VanGold Mining (VGLD.V; VGLDF) is an exploration company engaged in silver and gold mineral projects in the Guanajuato region of central Mexico – an area with over 500-years of mining history. The Company’s flagship El Pinguico project is a significant past producer of high-grade silver and gold and is located 7 km south of Guanajuato City, Mexico. Other VanGold Mining projects based in Mexico include Patito I & II, Analy I & II, and the Three Amigos.
SAFE MINING JURISDICTION
VanGold Mining’s flagship project, El Pinguico, is located in the region of Guanajuato, Mexico – an area with over 500-years of rich mining history – and is a historic high-grade silver and gold mine that was in production from the late 1880s until 1913.
Today, the El Pinguico Property totals 71 hectares and is comprised of two mining concessions – El Carmen and El Pinguico. The Project is located seven kilometers southeast of Guanajuato City, Mexico with easy road access. The historic mine is in close proximity (2-30 kilometers) to several active, modern mining operations. These operations include Endeavour Silver’s El Cubo and Bolanitos mine and mill complexes, Fresnillo PLC’s Las Torres mine and mill operation, and Great Panther Mining’s Guanajuato mine complex which includes the San Ignacio mine.
In 2017, VanGold Mining completed sampling programs of the mine’s underground and surficial stockpile material to quantify its exploration potential. VanGold Mining will be commencing an underground drill program for December 2020 with a surface drilling program to follow in Q1 2021.
GUANAJUATO DISTRICT REGIONAL GEOLOGY
The Guanajuato District is near the southern edge of the Mexican Central Plateau, where the northwest structures of the Plateau have been abruptly cut by the easterly trend of the Transverse Volcanic Belt. A few kilometers south of Guanajuato are outcrops of only Pliocene, and younger, sediments and volcanics; to the north, northwest, and northeast, the most common rocks exposed are Cretaceous calcareous sediments folded into open and tight northwest-trending folds.
The district lies on the northeast flank of a poorly defined northwest-trending anticline (Wandke and Martínez, 1928). Normal faults parallel to the anticlinal axial trace have dropped the central portions of the anticline downward, and a younger, second set of normal faults formed a series of horsts and grabens trending nearly perpendicular to the axial trace.
The fault parallels to the anticlinal axial trace cut rocks as young as late Oligocene and are mineralized with adularia giving a K-Ar date as 27.4 m.y. (Gross, 1975). Therefore, a late age is assigned to the faulting. This age corresponds well to the taphrogenic stage of the post-Hidalgoan orogeny described by De Cserna (1960).
The oldest rocks of the Guanajuato District are marine organic and calcareous black shales deposited in the Triassic through the Cretaceous Jaliscoan sea (De Cserna, 1960). These are unconformably overlain by post-orogenic continental red beds (Edwards, 1955) and Eocene and Oligocene andesitic and rhyolitic air fall tuffs. Other than alluvium and landslide deposits. The nearest outcrops of post-Oligocene rocks, a basaltic cap at Cerro del Cubilete is about 13 kilometers southwest of Guanajuato.
Underground drilling targets are set to commence in December 2020, primarily from the Don Ricardo target area. The first phase of drilling will consist of approximately 2,100 meters of drilling in 12 holes at drill stations located at the end of crosscuts within the mine. Surface drilling will commence in Q1 2021 and will consist of approximately 4,000 meters of drilling in 13 holes. An additional three holes will be drilled to test for the extension of the regional Veta Madre (Mother Vein) fault structure.
SURFACE STOCKPILE OF MINERALIZED MATERIAL
On the surface of the El Pinguico Project is an additional large stockpile of material, which originated as waste material from the El Pinguico shaft during mining from circa 1904-1913.
In 2012, a private company commissioned by the then owner of El Pinguico calculated the volume of the surface stockpile as 92,849.5 m3, with a surface of 15,769.40 m2.
