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VanGold Mining (VGLD) - Tapping the Mother of All Loads?

October 18 2020, 08:22 GMT+01:00

VanGold Mining Corp.

  • TSX-V: VGLD
  • Shares Outstanding:  104.37M
  • Share price: C$0.25 (15.10.20)
  • Market Cap: C$25.86M

VanGold Mining is engaged in the exploration of mineral projects in the Guanajuato region of central Mexico. The Company’s flagship El Pinguico project is a significant past producer of high grade silver and gold and is located just 7km south of the city of Guanajuato, Mexico. 

The Company remains focused on the near term potential for development and monetization of both its surface and underground stockpiles of mineralized material at El Pinguico. 

Can VanGold Mining re-invigorate this former producing mine and tap into one of the worlds former highest grade silver mines. They have lots of data to work with but not a lot of cash. How are they going to tackle the project and the markets?  

We Discuss: 

  • 2:29 - Company Overview  
  • 4:03 - Business Model & Strategy; The Difficult Option?  
  • 5:48 - The Journey & History: Why No One Cared for the Asset for 110 years  
  • 11:55 - Studies, Operations, & Data; Strategy on Moving Forward  
  • 14:51 - Quick Math: Net, G&A, OpEx  
  • 16:24 - Process of Value Creation & Growth: $4M Enough to Make a Difference? 
  • 28:54 - Company VS Market; What's the Next Big Thing for VanGold
  • 34:15 - Considerations on Mills  
  • 37:13 - Endeavour Silver VS Fresnillo PLC; Recovery Grade Expectations  
  • 38:35 - Defining Success: Targets, Expectations, & Timing 

Company Overview 

VanGold Mining is trying to rejuvenate and restart a 110-year old Silver and Gold mine in central Mexico which was an important high-grade past producer of Silver and Gold. We sppoek with Vangold Mining CEO, James Anderson, to find out that in the last 6-months, VanGold Mining has started to find out what is there. Four-months ago sent a 1,000t bulk sample from material that was left over from mining 110-years ago to a local mill and got the results back last week. The results were good and the stock traded to a new 52-week highVanGold Mining haalso purchased their own drill rig which will be on site in about 30-40 days and they will start drilling underground. This mine is about 7km away from a mining city of 150,000 people which makes it a straightforward project and has a much better chance of having efficacy for shareholders. 

Pinguico

Location of the El Pinguico mine in Guanajuato, Mexico - VanGold Mining presentation Oct'20

El Pinguico 

VanGold Mining have found 2 stockpiles of material at the property. On the surface there's a waste pile which was waste 110-years ago and VanGold thinks that will make a little bit of money to pay some bills and are planning to send that to one of the 4 local mills nearby. The stockpile at surface is at lower-grade so the tolling and transportation costs could eat up most of the margin to be had. Potentially they have as much as a $2M contribution from this stockpile says Anderson. 

Screenshot (80)

Pinguico Mines Company which closed in 1913 due to the Mexican Revolution - VanGold Mining presentation Oct'20

They hope that they can make USD$15M-20M for the underground stockpile which is 3x the grade of the surface waste. The initial difficulty being the money needed to get it to surface and transport it to a mill. So realistically contribution from the underground stockpile is on the backburner for now whilst they work out the operational sequencing and raise money. Anderson thinks that if they can possibly bring that to surface safely, without too much expenditure, and send that on to a local mill, they will potentially make some very good margin. But they do have to bring it to surface safely which is a worthy endeavor says Anderson.  

Screenshot (79)

The El Pinguico mine today - VanGold Mining presentation Oct'20

VanGold is also sampling by trenching across the veins on the southern part of the property. All the samples and assays are from underground sampling of exposed vein material that was left 100-years ago and was 5-6g/t Gold equivalent in underground vein exposures. They plan to start drilling into those veins from underground in about 40-days’ time when the drill rig arrives and hope to start that very quickly and efficiently. Then in Jan/Feb 2021 they have a drill contractor coming to drill some of the surface drill holes and some of the deeper targets including the Veta Madre Target. 

Screenshot (78)

The Veta Madre fault - VanGold Mining presentation Oct'20

VanGold also has a larger land package immediately south of the main property that they’re working on. There's a 1.5km gap and then there are 2 fairly large pieces of ground called the Patito 1 and Patito 2 which gives them a larger footprint in the mining camp. The current property is a smaller footprint, but it is about 2.5km worth of strike length along this known break, high angle, high grade of instruction.  

Historical data 

VanGold has the annual report from 1909 and it details the quantity and average grade that was produced back thenThey reported USD$0.57c/oz Silver and about USD$20/oz Gold and Anderson says that it was remarkably high-grade Gold. There are 8 different geological reports from 1906 of this New York Stock Exchange listing and VanGold are able to use this information from the mine at that time to take them forwards today. 

Veta Madre 

The bigger target called Veta Madre, likely, claims Anderson, cuts underneath the VanGold property, but is it important enough for investors to take note? Anderson says that about 10km to the North, right along that Veta Madre regional break there is a very famous mine, in Mexican geological circles called Valenciana which produced somewhere between 700Moz-1.5Bnoz Silver over the centuries and VanGold would aim to be Valenciana #2. Their high-grade, high angle features, plunging down will likely intersect with Veta Madre, which was mined by Fresnillo within just 250m of the VanGold claim boundary and Anderson is 95% certain that this crosses their claim. The plan is to drill down there find out which could be very important for VanGold shareholders.  

company-profile-ad-copy-1024x115-Oct-07-2020-06-00-35-80-AM

VanGold has about CAD$4,5M in the treasury, having purchased the new drill and they have enough money to drill deeper holes and test the targets. After that VanGold do need to raise more money. A deeper hole in Veta Madre, which they plan to be drilling in January-February cuts through 25m of the type of grade that was mined property 100-years ago and will absolutely change the market cap and share price if successful.  

Expectations   

Anderson says that VanGold have done everything the right way. They are doing everything necessary in terms of all the geological interpretation and the wireframe building before they start on the drilling and are now ready to drill those drill holes from undergroundAnderston thinks that there is a very good chance of success drilling these holes underground and the potential for near term cash flow is high.  

To find out more, go to the VanGold Mining Website.


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