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The Company's Eagle Gold Project in Yukon Canada hosts a National Instrument 43-101 compliant Reserve of 2.3 million ounces of gold.
Message: VIT Opportunity Knocks!!!
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The recent pull back in VIT has sparked some concern of the possibility of further stockholder dilution to fund the development of our Eagle project and the possibility of joint venturing this project. Their has also been some speculation that Newmont Mining may chose to exercise their right to a royalty on any future production from our Cove property rather than exercise their "back in" rights, and reimburse our company 2 1/2 times the money we have already spent on this project. I believe there is no merit to these concerns.
The first thing to realize is the fact that the costs of developing a mine at Eagle is going to be at least 18 months from now, so there is obviously no need for development costs today. IMO, when funds are required for mine development costs, it would be far wiser to obtain a loan to finance the development rather than sell additional stock and dilute shareholder equity. Since the recapture of costs to develop a mine at Eagle is only 3 years - and possibly less - our financing costs would not be onerous.
Secondly, I see no merit in joint venturing the Eagle project. Why dilute your interest in a project that you have a 100% interest in when you get all your capital costs recovered in a three year period.
Regarding Newmont Mining:
I believe there is little merit in believing that Newmont won't exercise their "back in" rights to our Cove project. IMO, a "back in" is inevitable, and when that happens VIT will be reimbursed 2 1/2 times the money they have spent on the Cove project - a "back in" now would trigger a payment to VIT of at least $25 million - funds that reduce the need for further stockholder dilution. The first thing you need to consider with regard to the possibility of Newmont exercising their back in rights has to do with the fact that Newmont's gold reserves are depleting and they haven't been able to replace their depleting reserves through their own drilling activities - and, by the way, this is not a unique problem - most of the senior gold producers face a similar problem. Thus there is a real motivation for Newmont and other senior gold producers to do joint ventures and exercise their "back in" rights when the project is economic. It appears that our Cove project has all the makings being and economic project, and if so, it would be a wise decision for Newmont to exercise their "back in" rights now. Since Newmont has to reimburse VIT 2 1/2 times the money they spend on the Cove project, it would be a lot cheaper to back in now rather than have to reimburse VIT a lot more money for additional expenditures that VIT will incur in the coming months. Thus an early "back in", IMO, will be good for all parties involved.
Bottom line: The pull back in VIT is a gift for long term investors to add to their core holdings. With a 12 month target of C$2.40 and VIT presently selling at @ C$.88 - you have a real bargain IMO. My chart shows the ideal entry point for added positions is in the low 80's/high 70's.
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