Before I delve into the VanGold news, I want to briefly discuss the ongoing theater of the absurd happening in Washington. The biggest election of many of our lifetimes is less than a month away and the economy remains sluggish at best. The politicians are jostling for position and trying to get their way in order to claim a victory in the coming stimulus.
I don't believe for a moment that anyone is walking away from giving handouts to voters. Equity futures seem to agree as they have recouped more than 1/2 of yesterday afternoon's plunge:
The problem that the US economy faces is structural in nature, covid and its economic side-effects are helping to expose what already existed beneath the surface. Government deficit spending is putting some neosporin and a tiny band-aid over a gaping wound.
I firmly believe that the recent consolidation in precious metals, which is occurring against a backdrop of chaos in Washington, is spring-loading the next leg higher in gold and silver. That next leg higher could begin in a few weeks or a few months, but make no mistake, it's coming.
Turning to VanGold Mining (TSX-V:VGLD, OTC:VGLDF), we received excellent news that the channel sampling of an underground vein exposure encountered at VGLD's El Pinguico silver and gold project returned an average grade of nearly 7 grams/tonne gold-equivalent.
It's important to understand that VanGold has been clearing debris from the El Pinguico Shaft in order to access the #7 adit level where the underground ore stockpile sits. The company noticed the very attractive vein material in the stope walls and decided to sample it and send it off for assays.
The results are a pleasant surprise and help to confirm that significant amounts of high-grade material, left when mining ceased over a century ago, remain to be identified within and adjacent to the El Pinguico historic workings.
Why would the old timers leave such high-grade material in exposed stope walls? Simple. In the early 1900s the cut-off grade at El Pinguico was 15 grams/tonne gold.
VanGold Mining director William Gehlen, geologist and epithermal system expert, commented:
"There are a lot of things to like about these results, and chief among them is the uniformity of good grades from what was historically considered waste rock. Historical geologic reports that discuss the El Pinguico vein system comment on the consistency of high-grade distribution within the veins. If VanGold continues to find these sorts of grades in the wall rocks left behind by previous mining, the residual material could represent a significant resource and the potential to find additional and wider vein zones of potentially economic grades in unexplored parts of the system seems possible".
VanGold has purchased an underground drill rig which is expected to be delivered within six weeks and the company has already planned a drill program which will consist of approximately 14 drill holes, totalling approximately 2230m of HQ and /or NQ diamond drilling.
In addition, the pace of clearing the debris blocking access from the El Pinguico shaft to the #7 adit level has accelerated due to the addition of a 2nd shift. VanGold plans to sample the bottom of its underground stockpile once all of the debris has been removed.
A decidedly good NR which should serve to trigger a technical breakout from a bullish cup & handle chart pattern:
VGLD.V (Daily)
VanGold is one of the few junior explorers that has been left relatively unscathed from the recent sector-wide correction. This is largely due to management's strong execution and the majority of shares remaining in strong hands that are committed to seeing VanGold achieve its stated objectives which include 1) sampling and eventually processing the underground ore stockpile at El Pinguico 2) underground drilling at El Pinguico targeting the Don Ricardo, and eventually the Don Ernesto/Veta Madre Targets.
Disclosure: The author owns VGLD.V shares and may choose to buy or sell at any time without notice. The author has been compensated for marketing services by VanGold Mining Corp.
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