VanGold Mining's new CEO, James Anderson, explains the explosive possibilities of the company. 7/27/20
VanGold can generate two years+ of steady free cash flow of $17 M to $26 M starting in about 6-9 months by monetizing historical surface and underground stockpiles of ore.
While free cash flow from harvesting stockpiles would greatly reduce the need for future equity raises, better still is the tremendous exploration and near-term production potential. High-grade ore veins in and around historical workings is low-hanging fruit that could pay off for years to come.
The head grade of 1.23 g/t Au Equivalent. on the 1,039 tonnes of surface material that was passed through the mill was almost exactly what we expected. That gives us confidence in our other grade assumptions — especially for the underground stockpile — which we believe is about three times higher than the surface stockpile, roughly 3.6 g/t Au Equivalent.
In any underground operation, even though you are mining consistent tonnage, the mining widths and grades of te vein vary. There will be times when what you are mining is mostly rock, not ore.
Miners keep a stockpile of lower-grade ore to supplement the material sent to the mill. We believe our underground stockpile is high-grade ore that never made it out of the mine when operations ended in 1913.
With regard to mining the surface stockpile, it could not be easier. A front end loader will shovel material into 20-tonne trucks for delivery to a local mill. With regard to the underground stockpile, there are several additional steps. First, we need to clear the bottom of the El Pinguico shaft and sample the bottom of the underground stockpile to see if it grades the same 3.6 g/t as the top of the stockpile.
As established by VanGold’s trenching (to NI 43-101 standards), the top of the stockpile grades about 3.6 g/t Au Eq. We plan to further establish and confirm that grade by sampling the bottom. We are carefully studying options to either refurbish the El Pinguico shaft or the Sangria adit, to 21st century safety standards, to bring the uunderground material to surface. Finally, let me emphasize this point, we need to establish a medium-term contract with a mill to process our material.
Finally, there’s a decent chance that the entire region’s blockbuster vein, the Mother Vein, passes through VanGold’s property at depth with (possibly) very wide stopes and high grades.
We are nearly certain the Veta Madre or ‘Mother Vein’ crosses our property at depth. The structure is regional in size, having a surface expression over 25-30 km. Meanwhile, we know that Fresnillo PLC mined the Veta Madre to within 250m of our property border.
As far as looking at nearby properties, we certainly have some ideas about that, but I really can’t say more at this time. There is an important balance for VanGold regarding staying focused on the work we have ahead at El Pinguico, and yet maintaining our eyes on the horizon too. We’re keenly watching for new opportunities within the 450 year old Guanajuato mining camp.
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