GoGold Resources Advances Los Ricos South as Parral Funds Mexico Growth

Key Points

• Los Ricos South construction is underway after GoGold received its permit in June. The project’s construction budget is approximately $260 million–$265 million, with first pour targeted for June 2028 and commercial production expected by year-end 2028.
• GoGold plans to fund development with cash flow from its Parral tailings operation, which generated about $80 million in pre-tax free cash flow last year and is expected to produce similar annual amounts for the next four years. The company reported $284 million in cash and remains debt-free.
• At Los Ricos North, GoGold is considering a smaller initial mine and mill because of water-permitting constraints. It plans to submit permits in the first quarter of 2027, with potential production targeted for 2030.

GoGold Resources TSE: GGD said it is advancing construction at its Los Ricos South mine in Mexico after receiving its permit in June, while pursuing a phased development strategy for the larger Los Ricos North project.

The company said it remains committed to operating in Mexico despite some industry participants considering geographic diversification. GoGold described its capital structure as debt-free, with roughly 50% institutional ownership and an additional 15% to 20% held by insiders, friends and family.

Its Parral tailings operation, which was built in 2012, continues to provide cash flow to support exploration, corporate expenses and development work at Los Ricos. The company said Parral generated about $80 million in pre-tax free cash flow last year and is expected to produce a similar amount annually over the next four years based on current reserves.

Los Ricos South construction underway

GoGold acquired the Los Ricos project in 2019 for $7.5 million from a private family following a bankruptcy process. Since then, it has spent approximately $60 million to $70 million on exploration, engineering and studies, according to the presentation.

Los Ricos South is the first mine planned in what GoGold views as a broader mining district. The company said it has drilled about 120 million silver-equivalent ounces at the project and completed a feasibility study last year. Construction began in August following receipt of the permit.

• GoGold reported $284 million in U.S. cash.
• The initial feasibility-study capital estimate was $227 million, while the current construction budget is approximately $260 million to $265 million.
• About $15 million of the current budget has been spent.
• Detailed engineering is 90% complete.
• First pour is targeted for June 2028, with commercial production expected before the end of 2028.

The company said it expects its cash balance to remain above $100 million during construction, supported by cash flow from Parral, and does not currently believe it needs a cost-overrun facility or revolving credit line.

Los Ricos South is planned as a 2,000-tonne-per-day underground gold and silver mine. The feasibility study outlined average production of 7.3 million silver-equivalent ounces annually during the first five years, while the company cited a broader annual production figure of 7.4 million silver-equivalent ounces for the project. GoGold said the study estimated all-in sustaining costs at about $12 per ounce, though it now expects costs could reach roughly $15 per ounce due to inflation.

The company said it has ordered the SAG mill and filters, with delivery scheduled for May 2027, and expects plant commissioning to begin in January 2028. It is also developing a second portal intended to bring ore forward and ensure the mine can supply the mill when it is ready. The project will use paste backfill, returning about 60% of tailings underground, with the remaining material placed in dry-stack storage.

North project may begin at smaller scale

At Los Ricos North, GoGold said it has drilled approximately 160 million silver-equivalent ounces and completed a preliminary economic assessment for an 8,000-tonne-per-day mill. That study contemplated average production of 8.8 million silver-equivalent ounces per year over a 13-year mine life.

However, the company is considering a smaller initial development plan because water availability is a key permitting consideration in Mexico. GoGold said it may initially build a 2,000- to 3,000-tonne-per-day mill supported by water drained from an old underground mine, before expanding later as additional water is secured.

The proposed initial phase would center on a higher-grade, smaller open pit that the company said could supply a smaller mill for about six years. GoGold plans to submit permits for this approach in the first quarter of 2027 and believes the smaller project could potentially be permitted within one year.

The company contrasted that outlook with Los Ricos South, where the permitting process took three years and two months. GoGold said it believes a project that can demonstrate water availability may now be processed in about 12 months, though it noted that larger projects with greater disturbance and water needs may require more time.

Production outlook and Mexico operations

GoGold expects Parral to remain its producing operation during 2027 construction at Los Ricos South. It expects Los Ricos South to begin ramping up in 2028 and Los Ricos North to enter production in 2030. The company said South’s production profile is expected to peak in 2030 because of a high-grade area known as the Eagle, and it plans further underground drilling to seek additional high-grade material.

Parral currently reprocesses historical tailings from a mining district with more than 300 years of history. While the operation has about four years of reserves, GoGold said there are additional smaller tailings piles in the area that could potentially extend processing beyond that period.

During the question-and-answer session, the company said it has not experienced security issues at either Parral or Los Ricos in Jalisco. GoGold said it maintains gate security and stays in contact with local authorities, but does not use armed security at its sites.

About GoGold Resources (TSE:GGD)

GoGold Resources TSX: GGD is a Canadian-based silver and gold producer focused on operating, developing, exploring and acquiring high quality projects in Mexico. The Company operates the Parral Tailings mine in the state of Chihuahua and has the Los Ricos South and Los Ricos North exploration and development projects in the state of Jalisco. Headquartered in Halifax, NS, GoGold is building a portfolio of low cost, high margin projects.

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