Vancouver – Goldgroup Mining (GGA-T) has sold its El Porvenir gold project in Mexico for US$25 million to the mining division of Latin American conglomerate Grupo Carso.
The sale comes a little over three years after Goldgroup bought the property from Goldcorp (G-T, GG-N) for US$3 million. As part of the sale to Carso subsidiary The Frisco Group, Goldgroup paid a third party US$1.7 million for a 3% royalty it on the property.
“It didn’t fit our strategic plans for going forth in the future,” said Keith Piggott, chief executive of Goldgroup in a phone interview. “We’re focused on developing properties with high exploration potential…we’re a production company focused on near-term production.”
Last August Goldgroup released a technical report on the project that outlined a global resource of 14.8 million indicated tonnes grading 0.62 gram gold per tonne and 18.8 grams silver per tonne and 485,000 inferred tonnes grading 0.41 gram gold and 11.9 grams silver, both using a cutoff of 0.2 gram per tonne.
The company sold the mine as an alternative to a $20-million equity financing it had planned to fund exploration at its other Mexican projects including Caballo Blanco and San Jose de Gracia, where Piggott sees more room for growth.
“Although El Provonir was a nice property, it didn’t have the same sort of upside potential,” said Piggott. “We thought that in this current market it would be a good idea to do some non-dilutive financing.”
Goldgroup Mining only formed in April through a combination of Sierra Minerals and then privately-held Goldgroup Resources. The company will now channel efforts towards its flagship Caballo Blanco in the state of Veracruz and the San Jose de Gracia project in the state of Sinaloa, while also upgrading its producing Cerro Colorado open-pit gold mine.
At Caballo Blanco the company plans to put two drills into operation as well as drive a tunnel to better define the structure and do bulk metallurgical sampling. The 197-sq.-km property hosts multiple high-sulphidation epithermal gold targets.
The company bought the right to earn a 70% interest in the property from Lundin-subsidiary NGEx Resources (NGQ-T) for US$15 million made up of US$6 million in cash and 9 million shares. Goldgroup needs to spend US$3 million more to fully earn the 70% interest while Almaden Minerals (AMM-T) controls the rest.
At San Jose, Goldgroup recently pulled some good intercepts with a single drill rig and plans to add another by September. The company has spent roughly US$12 million of the US$18 million needed to earn a 50% interest in the project.
The company recently installed a new crusher at its Cerro Colorado mine in Sonora, Mexico and expects to produce roughly 25,000 oz. gold at the site this year.
Goldgroup’s share price closed down 3¢ on 1.9 million trades to close at 62¢ on the day of the news. The company has 85 million shares outstanding.
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