VanGold Mining (TSX-V: VGLD) continues to advance and restore the Pinguico project in a very timely and effective manner.
VanGold has reinvented itself in the past year as it has done plenty of things that now set the company up for a very aggressive and expansive 2021.
As many of my readers know, the mine is located just 7km from the city of Guanajuato, which is one of the premier silver districts in the world. In fact, it is worth highlighting the historic Valenciana Mine, which was a mine located in Guanajuato.
The mine produced 60% of world silver production in the 18th century, as the mine was notoriously known to extract ore from the mother vein, which was discovered in 1598.
Since then, many deposits have been found, developed, and put into production in the region since the mother vein’s discovery.
Now back to VanGold, the company has been working diligently to restore the former producing Pinguico Project these past eight months.
The mine was in production from the late 1800s to 1913 and produced over 200,000 gold equivalent ounces. After several years of successful operation, the mine was closed due to local violence associated with the Mexican revolution.
Today, the project is surrounded by silver majors that mine very rich, economic deposits.
The company has a complex but fascinating value proposition to investors as there are plenty of moving pieces here.
First, the company has surface and underground stockpiles which was left from the previous operator.
Surface Stockpiles:
VanGold estimates the surface stockpile comprises approximately 175,000 to 185,000 tonnes of material grading between 0.45 gpt Au and 67 gpt Ag (100 gpt AgEq) and 0.52 gpt Au and 70 gpt Ag (110 gpt AgEq).
Underground Stockpiles
Inside the El Pinguico mine, there is a large stockpile of broken mineralized material, which has existed since the mine closed in 1913. The Mexican Geological Survey have completed historical estimates of the stockpile’s size and grade.
The historical estimate came in at 25,600 “Certified Tonnes” and 71,228 “Uncertified Tonnes.” The certified tonnes were established through trenching of the stockpile, and giving their results an influence of 5m in depth. They estimated the grade of this material as 1.67 gpt Au and 166 gpt Ag or 303 gpt AgEq.
The company currently has a team clearing the shafts, which includes ten levels that will enable the company to access the material underground, allowing them to bring it to the surface to be processed.
Upcoming Catalysts:
With the on-going work happening to get access to the underground stockpiles, which represents a significant catalyst for generating near-term cash flow for the company.
Drill Programs:
Underground Drilling
The company has planned an underground drill program, which is set to commence in early December, primarily from the Don Ricardo target area.
This drilling will use drill stations located at the end of cross-cuts within the mine and will consist of approximately 2,230m of drilling in 14 holes as a first phase program.
It is worth noting in September; the company purchased an underground drill rig. This is a key variable for future plans as the company will have the capability to have the drill turning on an on-going basis for the foreseeable future, which should generate plenty of news flow from the company in the coming months.
This program has plenty of momentum behind it as the company reported stellar assay results in early October that included 536.8 grams per ton silver equivalent or 6.71 grams per ton gold equivalent over 55 meters of vertical extent. Drilling will be targeting areas 100-400m south of these assay values.
The company reported these assays of channel samples taken from safely accessible pillars and stope walls within an ore shoot of the El Pinguico vein system between the 4th and 6th levels (from approximately 130m to 185m below surface), covering an area approximately 55 meters in height, by 60 meters in width and where the stopped out area, plus remaining vein material ranges from 1.5 meters to 5.5 meters wide.
This exposure is adjacent to the El Pinguico shaft.
The upcoming program will consist of approximately 14 drill holes, totaling approximately 2230m of HQ and /or NQ diamond drilling. The drill program will initially focus on the Don Ricardo target area, which is immediately south of where this underground vein was sampled.
Surface Drilling:
Surface drilling will commence in February consisting of approximately 4,000m of drilling in 13 holes, and will include 3 holes to test for the extension of the regional Veta Madre fault structure.
As touched on in the opening paragraphs, the Veta Madre (the mother vein) is a regional fault structure, observable for over 25km, and responsible for +/-1.5 billion ounces of silver production.
The company believes the Vata Madre could extend on to their property. The company will focus on the “Veta Madre Target” in the new year which it will test from the Don Ernesto target area:
As we get closer to the new year, I am sure the company will provide a detailed plan for the surface drill program, which will test this exciting target.
Processing Stockpiles
As touched on above, the company is continuing to work on clearing all the shafts so they can safely get to the underground stockpiles, which management tells me that after some delays, is now just days away.
It provides shareholders the near-term catalyst of seeing the company potentially generate cash flow between the surface and underground stockpiles in the coming months.
The company is well equipped financially to continue to advance on all these initiatives as the company currently has CAD 4.6 million on its balance sheet as of 8/15/2020.
Conclusion:
VanGold has plenty of things to look forward to in the coming months, and I am sure 2021 will be incredibly busy for the company.
In the coming weeks, I will be doing a Q&A with the Chief Executive Officer and Chairman, James Anderson, to go over all of the upcoming work programs and a general update.
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