April 28, 2024
Victoria Gold (VGCX.TO / VITFF) operates in the Yukan, Canada. Despite wild fires, the company had a pretty good 2023, producing 166,700 ounces of gold. It should do much better in 2024 and 2025, given the increasing price of gold.
Here is the most recent investor presentation: https://vgcx.com/investors/corporate-presentation/
The market cap is $358.9 million, while enterprise value (EV) is $514.76 million.
Here are the multiples:
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- EV/EBITDA = 3.74
- P/E = 10.45
- P/NAV = 0.49
- P/CF = 3.15
- P/S = 1.17
Victoria Gold has a Piotroski F_Score of 7, which is good.
Cash is $26.75 million. Debt is $239.65 million. TL/TA is 42.0%, which is good. ROE is 4.43%. This is low but will likely improve in 2024 and 2025, given increasing gold prices.
Insider ownership is 5.2%, worth $18.7 million. This includes 1.3% for the CEO John McConnell, worth $4.7 million.
Intrinsic value scenarios:
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- Low case: If there is a bear market or recession, the stock could drop 50%. This would be a buying opportunity because long-term intrinsic value would likely stay the same or increase once gold prices moved higher.
- Mid case: Free cash flow will hit at least $120 million in the next year or so. With an EV/FCF multiple of 7, EV would be $800 million. That works out to a market cap of $644.14 million, or $9.57 per share, which is 80% higher than today’s $5.33.
- High case: If it’s a secular bull market for gold, then gold could hit $3,000 or more. Free cash flow could hit at least $240 million. With a EV/FCF multiple of 7, EV would be at least $1,600 million. That works out to a market cap of $1,444.14, or $21.45 per share, which is over 300% higher than today’s $5.33.
RISKS
As noted, if there is a bear market or recession, the stock could drop 50% temporarily.
It’s also possible the company’s exploration for new resources won’t be very successful. But, in this case, probable intrinsic value would still be much higher than the current stock prices of $5.33.
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