GoGold Accelerates Acquisition of Los Ricos Property
GoGold Accelerates Acquisition of Los Ricos
Property
Trading Symbol: TSX: GGD
Shares Outstanding: 171,901,481
HALIFAX
,
Aug. 22, 2019
/CNW/ -
GoGold Resources Inc. (TSX: GGD) ("GoGold", "the
Company")
has entered into various agreements ("the Concession Agreements") to accelerate the
acquisition of the 29 concessions that comprise the Los Ricos property in
Jalisco, Mexico
from
private Mexican owners. The Concession Agreements replace the option agreement GoGold had
for the Los Ricos property and save GoGold
$5.4 million dollars
(all amounts USD).
Los Ricos Property Acquisition
With the signing of the Concession Agreements, GoGold is required to make payments as follows:
1
.
$500,000
in cash upon signing;
2
.
$3,220,000
in cash paid in installments over 24 months; and
3
.
9,046,968 GoGold common shares to be delivered in equal numbers over 24 months.
Upon signing the Concession Agreements, 5 of the 29 concessions will be transferred to the
Company, with the remaining 24 concessions transferred at a rate of 5 concessions every 5 months.
The first 5 acquired concessions is where GoGold is conducting its current drill program. Total
consideration for the acquisition is
$7.1 million
based on the Company's closing share price on
August 21, 2019
.
In conjunction with the signing of the Concession Agreements, the option agreement previously
entered into by the Company to acquire the 29 concessions at Los Ricos (see press release dated
March 26, 2019
) has been terminated. The terminated option agreement had provided the
Company exclusive exploration rights at Los Ricos for a five year term for
$1.5 million
, with the
option to acquire the concessions for a lump sum payment of
$11.0 million
for a total purchase price
of
$12.5 million
. Also, pursuant to the terminated option agreement, the private Mexican owners
would retain a 2% net smelter return royalty ("NSR") on 5 of the 29 concessions at Los Ricos.
Pursuant to the Concession Agreements, the 29 concessions at Los Ricos can now be purchased by
GoGold for
$7.1 million dollars
in cash and share consideration divided over the next 24 months,
which represents a
$5.4 million
discount.
Royalty Purchase
In addition to the Concession Agreements, the Company has entered into an agreement to acquire
the existing 2% NSR for the Los Ricos property for payments as follows:
1
.
$1 million
in cash; paid in equal installments over 36 months; and
2
.
4,875,012 GoGold common shares to be delivered in equal numbers over an 18 month period.
Brad Langille
, President and CEO said "With the success we've seen with our drilling, the time is
right to acquire ownership of the Los Ricos concessions and royalty. Our track record of developing
assets and monetizing royalties, like our
Santa Gertrudis
sale, should increase shareholder value
and provide future financing optionality from the royalty."
Los Ricos Drill Program
The Company started a
10,000m
diamond drilling program of HQ size core in conjunction with a field
program of geological mapping, sampling and trenching at Los Ricos in
March 2019
. Currently, 44
holes totalling
6,891m
of HQ size drill core have been completed, with assayed results received and
reported for 26 drill holes. The program has focused on testing the top 200 metres of the
mineralized zone to determine the potential for surface mining. This work includes "twinning"
selected historical RC drill holes; completing new holes on
25m
spaced "infill" sections; completing
new deeper holes down dip beneath the historical RC drill holes; testing the strike extension of the
deposit to the north of the underground workings; and stepping out 1,500 metres to the south where
the Company had success at initial greenfield exploration trenching. The table below shows some
highlights of GoGold's drill results to date at Los Ricos:
Hole ID
From
To
Length
1
Au
Ag
AuEq
2
(m)
(m)
(m)
(g/t)
(g/t)
(g/t)
LRGG-19-001
3
71.0
106.5
35.5
1.24
284.7
5.04
LRGG-19-003
4
145.0
165.4
20.4
2.21
318.7
6.45
LRGG-19-008
5
109.4
131.7
22.4
4.13
182.1
6.55
LRGG-19-009
6
34.5
55.7
21.2
7.66
1270.2
24.60
LRGG-19-022
7
170.4
193.7
23.3
1.78
201.5
4.47
1.
Not true width
2.
AuEq converted using a silver to gold ratio of 75:1
3.
See press release dated April 17, 2019
4.
See press release dated April 24, 2019
5.
See press release dated May 1, 2019
6.
See press release dated May 14, 2019
7.
See press release dated July 31, 2019
Parral Update
Parral continues to perform well and is on track to set another record production quarter for the
quarter ending
September 30, 2019
. The SART project is on schedule, and once this is in operation
in early 2020, we anticipate significant cost savings and cash inflows from liberated cyanide and
copper that is currently in solution.
The acquisition of the concessions and NSR is subject to final TSX acceptance.
Mr.
David Duncan
, P. Geo. is the qualified person as defined by National Instrument 43-101 and is
responsible for the technical information of this release.
About GoGold Resources
GoGold Resources (TSX: GGD) is a Canadian-based silver and gold producer focused on
operating, developing, exploring and acquiring high quality projects in Mexico. The Company's Parral
Tailings project produces silver and gold at a low cash cost. Headquartered in
Halifax, NS
, GoGold
is building a portfolio of low cost, high margin projects. For more information visit
gogoldresources.com
.
CAUTIONARY STATEMENT:
The securities described herein have not been, and will not be, registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and
may not be offered or sold within
the United States
or to, or for the benefit of, U.S. persons (as
defined in Regulation S under the U.S. Securities Act) except in compliance with the registration
requirements of the U.S. Securities Act and applicable state securities laws or pursuant to
exemptions therefrom. This release does not constitute an offer to sell or a solicitation of an offer to
buy of any of GoGold's securities in
the United States
.
This news release may contain "forward-looking information" as defined in applicable Canadian
securities legislation. All statements other than statements of historical fact, included in this release,
including, without limitation, statements regarding the Parral tailings project, the Los Ricos project,
future operating margins, future production and processing, and future plans and objectives of
GoGold, constitute forward looking information that involve various risks and uncertainties. Forward-
looking information is based on a number of factors and assumptions which have been used to
develop such information but which may prove to be incorrect, including, but not limited to,
assumptions in connection with the continuance of GoGold and its subsidiaries as a going concern,
general economic and market conditions, mineral prices, the accuracy of mineral resource
estimates, and the performance of the Parral project There can be no assurance that such
information will prove to be accurate and actual results and future events could differ materially from
those anticipated in such forward-looking information.
Important factors that could cause actual results to differ materially from GoGold's expectations
include exploration and development risks associated with GoGold's projects, the failure to establish
estimated mineral resources or mineral reserves, volatility of commodity prices, variations of
recovery rates, and global economic conditions. For additional information with respect to risk
factors applicable to GoGold, reference should be made to GoGold's continuous disclosure
materials filed from time to time with securities regulators, including, but not limited to, GoGold's
Annual Information Form. The forward-looking information contained in this release is made as of the
date of this release.
SOURCE
GoGold Resources Inc.
View original content:
http://www.newswire.ca/en/releases/archive/August2019/22/c7662.html
%SEDAR: 00029249E
For further information:
Steve Low, Corporate Development, GoGold Resources, T: 416 855
0435, E: [email protected]
CO: GoGold Resources Inc.
CNW 07:30e 22-AUG-19