Extends Payments To March 2023
VANCOUVER, BC / ACCESSWIRE / November 13, 2020 / VanGold Mining Corp (the "Company" or "VanGold") (TSXV:VGLD) is pleased to announce it has amended its option agreement (the "Agreement") to re-purchase three of the four underlying royalties on its El Pinguico silver and gold project located 7km south of Guanajuato, Mexico.
VanGold Director Dan Oliver stated: "We are very pleased to have reached this new Agreement with Hernan and Gerardo Dorado the original venders of El Pinguico. The new terms allow VanGold to extend the cash payment portion of the Agreement out until March 2023 to allow VanGold to direct more of its resources to developing the El Pinguico Project."
Under the original terms of the option (the "Option"), as reported in the Company's August 20, 2020 news release, the Company had until December 31, 2020 to pay C$1,680,000 cash and issue 3,750,000 units of VanGold to the original vendor of the property Exploraciones Mineras Del Bajio S.A. de C.V. ("EMBSA"), a company controlled by Hernan Dorado (a Director of VanGold) and Gerado Dorado in order to eliminate three underlying royalties from the El Pinguico property. An upfront option payment of C$5,000 has been paid to EMBSA at the time of the execution of the Agreement, and C$200,000 has been paid to fulfill the November 2020 option requirement. Each Unit paid to EMBSA will be comprised of one common share and one non-transferable common share purchase warrant (a "Warrant") of VanGold. Each Warrant will entitle EMBSA to purchase one additional common share of VanGold at a price of $0.175 within five years of closing.
Under the new terms, the Option shall be exercisable by VanGold making cash and share option payments to EMBSA as follows:
- (a) $200,000 cash and 3,750,000 Units on or before November 20, 2020;
- (b) $325,000 cash on or before February 22, 2021;
- (c) $525,000 cash on or before February 22, 2022; and
- (d) $625,000 cash on or before February 22, 2023.
Upon exercise of the Option, VanGold's Mexican subsidiary, Obras Mineras El Pinguico, S.A de C.V., ("OPMSA") will own an undivided 100% interest in the El Pinguico silver and gold project free and clear from the royalties purchased in this agreement. A 15% net profits interest royalty will remain, in favour of EMBSA, solely on the existing above ground and underground stockpiles of mineralized material. Other than the remaining 15% NPI, there will be no other royalties, net smelter returns or otherwise, on the El Pinguico project including the existing stockpiled material.
Under the Agreement, VanGold has the Option to repurchase the following royalties from EMBSA:
- a 4% Net Smelter Royalty (NSR) on all ‘broken material' within both the above ground and underground stockpiles;
- a 3% Net Smelter Royalty (NSR) on all newly established in-situ material discovered on the El Pinguico property; and
- a 5% Net Profits Interest Royalty (NPI) on all newly established in-situ material discovered on the El Pinguico property.
Hernan Dorado Smith, a director of VanGold is also the Managing Director and a principal shareholder of EMBSA, and as such the Agreement constitutes a "related party transaction" for the purposes of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions ("MI 61-101"). VanGold intends to rely upon exemptions from the requirement to obtain a formal valuation and seek minority shareholder approval for the Agreement on the basis that the fair market value of Mr. Smith's interest in the Option, if exercised, will be less than 25% of VanGold's current market capitalization.
The Agreement is subject to the acceptance of the TSX Venture Exchange.
The El Pinguico Project:
El Pinguico is a high-grade gold and silver deposit that was mined from the early 1890s until 1913. Toward the end of that period it was mined exclusively by The Pinguico Mines Company of New York City, whose shares traded on the Boston and New York Stock Exchanges. The mining was done principally from the El Pinguico and El Carmen veins, which are thought to be splays off the Mother Vein, or ‘Veta Madre'.
The Veta Madre is associated with a mega fault that outcrops for 25 kilometres and is the most important source of precious metal mineralization in the region. The Veta Madre may cross VanGold's property at depth, underneath the high grade El Pinguico and El Carmen veins. Very limited drilling has been done on the property and no drilling has attempted to encounter the Veta Madre at depth.
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.
About VanGold Mining Corp.
VanGold Mining is an exploration and development company engaged in reactivating high-grade past producing silver and gold mines near the city of Guanajuato, Mexico. The Company's flagship El Pinguico project is a significant past producer of both silver and gold located just 7km south of the city. The Company remains focused on the near-term potential for development and monetization of its surface and underground stockpiles of mineralized material at El Pinguico, and in delineating silver and gold resources through underground and surface drilling on projects located in this historic mining camp.
ON BEHALF OF THE BOARD OF DIRECTORS
Chairman and CEO
For further information regarding VanGold Mining Corp, please contact:
James Anderson, Director, +1 (778) 989-5346
Continue to watch our progress at: www.vangoldmining.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains certain forward-looking statements, which relate to future events or future performance (including, but not limited to, the Option to buy back certain existing royalties on the Company's El Pinquico project in Mexico from EMBSA and the proposed work programs, and potential for near term monetization of existing stockpiles of mineralized material, at El Pinguico) and reflect management's current expectations and assumptions. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. Readers are cautioned that these forward-looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected including, but not limited to, market conditions, availability of financing, currency rate fluctuations, actual results of exploration and development activities, environmental risks, future prices of gold, silver and other metals, operating risks, accidents, labor issues, delays in obtaining governmental or regulatory approvals and permits, and other risks in the mining industry. In addition, there are no assurances that the Company will exercise the Option to repurchase the royalties set out in the Agreement on the terms contemplated therein or at all. There is also uncertainty about the spread of COVID-19 and the impact it will have on the Company's operations, supply chains, ability to access El Pinguico or procure equipment, contractors and other personnel on a timely basis or at all and economic activity in general. All the forward-looking statements made in this news release are qualified by these cautionary statements and those in our continuous disclosure filings available on SEDAR at www.sedar.com. These forward-looking statements are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances save as required by law.
SOURCE: Vangold Mining Corp.
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