Special Report
Gold and Black Gold

Greg McCoach
The Mining Speculator
January 28, 2005

The recent correction in the gold market has created a brief and exceptional opportunity to pick up gold on the cheap:

Currently, a top-notch exploration company with seven advanced stage gold projects (all in elephant country) is hard at work and trading at a small fraction of what they are worth. In and of itself this would be a very exciting play, but what makes this story even more compelling is the amount of oil and gas revenue they are about to generate!

Recent activity on several of their world-class gold properties points to an excellent chance for a major gold discovery. With proven management, great share structure, and a current revenue stream that is about to get much larger, I'm betting Vangold Resources is poised to hit our next gold stock HOME RUN!

If you've been reading our Mining Stock Focus Brief the past few years, you've come to expect stock ideas that have greatly multiplied in price.

As a newsletter writer, I am always on the hunt for undervalued companies exploring for gold that have 10X upside potential. When looking for such companies, I talk with many people, searching for just the right combination of circumstances that will give us the next big hit. With the current share price at C$0.24, Vangold Resources is an incredible value that gives investors an extraordinary opportunity to profit. I recommend buying your shares quickly as I believe both forthcoming positive news for the company and a higher gold price will propel these shares to a new 52 week high.

Longevity
One of the things I look for to protect our downside is a company that has the ability to stay in the game for the long-term. Many junior mining companies simply don't have the staying power to play the game over the long haul. What makes Vangold different from most other junior exploration companies is that they have used revenue from oil and gas investing as a way to help finance their exploration activities. This fact speaks volumes about the wisdom of the management team, who has been through the thick and thin of the mining business for many years. They know how to survive and give shareholders the best chance at exploration success. Right now, Vangold is on the verge of increasing their oil and gas revenue by a very large margin. What this means to us as shareholders is that we will get many chances to make a gold discovery, without undue shareholder dilution. The properties on Papua New Guinea encompass large land areas and may take multiple tries before we hit the success that we know is there. Some of the best gold mines in the world drilled over 100 holes before they hit the one that sent them on their way to becoming a gold mine. Vangold is hunting for big deposits in areas that already have proven gold mineralization. Vangold's oil and gas strategy lessens our risk and gives investors many opportunities for hitting the golden jackpot.

Black Gold (The Culane Oil Field in Alberta, Canada)
Vangold has invested in this oil property, which is showing tremendous promise. The first hole has been successfully drilled and is in production. Ten to twelve more holes will be drilled in this field with each hole having two spurs for a total of up to 38 horizontal wells. This is a significant discovery and will be an exciting story as it unfolds in 2005. Vangold has earned a 26.25% working interest in the Killam project by contributing 52.50% of the costs of drilling, completing and equipping the first well in the field. On December 28th the completion operations commenced and the well was swabbed at rates of 300 barrels of 24.2 API gravity oil per day. The well was then equipped for production and a 30-day production test period was commenced on January 7th, 2005. Initial oil production rates have been restricted by the company at 100 to 150 barrels per day. Over the duration of the test period the oil production rate will be increased until the well achieves a stabilized production level.

In addition, Vangold will participate in the drilling, completing and equipping of a high impact natural gas well in the liquids rich Deep Basin of the Alberta's Foothills. Vangold will earn a 21% net working interest in the Test Well. The Western Canadian Sedimentary Basin contains some of the most prolific multi-zone gas wells in North America as well as some of the largest accumulations of oil and gas reserves. Typically, wells in this area produce from 5 million to 25 million cubic feet of gas per day. The field should accommodate 2 to 5 wells and may contain 10 to 100 BCF of gas. The area has long been a focus area for Exploration and Production Companies and continues to be today, with recent announcements highlighting discoveries of significant new gas pools. The property is covered by high-resolution 3D seismic and is close to gas processing facilities.

It now appears the company is well on their way to generating substantial revenues from their oil and gas investments. The Culane oil field when fully developed could produce 4000 barrels of oil a day. At C$50 (C$27 net return) a barrel for oil, Vangold's monthly income would be C$648,000 just on this field alone! It is also possible that these 38 horizontals wells could produce more like 200 to 400 barrels of oil a day. Let's stay conservative and pick 200 barrels a day times 38 wells, which would equal 7,600 barrels of oil production a day! You can do the math! On the gas wells a conservative estimate would be to generate 5,000,000 cubic feet of gas a day. At C$7.00 gas price, Vangold could expect to generate roughly C$204,000 a month in revenue. Combined with the oil revenue (C$648,000) that equals C$852,000 a month in revenue by the end of 2005. This revenue will go a long way in helping Vangold to aggressively drill their gold properties without further financings.

