GoGold’s Big Break: Los Ricos South Permit Approval Coming Soon?

• GoGold Resources is seeing permits start to move in Mexico under the new administration.
• The company is ready to build a 2,000 ton/day underground silver mine at Los Ricos South with $227M capital expenditure.
• GoGold has $76M cash and plans to raise $150-175M in debt to fund the rest of the mine build.
• Exciting exploration potential to extend Los Ricos South deposit by 500m and advance Los Ricos North is a milestone to look out for.
• The company is open to M&A at good valuations for shareholders given scarcity of pure-play silver companies.

Brad Langille, CEO of GoGold Resources, provided an insightful update on the company's progress and future plans in Mexico.

Permits Moving Forward

One of the most encouraging developments is that mining permits are starting to move under Mexico's new president, Claudia Sheinbaum, who took office in October 2024. The government has been issuing permits for ongoing operations and working through a shortlist of new permits. GoGold is confident they will receive the approval for Los Ricos South in the near future.

"It's not a question will we get the permit, it's not a question does the Mexican Government want to give permits," Langille stated. "I think they're going through their list, they're doing their work, I believe we're on the short list and I think we'll get that permit over the coming months."

Ready to Build

Upon receiving the final permit, GoGold is ready to start construction of a new 2,000 ton per day underground silver mine at its Los Ricos South project. The company has completed a feasibility study and front-end engineering design putting the capital cost at $227 million.

Funding is not expected to be an issue, with GoGold already having $76 million of cash on its balance sheet as of last quarter. The company has received multiple term sheets from lenders and is targeting a $150-175 million debt package to fund the remaining capex.

"We have the equity portion of it, we have enough equity there," explained Langille. "And then it would, it could be, there's several ways we could go, and this is where the flexibility comes in."

Interview with President & CEO Bradley Langille

Exploration Upside

While the focus is on building Los Ricos South, GoGold sees substantial exploration upside both near the existing deposit and at its earlier-stage Los Ricos North project.

The company has been drilling to the south of a fault that previously cut off the deposit, with a theory that the structure was displaced to the west. Initial holes have hit a good broad structure that looks very similar to the main deposit. Confirmation of this theory could add 500 meters of strike to Los Ricos South.

"If it proves out to be what we hope, and you have that 500 meters where if you look at, the 500 meters north of that fault was 22 years of mining for that other company," noted Langille.

At Los Ricos North, GoGold has delineated a resource of 161 million silver equivalent ounces and wants to advance the project while Los Ricos South is being built.

M&A Potential

As one of the few pure-play silver developers remaining after several acquisitions in the space last year, GoGold could become an attractive M&A target. Langille pointed to the recent takeovers of SilverCrest Metals at 1.7x NAV and Los Gatos at 2.0x NAV as relevant valuation benchmarks.

"When you've also in an environment where there's not a lot of choice or optionality on the table in terms of who and this is going to left now and you're talking about new answers right, you know much significantly dressed with the optionality of this expiration upside," he explained.

While GoGold is focused on developing its own assets, Langille said the company is open to opportunities that can create value for shareholders, especially as a large shareholder himself.

Conclusion

When considering silver investments, Langille believes GoGold stands out due to its proven management team, high-quality projects, and funding capability.

"Our expertise is you have an experience management team, we've done it before, you have the support of the market. The lending markets we've done a lot of that before," he said. "We've raised a lot of money, I think in my career probably in the range of $ 1.5 to 2 billion equity, we've done hundreds of millions of dollars with debt deals with private equity."

The company also focuses on high-margin projects to mitigate downside commodity price risk. Los Ricos South is expected to produce silver at an all-in sustaining cost of just $12 per ounce.

The Investment Thesis for GoGold Resources

• Permits to build the Los Ricos South mine expected in the near-term
• Construction ready to begin immediately with most funding secured
• 150-175 million ounces per year of low-cost ($12/oz AISC) silver production
• Exploration upside to significantly increase mine life and production profile
• Potential M&A target at attractive 1.7-2.0x NAV valuations
• Proven management team with track record of mine building and capital raising
• One of the few remaining pure-play silver investments in a tight market

Macro Thematic Analysis

The interview with GoGold CEO Brad Langille highlighted several important macro themes in the silver market. Most notably, the ongoing consolidation of silver companies is significantly reducing investment options for those seeking exposure to the metal. Recent acquisitions of SilverCrest and Los Gatos at 1.7-2.0x NAV have left few pure-play silver developers or producers.

This is occurring at a time when silver may have significant upside potential, both as a monetary and industrial metal. If silver prices break above $35-36 and make a run to $40 or $50, companies will provide the most torque to those gains. However, the industry is becoming increasingly bifurcated between the few well-funded players like GoGold and a large number of juniors that are struggling to raise capital.

As Langille summarized, "I think in the silver space, to find it hard to raise money, we're very fortunate we've been at this for a long time. We built a lot of mines, we've done a lot of transactions and even in GoGold I'll say we, we can do it all."

GoGold Resources is well-positioned to benefit from the positive macro outlook for silver and ongoing industry consolidation. With permits expected shortly for a fully-funded, high-margin mine at Los Ricos South and multiple exploration catalysts on the horizon, the company provides a compelling investment opportunity. Investors seeking exposure to silver should act soon before GoGold potentially becomes the next M&A target in the space.