Shares Outstanding: 265,551,467
Trading Symbols: TSX: GGD
OTCQX: GLGDF

HALIFAX, NS, Feb. 22, 2021 /PRNewswire/ - GoGold Resources Inc. (TSX: GGD) (OTCQX: GLGDF) ("GoGold", "the Company") is pleased to announce the filing of a National Instrument 43-101 Preliminary Economic Assessment ("PEA") Technical Report (the "Report") for their Los Ricos South Project located in Jalisco State, Mexico.  The highlights of the Report were previously announced in a news release dated January 20, 2021, and the effective date of the Report is February 22, 2021.

Highlights of the PEA, with a base case silver price of US$21/oz and gold price of US$1,550/oz are as follows (all figures in US dollars unless otherwise stated):

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• After-Tax NPV (using a discount rate of 5%) of $295 Million with an After-Tax IRR of 46% (Base Case);
• 11-year mine life producing a total of 69.6 million payable silver equivalent ounces ("AgEq"), consisting of 42.9 million silver ounces, 352,000 gold ounces and 4.5 million copper pounds;
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• Initial capital costs of $125 million, including $16 million in contingency costs, over an expected 18 month construction period, and additional sustaining capital costs of $62 million over the life of mine ("LOM");
• Average LOM operating cash costs of $8.65/oz AgEq, and all in sustaining costs ("AISC") of $11.35/oz AgEq
• At approximate spot metal prices of $24.40 silver/oz and $1,800 gold/oz, provides an After-Tax NPV (using a discount rate of 5%) of $408 million and an After-Tax IRR of 58%;
• Average annual production of 8.7 million AgEq in years two through six;
• Approximately 2/3 of LOM production is open pit ("OP"), and approximately 1/3 is bulk underground ("UG") mining;
• 22 months from project acquisition to PEA, including initial Mineral Resource on first target at Los Ricos South.

"We are advancing Los Ricos South towards Pre-Feasibility and towards a mine in parallel with our 100,000m drill program at Los Ricos North to define Mineral Resources and new discoveries," said Brad Langille, President and CEO. 

"We see the Los Ricos district unfolding into continued value creation for our shareholders in 2021 and beyond."       

What's Next for Los Ricos South

In 2021, the Company will continue the engineering studies required for a Pre-Feasibility Study.  These studies include further defining the capital and operating costs including geotechnical drilling and bedrock studies, civil earthworks, metallurgical studies, and socio-economic programs with the local, State and Federal authorities.

PEA Summary

The PEA was prepared by the independent firm P&E Mining Consultants Inc. ("P&E"), with metallurgical test work completed by SGS Canada Inc.'s Lakefield office ("SGS"), geotechnical study by Golder & Associates of Tucson, process plant design and costing by D.E.N.M. Engineering Ltd., and environmental and permitting led by CIMA Mexico.

Following are tables showing key assumptions, results, and sensitivities.

Table 1 – Los Ricos South PEA Key Economic Assumptions and Results

Table 2 – Los Ricos South PEA Gold and Silver Price Sensitivities

Table 3 – Los Ricos South PEA Operating Expense and Capital Expense Sensitivities

Capital and Operating Costs
The Los Ricos South Project has been envisioned as a combined open pit and underground mining operation, with contract open pit mining in years one to six of the mine plan, and contract underground mining in years six to eleven.

The processing plant is comprised of conventional crushing and grinding followed by cyanide tank leaching. Back end filtration is required to maximize water recycling (dry stack tailings) as well as a SART (sulfidation, acidification re-neutralization and thickening) circuit to re-generate cyanide back to the process and to produce a saleable Cu2S copper sulfide product. Water supply to the process plant is provided by a nearby seasonally charged water dam and high voltage grid power is provided by the local utility.

Key components of the capital cost estimate are provided in Table 4 and operating costs are provided in Table 5.

Table 4 – Capital Cost Estimate

Table 5 – Operating Costs (Average LOM)

Mining

The open pit mining will be contracted and carried out by drill and blast followed by conventional loading and truck haulage to the waste rock storage facilities and the processing plant. The contract underground mining will involve long hole stoping and cemented paste back filling of the mined-out stopes. A cement reinforced plug will be placed in the bottom of the open pits after they are mined out to provide additional support for underground mining of the crown pillars to maximize mineralized material recovery.

Metallurgy

A metallurgical test program was carried out by SGS Lakefield of Ontario, Canada. The program included grinding and leaching as well as comminution testing. The leach samples comprised of drill core sampling rejects representing the various zones of the Mineral Resource and whole HQ drill core for the comminution work. This preliminary test program estimated a gold and silver respective metallurgical recoveries of 93% and 88%.

Surface Rights Agreement

The Company has an agreement with the Ejido of Cinco Minas, which owns the surface rights over all of those concessions included in this PEA.  The agreement allows GoGold to mine and explore the 1,280 hectares of land that is owned by the local Ejido for a period of twelve years with an option to renew for a further twelve years.

Mineral Resource Estimate

The basis for the PEA is the Mineral Resource Estimate completed by P&E in the National Instrument 43-101 Technical Report on the Initial Mineral Resource Estimate for the Los Ricos South Project located in Jalisco State, Mexico, which has an effective date of July 28, 2020.  A summary of the Mineral Resource Estimate is provided in Table 6.

Table 6: Los Ricos South Mineral Resource Estimate – Pit Constrained and Out-of-Pit(1-8)

Qualified Persons
Robert Harris, P.Eng. and David Duncan, P.Geo. are the GoGold Qualified Persons and Eugene Puritch, P.Eng., FEC, CET, president of P&E Mining Consultants Inc. is the Independent Qualified Person all as defined by National Instrument 43-101 and whom are responsible for the technical information in this press release.

VRIFY Slide Deck and 3D Presentation
VRIFY is a platform being used by companies to communicate with investors using 360° virtual tours of remote mining assets, 3D models and interactive presentations. VRIFY can be accessed by website and with the VRIFY iOS and Android apps.

Access the GoGold Company Profile on VRIFY at: https://vrify.com

The VRIFY Slide Deck and 3D Presentation for GoGold can be viewed at: https://vrify.com/explore/decks/9404 and on the Company's website at: www.gogoldresources.com.

Los Ricos District Exploration Projects

The Company's two exploration projects at its Los Ricos Property are in Jalisco State, Mexico.  The Los Ricos South Project began in March 2019 and includes the 'Main' area, which is focused on drilling around a number of historical mines including El Abra, El Troce, San Juan, and Rascadero, as well as the Cerro Colorado, Las Lamas and East Vein targets.  An initial Mineral Resource on the Los Ricos South project was announced on July 29, 2020 and indicated a Measured & Indicated Mineral Resource of 63.7 million ounces AgEq grading 199 g/t AgEq contained in 10.0 million tonnes, and an Inferred Mineral Resource of 19.9 million ounces AgEq grading 190 g/t AgEq contained in 3.3 million tonnes.  An initial PEA on the project was announced on January 20, 2021 indicating an NPV5% of US$295M.

The Los Ricos North Project was launched in March 2020 and includes drilling at the El Favor, La Trini, and El Orito targets.  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 metres of drilling and will be one of the largest in Mexico.

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 operates the Parral Tailings mine in the state of Chihuahua and has the Los Ricos South and Los Ricos North exploration projects in the state of Jalisco. 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 Los Ricos South and North projects, and future plans and objectives of GoGold, including the NPV, IRR, initial and sustaining capital costs, operating costs, and LOM production of Los Ricos South, 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.

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SOURCE GoGold Resources Inc.