GoGold Announces NPV of US$295M for Los Ricos South PEA

HALIFAX, NS, Jan. 20, 2021

HALIFAX, NS, Jan. 20, 2021 /PRNewswire/ - GoGold Resources Inc. (TSX: GGD) (OTCQX: GLGDF) ("GoGold", "the Company") is pleased to release the results of its initial Preliminary Economic Assessment ("PEA") at its Los Ricos South Project located in Jalisco State, Mexico. 

Highlights of the PEA, with a base case silver price of US$21.00/oz and gold price of US$1,550/oz are as follows (all figures in US dollars unless otherwise stated):

• GoGold completes PEA at its first target in Los Ricos district – Los Ricos South;
• After-Tax NPV (using a discount rate of 5%) of $295 Million with an After-Tax IRR of 46% (Base Case);
• 11-year mine life producing a total of 69.6 million payable silver equivalent ounces ("AgEq"), consisting of 42.9 million silver ounces, 352,000 gold ounces and 4.5 million copper pounds;
• Initial capital costs of $125 million, including $16 million in contingency costs, over an expected 18 month build, and additional sustaining capital costs of $62 million over the life of mine ("LOM");
• Average LOM operating cash costs of $8.65/oz AgEq, and all in sustaining costs ("AISC") of $11.35/oz AgEq
• At approximate spot metal prices of $24.40 silver/oz and $1,800 gold/oz, provides an After-Tax NPV (using a discount rate of 5%) of $408 million and an IRR of 58%;
• Average annual production of 8.7 million AgEq in years two through six;
• Approximately 2/3 of LOM production is open pit ("OP"), and approximately 1/3 is bulk underground ("UG") mining;
• 22 months from project acquisition to PEA, including initial Mineral Resource on first target at Los Ricos South.

"The acquisition of the Los Ricos district, only 22 months ago in March 2019, has proven to be a tremendous catalyst of growth for GoGold," said Brad Langille, President and CEO.  "More importantly, this has been accomplished with the first of many targets in the Los Ricos district. This PEA demonstrates the strong economics of the district which will continue to expand as we drill additional targets. We feel the PEA is the first step in unlocking the significant potential of the Los Ricos district and creating additional value for our shareholders.  With our strong balance sheet and cash flow from our operating mine, we are now aggressively advancing Los Ricos North with a 100,000m drill program and targeting an initial Mineral Resource in 2021."       

What's Next for Los Ricos South
In 2021, the Company will continue the engineering studies required for a pre-feasibility study.  These studies include further defining the capital and operating costs including geotechnical drilling and bedrock studies, civil earthworks, metallurgical studies, and socio-economic programs with the local, State and Federal authorities.

Plan for Resources and Discovery – Los Ricos North
The Company's focus for Los Ricos North in 2021 will be to define the initial NI 43-101 compliant Mineral Resource.  During 2020, GoGold's exploration team identified over 100 targets on the Los Ricos North properties, demonstrating the significant exploration potential.  The Company plans to drill 10 of these targets as part of its 2021 drilling program which is planned to exceed 100,000 metres of drilling and will be one of the largest in Mexico.

PEA Summary
The PEA was prepared by independent consultants P&E Mining Consultants Inc ("P&E"), with metallurgical test work completed by SGS Canada Inc.'s Lakefield office ("SGS"), geotechnical study by Golder & Associates of Tucson, process plant design and costing by D.E.N.M. Engineering Ltd., and environmental and permitting led by CIMA Mexico.