VanGold has been very busy these last few months as the company looks to restore the El Pinguico mine, which is located 7km away from the silver-rich city of Guanajuato in Mexico.
The El Pinguico mine was previously a 400 ton per day mine operated by the “Pinguico Mines Company” which was listed on the New York Stock Exchange until operations ceased in 1913 due to the Mexican revolution.
As the company has showcased, even during COVID business can be done in a timely and efficient manner. Since March, the company has:
- Successfully conducted a bulk sample of its above-ground stockpile
- Closed a private placement to capitalize the company for the foreseeable future
- Begun clearing the El Pinguico shaft
- Geological work started August 24th with initiatives that will support drill hole targeting. Both underground and surface structural mapping is now being undertaken
- Optioned back El Pinguico royalties to streamline the asset’s ownership structure
- The company’s sampling of exposed vein material, which resided in the vicinity of the shaft is out for assay and expected for release shortly
- In late September, the company purchased an underground drill rig with drilling commencing in November
Some near term catalysts that the market should be on the lookout for are:
- Drilling commencing in late November
- Assays for underground channel sampling expected shortly
- Generating Free-Cash Flow: Potentially running bulk sample on underground stockpile
- Will drill from surface to test for the extension of the Mother Vein onto VanGold’s property in Januany
For a more thorough walk through of the companies story, I encourage you to review the companies infographic, here: https://www.goldtelegraph.com/company-spotlight-vangold-mining/
We recently caught up with James Anderson, CEO, and Chairman of VanGold, and asked him a few questions about the company’s upcoming plans:
Alex Deluce: Thank you, Mr. Anderson, for taking the time to provide our readers with another update on VanGold. Many things have happened since we did a Q/A regarding corporate development ranging from optioning back royalties at the mine to purchasing an underground drill rig. It seems the company is positioning itself for a very active fall leading into the new year.
Can you expand on why these two recent milestones will help strengthen VanGold long term?
Thank you, Alex, it’s always a pleasure to discuss VanGold’s progress with you. Let me start with the purchase of our own drill rig.
It is VanGold management’s belief that we are in a powerful long-term bull market for precious metals. Therefore, in the months ahead it may well become difficult to secure a drill rig from a drill contractor. That was certainly the case from 2009 to 2011 in many mining jurisdictions – it was very difficult to get a drill, more difficult to get good drillers, and impossible to hire experienced geologists and mining engineers. We at VanGold are taking steps to curtail any downside effects of the bull market on our operations.
The drill rig we have purchased, after looking at many alternatives, is just right for our needs. It is a small enough rig to fit into the closed quarters of our 110-year-old adits and crosscuts, and powerful enough to drill as deep as 430m holes. It can also drill up to 200m with large diameter HQ size core, which is something we intend to do as much of as possible with the initial drill campaign which we plan to start near the end of November. The larger drill core will give us a better chance for good core recovery when drilling through our quartz vein material and will allow company geologists the opportunity to study the vein system more easily since they will have larger and more representative samples of the veins to examine.
From a financial perspective, we feel the drill will likely pay for itself after the first dozen drill holes – and we certainly expect to be drilling a lot more than that in the months ahead.
Also, VanGold’s situation in Mexico is very different from many other exploration companies that you might cover. Our property is located just 7km from a mining city of 150,000 people, where there are many experienced underground drillers. These drillers will be happy to have regular work near the city, and to be able to be home at night for dinner with their families.
Regarding our arrangement to repurchase El Pinguico’s underlying royalties, this does many things for VanGold, and is a classic Win-Win situation. First, the arrangement more perfectly aligns the interests of our Mexican partners – mining engineers Hernan and Gerardo Dorado – with all VanGold shareholders. Second, it eliminates several underlying royalty obligations for the company. The Dorados and the rest of the team at VanGold plan to make the company into an important multi-asset, silver focused, precious metals company, and this agreement is part of the foundation of that future.
Alex Deluce: As crews have been working hard to clear the El Pinguico shaft, I noticed in a recent news release that the company is already sampling material from exposed areas of the El Pinguico vein.
As we await assay results from the sample, how is excavation going for the remainder of the shaft, and do you have a rough estimate as to when the company will have access to the level 7 adit level?
Sampling of the 40m of vertical extent of vein material found exposed near the El Pinguico shaft has been done. Those assays are expected within 5-7 days.
Sampling of the entire length of the #4 adit level has also been done. Channel samples were collected every 10 meters, sent to an assay lab for crushing, and then tested with an XRF scanner to reduce initial assay costs. Those results will be studied, then crews will return to the #4 adit level to sample several meters left and right of elevated gold, silver, and trace element numbers.
Crews continue to work removing material from the El Pinguico shaft. This work is slightly behind schedule, as noted in our news release of September 28th, 2020. It is tricky work; our crews are not being hurried in any way, and therefore predictions about timing for completion of the task are difficult. That being said, I’d be disappointed if we had not reached Level Seven by mid-October.
Alex Deluce: In early June, the company conducted a really successful bulk sample on the above-ground stockpiles, which showcased great recoveries.
As the company continues clearing the shaft, does the company plan on processing its underground stockpiles in 2020, and can you elaborate a little bit on the estimated tonnage and grade on the underground stockpiles?
The bulk sample we conducted was very successful. We achieved average gold recoveries of 75% and average silver recoveries of over 60%. We produced 18 ounces of gold and 913 ounces of silver – which admittedly is a modest beginning, but an important beginning, nonetheless. Once we sample the bottom of the UG stockpile, we will be in a better position to plan how to extract that material from underground safely, and to negotiate with local mills regard the financial terms for processing material from both stockpiles.
We describe the above ground stockpile as an exploration target, comprised of between 175,000 and 185,000 tonnes of between 1.25 and 1.35 grams of gold equivalent per tonne (combined Au and Ag). The UG stockpile consists of an historic estimate (not to NI43-101 compliant standards) done by the Mexican Geological Survey Agency in 2012, of 148,000 tonnes of 3.56 gpt AuEq.
Alex Deluce: With underground drilling set to begin in November and initially focusing on the Don Ricardo target area, does the company also plan on conducting surface drilling in the coming months?
Yes. We are currently getting quotes from drill contractors that will test the Don Filipe target area in the north (extensions of high grade Ag and Au mined historically), as well as the Don Ernesto target area that will test for the extension of the Veta Madre (or Mother Vein) from Fresnillo PLC.’s claims to the east and onto our property at approximately 500m depth. This surface drilling will likely commence in January, 2021.
Alex Deluce: It is evident the company will be extremely active with regards to advancing and restoring the mine in the coming months.
Are there any other upcoming catalysts that you would like to note for our readers that are learning about the VanGold story?
One additional thing that we have been working on is trenching on vein exposures on the south side of the property. These vein exposures are either direct extensions of the main El Pinguico vein system, or are separate and distinct targets. In February I was able to enter many old adits in this area and observe extensive exposed veins with evidence of past artisanal mining. My instincts tell me we may have some good surprises along the way from this area.
Alex Deluce: Thank you very much, James, for giving our readers a glimpse into the companies exciting emerging development. We will follow up in about a month for another update.
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