Vango Roars Toward Resource Upgrade
PUBLISHED: 30-03-2020 14:22 p.m.
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As the market continues its volatile ride, small cap investors are looking for stocks that have reason to rebound in both the near and longer term.
One such stock is gold exploration and development company Vango Mining Ltd (ASX:VAN).
Vango is exploring for gold at its 100%-owned Marymia Gold Project, located 300 kilometres northeast of Meekatharra in the mid-west region of WA and has continued to release high-grade results from its aggressive drilling programmes testing a number of targets across the property.
The Company has signalled it is aiming for a significant resource upgrade in the near future, to build upon the Trident resource announced last year of over 400,000 ounces at a high-grade of 8 grams per tonne (g/t) gold (70% Indicated, 30% Inferred).
The resource upgrade will be a key milestone towards the development of this very exciting asset that is already supported by a strategic partnership framework agreement with China Nonferrous Metal Industry’s Foreign Engineering and Construction Co Ltd (NFC), that will provide finance for a current estimate of $70m for development costs.
This conditional partnership for engineering, procurement, and construction facilitates developing Vango’s Marymia Gold Project into a significant, high grade, standalone gold mining operation.
Marymia is potentially one of the most significant, high-grade and untapped gold assets left in Australia.
Vango has been very active at its Marymia Gold Project with the company releasing more, outstanding, drilling results in March, and making significant progress towards realising its two key objectives:
i) To grow the company’s high‐grade gold resource base at Marymia; and
ii) To become a significant gold producer.
Recent results suggest the company is well on track to achieve these aims.
This comes amidst uncharted territory as markets adjust to the COVID-19 pandemic. Even the gold price — typically a safe haven in uncertain times — looked to be in limbo because of the pandemic.
However, that changed this week when the US Federal Reserve announced it would aggressively buy more securities tied to residential and commercial mortgages to ward off a credit crunch.
This has led to several analysts predicting gold will now head north of US$1,700/oz, or as the article below suggests to US$2,000/oz.
Peter Spina, president and chief executive officer at GoldSeek.com said, “I will not be shocked if we see gold at $1,700 an ounce by Friday of this week or next.’
He went on to say, “We are near the days where we see gold go up $100 or $200 a day and not see a pullback.”
That’s good news for Vango as it looks to deliver a resource upgrade, ramp up its exploration programme and then fast track project development with the assistance of the NFC finance.
Vango continues to deliver to expectations, so let’s catch up with the company to analyse its latest results.
Market capitalisation: $70.9 million
Share price: $0.110
The Vango investment case:
PHB-1’s high grade payload
Vango Mining Limited (ASX:VAN) has been extremely active at its Marymia Gold Project located 300 kilometres north-east of Meekatharra in the mid-west region of WA.
Read our initial coverage for an overview of Vango’s complete operations in the article: ASX Gold Junior On Fast Track to WA Production.
The gold exploration and development company hasn’t let recent market volatility temper its activities as it looks to grow the high‐grade gold resource base at Marymia.
March has been a particularly good month.
Recent drilling activities focused on testing targets for both open‐pit and high‐grade underground resources within the high‐priority Trident Corridor and the Triple-P Corridor as shown on the map below:
A third significant prospect, the PHB-1 Corridor, located north-east of the previously mined K2 open-pit (see below), has also now begun to generate significant high-grade results from where drilling previously focused on a narrow mineralised corridor.
Little testing has historically been conducted below 100 metres from surface in the PHB-1 area, and extensions of significant structures remained un-tested, until now, pointing to a great deal of upside as the company continues its exploration.
Drillhole VK2RC0007, shown above, immediately to the northeast of the previous pit, targeted extensions of the Main Lode structure based on a new, shallow plunge, interpretation of the gold mineralised zones.
Exceptional intersections included 7 metres at 103.6 g/t gold from 48 metres and 4 metres at 11.8 g/t gold from 134 metres.
This week, Vango added further high-grade intersections to the ledger.
Reverse circulation (RC) drilling targeted a shallow northerly plunging extension of the Main and Central Lodes, to the northeast of areas that were mined previously in the historical open-pit.
The new intersections feature grades of up to 51 g/t gold.