In January 2017, Findore S.A. DE C.V. (Findore), a private geological services company engaged by VanGold, surveyed 10 trenches at different locations and depths of the stockpile, resulting in 20 samples (two samples per trench, one at the top and one at the bottom). The samples confirmed there was no movement of economic values from the surface to the bottom of the stockpile due to weathering or erosion over time. The samples’ average grades as follows:
Based on the foregoing, VanGold estimates the surface stockpile comprises approximately 175,000 to 185,000 tonnes of material grading between 0.45-0.52 g/t Au and 67-70 g/t Ag (1.25 g/t-1.35 AuEq). The potential quantity and grade of the surface stockpile are conceptual in nature as there has been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in the stockpile being delineated as a mineral resource.
LOCAL GEOLOGY OF EL PINGUICO
Outcrops in the area of the El Pinguico Property are comprised of Tertiary volcanic formations, called calderones and bufas, and host the El Carmen-El Pinguico vein. The oldest unit in these concessions is the Bufa Formation and consists of rhyolites, tuffs, and rhyolitic breccias. It has a light pink color, a thickness of approximately 500 meters, and hosts most of the mineralization of the El Carmen-El Pinguico vein. The Calderones Formation overlies the Bufa Formation and outcrops in the southeast portion of the mining district of Guanajuato. It consists of massive andesite, tuffs, and andesitic breccias of green color, and has a thickness of approximately 500 meters. In the north exists a dike of rhyolitic composition.
REGIONAL MINING HISTORY OF GUANAJUATO: 1500 – 1700
The 500-year mining history of Guanajuato, Mexico began when the Spanish initiated mineral exploration in the region in 1520 and was followed by significant silver discoveries during 1548-1554 near the San Bernabé mine – west of present-day Guanajuato. The discovery of silver led to settlements in the region, and eventually, Guanajuato City was established as one of the premier mining districts in New Spain.
In 1548, the first silver vein – San Bernabé – was discovered by a local mule driver. At that time, the silver ore was hand-mined and sorted, then transported by mule to the neighboring region of Zacatecas where it could be milled. In 1558, the first mine shafts were sunk at the Rayas and Mellado mines, leading to the discovery of the now-famous Veta Madre (Mother Vein) of Guanajuato. Today, the Veta Madre can be seen running along the hills of Guanajuato for 30 kilometers trending northwest to southeast, and is marked by mines and shafts along its length.
These discoveries triggered an exploration rush that led to the identification of the Valenciana, Tepeyac, Mellado, Cata, and Sirena silver mines. From 1760 to 1810, the Guanajuato mines accounted for 30% of Mexican silver production and 20% of the entire world’s output of silver. In fact, silver discoveries at the Valenciana Mine in 1771 were estimated to have produced one-third of the world’s silver.
HISTORY OF THE EL PINGUICO SILVER & GOLD MINE
The El Pinguico Project is comprised of two historic mines – the El Carmen and the El Pinguico. Early work on the El Pinguico Property is thought to have commenced around 1890 and exploitation of its rich deposits began in 1904; one-year after ownership of El Pinguico was transferred from The Guanajuato Development Company to The Pinguico Mining and Milling Company. In total, the mine was in production from the late 1800s to 1913 and produced over 200,000 ounces of gold equivalent (EMBSA, Proyecto El Pingüico, 2014). After several years of successful operation, the mines were closed due to local violence associated with the Mexican revolution.
Later, in 1932 an engineer named Luis Frausto carried out feasibility studies at the two mines – El Carmen and El Pinguico – and according to his calculations, 75,000 metric tonnes of potentially economic mineral with estimated grades of 300 to 400 g/t Ag and 4 to 5 g/t of Au exist at the mine.1
“The shaft was carried on down to the 350’ depth where a short cross-cut encountered a narrow vein of rich ore which afterwards proved to have been the apex of the values in a true fissure… This narrow vein rapidly widened as depth on it was attained until it reached a width varying from 10’ to 33’ all highly mineralized from wall to wall… After the pay ore was found… it became the most talked- of mine in Mexico; its record is still ranked as one of the greatest bonanzas of modern mining in Mexico…” – G. W. McElheney, October 1945
1 Of course these figures are historic in nature, have not been verified, and should not be relied upon. Additional work is required to verify the tonnage and grade of any minerals at these historic mines. A “qualified person” as defined under NI 43-101 has not done sufficient work to classify this historical estimate as current mineral resources or mineral reserves and VanGold is not treating the historical estimate as current mineral resources or mineral reserves.
