VanGold Signs Definitive Purchase Agreement with Endeavour Silver Corp. ~ Transaction Anticipated to Close by End of March ~
TSX-V: VGLD OTC: VGLDF
VanGold Signs Definitive Purchase Agreement with Endeavour Silver Corp.
~ Transaction Anticipated to Close by End of March ~
March 17, 2021 – Vancouver, British Columbia – VanGold Mining Corp (the “Company” or “VanGold”)
(TSXV:VGLD) is pleased to announce it has signed a definitive asset purchase agreement with Endeavour Silver
Corp. (“Endeavour”) (NYSE:EXK) (TSX:EDR) to acquire the El Cubo mine and mill complex (the “El Cubo
Complex”) 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 (the “Endeavour
Agreement”) to acquire the El Cubo Complex, finalizing the binding letter agreement entered into by VanGold and
Endeavour on December 1 7, 2020. VanGold anticipates compl eting the purchase of the El Cubo Complex from
Endeavour by the end of March, 2021, with the signing of customary closing documents in Mexico and Canada.
Chairman and CEO James Anderson said: “Everyone at VanGold is excited to be completing the Endeavour
Agreement and looks forward to welcoming Endeavour as our largest shareholder. Immediately after closing, we
will focus all our attention on refurbishing the El Cubo mill in order to begin processing mineralized material later
this year.”
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 mineralized 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 very satisfying to
see both of these past producing mines returning to operating status , and taking their rightful place within the
Guanajuato mining district that has been the source of so many successful mining operations.”
El Cubo Complex:
As part of the El Cubo Complex, VanGold will acquire 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.
In the coming months, the Company intends to refurbish the El Cubo mill and begin processing resources from both
its El Pinguico and El Cubo properties (the “ Combined Project ”) beginning in Q4, 2021, ramping up to a
throughput of ~750 tonnes per day. As a result of the Company’s recently completed non-brokered private
placement announced March 10, 2021, the Company will have cash on hand of approximately C$6.55 million. This
is after giving effect to the US$7.0 million cash payment - plus 16% Mexican VAT where applicable - to Endeavour
on closing of the Endeavour Agreement – see “The Endeavour Agreement” below. Current funds will be used to
refurbish the El Cubo mill, begin processing resources and carry out additional exploration and definition drilling
at the Combined Project.
2
According to the Company’s recently announced PEA from Behre Dolbear and Company (USA) Inc., (“ Behre”)
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 (NPV),
Internal Rate of Return (IRR), 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 $19.49/oz for silver and $1527/oz for gold. 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 us with a high-level view of VanGold's plan to process resources 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.
Current Mineral Resources at the Combined Project:
The Mineral Resource estimates for the Combined Project detailed in the Behre’s NI 43-101 PEA (effective date
Jan. 31, 2021) are shown below in tables for El Cubo and for 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 DECEMBER 2020
Classification Tonnes Silver Gold Silver Eq
g/t g/t Oz g/t oz
Measured None
Indicated 508,055 194 3,169,000 2.44 39,860 389
Inferred 1,453,000 214 10,004,000 2.78 129,900 435
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.
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.
3
TABLE 1.2
EL PINGUICO MINERAL RESOURCES AS OF 31 DECEMBER 2020
Classification Tonnes Silver Gold Silver Eq
g/t g/t oz g/t oz
Measured None
Indicated
Surface Stockpile 185,000 67 398,500 0.45 2,680 103
Underground Stockpile 25,600 166 136,600 1.67 1,375 300
Total 210,600 79 535,100 0.60 4,055 127
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.
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.
The Endeavour Agreement:
As announced by the Company on Dec. 18, 2020, VanGold will pay 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.
• 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.
• US$2.5m promissory note due 12 months from closing.
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:
4
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 Pinguico project is a significant past producer
of both silver and gold located just 7 kilometers south of the city. Upon closing of the El Cubo acquisition, the
Company will focus on the refurbishment of the El Cubo mill, and swift commencement of production from the El
Cubo and El Pinguico Combined 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.
ON BEHALF OF THE BOARD OF DIRECTORS
"James Anderson"
Chairman and CEO
For further information regarding VanGold Mining Corp, please contact:
James Anderson, Director, +1 (778) 989-5346
Email: [email protected]
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.
Forward-Looking Statements
This news release contains certain forward-looking statements and information, which relate to future events or
future performance including, but not limited to, the successful acquisition of El Cubo on the terms and conditions
contemplated, the proposed use of proceeds from VanGold’s recently completed private placement financing, the
ability of VanGold to successfully re-start the El Cubo mill and supply sufficient mineralized material from El Cubo
and El Pinguico for processing through the El Cubo mill at projected rates, the ability to generate positive cash
flow from the El Cubo mill as contemplated or at all, the exploration and development potential of El Cubo and El
Pinguico and the potential existence of additional mineral resources thereon. 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, unanticipated geological formations and characteristics, 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. There are no assurances
that VanGold will successfully complete the acquisition of El Cubo on the terms contemplated or at all or, if
acquired, that the Company will be able to re-start the El Cubo mill to process mineralized materials in the amounts
and at the costs anticipated. In addition, there is 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 El Cubo 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
5
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.
Cautionary Note for U.S. Investors regarding Reserve and Resource Estimates
Canadian public disclosure standards, including NI 43-101, differ significantly from the requirements of the United
States Securities and Exchange Commission (the " SEC") set forth in Industry Guide 7 (" Industry Guide 7"), and
information concerning mineralization, deposits, mineral reserve and resource information contained or referred
to herein may not be comparable to similar information disclosed by U.S. companies in accordance with Industry
Guide 7. In particular, but without limiting the generality of the foregoing, this news release uses the terms
"measured mineral resources", ‘‘indicated mineral resources'' and ‘‘inferred mineral resources''. U.S. investors
are advised that, while such terms are recognized and required by Canadian securities laws, Industry Guide 7 does
not recognize them. U.S. investors should also understand that "inferred mineral resources " have a great amount
of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be
assumed that all or any part of "inferred mineral resources" exist, are economically or legally mineable or will ever
be upgraded to a higher category. Under Canadian securities laws, estimated "inferred mineral resources" may
not form the basis of feasibility or pre-feasibility studies except in rare cases. Disclosure of "contained ounces" in
a mineral resource is permit ted disclosure under Canadian securities laws. However, Industry Guide 7 normally
only permits issuers to report mineralization that does not constitute "reserves" by Industry Guide 7 standards as
in place tonnage and grade, without reference to unit measures. Accordingly, information concerning mineral
deposits set forth herein may not be comparable with information made public by companies that report in
accordance with Industry Guide 7.
VANGOLD MINING CORP.
PH: +1(778) 989-5346 E: [email protected] W: vangoldmining.com
CA: Suite 2820 - 200 Granville Street, Vancouver B.C. V6C 1S4
MX: Carretera – Guanajuato - Silao km 5.5, Int 4, Col. Marfil CP36250, Guanajuato, Gto., Mexico