2015 News Releases
July 20, 2015
Goldgroup Acquires Option to Earn 80% Interest in El Mozo Gold Project in Ecuador
Vancouver, British Columbia (July 20, 2015) -- Goldgroup Mining Inc. ("Goldgroup" or the "Company") (TSX:GGA, OTC:GGAZF, BMV SIX:GGAN.MX) is pleased to announce that it has acquired all of the issued and outstanding shares of 0990718 B.C. Ltd. ("0990718"), a private company which holds the option to acquire an undivided 80% right, title and interest in the El Mozo gold project (the "El Mozo Project") in Ecuador.
The 1,776 hectare El Mozo Project is located approximately 60km south of the city of Cuenca in southern Ecuador. A total of 120 core holes (18,722 metres) have been drilled on the property by previous workers, focused primarily on three zones with near surface oxide gold mineralization. Preliminary metallurgical test work indicates these oxide zones are amenable to low cost heap leaching.
0990718 holds its right to acquire an 80% interest in the El Mozo Project pursuant to an option agreement dated June 6, 2014 (the "Option Agreement"), as amended, between 0990718 and the owner of the El Mozo Project (the "Optionor"). Under the Option Agreement, 0990718 may earn an
80% interest in the El Mozo Project by fulfilling the following requirements:
| Earn in % of El Mozo Project |
Obligation |
|---|---|
| 15% | · Paying the Optionor US$50,000 on or before June 13, 2016 |
| 35% | · Fulfilled obligation to earn in 15% · Paying the Optionor US$60,000 on or before June 13, 2017 |
| 55% | · Fulfilled obligation to earn in 35% · Paying the Optionor US$100,000 on or before June 13, 2018 · Incurred at least US$1,000,000 in exploration expenditures on or before June 6, 2018 |
| 80% | · Fulfilled obligation to earn in 55% · Paying the Optionor US$150,000 on or before June 12, 2019 · Incurred at least US$1,000,000 (total US$2,000,000 accumulated) in exploration expenditures on or before June 12, 2019 · Issuing US$500,000 of common shares of Goldgroup to Optionor on or before June 6, 2019. |
These earn-in obligations must be fulfilled on or before June 12, 2019. Upon successful earn-in on the El Mozo Project by 0990718, the Optionor has the right to convert its 20% interest in the El Mozo Project into a 2% net smelter returns royalty ("NSR1"). If the Optionor converts its interest into a 2% NSR1, 0990718 will have the right to purchase 1% of this NSR1 royalty by paying:
- US$1,000,000 (if estimated mineral resources are less than 500,000 gold equivalent ounces), or
- US$1,500,000 (if estimated mineral resources are equal to or greater than 500,000 but less than 1,000,000 gold equivalent ounces), or
- US$2,000,000 (if estimated mineral resources are equal to or greater than 1,000,000 gold equivalent ounces).
Goldgroup acquired all of the issued and outstanding shares of 0990718 in exchange for the issuance of an aggregate of 5,500,000 common shares of Goldgroup to the shareholders of 0990718 (the "Vendors") pursuant to a share exchange agreement with the Vendors (the "Share Exchange Agreement"). None of the common shares of Goldgroup issued pursuant to the Share Exchange Agreement have been or will be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.
In addition, Goldgroup granted to the Vendors an aggregate 1% net smelter returns royalty ("NSR2") on Goldgroup's ownership portion in the El Mozo Project pursuant to a net smelter returns royalty agreement (the "Royalty Agreement"). Under the Royalty Agreement Goldgroup has the right to repurchase the Vendors' NSR2 for consideration of:
- US$1,000,000 paid on or before the date (the "Repurchase Date") which is the later of January 17, 2017 and the date permits for commercial production on the El Mozo Project are granted; or
- US$1,500,000 paid on or before the date which is 30 months following the Repurchase Date; or
- US$2,500,000 paid on or before the date which is 42 months following the Repurchase Date.
The consideration for the NSR2 royalty repurchase can be paid in cash or in Goldgroup common shares, at Goldgroup's option.
Keith Piggott, Chairman and President of Goldgroup commented: "Our Company continues to minimize the business risk by diversifying our mining assets portfolio geographically. We continue to strategically operate in mining friendly jurisdictions in the Americas".
About Goldgroup
Goldgroup is a Canadian-based gold production, development, and exploration Company with a portfolio of projects in Mexico, including a 50% interest in DynaResource de Mexico, S.A. de C.V., which owns 100% of the high-grade gold exploration project, San José de Gracia located in the State of Sinaloa. The Company also operates its 100%-owned Cerro Prieto heap-leach gold mine, in the State of Sonora.
Goldgroup is led by a team of highly successful and seasoned individuals with extensive expertise in mine development, corporate finance, and exploration. Goldgroup's mission is to increase gold production, mineral resources, profitability and cash flow, with a view to becoming a leading gold producer.
For further information on Goldgroup, please visit www.goldgroupmining.com
On behalf of the Board of Directors,
Mr. Keith Piggott, Chairman and President
Tel: 1-520-247-5753
Investor Relations
Toll Free: 1-877-655-ozAu (6928)
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