I believe a starting point in determining whether VIT's shares are undervalued or overvalued is to determine its valuation based on its reserves in the ground and then comparing VIT's value to its peer group. This could be helpful in making a decision as to what price to take your profits in VIT. Keep in mind that the valuation methodology that is shown below has a lot of moving parts and fair value will change when any of the moving parts change.

So lets start off with VIT's current valuation:

VIT's Enterprise Value (EV) = VIT’s Market Capitalization in US Dollar – VIT’s Cash on hand

EV = [195 million shares outstanding X US$.75 --closing price of VIT on Friday] – ($8 million in cash)

EV = US$138 million

Current Valuation: VIT is presently is selling at 31 times its reserves in the ground (EV -- $138 million) / 4.4 million ounces -- VIT’s ounces of gold in the ground)

Now for our Peer Group: I have seen two reports on their average valuations based on their reserves in the ground: 50 and 66

Let’s use the more conservative number "50". If VIT should be re-priced in the market and sells at its peer groups average valuation then its fair value would be:

VIT's reserves (4.4 million ounces of gold) X 50 (peer group average valuation) = US$220 (VIT's capitalization)

US$220/195 million shares outstanding = US$1.12 (fair value)

If we should use "66" as an average valuation for its peer group, and then compute what VIT fair value would be if it was re-priced in the market where it was also selling at peer group's average valuation, then VIT's fair value would be:

VIT's reserves (4.4 million ounces of gold) X 66 (peer group average valuation) = US$293 (VIT's capitalization)

US$293/195 million shares outstanding = US$1.50 (fair value)

Now let’s look at some other variables that could significantly change VIT's fair valuation relative to its peer group:

Let’s make an assumption that when VIT publishes its NI 43-101 compliant resource estimates for its Cove and Eagle properties by year-end, its actual total gold reserves for all of its properties increase by 500,000 ounces. Shown below is what its new fair value would be, given this new information:

VIT's reserves (4.9 million ounces of gold) X 50 (peer group average valuation) = US$245 (VIT's capitalization)

US$245/195 million shares outstanding = US$1.25 (fair value)

If we should use "66" as an average valuation for its peer group, and then compute what VIT fair value would be if it was re-priced in the market where it was also selling at peer group’s average valuation, then VIT's fair value would be:

VIT's reserves (4.9 million ounces of gold) X 66 (peer group average valuation) = C$323 (VIT's capitalization)

C$323/195 million shares outstanding = C$1.65 (fair value)

Naturally, VIT’s fair value will increase even more should their gold reserves increase by more than 500,000 ounces. IMO, VIT will ultimately increase its reserves by multiples of 500,000 ounces; but that will take considerable more time, money, and future drilling success.

Note: Chad Williams, President and CEO at Victoria Gold, goal is for VIT to become the top dog in its peer group - for that to happen, VIT would have to be selling at 100 times its reserves in the ground - which equates to a fair value of C$2.25 based on its present reserves in the ground - based on a 500,000 ounce increase in reserves, its fair value would be C$2.51.

Based on my analysis thus far; IMO, we will see an increase in reserve estimates for VIT before year-end, and I believe it is reasonable to expect at least a 500,000 ounce increase. So my initial target price for fair value would be between C$1.25 and C$1.65 which I feel could take place between now and the end of this year. Keep in mind that this is a moving target. For every 500,000 increase in reserves, my fair value valuation would have to be bumped up by approximately 12%. So far this evaluation methodology hasn't taken into consideration the following factors:

1. An increase in bullion prices

2. An increase in what investors are willing to pay for reserves in the ground

3. The possibility that VIT investors will be willing to pay more for its reserves than its competitors

If gold reaches my price objective of $1600 per ounce over the next 15 months - a 51% increase - I would expect investors would be willing to pay a minimum of 51% more for their reserves in the ground. So my longer term fair value for VIT would be from C$1.87 to C$2.47.Based on history, gold stocks generally go up three times the percentage increase in bullion prices. I don’t even want to go there, because in that case VIT would be selling north of $3.75.

Lastly, you don’t want to rule out the possibility of a buying frenzy in gold stocks just like we had in the dot com stocks a few years ago. The capitalization of all the gold stocks on earth is very tiny and it won’t take a great deal on dollars to exert some extraordinary gains. Under these conditions there is no telling how high some of the gold stocks may go.

Cautionary Note: I don’t portend to have an expertise in picking a top. My objective is to give you some tools to help yourself in evaluating when to take your profits. My guess is that I could send this email to 10 different investors and each one would have their own interpretation of where to take there profits. The important thing is to have some game plan on where to begin taking profits – you don’t have to take your profits all at once – and in fact, you may be better off scaling out of your position as the price of your stock reaches specific milestones either from this analysis or some other tools you may have that are helpful in making sell decisions. Where I decide to take partial or total profits will be unique to my own position, and you ultimately have to make your own decision based on your own unique situation.