Goldgroup Completes PEA at Caballo Blanco Project

Goldgroup Mining Inc.(TSX:GGA) announced the first positive results from the Caballo Blanco PEA. According to the results of the PEA, the project is expected to produce approximately 687,000 ounces of gold and 1.3 million ounces of silver over the span of a 7.5 year mine life. The Company expect to file the technical report on SEDAR in the coming 45 days.

PEA Highlights:

• Indicated mineral resources of 575,000 ounces of gold (28.9 million tonnes grading 0.62 g/t Au) and inferred mineral resources of 419,000 ounces of gold (24.0 million tonnes grading 0.54 g/t Au)
• The Whittle optimization model shell contains 49.3 million tonnes of mineralized material above the Net Smelter Return (“NSR”) cut-off of $3.04/t and 852,000 ounces of contained gold and 3.6 million ounces of contained silver. The NSR parameters utilized in the optimization model were $1,150 per ounce for gold and $21.50 per ounce for silver. The initial strip ratio is 0.5 and 1.3 in years one and two respectively, and an overall strip ratio of 1.66 for the Life-of-Mine (“LOM”).

Goldgroup, President and CEO, Keith Piggott, commented:

The preliminary economic assessment is a significant milestone for Goldgroup, and we are pleased with its results, indicating that the Caballo Blanco project is economically robust both in terms of its NPV and IRR, even well below current gold prices. We are moving this project forward responsibly to achieve production within the earliest possible timeframe. We are confident that our team at Goldgroup is capable of achieving the conservative parameters described in the PEA. Furthermore, we intend to continue growing our resources in 2012 as we continue to conduct infill and step-out drilling at Caballo Blanco.

Click here to read the Goldgroup Mining Inc. (TSX:GGA) press release