Significant intersections include:
- 8m @ 4.17 g/t Au from 110m, including 3m @ 8.69 g/t Au and
3m @ 19.7 g/t Au from 126m, including 1m @ 51 g/t Au in VK2RC0009
- 15m @ 6.51 g/t Au from 118m, including 5m @ 12.53 g/t Au in VK2RC0010a
RC drill holes VK2RC0009 and VK2RC0010a (as seen below) produced these high-grade intersections from targeted extensions of the Main Lode structure, based on the new, shallow plunge, interpretation of the gold mineralised zones.
The new interpretation of shallow plunging, and untested, extensions to the Main Lode and other lode structures in the PHB-1 area, opens up a strike potential of over 500 metres on these structures, where both open pit and underground targets have been identified.
Vango will undertake further drilling to extend and define these new projected high-grade gold lode extensions.
Any further drilling now has the potential to provide share price momentum despite challenging market conditions.
As shareholders wait for drilling to recommence, the third round of drilling results from this area are imminent, along with proposals for new drilling to define new open pit and underground resources in this area.
The latest intersections will generate new interpretations of key lode structures, prior to incorporation into the planned Marymia Gold Project resource upgrade.
The resource upgrade is one of the most significant developments that will occur in 2020 and it’s not too far away.
Is a new discovery close?
Other recent milestones, most notably with regard to the shallow Eastern Lode intersection at PHB-1, may represent a new discovery open to the north-east, south-east and at depth.
Meanwhile, the Main Lode intersection may represent the down plunge extension of the mineralisation that was the main focus of the previously mined open pit.
Follow-up drilling is required to define the resource potential in this exciting new area, however it is already evident that PHB-1 may be a significant new open pit resource opportunity with the possibility of high-grade underground extensions.
Significant intersections were also produced from the West Lode structure, most notably 5 metres at 5.3 g/t gold from 176 metres, including 2 metres at 7.2 g/t gold in VK2RCD0004 which can be seen on the map just to the south-east of the ‘Western Lode’.
There is a lot to like about what Vango is currently doing and the results they are achieving, with the prospect of a significant resource upgrade and more drill testing of high-grade targets to come. The company has also strengthened its board and management as it looks to fast track development of this exciting asset.
Vango beefs up operations
To back its results, Vango has strengthened its board and management team.
The appointment of Mr Andrew Stocks as Managing Director could be a defining move for the company.
Stocks has a strong track record of project development and management in the resources sector, and notably was responsible for mining operations at the Plutonic mine immediately south of Vango’s Marymia project.
When we last covered Vango, executive chairman Bruce McInnes noted that “If you look at the Plutonic Gold Mine (about 180 km north-east of Meekatharra), it’s produced over 5.5 million ounces down to 600 metres.”
Vango is yet to drill below 200m.
“Who knows how much gold exists to depths of 600 metres or a kilometre?” McInnes said. “Up to now, we’re just tapping the surface.”
Vango believes its Trident Corridor and the Triple-P Corridor could both be Plutonic Repeats.
As we noted in our previous article, the Triple-P prospect is interpreted to be part of a large mineralised gold corridor (Triple-P Corridor previously referred to as Vulcan) that potentially links with targets below other previous open pit mines at Albatross-Flamingo and Exocet, across a >3km zone.
The geological structure of the Triple-P Corridor is quite similar to Plutonic and historical data reveals there’s potentially a lot more gold underneath the previous pits and the target zone may even extend to the north to link with the Trident Corridor.
Triple P Corridor - A Plutonic Repeat
The exploration team, led by Chief Geologist Jon Dugdale, will now determine just how close to a repeat of Plutonic this Corridor could be.
A further addition to the team
Mr Hunter Guo has also joined Vango as a Non‐Executive Director, bringing more than 25 years’ experience in global commodity research and trade and financial investment. Mr Guo has already provided both business advice to the Board and significant financial support to the company.
Go for gold
Despite recent volatility, Vango is well-supported and leveraged to a rising commodity.
Exploration continues at its Marymia Gold Project — potentially one of the most significant, high-grade, untapped, gold assets left in Australia.
Its contract with China Nonferrous Metal Industry’s Foreign Engineering and Construction Co Ltd for a proposed A$70 in project financing for engineering, procurement, and construction could see the development of Marymia into a significant, high grade, standalone gold mining operation.
In the near term a significant resource upgrade could be on the cards, all the while the stock adjusts to a higher anticipated gold price.