Main Gold Properties
Vangold is a diversified natural resource company with working interests in seven advanced stage world-class gold properties in Papua, New Guinea, which is located in the South Pacific, north of Australia. These properties are considered advanced because C$22 million has already been spent by others in exploring for gold. (See Map of Area) All of the areas are considered to be vastly under-explored and highly prospective for the discovery of new mineral deposits, making this a dream property play for an exploration company like Vangold. Kanon Resources Acquisition - Vangold and New Guinea Gold reached an agreement to acquire Kanon Resources Ltd. on a 50/50 basis. Kanon holds 100% interest in five gold properties (Bismarck, Mt Penck, Mt.Allemeta, Fergusson and Yup River) and 50% interest in one copper/ gold property (Mt. Nakru). In addition Vangold controls a majority position in the Feni Island project with partner New Guinea Gold.

Feni Island Gold · Mt. Penck Gold
Mt. Allemata Gold · Bismarck Gold
Fergusson Gold · Yup River Gold
Mt. Nakru Copper/Gold

Any or all of these properties could host a major gold deposit. However, pay particular attention to what is happening at Feni, Mt. Penck, Allemata, and Bismarck as I believe these areas hold the best chance for a major discovery.

Mt. Penck Project
Recent drill results from Mt. Penck, released October 14th , 2004 indicate the company could be on to something big. Seven holes were drilled and results included 72m at 1.79g/t gold, and 12.9g/t silver including 43m at 2.35 g/t gold. Hole MPD 7 returned 2m 36.7 g/t gold from a depth of 68 meters in addition to 14m of 2.82 g/t gold from surface in the same hole. What this means is that they have identified a gold system that will require more drilling. This is similar to what nearby Lihir Gold originally found when they were looking for gold on their property (which is now a 40 million ounce deposit)! Further drilling is planned for early 2005. This is the beginning for what looks to be the first major gold discovery for the partners on their Papua New Guinea projects. Mt. Penck is owned 60% by New Guinea Gold (NGG) and 40% by Vangold.

Mt. Allemeta Project
Recent fieldwork has resulted in the definition of high grade gold in trench such as (a 4m width of 100g/t gold) and wide and anomalous gold in soils (200m wide zone of 1.24g/t gold including a 50m wide zone of 4.54g/t gold). The Allemeta property is connected by a 15km, all weather road to the town of Alotau, with numerous logging tracks providing access to most parts of the property. Drilling is expected to commence in February 2005. Allemeta is owned 50% by Vangold and 50% by NGG.

Bismarck Project
This project is located approximately 100km ENE of the giant Porgera Mine, and has excellent exploration and mine development potential for a Porgera-style bulk tonnage gold deposit. With more than 6 million spent historically, Bismarck has 3 advanced drill-ready, high-grade and bulk mineable gold prospects and one drill-ready porphyry copper/gold prospect. A 2000 meter trenching program is currently in process. Results are expected in early 2005. Bismarck is owned 50% by Vangold and 50% by NGG.

Feni Island Project
The Feni Islands lie within the Lihir Corridor, which hosts the world-class porphyry copper-gold deposit at Bougainville and the world's largest gold porphyry, hot spring gold deposit at Lihir. Feni exhibits strikingly similar geology, including widespread gold mineralization, similar alteration styles and similar alkaline intrusives to the Lihir Mine. As a result, Feni is highly prospective for large bulk mineable gold deposits, such as the Lihir deposit. This property in my opinion holds the greatest potential for finding a monster deposit. With such a large land area to evaluate, Vangold plans to do a complete reappraisal of the prospective targets using high-quality aeromagnetics, with outcrop mapping and a review of the historical exploration database as soon as possible. This will help the company pinpoint the best locations for doing the next round of fieldwork and drilling, which could commence as early as February/March of 2005. Vangold owns 50% of the Feni Project, with an option to go up to 75%. NGG owns 25%.

Management Team
Of all the factors to consider when evaluating junior exploration companies, there is nothing more important than company management. In this regard Vangold is abundantly blessed with the talent and experience to get results. Below is a brief outline of key personnel on this top-notch management team.

Dal Brynelsen, President/CEO
Dal has over 30 years experience in the mining industry - 12 as Vangold's driving force. He has discovered, financed and brought to production two gold mines in Canada. Dal has done an incredible job in positioning Vangold to take advantage of the long-term bull market in gold, which is only in its early stages.

Mike Muzylowski, B.Sc.,
Audit Committee Chairman
Voted Mine Developer of the Year by the PDAC in 1988.
Mike is a geologist credited with a number of successful discoveries (15 mines). Formerly President and CEO for Granges Exploration - where he took revenues from $4 million to $65 million per year. Mike was also Chairman/ CEO of Hycroft Resources where he increased gold production to over 100,000 ounces per year.

Locke Goldsmith M.Sc., P. Eng., P.Geo.
Vice President Exploration, North America
Locke's professional career started in 1958 as Assistant Geologist for Campbell Red Lake Mines, and Assistant Mine Engineer and/or Geologist for Glen Lake Silver Mines, Agnico Silver Mines, Copper Range Co. and Algoma Steel Corporation. He was Chief Geologist and Exploration Manager for Pan Nevada Inc. and Chief Geologist and Exploration Manager for Horizon Explorations Ltd. (Australia). Locke is the founder and President of Arctex Engineering Services.

