Endeavour Silver Now Our Largest Shareholder

VanGold Mining Corp (TSX-V:VGLD) is pleased to announce it has closed the acquisition of the El Cubo Mine and Mill complex from Endeavour Silver Corp. located 8km by road northeast of the Company’s El Pinguico silver-gold project near the city of Guanajuato, Mexico.

Closing the El Cubo Acquisition:

On March 16, 2021 the Company signed a definitive asset purchase agreement with Endeavour to acquire the El Cubo Complex, finalizing the binding letter agreement entered into between VanGold and Endeavour in mid-December 2020. VanGold and Endeavour closed the purchase and sale of the El Cubo Complex on April 9, 2021, with the execution of customary closing documents in Mexico and Canada, and with the payment to Endeavour of US$7,000,000 cash, plus applicable Mexican VAT of US$1,275,200, and the delivery to Endeavour of 21,331,058 shares of VanGold.

VanGold Director Hernán Dorado said: “Now we begin the process of re-commissioning the El Cubo mill. It remains the Company’s intent to begin processing mineralised material at the mill from our El Pinguico and El Cubo operations by Q4, 2021.”

VanGold’s newest advisory board member Ramon Davila said: “With this acquisition VanGold can readily combine the El Cubo and El Pinguico assets to create Mexico’s newest silver and gold producing company. The availability of mineralised material from El Pinguico’s historic stockpiles and El Cubo’s current resources as well as a new approach from management gives us great flexibility in deciding where to source material for the mill, and how to sequence that throughput. As a graduate of the University of Guanajuato School of Mines, it is satisfying to see both of these mines returning to operating status, becoming part of the long history of the Guanajuato mining district that has been the source of many successful mines for almost 480 years.”

El Cubo Complex:

In the coming months, the Company intends to refurbish the El Cubo mill and begin processing mineralized material from both its El Pinguico and El Cubo properties at the mill beginning in Q4, 2021, ramping up to a throughput of ~750 tonnes per day. According to the Company’s recently announced PEA from Behre Dolbear and Company (USA) Inc., the Combined Project contains total indicated resources of 718,655 tonnes grading 160 gpt Ag and 1.90 gpt Au, or 306 gpt AgEq, which equates to 7.2 M oz AgEq, and total inferred resources of 1,453,000 tonnes grading 214 gpt Ag and 2.78 gpt Au, or 435 gpt AgEq, which equates to 20.4 M oz AgEq. These estimates use a 1:80 ratio for Au and Ag prices.

Behre prepared a discounted cash flow model for the Combined Project to determine the Net Present Value, Internal Rate of Return, Initial Capital and Sustaining Capital, and payback period. Cash flow estimates were prepared on an after-tax basis and in accordance with NI 43-101 Standards of Disclosure for PEA studies, using Base Case metal prices of $1527 for gold and $19.49 for silver. The PEA considers a plan to ramp up to a 750 tonne-per-day operation, with an initial mine life of 7.0 years. On an after-tax basis, the combined project generates a Base Case NPV (5%) of $32.9 M and an IRR of 105%, excluding El Cubo acquisition costs. Using commodity prices of $22.41/oz Ag and $1756/oz Au, which are +15% above the Base Case the after-tax NPV(5%) is $79.0 M and the IRR is 344%. Behre calculates a Base Case payback period of 1.87 years.

Behre’s PEA provides a high-level view of VanGold’s plan to process material from both El Pinguico and El Cubo at a centrally located mill. This study is an important step in unlocking value for all stakeholders at the Combined Project in Guanajuato.

The PEA summarized above is preliminary in nature, is based on numerous assumptions and includes the use mineral resources including inferred mineral resources considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability and may be materially affected by environmental, permitting, legal, title, socio-political, marketing, and other relevant issues. See the Company’s news release dated February 16, 2021 for a more complete description of the key parameters, assumptions and risks associated with the PEA.

