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Goldgroup Provides Permitting and Project Update at Caballo Blanco and Election of Board of Directors

June 12, 2012

VANCOUVER, June 12, 2012 /PRNewswire/ – Goldgroup Mining Inc. (“Goldgroup” or
the “Company”) (TSX:GGA) is pleased to announce that it has completed
the next stage of its permitting process at the Caballo Blanco project
by submitting responses to the list of comments from the Secretaría de
Medio Ambiente y Recurso Naturales (“SEMARNAT”), also known as the
Ministry of Environmental and Natural Resources, received on March 13,
2012, regarding its previously submitted Environmental Impact Statement
(“EIS”).  Goldgroup’s responses were filed within the 60 working day
timeframe provided by SEMARNAT.  The responses are standard procedure
in the environmental permitting process and are meant to clarify
certain aspects of Goldgroup’s permit application, as well as
facilitate SEMARNAT’s review of the EIS.  The environmental permitting
process is governed by Mexican federal law and regulations.

Background for the Environmental Impact Statement and Change of Soil Use
Permitting Application

As previously disclosed, Goldgroup requires two independent
environmental permits in order to commence construction at the Caballo
Blanco project.  The two permits are the EIS and the Estudio Técnico
Justificativo para Cambio de Uso de Suelo” (“ETJ”), also known as the
Change of Soil Use Permit.

The EIS application was submitted by Goldgroup to SEMARNAT on December
15, 2011.  Formal comments from SEMARNAT in regards to Goldgroup’s EIS
application were received by the Company on March 13, 2012.  The
comments requested more information on risk mitigation, along with
environmental protection and rehabilitation of several aspects of the
proposed mining operations.

As of the date of this news release, Goldgroup has addressed all of
SEMARNAT’s comments and provided a detailed written response to
SEMARNAT within the required 60 working day response time.  Goldgroup
will continue to ensure that the best interests of all stakeholders are
factored into the development process of the project.  Following the
receipt of this written response from Goldgroup, SEMARNAT will further
evaluate the comments. This form of federal regulatory response is
standard procedure in the environmental permitting process.

The ETJ application was submitted by Goldgroup to SEMARNAT on December
16, 2011.  The ETJ is evaluated by the regional office of SEMARNAT in
Veracruz.  As disclosed in Goldgroup’s May 23, 2012 news release,
comments received by SEMARNAT requested that the Company provide
further details on the following information for its ETJ application:

        --  Rescue programs for protected flora species
        --  Environmental mitigation measures for the project and how
            Goldgroup will measure its success
        --  Ecosystems affected by the use of environmental services
            (water, soil, air, etc.) required for the project
        --  Economic and social benefits of the project

Goldgroup is currently addressing the above issues and after completion
will resubmit an enhanced ETJ application to SEMARNAT on a timely
basis.  When the enhanced ETJ application is submitted Goldgroup will also include all
information on additional land which has been acquired since the time
of the initial filing of the ETJ application.

The timing of the EIS and ETJ permit approvals is currently anticipated
to be in the third quarter of 2012, however, extensions by SEMARNAT may
occur. Based on recent results from the Preliminary Economic Assessment
on the Caballo Blanco project, management estimates the project will
require approximately nine months of construction time from the date of
the anticipated approvals of the EIS, ETJ and other related permits.

Project Update

Goldgroup also announces that a local municipal authority has alleged
that underground workings at the Caballo Blanco site have encroached on
a neighbouring surface property.  Goldgroup retained surveyors who have
confirmed that no such encroachment has occurred.  Until this
encroachment issue is resolved, the municipal authority has restricted
access to certain areas of the Caballo Blanco property as a result of
the alleged encroachment.   The Company has applied to the Mexican
courts for a formal declaration that access to the Caballo Blanco site
be restored.  The courts are currently in the process of rendering a
judgement and issuing notifications to the parties involved.

Work has been completed at the Caballo Blanco exploration tunnel to
sufficiently conclude the project’s bulk sample program.  Due to the
wet season in Veracruz, which runs between mid-June to late September,
exploration drilling has been suspended at the Caballo Blanco project.
Goldgroup has undertaken a program of cost containment with the aim of
focusing on obtaining the required permits, the required land surface
rights and the completion of additional engineering studies prior to
the commencement of construction at the Caballo Blanco project.

