The Eagle Gold mining project has been given the go-ahead to start construction with the issuance of a quartz mining licence.

John McConnell, the president and CEO of Victoria Gold Corp., said this morning the licensing was the biggest milestone in the project's three-year history.

Securing the funding for construction continues to be the project's major stumbling block. However, McConnell said he is confident the funds will be in place for construction to begin next spring.

A spring ground-breaking would put the project about eight months behind its original schedule.

But "the gold's still in the ground,” McConnell noted, adding that an eight-month delay in this economic environment is still close to being on schedule.

Eagle Gold has not yet secured its water licence, but McConnell noted that's required more for operations and he's hoping to have that in place next year.

The Eagle Gold project, located northeast of Mayo, is planned as an open-pit heap leach mine.

McConnell said the project would employ about 200 people during construction and closer to 400 at full operation. He has said it would be bigger than the Faro lead-zinc mine, which operated between 1969 and 1998.

It's expected to produce about 200,000 ounces of gold annually.

While the Bellekeno and Wolverine mines have announced plans to scale back operations in the face of struggling commodity prices, McConnell said Eagle Gold is still viable with gold prices where they are.

"Certainly, gold is lower than it was a year ago, but our feasibility study was based on a gold price of $13.25, and coincidentally, this morning, I think gold was at $1,325.

"So we still have a very robust project at $1,300 gold,” he said.