Goldgroup rises on long intercepts

Goldgroup Mining’s (GGA-T) latest round of drill results didn’t bring the high grades of its previous announcement, but the length of mineralization remains impressive.

The company is currently drilling at the Caballo Blanco project in Mexico and the best intercepts from its latest round of assays graded of 0.70 grams gold over 91 metres; 0.61 grams gold over 134 metres and 0.80 grams gold over 122 metres. Those results come out of three separate holes.

The latest assays dovetail nicely with results released earlier in April that were highlighted by 48.5 metres grading 3.47 grams gold.

With the latest results Goldgroup says it has managed to grow the La Paila zone at the project to the southwest and northeast by at least 100 metres.

“Importantly, the drill-hole intercepts all occur at shallow depths, consist exclusively of oxide material, and are consistent with our strategy of developing an open-cut, run-of-mine, heap-leach gold operation,” Goldgroup’s president and chief executive, Keith Piggott said in a statement.

And the company believes that it can grow the zone further as La Paila remains open to the southwest, northeast, and southeast. The company is currently targeting drills in the southeast area.

The Caballo Blanco project is made up of a series of oxide gold zones and is located in the Veracruz province of eastern Mexico.

La Paila is currently considered the main gold zone in a cluster of high-sulphidation epithermal gold deposits which are collectively known as the Northern Zone.

The zone has measured and indicated resources of 6.7 million tonnes grading 0.65 grams gold for 139,000 oz. and another 27.6 million tonnes of inferred resources grading 0.58 grams gold for 517,000 oz.

That estimate was completed by the project’s former owner, NGEx Resources (NGQ-T) and was compiled from 32 diamond drill holes totaling 7,000 metres.

Goldgroup acquired an option to earn into the project from NGEx in November, 2009.

With the recent drilling the company has met its 30,000 metre obligation for a 70% stake, leaving in the remaining 30% in the hands of Almaden Minerals (AMM-T, AAU-X)….at least for now.

Almaden can only keep that 30% carried interest until a bankable feasibility study is completed by Goldgroup.

Almaden says its business model is to acquire mineral properties and develop them by seeking option agreements with others who can acquire an interest in a project by making payments and exploration expenditures. The company currently holds a 2% net smelter return on 11 projects.

In Toronto on April 20 Goldgroup shares were up 6% or 9¢ to $1.48 on 911,000 shares traded, while Almaden shares were up 9% or 36¢ to $4.45 on 158,000 shares traded.