Toronto, ON / March 24, 2022 / Victoria Gold Corp. (TSX-VGCX) (“Victoria” or the “Company”) is pleased to announce its fourth quarter and year ended December 31, 2021 summary financial and operating results. The Company will host a video conference call and webcast Monday, March 28th at 8:00am PST (11:00am EST) to discuss the fourth quarter and year ended December 31, 2021 consolidated results (details are provided at the end of this news release). The Company uses certain non-IFRS performance measures throughout this news release. Please refer to the “Non-IFRS Performance Measures” section of this new release for more information.

All amounts are in Canadian dollars unless otherwise indicated. This release should be read in conjunction with the Company’s Financial Statements and Management’s Discussion and Analysis (“MD&A”) for the years ended December 31, 2021 and 2020, available on the Company’s website or on SEDAR.

2021 Highlights
Gold produced 164,222 oz
Average gold price realized US$ 1,790
Revenue US$ 284,366,680
Gross Profit US$ 120,441,442
Net Income US$ 88,047,991
Earnings (loss) per share – Basic US$ 1.41
EBITDA US$ 175,497,811
“2021 saw record annual gold production of 164,222 ounces, an increase of over 40% from 2020. Our increased production led to other record highs for Victoria including revenues of $356 million and net income of $108 million.”, noted Mr. John McConnell, President and CEO. “2021 Capital expenditures and all-in-sustaining-costs were higher as the Company not only dealt with the impacts of COVID-19 and inflation, but continued advancing growth initiatives. These growth initiatives, which include Project 250 and exploration at Eagle and Raven, will continue through 2022 and are expected to lead to material increases in production and reduction in unit costs for 2023 and beyond.”

Operational Summary – Fourth Quarter and Year Ended 2021

Mine production was 2.5 million tonnes of ore in the quarter. Mine production for the year was 9.5 million tonnes of ore.
Ore stacked on the heap leach pad in the quarter was 2.5 million tonnes at an average grade of 0.83 grams per tonne (g/t). Ore stacked for the year was 9.2 million tonnes at an average grade of 0.85 grams per tonne (g/t).
Gold production was 49,496 ounces in the quarter. Gold production for the year was 164,222 ounces.
Financial Summary – Fourth Quarter and Year Ended 2021

Gold sold in the quarter was 49,219 ounces, at an average realized price of $2,251 (US$1,786) per oz. Gold sold for the year was 158,736 ounces, at an average realized price¹ of $2,243 (US$1,790) per oz.
Recognized revenue was $110.6 million based on sales of 49,219 ounces of gold in the quarter. Recognized revenue was $356.5 million based on sales of 158,736 ounces of gold for the year.
Operating earnings were $47.4 million in the quarter. Operating earnings were $142.6 million for the year.
Net income was $45.7 million, or $0.73 per share outstanding in the quarter. Net income of $110.4 million, or $1.77 per share outstanding for the year.
Cash costs² were $905 (US$718) per oz and all-in sustaining costs (“AISC”)¹ were $1,326 (US$1,052) per oz of gold sold in the quarter. Cash costs¹ were $909 (US$725) per oz and AISC¹ were $1,496 (US$1,193) per oz of gold sold for the year.
EBITDA¹ were $66.1 million in the quarter. EBITDA¹ were $220.0 million for the year.
Free cash flow¹ was $31.1 million, or $0.50 per share¹ in the quarter. Free cash flow¹ was $26.8 million, or of $0.43 per share¹ for the year.
Cash and cash equivalents were $31.3 million at December 31, 2021 after net repayment of $63.5 million principal against the Company’s debt facilities for the year.
Fourth Quarter and Year to Date 2021 Operating Results

