GoGold Resources (GGD) - Best Silver Project in the World?

GoGold Resources is a Canadian-based mining company involved in the exploration, development, and production of Silver and Gold in Mexico. The mining project owned by the company includes the Parral heap leach project which is in commercial production. GoGold Resources generates revenue from the sale of Gold, Silver, and other by-products and uses the cash flow to fund exploration at its Los Ricos projects.

We caught up with Bradley Langille, President & CEO of GoGold Resources for an update on the Los Ricos projects and the plans for the company going forward.

Company Overview

GoGold Resources has been very focused on Los Ricos North which is turning out to be an even bigger system than they had originally thought it would be. They haven’t forgotten about Los Ricos South and are working towards Pre-Feasibility which may be completed by the end of the year. 

The Company’s two exploration projects at its Los Ricos property are in Jalisco state, Mexico. The Los Ricos South Project began in March 2019 and includes the ‘Main’ area, which is focused on drilling around a number of historical mines including El Abra, El Troce, San Juan, and Rascadero, as well as the Cerro Colorado, Las Lamas and East Vein targets. An initial resource on the Los Ricos South project was announced in July, 2020 and indicated a Measured & Indicated Mineral Resource of 63.7Moz AgEq grading 199g/t AgEq contained in 10.0Mt, and an Inferred Resource of 19.9Moz AgEq grading 190 g/t AgEq contained in 3.3Mt. An initial PEA on the project was announced in January, 2021 indicating an NPV5% of US$295M. 

The Los Ricos North Project was launched in March 2020 and includes drilling at the El Favor, La Trini, and El Orito targets. During 2020, GoGold’s exploration team identified over 100 targets on the Los Ricos North properties, demonstrating significant exploration potential. The Company plans to drill 10 of these targets as part of its 2021 drilling program which is planned to exceed 100,000m of drilling and will be one of the largest in Mexico.

Results from Los Ricos North

Los Ricos North has been delivering some great results in wide bulk zones. The El Favor target is demonstrating that not only does it have some high grades in kilos, but also potentially bulk mineable zones approaching 100m in combined intercepts that are near the surface. The convergence of three semi-parallel veins on the Favor deposit in the Hundido area is giving widths and grades that could accelerate the growth of resource ounces. These results have strengthened the belief that Los Ricos North is a large mineralized system.

Precious Metals Market & Price Dynamics

The price of precious metals has come off a bit in recent weeks which isn’t a surprise. The institutions are coming back in and they are a big driver of the commodity price. Silver has a new lease life with the green revolution and the use of silver panels and electrification of vehicles, which will use a lot of Silver. There is reinvigoration into Silver which could possibly outperform Gold for that reason. 

Comparisons & Differentiation: The Make-Up of a Perfect Mine

There are lots of different types of Silver projects and all have their own advantages and disadvantages. With a narrow-vein high-grade system, the disadvantage is that it takes a lot of development to get the tonnage results. It is all about volume, so its length x width x depth, and then the grade is important too. GoGold Resources has narrow veins but they're within a wider zone of very good grade, which adds up the ounces. 

Expectations for the Future: Good Results The New Norm for GoGold?

The GoGold share price shows that the market is not paying attention as much as they did despite drill results showing very good grades. Exploration potential is there but the market is awaiting the resource for comparison with peers. There's a team working on Pre-Feasibility Study (PFS) at Los Ricos South at the moment which is moving ahead quickly and there will be more drilling there too. There will be news flow to the market through the year and it is hoped that the Pre-Feasibility study will be completed by the end of the year. Los Ricos North and it’s high grade results has rather stolen the limelight as has potential to be a really big Silver asset for the company.

GoGold Resources is purely interested in making money for the shareholders. They have bought and sold lots of properties in the past but have also built 3 mines. Los Ricos is big enough to go into production and is getting interest from the market but they need to keep on moving towards production to de-risk the project. If a potential buyer came along wanting to buy a de-risked project and willing to pay more for less risk then M&A could be a possibility in the future but GoGold Resources is entirely capable of building the resource into production themselves. 

World-Scale Project or Just Another Silver Company? 

The Los Ricos North resource will not be coming out yet as there is still so much expansion potential as they find new intercepts, new discoveries and new zones in the current drilling programme. The exploration potential looks to be as big as multiples of Los Ricos South so it will take time to confirm but they hope to have that first resource out in September or October. There is a huge drill programme planned of 100,000m over 12 months. 

The Los Ricos North mine is becoming one of the big discoveries in the Silver space. The GoGold Resources team feels that this will be a leading Silver asset which will transform GoGold into that next mid-tier or beyond.  

We followed GoGold Resources last year and saw extraordinary growth which was amazing for the shareholders. They continue to deliver some great grades and hopefully can show that the scale and the volume of metal contained in the ground going forward can deliver something which is world class. And easy to see why we call this a $Billion company in the making.

To find out more, go to GoGold Resources' Website.