DDH 11 CBN 139: 79.42 m @ 1.20 g/t Au DDH 11 CBN 131: 90.60 m @ 0.91 g/t Au DDH 11 CBN 134: 85.00 m @ 0.65 g/t Au
Vancouver, British Columbia (December 16, 2011) - Goldgroup Mining Inc. ("Goldgroup" or the "Company") (TSX:GGA) is pleased to announce that additional diamond drill holes at its Caballo Blanco gold project in Veracruz, Mexico have yielded significant gold intercepts, expanding the La Paila oxide gold zone to the west and southwest. All ten drill holes reported below (see Tables 1 and 2 and the drill hole location map) are part of the ongoing drill program to define and to expand the southwestern flank of the La Paila gold zone as the zone currently remains open in this direction.
Keith Piggott, President and CEO of Goldgroup stated, "These diamond drill results yielded significant gold intercepts above the cut-off grade, which are contained in completely oxidized, vuggy and siliceous rock occurring within and peripheral to the existing La Paila zone. As anticipated, the planned 2011 drilling program is on-time and within budget, and will be completed by December 18, 2011. We are pleased to be on target for initial production at Caballo Blanco by 2012 year-end."
The Company focused its 2011 drilling program primarily on the La Paila zone, specifically with the objective to design the first open pit and to update the project's NI 43-101 resource estimate, which is expected to be released in the first quarter of 2012. Additionally, in-house and consultant engineering had significantly advanced Goldgroup's column leach testing in its large on-site facility, as well as progressed leach pad and carbon recovery plant design. The drilling and infrastructure work, combined with the upcoming updated NI 43-101 resource estimate, form the basis of our Preliminary Economic Analysis (PEA) expected to be completed in the first quarter of 2012. As a result of the La Paila's mineral characteristics and testwork indicating fast leach cycle times with a simple carbon recovery plant, Goldgroup is targeting initial production for Caballo Blanco by 2012 year-end.
As part of Goldgroup's 2012 drilling program, the Company expects to continue drill testing in the La Paila zone, in addition to drill testing a number of geochemical and geophysical targets in the large Northern zone ring structure, beyond the La Paila zone. Additionally, the Company intends to drill targets in the Highway zone, which is approximately seven kilometers to the southeast of the Northern Zone.
Table 1. Drill-Hole Results for the Caballo Blanco Project, Mexico DIAMOND DRILLING - LA PAILA ZONE
Diamond Drill Hole Mineralization
From (m) To (m) Interval (m) Au grade (g/t)
11 CBN 130 146.09 180.35 34.26 0.37
and 224.35 243.50 19.15 0.44
11 CBN 131 86.90 177.50 90.60 0.91
and 227.28 241.28 14.00 0.25
11 CBN 132 98.20 108.20 10.00 0.24
and 140.20 172.20 32.00 0.24
and 238.80 246.80 8.00 0.23
11 CBN 133 163.15 172.50 9.35 0.32
and 192.50 200.50 8.00 0.38
11 CBN 134 141.40 226.40 85.00 0.65
11 CBN 135 97.90 109.90 12.00 0.68
and 119.90 137.90 18.00 0.24
and 155.90 231.90 76.00 0.25
and 245.90 251.90 6.00 0.31
11 CBN 136 137.20 147.20 10.00 0.37
and 273.20 302.20 29.00 0.27
11 CBN 137 146.15 173.07 26.92 0.34
and 245.00 257.00 12.00 0.42
11 CBN 138 51.40 57.40 6.00 0.25
and 107.40 165.40 58.00 0.40
11 CBN 139 74.87 85.90 11.03 0.50
11 CBN 139 140.10 219.52 79.42 1.20
and 251.00 257.00 6.00 0.36
and 269.00 278.50 9.50 1.60
For a drill hole location map, click here.
All the holes presented above intersected gold mineralization in excess of the 0.2g/t Au cut of grade used in our technical reports. However, it is expected that as a result of favourable leach kinetics, recovery and ease of mining, that a lower cut off grade may be applicable.