As part of the El Cubo Complex, VanGold has acquired the El Cubo mine including silver and gold resources outlined below, the El Cubo floatation mill and approximately 7,000 hectares of prospective mining concessions located adjacent to El Cubo and within the greater Guanajuato mine region.

Current Mineral Resources at the Combined Project:

The Mineral Resource estimates for the Combined Project detailed in the Behre’s NI 43-101 PEA report effective date January 31, 2021 are shown below in tables for El Cubo and El Pinguico respectively.

The remaining Mineral Resources in 2021 at El Cubo are shown in Table 1.1 and total approximately 1.96 million tonnes. Mineral Reserves have not been identified for El Cubo.

Table 1.1
Estimate of the Remaining El Cubo Mineral Resources as of 31 January 2021

Notes:

1. Silver Equivalent calculated using 1 ounce of gold is equal to 80 ounces of silver, on the basis of the average 5-year historic silver and gold prices.
   2. Numbers have been rounded.
   3. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves.

The Mineral Resources in 2021 at El Pinguico are shown in Table 1.2 and total approximately 210,000 tonnes. Mineral Reserves have not been identified for El Pinguico.

Table 1.2
El Pinguico Mineral Resources as of 31 January 2021

Notes:

1. Silver Equivalent calculated using 1 ounce of gold is equal to 80 ounces of silver, on the basis of the average 5-year historic silver and gold prices.
2. Numbers have been rounded.
3. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves.

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There has been insufficient exploration to allow for the classification of the inferred resources at El Cubo as an indicated or measured mineral resource, however, it is reasonably expected that the majority of the inferred mineral resources could be upgraded to indicated or measured mineral resources with continued exploration. There is no guarantee that any part of the mineral resources discussed herein will be converted into a mineral reserve in the future.

A complete copy of the Behre Report is available for review on SEDAR at www.sedar.com and on the Company’s website at www.vangoldmining.com.

The Endeavour Agreement:

As announced by the Company on Dec. 18, 2020, VanGold has paid US$15,000,000 for the El Cubo Complex as follows:

• An upfront non-refundable down-payment of US$500,000 cash (paid).

• US$7.0m cash on closing (paid).

• US$5.0m in VanGold common shares on closing – priced at C$0.30 per share for a total of 21,331,058 VanGold shares (delivered).

• US$2.5m promissory note due 12 months from closing (delivered).

Endeavour has agreed to (a) abstain from voting its shares of VanGold, other than as recommended by VanGold’s management, for a period of 2 years, and (b) a 12-month restriction on the resale of any VanGold shares acquired in this transaction.

VanGold has also agreed to pay Endeavour up to an additional US$3.0m in contingent payments based on the following:

• US$1.0m – upon VanGold producing 3,000,000 AgEq ounces at the El Cubo mill, derived from either the El Cubo or El Pinguico properties.
• US$1.0m – if the price of gold closes at or above US$2,000 per ounce for 20 consecutive days within two years after closing.

• US$1.0 m – if the price of gold closes at or above US$2,200 per ounce for 20 consecutive days within three years after closing.

About Endeavour:

Endeavour Silver Corp. is a mid-tier precious metals mining company listed on the NYSE:EXK and TSX:EDR. Endeavour owns and operates three underground silver-gold mines in Mexico and is currently advancing the Terronera Mine Project towards a development decision. Endeavour is also exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer.

About VanGold Mining Corp.:

VanGold Mining is an exploration and development company engaged in reactivating past producing silver and gold mines near the city of Guanajuato, Mexico. The Company’s El Cubo and El Pinguico projects are significant past producers of both silver and gold located in close proximity to Guanajuato city, and to each other. The Company is currently focused on refurbishing the El Cubo mill and commencing production from the combined El Cubo / El Pinguico operation, as well as delineating additional silver and gold resources through underground and surface drilling on its projects located in this 480-year-old mining camp.

Hernan Dorado Smith, a director of VanGold and a “qualified person” as defined by National Instrument 43-101, Standards of Disclosure for Mineral Projects, has approved the scientific and technical information contained in this news release.