Goldgroup Mining Inc. (TSX:GGA) has announced that, further to its news release dated September 14, 2010, a 30,000 metre multi-phase drilling and exploration program at its Caballo Blanco gold project in Veracruz, Mexico has commenced.
Goldgroup's 500 km2 Caballo Blanco property hosts multiple mineralized zones comprising numerous geological targets. The Company expects initial assay results by mid-Q4, 2010.
The following initiatives are also part of this extensive exploration program at Caballo Blanco:
- Ground geophysics - a 63 km IP (induced polarization) survey-prospecting started September 10, 2010
- Geochemical analysis of surface chip samples, is in progress
- Metallurgical testing will start in October, 2010
- Construction of several underground adits for bulk sampling and to assess structural geology
- An environmental impact study, including the environmental baseline and impact statement, the socio-economical study and a risk analysis, is in progress
The 30,000 metre multi-drill program, using diamond and reverse circulation drilling, is designed to expand and upgrade the current NI 43-101-compliant mineral resource estimate at the La Paila anomaly (contained in the technical report dated March 22, 2010) and to test other highly prospective areas for mineralization, including other targets at the Northern Zone as well as targets at the Red Valley and Highway zones. The current estimated indicated mineral resource of 139,000 ounces of gold (6.7 million tonnes grading 0.65 g/t Au) and inferred resource of 517,000 ounces of gold (27.6 million tonnes grading 0.58 g/t Au) covers only the La Paila area in the Northern Zone. It was compiled from 32 diamond drill holes totaling approximately 7,000 meters completed by NGEx Resources Ltd. ("NGEx"), prior to Goldgroup's acquisition of its interest in the project in November 2009.
The Company purchased the option to acquire a 70% interest in Caballo Blanco from NGEx, a member of the Lundin Group, for CDN$6.0 million in cash and 9 million Goldgroup shares. The remaining 30% interest in Caballo Blanco is owned by Almaden Minerals Ltd. NGEx is the Company's second largest shareholder, currently holding approximately 10.5% of the outstanding Goldgroup shares. NGEx also holds a 1.5% NSR royalty on Goldgroup's portion of future mine production. Upon commercial production, NGEx will receive a one-time advance royalty payment in the amount of CDN$5.0 million.
The Company also announces that, effective September 30, 2010, Michael Farrant has resigned from the position of President. The Company wishes to thank Mr. Farrant for his contributions to Goldgroup. Mr. Farrant will continue to serve as a director of the Company.
Source: GOLDGROUP MINING INC.