The results presented today are part of the current drill program and are intended to be used in the preparation of an updated NI 43-101 mineral resource estimate. A complete summary of the assay results from diamond drill holes DDH 11 CBN 130 to DDH 11 CBN 139, as well as a drill-hole location map of the La Paila zone detailing the relative locations of the drill holes will be posted on the Goldgroup website under "Projects - Caballo Blanco" at www.goldgroupmining.com.
Table 2. Drill Hole Location Data, Caballo Blanco Project, Mexico DD Hole Number East UTM Coord (metres) North UTM Coord (metres) Elevation (m.a.s.l) Azimuth (degrees) Plunge (degrees) Total Length (metres)
11 CBN 130 768345 2184454 513 90 -45 290.2
11 CBN 131 768286 2184189 476 270 -72 251.4
11 CBN 132 768338 2184298 518 180 -50 373.8
11 CBN 133 768336 2183862 494 0 -90 247.5
11 CBN 134 768302 2184038 488 180 -70 274.5
11 CBN 135 768283 2184190 499 090 -85 284.6
11 CBN 136 768244 2183943 529 0 -90 308.2
11 CBN 137 768302 2184400 497 090 -50 305.7
11 CBN 138 768351 2184050 492 090 -75 224.0
11 CBN 139 768202 2184106 498 270 -80 291.5
m.a.s.l = metres above sea level; Coord = Coordinate; na = not applicable
About Caballo Blanco
Goldgroup owns 100% of Caballo Blanco. The Caballo Blanco project consists of a series of oxide gold zones located in the Veracruz province of eastern Mexico. The principal known gold zone at Caballo Blanco is the La Paila prospect located within a cluster of high-sulphidation epithermal alteration zones referred to as the Northern Zone. The 43-101 compliant estimated mineral resource for La Paila which was compiled from 32 diamond drill holes totaling approximately 7,000 metres completed by NGEx Resources Inc., prior to Goldgroup's acquisition of its interest in the project in November 2009, consists of 139,000 ounces of gold (6.7 million tonnes grading 0.65 g/t Au) contained in the category of indicated resources and 517,000 ounces of gold (27.6 million tonnes grading 0.58 g/t Au) contained in the category of inferred resources.
Subsequently, during 2011 Goldgroup has diamond drilled an additional 116 holes at the La Paila zone and received assays for 71 holes totaling approximately 18,000 metres. These holes will be used to update the NI 43-101 resource in the first quarter of 2012.
Other known gold zones at Caballo Blanco occur to the northeast of the La Paila and approximately 7 km to the southeast of the Highway Zone. These gold zones together with geophysical anomalies in the Northern Zone ring structure are expected to be drill tested.
Assaying and Qualified Person
After project geologists logged and marked the core, technicians cut the individual lengths with a diamond saw, then tagged the bags and secured them with security clips. The samples were then collected by ALS Minerals and transported to their Guadalajara preparation facility where they were dried and crushed to -2mm. A 250 gram split of the coarse material was then pulverized to -200 mesh. The rejects remained at the prep facility and the pulps were air couriered to ALS Minerals North Vancouver facility and analyzed for gold by 30g fire assay with an AA finish. In addition, a 35 element ICP analysis was conducted on all samples. A QA/QC program was implemented as part of the sampling procedure for the drill program. One standard, one blank or one duplicate was inserted per group of ten samples sent to the laboratory. The information in this news release has been approved by Marc Simpson, P. Geo., the Company's Qualified Person under National Instrument 43-101 standards.
About Goldgroup Goldgroup is a well-funded Canadian-based gold production and exploration Company with significant upside in a portfolio of projects in Mexico, including its flagship 100%-owned advanced stage gold development project, Caballo Blanco, in Veracruz, and the 50%-owned high grade gold exploration project, San José de Gracia, in Sinaloa. The Company operates the 100%-owned Cerro Colorado gold mine in Sonora, Mexico.
Goldgroup is led by a team of highly successful and seasoned individuals with extensive expertise in mine development, corporate finance, and exploration in Mexico. Goldgroup's mission is to grow gold production, mineral resources, profitability and cash flow, building a leading gold producer in Mexico.
For further information on Goldgroup, please visit www.goldgroupmining.com or contact:
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