From the field trip to Victoria?s properties, if my memory serves me right, it was mentioned that it is unlikely that Newmont will exercise their back-in rights unless Victoria identifies gold reserves well in excess of 2 million ounces of gold. I believe it was mentioned that to-date, of the 70+ deals that Newmont has back-in rights, none of the back-in rights have been exercised. It may end up being to Victoria’s advantage if Newmont never exercises its back-in rights to Cove McCoy and instead elects to take a royalty income.

Here is the reason why Victoria would actually benefit from Newmont not exercising its back-in rights: Lets take a hypothetical situation where Victoria discovers 1 million ounces – and Newmont doesn’t exercise their back-in rights – in this case, for simplicity purposes, Victoria would net 95% after paying Newmont a royalty which could be as high as 5%. Now let’s assume that Victoria discovers 2 million ounces and Newmont backs-in for their 51% by paying 2.5 times Victoria’s cost of discovery – and the cost of discovery would more than likely be well below the value of the assets discovered. In this case Victoria would net out approximately .98%. Thus the additional value of 1 million ounces of gold discovered to Victoria would only amount to the 2.5 times their cost of discovery. On the surface of this example one may come to the conclusion that there would be a disincentive for Victoria to discover 2 million ounces, but one should also note the benefits to having a joint venture partner vs. doing the project all on your own.

Understand that any comments that I make are my personal opinions. All investors should be responsible for doing their own due diligence and verifying any comments that I make before making their own investment decisions.