Mexico A-GoGold

After months of waiting, GoGold Resources (GGD-V) has wrapped up its acquisition of Absolute Gold Holdings and is once again actively trading on the TSX Venture Exchange.

GoGold first announced the all-share take-over of Absolute in late March, but had to wait for Absolute to complete a $30-million subscription offering, for approval from shareholders on both sides, and for approval from the TSX Venture Exchange itself.

Those approvals wrapped up on July 20, the acquisition closed on July 30, and GoGold, halted since the deal was first announced, started trading again Aug. 2. On its first day of trading the company came out of the gate swinging, jumping as much as 38¢ before closing up 23¢, or 16.4% at $1.63, with 581,000 shares traded.

With the merger now complete, GoGold has added the potentially near-term Parral tailings project in Chihuahua, Mexico, to its portfolio of Mexican and Newfoundland projects. The Parral project hosts 21.3 million tonnes grading 0.31 gram gold per tonne and 38.5 grams silver per tonne for 214,000 oz. gold and 26.4 million oz. silver, with the resource sitting on surface in several large deposits of tailings sands.

Work by Absolute showed heap leaching could achieve gold extraction between 64% and 69%, and silver extraction between 57% and 61%. GoGold plans to rapidly advance the project.

Previously GoGold’s main asset was its 710-sq.-km San Diego project in the southwest region of Mexico’s Durango state. The company reports that the San Diego area hosts an epithermal gold-silver system that extends for more than 35 km, with gold in quartz veins, breccias and stockworks.

Results from a 2011 drill program at the Breccia Hill open-pit target on the project include 84 metres grading 1.98 grams gold and 20.5 grams silver; 70 metres averaging 1.18 grams gold and 13.5 grams silver; 95 metres carrying 1.22 grams gold and 12.1 grams silver; and 100 metres grading 0.12 gram gold and 37 grams silver, all true widths.

More recently the company poked the first drill holes into the high sulphidation Chispa de Oro target southeast of Breccia Hill and hit 74.5 metres grading 0.24 gram gold and 76.36 grams silver from 3 metres depth in hole 18, which also included a somewhat overlapping 54-metre interval at 1.25% copper. Hole 19 cut 94 metres of 0.04 gram gold and 54 grams silver from 36 metres downhole, and 65.6 metres of 0.45% copper from 26 metres downhole. Hole 20 hit 50 metres of 0.35 gram gold and 161 grams silver from 1 metre down, plus 14 metres of 1.07% copper from 40 metres down.

The company also finished a 1,500-metre drill program at its Rambler project in Newfoundland earlier this year, with a highlight hole of 55.7 metres grading 1 gram gold, but GoGold’s focus is clearly on Mexico.

Along with its now two primary assets being based there, company management has a fair bit of experience in the country. GoGold points out that company president and CEO Terence Coughlan and strategic advisor Bradley Langille were two of the original founders of Gammon Gold, now AuRico Gold (AUQ-T, AUQ-N), and both were involved in the development of AuRico’s Ocampo mine in Chihuahua State.

GoGold now has 128.3 million shares outstanding after issuing roughly 67.2 million shares to Absolute shareholders.