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Pinos Project

Overview
Pinos is a fully permitted, PEA-level gold project located in the historic Zacatecas mining belt in north-central Mexico, approximately 67 km northwest of San Luis Potosí. The project consists of 29 concessions covering 3,816 hectares, with extensive gold and silver vein systems. Zacatecas, Mexico’s second-largest mining state, hosts world-class operations such as Newmont’s Peñasquito and Capstone’s Cozamin mines.

Goldgroup has acquired a 100% interest in the Pinos Project. Pinos benefits from excellent infrastructure, with paved road access to the site, available power and water, and proximity to skilled labor and mining services.

Geology & Mineralization

The Project hosts low-sulphidation epithermal quartz-gold veins with excellent leach kinetics, as well as a larger-scale mineralized stockwork target with open-pit potential. The project features multiple high-grade vein structures with historical production grades averaging 30-50 g/t Au. Mining in the district was historically limited to 180 meters depth due to water table constraints, but mineralization remains open at depth.

2018 PEA Highlights

The 2018 Preliminary Economic Assessment (PEA) defined an initial resource and a plan for restarting underground mining operations. Key highlights include:

  • Mineral Resources: 86,000 oz Au and 1.3 Moz Ag
  • Using $1,250/oz Au price with 2.2 g/t AuEq cut-off
  • Life of Mine (LOM): 7 years
  • Gold Equivalent Ounces (GEO) Recovered: 89,000
  • Pre-Tax NPV (5%): $19 million
  • After-Tax NPV (5%): $12 million
  • After-Tax IRR: 25%
  • Initial Capital Costs: $13.5 million (LOM capital: $23 million)
  • Direct Cash Cost per gold equivalent ounce: $666
  • Processing & Metallurgy: +90% Au recovery via cyanide leaching with Merrill-Crowe precipitation

The PEA is based on the Cinco Estrellas vein that is open in all directions, with multiple additional vein targets existing on the project, presenting significant resource expansion potential.

Further details can be found in the NI 43-101 Preliminary Economic Assessment Study for the Pinos Project, Zacatecas, Mexico, authored by Jose Antonio Olmedo, Geol. Eng., M.Sc. and David J. Salari, P. Eng., dated October 16, 2018. The report is available for viewing on SEDAR (www.sedar.com)