Three months ended Years ended
December 31,
2021 December 31,
2020 December 31,
2021 December 31,
2020
Operating data
Ore mined t 2,515,702 2,247,243 9,488,128 7,529,181
Waste mined t 3,200,397 3,084,892 15,028,269 12,370,280
Total mined t 5,716,099 5,332,135 24,516,397 19,899,461
Strip ratio w:o 1.27 1.37 1.58 1.64
Mining rate tpd 62,132 57,997 67,168 54,369
Ore stacked on pad t 2,539,309 2,316,522 9,157,313 7,271,334
Ore stacked grade g/t Au 0.83 0.81 0.85 0.84
Throughput (stacked) tpd 27,601 25,174 25,089 19,866
Gold produced oz 49,496 42,436 164,222 116,644
Gold sold oz 49,219 40,023 158,736 102,551
The Company issued original 2021 Guidance for the Eagle Gold Mine on March 1, 2021. Revised 2021 Guidance was issued on December 16, 2021. The following table shows the Company’s performance compared to the revised Guidance:

Results vs. Revised 2021 Guidance

2021 Guidance 2021 Results Achievement
Gold production ounces 162,000 - 180,000 164,222 oz Met revised production target
AISC US$/oz sold $1,175 - $1,234 $1,193/oz Met revised AISC target
Gold production and sales
During the three months ended December 31, 2021, the Eagle Gold Mine produced 49,496 ounces of gold, compared to 42,436 ounces of gold production in Q4 2020. The 17% increase in gold production is attributed to the increase in ore mined and stacked during the current and preceding quarters along with higher ore grades.

During the three months ended December 31, 2021, the Company sold 49,219 ounces of gold, compared with 40,023 gold ounces sold in Q4 2020. The 23% increase in gold sold is attributed to the increase in gold produced.

During the year ended December 31, 2021, the Eagle Gold Mine produced 164,222 ounces of gold, compared to 116,644 ounces of gold production in 2020. The 41% increase in gold production is attributed to the increase in ore mined and stacked along with higher ore grades.

During the year ended December 31, 2021, the Company sold 158,736 ounces of gold, compared with 102,551 gold ounces sold in 2020. The 55% increase in gold sold is attributed to the increase in gold produced.

Mining
During the three months ended December 31, 2021, a total of 2.5 million tonnes of ore were mined, at a strip ratio of 1.3:1 with a total of 5.7 million tonnes of material mined. In comparison, a total of 2.2 million tonnes of ore were mined, at a strip ratio of 1.4:1 with a total of 5.3 million tonnes of material mined for the prior comparable period in 2020.

Total tonnes mined were 7% higher during the three months ended December 31, 2021 as a result of higher stacking rates allowing for higher mining rates.

During the year ended December 31, 2021, a total of 9.5 million tonnes of ore were mined, at a strip ratio of 1.6:1 with a total of 24.5 million tonnes of material mined. In comparison, a total of 7.5 million tonnes of ore were mined, at a strip ratio of 1.6:1 with a total of 19.9 million tonnes of material mined for the prior comparable year in 2020.

Total tonnes mined were 23% higher during the year ended December 31, 2021 as a result of higher stacking rates allowing for higher mining rates.

Processing
During the three months ended December 31, 2021, a total of 2.5 million tonnes of ore was stacked on the heap leach pad at a throughput rate of 27.6 k tonnes per day. A total of 2.3 million tonnes of ore was stacked on the heap leach pad at a throughput rate of 25.2 k tonnes per day for the prior comparable period in 2020.

Ore stacked on the pad increased by 10% during the three months ended December 31, 2021 as increased efficiencies started to materialize from ongoing improvement efforts.

Ore for the quarter had an average head grade of 0.83 g/t Au, compared to 0.81 g/t Au in the prior comparable period in 2020 due to mine sequencing.

During the year ended December 31, 2021, a total of 9.2 million tonnes of ore was stacked on the heap leach pad at a throughput rate of 25.1 k tonnes per day. A total of 7.3 million tonnes of ore was stacked on the heap leach pad at a throughput rate of 19.9 k tonnes per day for the prior comparable year in 2020.

Ore stacked on the pad increased by 26% during the year ended December 31, 2021 due to improved material handling.

Ore for the year had an average head grade of 0.85 g/t Au, compared to 0.84 g/t Au in the prior comparable year in 2020 due to mine sequencing.

As at December 31, 2021, the Company estimates there are 104,015 recoverable ounces within mineral inventory.

