Vancouver, British Columbia (September 14, 2010) - Goldgroup Mining Inc., TSX:GGA, ("Goldgroup" or the "Company") is pleased to announce that a multi-phase drilling and exploration program at its Caballo Blanco gold project in Veracruz, Mexico will commence near the end of September, 2010. The budget for this program is US$8.5 million. Goldgroup's 500 km2 Caballo Blanco property hosts multiple mineralized zones comprising numerous geological targets.
The 30,000 metre multi-drill program, using Diamond and reverse circulation drilling, has been designed to expand and upgrade the current NI 43-101-compliant mineral resource estimate at the La Paila anomaly (contained in the NI 43-101 technical report dated March 22, 2010) and to test other highly prospective areas for mineralization, including targets at the Red Valley and Highway zones. The NI 43-101 technical report dated March 22, 2010 addresses only the estimated mineral resource of 656,000 oz/Au (139,000 oz/Au indicated; 517,000 oz/Au inferred) from the La Paila area in the Northern Zone and was compiled from 32 Diamond drill holes totaling approximately 7,000 meters.
Francisco Escandon, Director of Operations at Caballo Blanco stated: "This extensive exploration program at Caballo Blanco will provide Goldgroup with enough geological knowledge of the area to significantly advance our production planning process. The Company's future annual production target for Caballo Blanco is approximately 100,000 ounces of gold".
As part of the exploration program at Caballo Blanco, the Company also intends to conduct:
- Ground geophysics - a 63 km induced polarization (IP) survey (line cutting has commenced)
- Geochemical analysis of surface grab samples-in progress
- Metallurgical testing
- Construction of several underground adits for bulk sampling and to assess structural geology
- An environmental impact study
About Caballo Blanco
The Company purchased the option to acquire a 70% interest in Caballo Blanco from NGEx Resources Ltd. ("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.
About Goldgroup
Goldgroup is a well-funded Canadian-based gold production and exploration Company focused exclusively on Mexico, targeting growth in gold production, mineral resources, profitability and cash flow from a portfolio of production, development and exploration stage projects. The Company owns and operates the Cerro Colorado Gold Mine in Sonora, Mexico. All gold production is un-hedged and the Company expects to produce approximately 25,000 ounces of gold in 2010. The Company's property portfolio includes its interests in the Caballo Blanco project in Veracruz and the San José de Gracia high-grade gold project in Sinaloa.
Goldgroup is led by a team of highly successful and seasoned individuals with extensive expertise in exploration, corporate finance and mine development in Mexico. Kevin Sullivan, B.Sc., M.AusIMM, the Company's Vice President, Exploration and a qualified person, as defined by NI 43-101, has reviewed the technical information contained in this news release.
For further information on Goldgroup and Caballo Blanco, please visit www.goldgroupmining.com.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
Certain information contained in this news release, including any information relating to future financial or operating performance may be deemed "forward-looking". All statements in this news release, other than statements of historical fact, that address events or developments that Goldgroup expects to occur, are "forward-looking information". These statements relate to future events or future performance and reflect Goldgroup's expectations regarding the future growth, results of operations, business prospects and opportunities of Goldgroup. These forward-looking statements reflect Goldgroup's current internal projections, expectations or beliefs and are based on information currently available to Goldgroup. In some cases forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "estimate", "projects", "potential", "scheduled", "forecast", "budget" or the negative of those terms or other comparable terminology. Certain assumptions have been made regarding the forecast 2010 production at Cerro Colorado of between 25,000 to 30,000 ounces of gold and regarding the Company's plans at the Caballo Blanco property, including the targeted updated resource estimate and the targeted annual production of 100,000 ounces of gold. Many of these assumptions are based on factors and events that are not within the control of Goldgroup and there is no assurance they will prove to be correct. Such factors include, without limitation: capital requirements, fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States and Mexico; price volatility in the spot and forward markets for commodities; discrepancies between actual and estimated production, between actual and estimated reserves and resources and between actual and estimated metallurgical recoveries; changes in national and local governments in any country Goldgroup currently or may in the future carry on business; taxation; controls; regulations and political or economic developments in the countries in which Goldgroup does or may carry on business; the speculative nature of mineral exploration and development, including the risks of obtaining necessary licenses and permits, diminishing quantities or grades of reserves; competition; loss of key employees; additional funding requirements; actual results of current exploration or reclamation activities; changes in project parameters as plans continue to be refined; accidents; labour disputes; defective title to mineral claims or property or contests over claims to mineral properties. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance or inability to obtain insurance, to cover these risks) as well as "Risks and Uncertainties" included in the Annual Information Form and MD&A for Goldgroup available at www.sedar.com. Forward-looking information is not a guarantee of future performance and actual results and future events could differ materially from those discussed in the forward-looking information. All of the forward-looking information contained in this news release is qualified by these cautionary statements. Although Goldgroup believes that the forward-looking information contained in this news release are based on reasonable assumptions, readers cannot be assured that actual results will be consistent with such statements. Accordingly, readers are cautioned against placing undue reliance on forward-looking information. Goldgroup expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.
This news release and the information contained herein does not constitute an offer of securities for sale in the United States and securities may not be offered or sold in the United States absent registration or exemption from registration.