GoGold Resources Inc. (TSX: GGD) is a Canadian-based, mineral resource company with active development and exploration properties in Mexico.
The company’s development property, The Parral Tailings Project, is in Chihuahua State, Mexico and is currently fully funded and permitted and in construction of a heap leach facility that will process the tailings.
The Parral Tailings Project is located in the heart of the Mexican silver belt. This 141 hectare property is host to a large tailings repository left over from over 300 years of operations at the historical Mina La Prieta silver and base metal mine. Inefficiencies in older recovery methods have left significant amounts of gold and silver in the 21.3 million tonnes of tailings which GoGold plans to recover.
The completion of a Pre-Feasibility Study on its Parral Tailings project in Chihuahua State, Mexico defined a reserve of 35 million Silver Equivalent Ounces and a pre-tax internal rate of return (“IRR”) of 80%. The study projects an initial capital cost of $35 million and a life of mine (“LOM”) of 12 years with an average annual production of 1.8 million Silver Equivalent Ounces* (1.2 million ounces of silver and 11,000 ounces of gold). The mine production is planned at 5,000 tonnes per day (“tpd”) on a conventional heap leach with a sustaining capital of $27.5 million over LOM. The Pre-Feasibility Study on the Parral Tailings Project in Chihuahua, Mexico was prepared by The MDM Group of South Africa, in accordance with the requirements of Canadian National Instrument 43-101 “Standards of Disclosure for Mineral Projects”. (“NI 43-101”) (*50:1 used for Silver Equivalent Calculation)
Parral Pre-feasibility Highlights
|Reserves (Silver Equivalent Ounces - 50:1)||35 Million|
|Capital Cost||$35 Million|
|Sustaining Capital||$27 Million|
|Silver Eq Oz. / Per Year||1.8 Million|
|Cost per Oz. Ag (Au as by-product)||$6.48|
|Net cash flow, pre-tax (LOM)||$230 Million|
|Pre-tax NPV (5% Discount)||$159 Million|
|Payback Period||16 Months|
|Life of Mine||12 Years|
The study includes a LOM reserve average silver grade of 38.4 grams per tonne (“g/t”) silver and 0.31 g/t gold and a recovery of 58% for silver and 64% for gold. Cash operating cost for silver of $6.48 an ounce using gold as a by-product credit. This project as outlined in the Pre-Feasibility Study has a pre-tax IRR of 80%, with pre-tax Net Cash Flow of $230 million and a pre-tax Net Present Value (“NPV”) of $159 million using a 5% discount rate. The study is based on a gold and silver price of US$1,475/oz. gold and US$29/oz. silver. Payback for the project is expected in the first 16 months of production. Investors are cautioned that the Pre Feasibility Study is considered preliminary in nature and there is no certainty that the pre feasibility will be realized.
The company's exploration property, San Diego, is in Durango, Mexico and is currently the focus of GoGold's exploration efforts. The property is a massive 70,000+ hectares located in the richest epithermal gold and silver belt in the world. The region is presently host to numerous operating gold and silver mines and is open to further mining development with a supportive local populace, cooperative government, and good infrastructure.