The Patito I and II claims are located approximately 1.5km south west, and 3.0km due south of the El Pinguico mine project. The properties are sparsely explored and never drilled, yet are well located within the region to potentially host precious metal deposits.
The Patito I claim has central coordinates 268132 east and 2318381 north (WGS84 datum) and elevations from 1940m to 2300m above sea level, and is approximately 1.5 kilometres south of the El Pinguico claims.
Geological, structural, and alteration mapping has been done on a scale of 1:5000 and was complemented with rock samples. In total, 17 samples were taken on the claim and the surrounding areas.
Old workings discovered on the claim include one tin mine and a few old, small, non-metallic mines (green andesitic rock). The tin is observed as thin veins of 10-15 centimetres – striking in all directions.
Samples taken from Patito I have low silver and gold values, but in analyzing the available geophysical images of the property, we can see some compelling magnetic anomalies at depth in the southeast corner of the claim allowing for the possibility of further and more detailed exploration.
As with Patito I, geological, structural and alteration mapping was completed on a scale of 1:5000 and was complemented with rock samples. In total 9 samples were taken from the claim and in the surrounding area. Only one old working – of a stope within sulphides – was identified along with two tin mines.
The samples taken from Patito II have low silver and gold values, however some samples indicate a subtle gold anomaly in the northeast corner where the old working (stope) is found. Analyzing the geophysical images, we can also see some magnetic anomalies at depth in the north, east and west of the claim block.
The Analy I & Analy II concessions are located 100 km east of the city of Guanajuato, Mexico. Access is very easy along paved highways to within 8 km of the properties, and then on dirt and gravel roads. Together the two properties total 722 hectares.
The area is an old Ag-Pb-Zn mining camp which has never been explored using modern exploration methods.
The geology consists of acid to intermediate volcanics and well bedded meta-sediments.
An old adit and shaft, which have not been mined for some decades, are located just outside the boundary of the western concession block. The adit exposes a 0.5m to 2.5m wide lode of limonitic, brecciated, silicified rock with strongly vuggy sacchariodal quartz, cut by later quartz veins.
On the slope near the adit – and extending into the western concession block – there is abundant scree/float of limonitic silicified/brecciated/quartz veined volcanics and strongly silicified hydrothermal breccia. Float cobbles of limonitic silicified meta-sediment cut by vuggy quartz veins with local box-works after sulphides were observed at several drainage sites.
A first-stage exploration strategy will include:
A program of geological mapping and reconnaissance float and subcrop sampling. Another priority will be the locating, mapping and sampling of old mines and workings within the concession areas.
The Three Amigos Project is comprised of three mining concessions – El Ruso, Ysabela and Camila – located near the northern boundary between the States of Guanajuato and Queretaro in central Mexico. All three properties are in close proximity of historic gold, silver-lead-zinc and mercury producing mines. The properties can be easily accessed by roads from Guanajuato and Queretaro. A first-stage exploration program is planned for the El Ruso property in 2021 to identify drill targets.
The El Ruso Property covers 493 hectares of mineral claims and is located in the northwest of the State of Guanajuanto, Mexico. Developed roads allow the property to be easily accessed within three-hours from Queretaro City. Adjacent to the El Ruso property are historic gold, silver and mercury mines and prospecting pits – including the El Nacimiento skarn deposit; no historical records are available. Vangold’s 2021 first-stage exploration program will be the first modern mineral exploration in the area. The exploration program will include:
The Ysabela and Camila properties cover 438 and 500 hectares, respectively, and are located in an old silver-lead-zinc mining camp in the Sierra Madre Oriental mountain range, straddling the northern border between the Mexican States of Guanajuato and Queretaro. The Ysabela property is located close the town of Rio Blanco in the northwestern margin of the State of Guanajuato, where there is active artisanal mining of mercury by locals. Whereas, the Camila property is located on the northeastern edge of the Queretaro mining region, which historically was a significant producer of Au and Ag in the 1800’s. Accordingly, abandoned silver-lead-zinc and gold mines are located in the vicinity of the two concessions; such as the Guadalupe, Santa Ana, and Golden Cave mines. These mines operated intermittently from the late 1800’s to late 1900’s, however, there are no historical records.
