Los Ricos Project Demonstrates Significant Potential In 2021

HALIFAX, NS – GoGold Resources Inc. President and CEO Brad Langille, said,  “As we look forward to 2021, we feel the Company is on the verge of unlocking the significant potential  of Los Ricos to create value for the shareholders. The key milestones for the Company in 2021 will include: Preliminary Economic Assessment at Los Ricos South in January; An aggressive 100,000 meter drill program at Los Ricos North focussed on discovery: and An initial mineral resource at Los Ricos North in the summer of 2021.

Parral continues to generate strong cash flow sufficient to fund the overhead and exploration allowing the Company to be a self funding junior with one of the largest exploration drill programs in Mexico. With our strong balance sheet which exceeds US$55 million in cash, we are well funded to unlock the true value of Los Ricos.”

A preliminary economic assessment (PEA) on the project is in the final stages and expected to be released in January 2021. The Company released an initial Mineral Resource Estimate at Los Ricos South which included a Measured & Indicated Mineral Resource of 63.7 million ounces silver equivalent (AgEq) grading 199 g/t AgEq contained in 10.0 million tonnes (“Mt”), and an inferred Resource of 19.9 million ounces AgEq grading 190 g/t AgEq contained in 3.3 Mt.  

The Company initially acquired the Los Ricos projects in March of 2019 and began the Los Ricos South drilling program at that time.  The Company was able to drill 222 holes totaling 33,600 meters in 15 months from the acquisition date to the Resource date at Los Ricos South.

During 2020, GoGold’s exploration team identified over 100 targets on the Los Ricos North properties, demonstrating the significant exploration potential.  The Company plans to drill 10 of these targets as part of its 2021 drilling program which is planned to exceed 100,000 meters of drilling and will be one of the largest in Mexico. The Company is working towards completing an Initial Mineral Resource Estimate at Los Ricos North, which is expected to be released in 2021.

At Los Ricos North, which is approximately 20km from Los Ricos South, the Company began an exploration drilling program on the project in March 2020.  Since that time, the results of 82 drill holes have been released at the La Trini and El Favor targets on the project. Since the initial acquisition of the Los Ricos properties in March 2019, as part of an ongoing concession consolidation program, GoGold has acquired 2 new concessions in the South and 11 in the North.  During the year, the Company completed two bought deal financings for net proceeds of US$53 million which significantly strengthened the balance sheet from a net book value of US$73 million on  September 30, 2019 to US$171 million on September 30, 2020, which included cash of US$53 million as compared to US$2 million in the prior year.  The bought deal financings also allowed additional institutional investors to join and strengthen the Company’s shareholder register.  The Company’s Parral mine, which has over eight years of remaining mineral reserves, had a record year for production, revenue, and cash flow.  Production increased by 29% over the previous year’s record, to 2.3 million silver equivalent ounces. In the quarter ended September 30, 2020 Parral generated US$6.5 million of free cash flow at a realized silver price of $22.71.  At current metal prices, Parral is generating sufficient free cash flow to fund all of the Company’s general and administrative costs, and exploration costs at the Los Ricos projects. In July GoGold updated the remaining Mineral Reserves at Parral, which resulted in a positive reconciliation of 14% on tonnage and 27% on silver equivalent ounces.