Goldgroup Mining Inc. is pleased to announce that it has received the results of an updated mineral resource estimate on the San José de Gracia project (the San José de Gracia Project). This estimate follows up an initial mineral resource estimate completed by Jim Cuttle, P.Geo. and Gary Giroux, P.Eng of Giroux Consultants Ltd. in March 22, 2010. The update is based on an additional 172 drill holes which have been completed since the last estimate and is effective as of September 5, 2011.
The National Instrument 43-101 -- Standards of Disclosure for Mineral Projects (NI 43-101) compliant updated mineral resource estimate was prepared on four separate vein systems on the San José de Gracia Project, namely: Tres Amigos, San Pablo, La Union and La Purisima. The estimate includes an indicated resource at Tres Amigos of 913,000 tonnes grading 5.00 grams per tonne gold, or 147,000 ounces of gold, and an aggregate inferred resource at all four veins of 5,813,000 tonnes grading 5.16 grams per tonne gold, or 963,000 ounces gold. The table below presents the updated mineral resource estimate for each of the four veins. The calculations have been completed with a gold cut-off grade of 2 grams per tonne (g/t) highlighted as a possible cut-off for underground extraction. At this time there is insufficient drill data to determine semivariograms on the La Union and La Purisima domains and too few blocks estimated in pass 1 and 2 on the San Pablo to classify any of this resource as measured or indicated.
Keith Piggott, President and CEO of Goldgroup, stated, We are very pleased with the results of the completed 21,000 metre drilling program, which substantially increases the gold resources at San José de Gracia.
Mineral Resource Classifications for the San José de Gracia Project
The San José de Gracia property is located in the northeast portion of Sinaloa State, Mexico, approximately 120 kilometres east northeast of the coastal city of Los Mochis. The mineral claim block covers an area of 69,121 hectares (170.801 acres) and is 100% owned by DynaResource de Mexico S.A. de C.V. (DynaMexico), a Mexican company of which Goldgroup owns 50% and DynaResource Inc. (DynaUSA), a Delaware company, owns the other 50%.
The updated mineral resource estimate for the San José de Gracia Project has been prepared by Jim Cuttle, P.Geo. and Gary Giroux, P.Eng of Giroux Consultants Ltd., each an independent qualified person under NI 43-101. An NI 43-101 compliant technical report containing the updated mineral resource estimate will be filed on SEDAR (www.sedar.com) within 45 days of the date of this news release. Messrs. Cuttle and Giroux have reviewed and approved the contents of this news release.
Key Assumptions, Parameters and Methods Used to Estimate the Mineral Resource
The database for the San José de Gracia Project consisted of 372 drill holes of which 361 were diamond drill holes and the remaining 11, drilled in 1992, were reverse circulation holes totalling a combined 75,878 m. Of the 372 drill holes, 368 were drilled to test the four vein systems. The remaining four holes tested the Z Argilica vein. Project geologists contracted by Mineras de DynaResource, S.A. de C.V. built three dimensional solids to constrain each vein system as shown below. The 172 additional holes drilled in 2010 and 2011 are located as follows: La Purisima (32 holes), La Union (24 holes), San Pablo (49 holes), Tres Amigos (64 holes) and Z Argilica (3 holes).
Pairwise relative semivariograms were used to model each variable within each vein where possible. The average strike and dip for the veins were used to model the variables. The Tres Amigos and San Pablo veins had enough composites to develop models. In each case anisotropic nested spherical models were fit to each variable. For the La Union and La Purisima veins, where there were too few composites to determine a model, the Tres Amigos model was used but the directions for the structures were modified to fit the strike and dip of the La Union and La Purisima veins respectively. In the area outside the veins nested spherical isotropic models were fit to all variables.
A total of 5,540 pieces of core were measured for specific gravity using the weight in air versus weight in water method. The average specific gravity of 5,051 wall rock samples is 2.59 while the average for 489 samples of vein material is 2.68. A specific gravity of 2.59 was applied to all estimated material outside the veins. Since specific gravity and bulk density are related to sulphide content the samples from the veins were sorted by combined Cu + Zn + Pb grades. The range of specific gravities seemed to match well with the increasing sulphide content so the specific gravity applied to vein material was based on the estimated Cu + Zn + Pb grade.
Ordinary Kriging was used to interpolate grades for the five variables into all blocks with some percentage inside the four vein system solids.
A single block model with blocks 10 x 10 x 5 m in dimension was superimposed over the four vein systems with the percentage of each block within the various vein solids and the percentage below surface topography recorded. Where possible, the underground workings on the San Pablo vein have been digitized with a 3D solid formed. The percentage of each block within underground workings has been determined and subtracted from the percentage within vein material for tonnage calculation.
Mr. Cuttle visited the San José de Gracia Project in May 2009 and Mr. Giroux visited the project in May 2011. In 2009, a total of five rock samples were collected by Mr. Cuttle including three rock samples of quartered core and two chip samples from underground workings from drill holes at Tres Amigos and San Pablo. These rocks were hand delivered to Acme Labs of Vancouver for analysis. Based on the results from Acme Labs, the author suggests that the five check samples support the fact that gold mineralization can be verified from five 'point' locations, in two areas namely Tres Amigos and San Pablo.
During the property visit Mr. Cuttle was able to verify locations of several surface drill collars as well as check different drill holes from San Pablo and Tres Amigos veins for consistency of general rock descriptions and sample assay locations. In addition to the quality control programs already in practice, the author requested 350 drill core pulps be sent to ALS Chemex Labs for assay checks. Results from this study show an acceptable degree of correlation between new assays from Chemex and the original assays from IPL Labs and Inspectorate Labs.
Known Legal, Political, Environmental and Other Risks
The potential development of the San Jose de Gracia Project will be subject to, and could be materially affected by, legal, political, environmental and others risks associated with mineral exploration projects in Mexico, including:
any inability to reach an agreement with the other 50% shareholder of DynaMexico, DynaUSA, with respect to major development decisions;
cancellation or renegotiation of contracts;
changes in foreign laws or regulations;
changes in tax laws;
royalty and tax increases or claims by governmental entities;
retroactive tax or royalty claims;
expropriation or nationalization of property;
inflation of costs that is not compensated by a currency devaluation;
restrictions on the remittance of dividend and interest payments offshore;
environmental controls and permitting;
risks of loss due to civil strife, acts of war, guerrilla activities, insurrection and terrorism; and
other risks arising out of foreign sovereignty over the areas in which Goldgroup's operations are conducted.
Goldgroup is a well-funded Canadian-based gold production and exploration Company focused exclusively on Mexico, targeting growth in gold production, mineral resources, profitability and cash flow from a portfolio of production, development and exploration stage projects. Goldgroup's property portfolio includes its 100% ownership of the flagship Caballo Blanco project in Veracruz and the Cerro Colorado Gold Mine in Sonora, as well as its 50% ownership of the San José de Gracia project in Sinaloa, Mexico.
Goldgroup is led by a team of highly successful and seasoned individuals with extensive expertise in exploration, corporate finance and mine development in Mexico.
For further information on Goldgroup, please visit www.goldgroupmining.com or contact:
Keith Piggott, President & CEO
Stephanie Batory, Investor Relations Manager