Capital
The Company incurred a total of $24.8 million in capital expenditures during the three months ended December 31, 2021, including: (1) sustaining capital of $15.0 million (including scheduled capital component rebuilds on mobile mining fleet of $2.9 million, expansion to the heap leach pad of $2.8 million and continued construction of the truck shop and water treatment facility of $8.0 million); (2) capitalized stripping activities of $4.3 million; (3) $4.1 million spend on growth capital expenditures (growth exploration and mine expansion) and; (4) $1.4 million adjustment to the Company’s asset retirement obligation during the quarter.

The Company incurred a total of $107.6 million in capital expenditures during the year ended December 31, 2021, including: (1) sustaining capital of $59.9 million (including upgrades to the material handling system including chute liners of $12.8 million, scheduled capital component rebuilds on mobile mining fleet of $14.6 million, expansion to the heap leach pad of $5.9 million, $7.0 million for light vehicle and machinery purchases and construction of the truck shop and water treatment facility of $18.0 million); (2) capitalized stripping activities of $31.0 million; (3) $5.7 million spend on growth capital expenditures (growth exploration and mine expansion), and; (4) $11.0 million adjustment to the Company’s asset retirement obligation during the year ended December 31, 2021.

Fourth Quarter and Full Year 2021 Financial Results

Three months ended Years ended
December 31,
2021 December 31,
2020 December 31,
2021 December 31,
2020
Financial data
Revenue $ 110,647,040 98,221,599 356,453,633 178,747,827
Gross profit $ 49,786,942 43,159,771 150,973,347 76,315,208
Net income (loss) $ 45,660,450 54,851,137 110,368,157 14,891,909
Earnings (loss) per share – Basic $ 0.73 0.89 1.77 0.25
Earnings (loss) per share - Diluted $ 0.70 0.83 1.68 0.23
As at
December 31, 2021 As at
December 31, 2020
Financial position
Cash and cash equivalents $ 31,250,867 56,136,314
Working capital $ 62,807,859 25,370,418
Property, plant and equipment $ 626,400,098 579,617,049
Total assets $ 891,386,863 776,760,617
Long-term debt $ 151,250,785 209,660,142
Revenue
For the fourth quarter, the Company recognized revenue of $110.6 million compared to $98.2 million for the previous year’s comparable period. The increase in revenue is attributed to a higher number of gold ounces sold, partially offset by a lower average realized price. Revenue is net of treatment and refining charges, which were $0.5 million for the quarter. The Company sold 49,219 ounces of gold at an average realized price of $2,251 (US$1,786), compared to 40,023 ounces at an average realized price of $2,453 (US$1,883), in the fourth quarter of 2020.

For the year ended December 31, 2021, the Company recognized revenue of $356.5 million compared to $178.7 million for the previous year’s comparable year, which only includes six months of revenue as the Company declared commercial production on July 1, 2020. Revenue is net of treatment and refining charges, which were $1.0 million for the year. The Company sold 158,736 ounces of gold at an average realized price of $2,243 (US$1,790), compared to 102,551 ounces at an average¹ realized price of $2,480 (US$1,882), in 2020.

Cost of goods sold
Cost of goods sold was $44.5 million for the fourth quarter compared to $40.9 million for the previous year’s comparable period. The increase in cost of goods sold is primarily attributed to the increase in production costs as a result of higher tonnes mined and gold ounces produced, (including mining, processing, site services and site general and administration costs), royalty and selling costs.

Cost of goods sold was $145.5 million for the year compared to $75.3 million for the previous year, which only includes six months of costs as the Company declared commercial production on July 1, 2020.

Depreciation and depletion
Depreciation and depletion was $16.3 million for the fourth quarter compared to $14.1 million for the previous year’s comparable period.

For the year ended December 31, 2021, depreciation and depletion was $60.0 million compared to $27.1 million for the previous year, which only includes six months of depreciation and depletion as the Company declared commercial production on July 1, 2020.

Assets are depreciated on a straight-line basis over their useful life, or depleted on a units-of-production basis over the reserves to which they relate.