Dr. David Lindley, B.Sc., Phd.
Vice President Exploration, Papua, New Guinea
David is supervising the fieldwork at Vangold's Feni and Kanon projects. A practicing geologist in Papua, New Guinea since 1977, he previously worked for CRA Exploration (now Rio Tinto), Esso Papua New Guinea Inc. (Exxon Minerals) and Highlands Gold. David has an extensive knowledge of the geology, mineralization, government liaison and indigenous culture of Papua, New Guinea. He has a BSc and Phd from the University of New South Wales, Australia, and is a Member of the Australian Institute of Geoscientists.

The Big Picture for Gold
A new enthusiasm for gold is firmly in place. The past few years have witnessed a remarkable resurgence in the popularity of gold among both individuals and institutional investors. There is a growing number of market experts that are now convinced that a "Perfect Storm" is brewing that will provide more upward pressure than any natural or artificial market pressures can contain. With many analysts citing numbers above $1,000 an ounce for gold, this can mean mind-boggling profits for shareholders of gold mining companies. The primary reason for this gold forecast is the rapid deteriorating financial condition of the U.S. Government. The debt structure of the U.S. Government is absolutely unsustainable at this point and will continue to put downward pressure on the dollar, despite the Fed's and Washington's attempt to prop it up. The national debt currently stands at $7.5 trillion, a figure previously unheard of in American or world history.

Because of this and other factors that are extremely positive for gold, more and more experts are saying that recent gains in gold represent only a small preview of what's to come. This of course bodes very well for our gold mining stocks, especially for a junior mining company like Vangold.

A Word About Rossland
In addition to the seven world-class gold properties in Papua New Guinea, the company also holds a key property in the historic Rossland Gold Camp, once the second largest gold mining district in Western Canada, producing over 3 million ounces of gold and 3.5 million ounces of silver between the years 1899 and 1928. Vangold is now the largest landholder in the district following an acquisition from Teck/Cominco in 2003. Vangold previously had two small producing mines at Rossland, which produced $15 million in high-grade gold. This property gives the company an extra kicker that they could develop themselves or sell or option out to someone else for additional cash flow. With a rising gold price, land positions around existing or previous mines will be highly sought after by other mining companies giving Vangold some nice options for the future. This is icing on the cake and also shows the experience of management in obtaining this land position from Teck/Cominco for cents on the dollar.

Summary
The potential for Vangold to find a major gold deposit is as good as it gets in the exploration business. If you're looking for gold, you may as well look in areas that can host a monster deposit, and give your share price a chance for a big ride. This has been the strategy for Vangold as they made their acquisitions of property in Papua, New Guinea. David Lindley, Vangold's leading geologist, was quoted recently after doing sampling work conducted along the Nanum River and its tributaries, "that 72% of all panned samples had visible gold." We know the gold is there, Vangold needs to unlock the geological puzzle of where this gold has its origin. With increased revenue coming into the company from its oil and gas properties, I believe Vangold will now be able to explore and drill their properties more aggressively, thus increasing their odds for success. In addition, I believe the sustained longterm bull market in gold will give management the time they need to bring things to a happy and profitable conclusion for shareholders.

Vangold is now a hybrid company that offers us great potential in both gold and black gold! With the anticipated oil and gas revenue, and such a low number of shares outstanding, I see Vangold pushing upwards to C$0.75 in the near future, just on their cash flow. At the current share price of C$0.245 I am recommending Vangold for immediate purchase. The market will not allow these shares to stay at these levels much longer! Please visit the company website and do your own due diligence on their various properties and the vast potential Vangold offers to investors.

Greg McCoach - January 2005
amerigold@msn.com

VANGOLD RESOURCES
Canadian Symbol VAN
Trades in the US under VNGRF
Shares Outstanding 28,682,721
Fully Diluted 33,931,281
Market Cap C$6,883,853
52 week range C$0.86-0.21
CEO Dal Brynelsen
Phone 604-684-1974
Website www.vangold.ca - Please note the suffix.

Warnings and Disclaimers: The publisher and staff of The Mining Speculator may hold positions in the securities of companies discussed or recommended, but no position will be substantially liquidated in any such security which is owned prior to the masthead date of this publication until at least 30 days after such date. The information contained herein has been received from sources, which the publisher deems reliable. However, the publisher cannot guarantee that such information is complete and true in all respects. The publisher is not a registered investment adviser and does not purport to offer personalized investment related advice. The publisher does not determine the suitability of the advice and recommendations. Each person should determine whether such advice and recommendations are suitable and whether they fit within such person's goals and portfolio. The mining company featured in this edition of THE MINING SPECULATOR'S MINING STOCK FOCUS BRIEF has reimbursed the publisher for the costs, including overhead, of printing and distributing this edition, based on a good faith estimate of such costs in the amount of $14,000. Any overage will be retained by the publisher as compensation. Authors of articles contained herein may have been compensated for their services in preparing such articles.

321gold Inc