Election of Directors

Goldgroup is pleased to announce that it has conducted its Annual
General Meeting and has elected its Board of Directors; Chairman, Gregg
Sedun, President and CEO, Keith Piggott, Lead Director, Dr. Hans von
Michaelis, Lenard Boggio, Chester Millar, Corry Silbernagel and
Francisco Escandon.

About Goldgroup

Goldgroup is a well-funded Canadian-based gold production, development,
and exploration Company with significant upside in a portfolio of
projects in Mexico, including its flagship 100%-owned advanced stage
gold development project Caballo Blanco in the state of Veracruz, and a
50% interest in DynaResource de Mexico, S.A. de C.V., which owns 100%
of the high-grade gold exploration project, San José de Gracia located
in the state of Sinaloa. The Company also operates its 100%-owned Cerro
Colorado gold mine in the state of Sonora.

Goldgroup remains in a flexible financial position with a strong cash
balance, no debt and no gold hedging. The Company is led by a team of
highly successful and seasoned individuals with extensive expertise in
mine development, corporate finance, and exploration in Mexico.
Goldgroup’s mission is to increase gold production, mineral resources,
profitability and cash flow, building a leading gold producer in
Mexico.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

Certain information contained in this news release, including any
information relating to future financial or operating performance, may
be considered “forward-looking information” (within the meaning of
applicable Canadian securities law) and “forward-looking statements”
(within the meaning of the United States Private Securities Litigation
Reform Act of 1995). These statements relate to analyses and other
information that are based on forecasts of future results, estimates of
amounts not yet determinable and assumptions of management. Actual
results could differ materially from the conclusions, forecasts and
projections contained in such forward-looking information. These
forward-looking statements reflect Goldgroup’s current internal
projections, expectations or beliefs and are based on information
currently available to Goldgroup. In some cases forward-looking
information can be identified by terminology such as “may”, “will”,
“should”, “expect”, “intend”, “plan”, “anticipate”, “believe”,
“estimate”, “projects”, “potential”, “scheduled”, “forecast”, “budget”
or the negative of those terms or other comparable terminology. Certain
assumptions have been made regarding the Company’s plans at the Caballo
Blanco project. Many of these assumptions are based on factors and
events that are not within the control of Goldgroup and there is no
assurance they will prove to be correct. Forward-looking information is
subject to a variety of known and unknown risks, uncertainties and
other factors that could cause actual events or results to materially
differ from those reflected in the forward-looking information, and are
developed based on assumptions about such risks, uncertainties and
other factors including, without limitation: uncertainties related to
actual capital costs, operating costs and expenditures, production
schedules and economic returns from Goldgroup’s projects; uncertainties
associated with development activities; uncertainties inherent in the
estimation of mineral resources and precious metal recoveries; risks
related to the continued operation of the Cerro Colorado mine without a
current economic analysis; risks related to the planned expansion of
the Cerro Colorado mine; uncertainties related to current global
economic conditions; fluctuations in precious and base metal prices;
uncertainties related to the availability of future financing;
potential difficulties with joint venture partners; risks that
Goldgroup’s title to its property could be challenged; political and
country risk; risks associated with Goldgroup being subject to
government regulation; risks associated with surface rights;
environmental risks; Goldgroup’s need to attract and retain qualified
personnel; risks associated with operating hazards at the Cerro
Colorado mine; risks associated with potential conflicts of interest;
Goldgroup’s lack of experience in overseeing the construction of a
mining project; risks related to the integration of businesses and
assets acquired by Goldgroup; uncertainties related to the
competitiveness of the mining industry; risk associated with theft;
risk of water shortages and risks associated with competition for
water; uninsured risks and inadequate insurance coverage; risks
associated with potential legal proceedings; risks associated with
community relations; outside contractor risks; risks related to
archaeological sites; foreign currency risks; risks associated with
security and human rights; and risks related to the need for
reclamation activities on Goldgroup’s properties, as well as the risk
factors disclosed in Goldgroup’s Annual Information Form and MD&A. Any
and all of the forward-looking information contained in this news
release is qualified by these cautionary statements. Although Goldgroup
believes that the forward-looking information contained in this news
release is based on reasonable assumptions, readers cannot be assured
that actual results will be consistent with such statements.
Accordingly, readers are cautioned against placing undue reliance on
forward-looking information. Goldgroup expressly disclaims any
intention or obligation to update or revise any forward-looking
information, whether as a result of new information, events or
otherwise, except as ay be required by, and in accordance with,
applicable securities laws.

SOURCE Goldgroup Mining Inc.


Source: PR Newswire