Goldgroup Mining Inc

General information

Goldgroup Mining Inc. ("Goldgroup") is a well-funded Canadian-based gold production, development and exploration company with a significant upside in a portfolio of projects in Mexico, one of the world's best mining jurisdictions. Goldgroup's goal is to produce 200,000+ ounces of gold per year through organic growth within three years from the Company's three main assets: Caballo Blanco, San José de Gracia and Cerro Colorado.

Goldgroup's 100% ownership of the Caballo Blanco gold project and the Cerro Colorado mine, as well as its 50% ownership of the San José de Gracia project, represents an estimated mineral resource (NI 43-101 compliant) totaling approximately 650,000 oz Au of indicated resources and 900,000 oz Au of inferred resources, plus the potential to considerably increase these estimated resources through continued drilling and exploration. Goldgroup is led by a team of highly successful individuals with extensive expertise in exploration, corporate finance, and mine development in Mexico.
In an equity financing in March 2010, Goldgroup raised $40million.

Caballo Blanco

Caballo Blanco, Goldgroup's 100%-owned advanced stage flagship gold project, is located 65km northwest of Veracruz, Mexico's largest port city. The project consists of two large areas of epithermal gold mineralization: Northern Zone, where the main La Paila Zone is located, and the Highway Zone. In 2011, Goldgroup completed a 30,000 metre drill program on the La Paila Zone. In February 2012, the Company announced an updated NI 43-101 mineral resource estimate on the La Paila Zone.

Approximately 36,000 metres in 145 holes of additional diamond drilling was completed at the La Paila Zone from October 2010 to December 2011 expanding the indicated resource significantly by 314%. Based on a 0.2 g/t Au cut-off grade, the Company’s indicated mineral resources at the La Paila Zone at Caballo Blanco grew from 139,000 to 575,000 ounces of gold (28.9 million tonnes grading 0.62 g/t Au). The inferred mineral resources summed to 419,000 ounces of gold (24.0 million tonnes grading 0.54 g/t Au). Furthermore, this updated mineral resource estimate added silver resources to the mineral resource estimate at Caballo Blanco, including 2,150,000 ounces of silver indicated resources (28.9 million tonnes grading 2.32 g/t Ag) and 1,930,000 ounces of silver (24.0 million tonnes grading 2.5 g/t Ag) inferred resources.

The updated mineral resource estimate will be used in the Preliminary Economic Assessment (PEA) expected in the first quarter of 2012. In 2012, the Company is continuing with another 30,000 metre diamond drill program, utilizing five large diameter HQ diamond drills. This drill program in 2012 is designed to expand the mineralization of the Northern and Highway Zones at the Caballo Blanco project. Goldgroup is targeting initial annualized production of 100,000 ounces of gold in 2013.

San José de Gracia

San José de Gracia, Goldgroup's 50%-owned high grade gold project, is located in the northeast portion of Sinaloa State, Mexico. In November 2011, Goldgroup announced an updated NI 43-101 compliant mineral resource estimate on the San José de Gracia project based on an additional 172 drill holes. A total of over 300 holes have been drilled at San José de Gracia to date. This updated NI 43-101 Technical Report hosts an Indicated Resource at the Tres Amigos vein of 147,000 oz Au (913,000 tonnes grading 5.00 g/t Au) and an aggregate Inferred Resource at all four veins of 963,000 oz Au (5.8 million tonnes grading 5.16 g/t Au). This updated mineral resource estimate will be used to support a future Preliminary Economic Assessment (PEA) for mining. The Company is targeting a resource estimate sufficient to sustain 100,000 ounces of annual gold production. In 2009, San José de Gracia was recognized as Sinaloa State's "Most Significant Gold Project."

Cerro Colorado

Goldgroup owns and operates 100% of the Cerro Colorado gold mine, located in northern Sonora, Mexico. Exploration drilling has continued in areas immediately adjacent to and also near distant to the Cerro Colorado mine site to enhance the mineralization available for production at this facility. The Company projects gold production of 20,000 oz in 2011.

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