CHAIRMAN & CEO
Mr. Anderson serves as Chairman and CEO of VanGold Mining Corp. His career began in the financial services industry with a successful 19-years as a retail broker, investment banker, and manager with several Canadian investment firms. These included First Canada Capital Ltd., Research Capital Corp., and Majendie Securities Ltd., where he was instrumental in the financing of numerous small-cap public companies in the mining exploration and development industry. James then went on a career in mining exploration, serving as CEO of NuLegacy Gold Corp. from 2012 until April 2019. He is also currently a director of Orestone Mining Corp. James was born in the gold mining community of Timmins, Ontario, and is a graduate of the University of Alberta.
Mr. Oliver manages Myrmikan Capital LLC, of New York, NY, which actively invests in the precious metals mining sector. Mr. Oliver also serves as President of the Committee for Monetary Research & Education, an organization founded by prominent economists and businessmen in 1970 in opposition to the Bretton Woods monetary system. His articles have been published in Forbes.com, The Wall Street Journal, The Washington Times, Real Clear Markets, National Review Online, among others, and he speaks frequently at precious metals conferences. Mr. Oliver has a J.D. from Columbia Law School and an MBA from INSEAD.
Mr. Silas is currently Corporate Secretary of Barksdale Capital Corp. During his tenor as President and Director of Barksdale, he played a vital role in acquiring the company’s flagship Sunnyside project in Santa Cruz County, Arizona. Sunnyside is located adjacent to South32’s Taylor deposit, which was acquired in 2018 for $2.1 Billion. Mr. Silas has 20+ years’ experience in corporate governance, regulatory compliance, and administration of junior resource companies. Prior to Barksdale, Mr. Silas was Director and Corporate Secretary of Gold Standard Ventures Corp. (listed on the TSX and NYSE) from 2009 until 2017. During his time at Gold Standard, the Company’s market capitalization increased from $23 million to over $400 million. His understanding of the junior exploration markets and ability to position, structure, and administer companies has been integral to their successes.
Hernan Dorado Smith
Mr. Hernan Dorado Smith has been a Director of VanGold Mining Corp. since April 2017. Mr. Smith is a 5th generation mining engineer and possesses 15-years of underground and open-pit mining experience. He has in-depth knowledge of the El Pinguico mine in Guanajuato, Mexico. He has worked with several mining companies on major projects: New Gold at its Peak Mine, Australia and Rainy River, Canada; Panamerican Silver at Navidad, Argentina and La Preciosa, Mexico. Mr. Smith graduated as a mining engineer from Universidad de Guanajuato in 2003 and received an Executive MBA from Escuela Europea de Negocios, Salamanca in 2013.
Mr. Gehlen was Manager of Resource Development for OceanaGold Corp. from 2013 to 2018. Prior to his term at Oceana, Mr. Gehlen served as VP of Exploration for Pacific Rim Mining Corp. where he managed all aspects of mineral exploration for the company and was in charge of exploration at the El Dorado gold deposit in El Salvador, and the Diablillos silver-gold deposit in Argentina. Mr. Gehlen currently serves as Manager of Corporate Development for Gold Standard Ventures Corp. Bill earned an M.S. (Geology) from the University of Idaho after completing a B.Sc. (Geology) at the University of Oregon.
Mr. Wenzel is a Chartered Professional Accountant (a member of the Chartered Professional Accountants of BC) with more than 20-years of public accounting experience as an auditor and senior-level executive with both public and private entities in North and South America. Mr. Wenzel is from Mexico City, is bi-lingual, and has served as the Chief Financial Officer for several exploration companies.
2820 – 200 Granville St,
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