Goldgroup Acquires Remaining 30% Interest in the Caballo Blanco Project
VANCOUVER, BRITISH COLUMBIA - (September 26, 2011) - Goldgroup Mining Inc. (TSX:GGA) ("Goldgroup" or the "Company") is pleased to announce that it has entered into an agreement with Almaden Minerals Ltd. and its subsidiary (together, "Almaden") to purchase Almaden's 30% interest in the Caballo Blanco project (the "Transaction"). As previously announced, Goldgroup recently completed its earn-in of its 70% interest in the Caballo Blanco gold project. Upon completion of the Transaction, Goldgroup will own 100% of the Caballo Blanco project.
In consideration for acquiring the remaining 30% interest in Caballo Blanco, at closing Goldgroup shall pay to Almaden a cash consideration of US$2,500,000 and issue to Almaden 7,000,000 of its common shares. An additional 7,000,000 of its common shares will be issued to Almaden under the following conditions: 1,000,000 common shares upon commencement of commercial production on the Caballo Blanco project, 2,000,000 common shares upon measured and indicated resources including cumulative production reaching 2,000,000 ounces of gold, 2,000,000 common shares upon measured, indicated and inferred resources including cumulative production reaching 5,000,000 ounces of gold and 2,000,000 common shares upon measured, indicated and inferred resources including cumulative production reaching 10,000,000 ounces of gold. The aforementioned Goldgroup shares to be issued are subject to certain statutory and agreed to hold periods. Goldgroup will also transfer to Almaden its 40% interest in the El Cobre property and grant a 1.5% net smelter royalty interest on the Caballo Blanco project to Almaden.
Goldgroup shall also pay US$650,000 and provide a 0.4% net smelter royalty on the Caballo Blanco project to the original claimholder of the property in settlement of certain rights and subject to certain terms and conditions.
Upon completion of the Transaction, Goldgroup's Caballo Blanco project will be subject to an aggregate 2.95% net smelter return royalty, which includes a prior 1.5% net smelter return royalty over the 70% interest Goldgroup acquired from NGEx Resources Inc. ("NGEx").
The closing of the Transaction is subject to certain conditions, including, but not limited to, the receipt of conditional listing approval for the common shares to be delivered pursuant to the Transaction by the Toronto Stock Exchange.
About Caballo Blanco
The Caballo Blanco project covers an area of approximately 55,000 hectares and is centered next to the Gulf of Mexico, 65 kilometres northwest of the city of Veracruz in the state of Veracruz, Mexico. In November, 2009, Goldgroup acquired from NGEx an option to acquire a 70% interest in the Caballo Blanco project from Almaden. In August, 2011, the Company satisfied its obligations to earn its 70% interest in the Caballo Blanco project. Further information of a technical or scientific nature related to the Caballo Blanco project is available in the technical report entitled "NI 43-101 Technical Report Caballo Blanco Project and a Resource Estimate at the La Paila Zone" dated February 28, 2011, which is available under Goldgroup's profile on SEDAR at www.sedar.com.
Goldgroup is a well-funded Canadian-based gold producer and is focused on the acquisition, exploration and development of advanced stage gold-bearing mineral properties in the Americas. The Company's current gold production and exploration and development related activities are conducted exclusively in Mexico, one of the world's most advantageous mining jurisdictions. Goldgroup owns and operates the Cerro Colorado Mine in Sonora along with a property portfolio that includes its interests in the Caballo Blanco project in Veracruz and the San José de Gracia project in Sinaloa.
For further information on Goldgroup please visit www.goldgroupmining.com or contact:
Keith Piggott, President & CEO
David Fry, Corporate Development
TF: 1-877-655-ozAu (6928)