GoGold gets going again on the Venture

VANCOUVER — After months of waiting GoGold Resources (GGD-V) has finally wrapped up its acquisition of Absolute Gold Holdings and once again actively trading on the venture.

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 Venture Exchange itself.

Those approvals wrapped up on July 20, the acquisition closed July 30, and GoGold, halted since the deal was first announced, started trading again August 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 of between 64% and 69%, and silver extraction of between 57% and 61% and 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 GGS-18, which also included a somewhat overlapping 54-metre interval averaging 1.25% copper. Hole GGS-19 cut 94 metres averaging 0.04 gram gold and 54 grams silver from 36 metres downhole and 65.6 metres averaging 0.45% copper from 26 metres downhole. Hole GGS-20 hit 50 metres carrying 0.35 gram gold and 161 grams silver from 1 metre down, plus 14 metres carrying 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 (AUQ-T, AUQ-N), and both were involved in the development of AuRico’s Ocampo mine in the country.

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