of-cleanup-through-the-fall-7490005 

[6] https://www.aptnnews.ca/national-news/recent-spill-stirs-speculation-about-future-of-yukon-mine/ 

[7] https://yukon.ca/en/news/government-yukon-provides-latest-update-heap-leach-failure-victoria-golds-eagle-gold-mine

[8] https://www.pwc.com/ca/en/car/victoria-gold/assets/victoria-gold-017_270824.pdf 


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MasterMetals

@MasterMetals

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