SELL VGCX.TO (Victoria Gold)

I sold my VGCX positions today for a meager gain. Picking a different horse for a gold miner, likely B2 Gold, but that’ll be in a separate post. Reasons for selling VGCX:

• Q1 production miss was large (29k compared to 37k oz produced in Q1 last year). Though production should improve in the warmer months, I don’t believe they’ll be able to make guidance as a result.
• John McConnell, the CEO seems to be an honest operator, but I don’t see any particular catalysts on the horizon other than watching the company release quarterly production numbers. (Mind you, this was something I was aware of when I bought it.) There is an updated Raven MRE that should have been released in Q1 which mysteriously isn’t hasn’t been mentioned.
• Rick Rule’s commentary on VGCX resonated a lot with me (43:12-43:58)

Rick’s summary:

• VGCX will ‘work’ (as a play in the gold bull) though not fantastically
• It’s a Tier2 asset
• It is not an easy asset to operate
• High AISC (not sure if Rick mentions this)

In short, I surmise that VGCX is cheap for a reason: it’s a difficult mine to operate (weather, finding staff, smoke from fires), and this difficulty will continue to cause it to risk missing production guidance. I chose VGCX because of a geographical bias–I tend to prefer operations closeby (it’s near my sister’s home) and it seemed like a safe gold play. I feel like the operational challenges, however, make it an inferior pick.

After following the stock for six months, I feel that selling now is the right decision.

MB

Disclaimer: This content is for informational purposes only and should not be construed as financial advice. The views expressed are those of the author, who is not liable for any losses or damages arising from any actions taken based on the information provided in this blog. Investing and trading involve risk; you are solely responsible for your decisions.