Liquidity and Capital Resources
At December 31, 2021, the Company had cash and cash equivalents of $31.3 million (December 31, 2020 - $56.1 million) and a working capital surplus of $62.8 million (December 31, 2020 – $25.4 million surplus). The decrease in cash and cash equivalents of $24.9 million over the year ended December 31, 2020, was due to changes in working capital primarily an increase in inventory ($55.2 million decrease in cash), a decrease in investing activities ($96.0 million decrease in cash) primarily from property, plant and equipment purchases and a decrease in financing activities ($60.9 million decrease in cash) from principal and interest repayments made on credit facilities. This is partially offset by an increase in cash from operating activities ($187.2 million increase in cash).

2022 Outlook
Victoria’s operational outlook assumes that operations will continue without any significant COVID-19 related interruptions. The Company has taken precautions to mitigate the risk of COVID-19 on operations. However, the COVID-19 pandemic and any future emergence and spread of similar pathogens could have a material adverse impact on our business, operations and operating results, financial condition, liquidity and market for our securities.

On February 24, 2022, Russia commenced a military invasion of Ukraine. In response, many jurisdictions have imposed strict economic sanctions against Russia and its interests, including Canada, the United States, the European Union, the United Kingdom, and others. While Victoria does not have any operations in Ukraine or Russia, our business may be impacted by the ongoing conflict between Russia and Ukraine and the related economic sanctions. The conflict and economic sanctions may also give rise to additional indirect impacts, including increased fuel prices, supply chain challenges, logistics and transport disruptions and heightened cybersecurity disruptions and threats. Increased fuel prices and ongoing volatility of such prices may have adverse impacts on our costs of doing business.

Refer to the “Risk and Uncertainties” section of the December 31, 2021 MD&A.

Production at the Eagle Gold Mine for 2022 is estimated to be between 165,000 and 190,000 ounces.

Mining, crushing, irrigation of ore on the heap leach pad and gold production are all expected to operate at full capacity during 2022. Stacking of ore on the heap leach pad was paused for six weeks in the first quarter of 2022 (late January through early March 2022) for regularly scheduled maintenance activities. Gold production, which lags stacking activities in heap leach operations will have a seasonal bias due to the winter scheduled maintenance program which will result in lower gold production in the first half of 2022 and higher production in the last half of 2022, similar to 2021.

AISC for 2022 are expected to be between US$1,225 and US$1,425 per oz of gold sold.

Sustaining capital, not including waste stripping, is estimated at US$55 million for 2022. Sustaining capital will be high in 2022 compared with future years due to one-time infrastructure expenditures including construction of the water treatment plant (US$17 million) and higher than normal mobile equipment rebuilds (US$8 million higher than normal).

Capitalized waste stripping is estimated at US$21 million and is included in AISC¹ but is not included in the sustaining capital above. Waste stripping will be expensed or capitalized based on the actual quarterly stripping ratio versus the expected life of mine stripping ratio and may be quite variable quarter over quarter and year over year. This accounting treatment for waste stripping will affect earnings and capital but will not affect AISC or cash flow.

Growth capital related to Eagle Gold Mine expansion initiatives is estimated at US$40 million for 2022. In addition, growth exploration spending in 2022 is estimated to be US$20 million.

The Company has initiated ‘Project 250’ aimed at increasing the average annual gold production of the Eagle Gold Mine toward 250,000 ounces of gold during 2023. The two primary opportunities to increase production are the scalping of fine ore from the crushing circuit and adjusting the seasonal stacking plan.

Scalping of fine ore is expected to reduce wear and energy requirements as well as increase overall capacity of the crushing circuit. There is potential to increase design throughput of the crushing circuit by approximately 15%, thereby increasing potential annual ore stacking on the heap leach pad by approximately 1.5 million tonnes annually. Detailed engineering and procurement of equipment is underway to enable construction to start in H2 2022 to benefit 2023 production.

The Company also intends to reduce the winter stacking curtailment down to 1 month increasing annual stacking to 11 months. Project 250 will require the addition of two 785 haul trucks and a loader.

Qualified Person
The technical content of this news release has been reviewed and approved by Paul D. Gray, P.Geo, as the “Qualified Person” as defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects.

Conference Call and Webcast Details
The webcast and conference call to discuss the 2021 fourth quarter and year ended December 31, 2021 operating and financial results and updates will take place on Monday, March 28, 2022 at 8:00am PST (11:00am EST). Call in details will be available on the Company’s website.

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