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The company now has the exclusive option to process tailings material from Promotora De La Industria Chihuahuense. It has a measured and indicated mineral resource of 5.77 million tonnes at 49 g/t silver and 0.26 g/t gold for an estimated 12.6 million silver equivalent ounces.
February is only half over, but already Canada-based gold and silver producer GoGold Resources (TSX:GGD) has made a fair amount of progress.
Earlier this month, its Mexican subsidiary, Grupo Coanzamex, signed a letter of intent regarding an option agreement to acquire irrevocable rights to tailings material from Promotora De La Industria Chihuahuense. The company then said Wednesday that it’s already signed a definitive agreement, completed its due diligence and received a NI 43-101 mineral resource estimate for the tailings.
The company now has the exclusive option to process the tailings, which have a measured and indicated mineral resource of 5.77 million tonnes at 49 g/t silver and 0.26 g/t gold for an estimated 12.6 million silver equivalent ounces. That estimate was derived from 3,323 meters of drilling conducted across 158 holes.
The tailings are located in Parral, Mexico, just 1 kilometer from the company’s Parral tailings project. It reported reserves of 35 million ounces of silver equivalent at the project back in 2013. Tailings from the Parral tailings project are processed at GoGold’s Parral heap leach facility, and the company believes that “with additional metallurgical work the new tailings could be incorporated” into that facility. The new tailings and old tailings reportedly all come from the same geologic structures.
The terms of the agreement require GoGold to pay a fee of US$15,000 a month until it decides whether to develop the new tailings. If it ultimately decides not to develop them, the payments will be terminated and the company will have no further obligations. However, if GoGold does decide to develop and operate the project, it will have to continue making the $15,000 payments; furthermore, Promotora will be entitled to a net profits interest of 12 percent after certain deductions.
No word yet on how long it may take the company to make a decision regarding development. At close of day Wednesday GoGold’s share price was up a modest 0.65 percent, at $1.55. It’s gained 6.9 percent since the beginning of 2015.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
