GoGold raises $46M to advance Los Ricos property in Mexico

GoGold Resources (TSX: GGD) closed a bought deal financing of $46 million to advance its Los Ricos gold-silver project 100 km northwest of the city of Guadalajara, Mexico. The company issued about 16.2 million common shares priced at $2.85 each. The total includes the overallotment exercised by the underwriters.

GoGold acquired the project – Los Ricos North and Los Ricos South – in March 2019. It completed an initial resource estimate in July 2020 and a preliminary economic assessment in January last year for Los Ricos South.

Los Ricos South has pit-constrained measured and indicated resources of 9.8 million tonnes grading 0.91 g/t gold and 118 g/t silver. In terms of contained metal, that represents 287,000 oz. gold and 37.1 million oz. silver. In inferred resource for the pit is 2.3 million tonnes at 0.75 g/t gold and 73 g/t silver. There are also small out-of-pit indicated and inferred resources.

GoGold’s PEA for Los Ricos South project estimates the initial capex to be $125 million and the sustaining costs to be $62 million. This would build a mine and 5,000 t/d mill with an 11-year life that would produce a total of 70 million oz. silver-equivalent. Two-thirds of the ore would be sourced from an open pit and the remainder from underground development.

At US$21/oz. silver and US1,550/oz. gold, the project has an after-tax net present value with a 5% discount of $295 million and an internal rate of return of 46%. Should metal prices rise to US$24/oz. silver and US$1,800/oz. gold, the NPV5% becomes $408 million and the IRR 58%. The company estimates the all-in-sustaining cost of producing an ounce of silver-equivalent will be US$11.35.

An initial resource estimate was provided for Los Ricos North in December 2021, showing 87.8 million oz. silver-equivalent indicated in 22.3 million tonnes grading 122 g/t silver-equivalent. GoGold has 100,000 metres of drilling planned this year to expand the resources.

Last month, GoGold announced its highest grade drill intercept to date from El Favor East at the Los Ricos North part of the project. Hole LRGF-21-107 returned 1 metre of 11,307 g/t silver-equivalent within 21.2 metres averaging 1,079 g/t silver-equivalent. This assay is from an area outside the previous resource estimate.

Additional drill results are posted on www.GoGoldResources.com.