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Last updated on April 24, 2014 at 11:09 EDT

Goldgroup Announces Tunnel Assays Confirming Drill Results at Caballo Blanco

June 25, 2012
        --  24.2 metres of 1.09 g/t gold
        --  19.35 metres of 1.48 g/t gold

VANCOUVER, June 25, 2012 /PRNewswire/ – Goldgroup Mining Inc. (“Goldgroup” or
the “Company”) (TSX:GGA) is pleased to announce final assay results
from the completed underground tunnel development at the Company’s
100%-owned Caballo Blanco gold project in Veracruz, Mexico.  Both the
recently completed main tunnel and crosscut tunnel west of the main
tunnel encountered mineralized, massive and brecciated massive silica.
Assay results from the channel sampling in the main tunnel returned 24.2 metres of 1.09 g/t gold and the crosscut tunnel returned 19.35 metres of 1.48 g/t gold. The average gold grades of the mineralized zones in the tunnel
correspond well with the grades of the drill holes completed in the
area surrounding the tunnel, and demonstrates strong gold grade
continuity through this section of the Caballo Blanco mineralized
zone.  These results provide confirmation of a robust resource model,
further de-risking the Caballo Blanco project. A sufficient supply of
mineralized material has been stockpiled from the underground tunnel
development for all anticipated remaining metallurgical test work at
Caballo Blanco.

Tunnel Results

The main tunnel and west crosscut tunnel at the La Paila Zone were driven to collect bulk-sample material for ongoing metallurgical
testwork.  The tunnelling also provides direct access to the
mineralized zone allowing the Company to enhance its understanding of
the geological and geotechnical characteristics of the mineralization
at the La Paila Zone.  Since the previous tunnel news release dated
March 29, 2012, the main tunnel has advanced an additional 24.2 metres
for a total length of 249.15 metres. The west crosscut tunnel has been
driven a total length of 51.2 metres.

The results disclosed today from the current tunnel sampling are
outlined in the table below:

Tunnel Assay Results

     __________________________________________________________________
    |                                         Main Tunnel              |
    |__________________________________________________________________|
    |           Channel Samples    |                Blast Samples      |
    |______________________________|___________________________________|
    |From (m)|To (m)|Interval|Gold |From (m)|To (m)|Interval|Gold Grade|
    |        |      |  (m)   |Grade|        |      |  (m)   |  (g/t)   |
    |        |      |        |(g/t)|        |      |        |          |
    |________|______|________|_____|________|______|________|__________|
    |  91.55 |115.75|   24.2 |1.09 |  91.55 |115.75|   24.2 |    1.09  |
    |________|______|________|_____|________|______|________|__________|
    |                                      Crosscut Tunnel             |
    |__________________________________________________________________|
    |           Channel Samples    |                Blast Samples      |
    |______________________________|___________________________________|
    |From (m)|To (m)|Interval|Gold |From (m)|To (m)|Interval|Gold Grade|
    |        |      |  (m)   |Grade|        |      |  (m)   |  (g/t)   |
    |        |      |        |(g/t)|        |      |        |          |
    |________|______|________|_____|________|______|________|__________|
    |  28.25 | 47.6 |  19.35 |1.48 |  28.25 | 47.6 |  19.35 |    1.47  |
    |________|______|________|_____|________|______|________|__________|

The complete results from the main tunnel and crosscut tunnel are
outlined in the table below.  Overall, excellent grade continuity was
noted throughout the tunnel and crosscut. Additionally, there is strong
correlation between the results seen in the channel sampling and the
results from the blast sampling.

     __________________________________________________________________
    |                            Main Tunnel Complete Results          |
    |__________________________________________________________________|
    |           Channel Samples    |                Blast Samples      |
    |______________________________|___________________________________|
    |From (m)|To (m)|Interval|Gold |From (m)|To (m)|Interval|Gold Grade|
    |        |      |  (m)   |Grade|        |      |  (m)   |  (g/t)   |
    |        |      |        |(g/t)|        |      |        |          |
    |________|______|________|_____|________|______|________|__________|
    |   23.5 |249.15| 225.65 |0.69 |   26.6 |249.15| 222.55 |    0.68  |
    |________|______|________|_____|________|______|________|__________|
    |                         Crosscut Tunnel Complete Results         |
    |__________________________________________________________________|
    |           Channel Samples    |                Blast Samples      |
    |______________________________|___________________________________|
    |From (m)|To (m)|Interval|Gold |From (m)|To (m)|Interval|Gold Grade|
    |        |      |  (m)   |Grade|        |      |  (m)   |  (g/t)   |
    |        |      |        |(g/t)|        |      |        |          |
    |________|______|________|_____|________|______|________|__________|
    |     0  | 47.6 |   47.6 |1.35 |     0  | 47.6 |   47.6 |    1.29  |
    |________|______|________|_____|________|______|________|__________|

For a detailed plan of the La Paila tunnels, click here.

The tunnel plan linked above shows the sample intervals and average gold
grades for both the channel and  blasted material samples together with
drill-hole traces in the vicinity of the tunnel.  These assays were
plotted 2.5 metres above and below the 485-metre level.

The tunnel was collared at an elevation of 485 metres above sea level,
approximately 115 vertical metres below the highest point at the La
Paila Zone.  The tunnel has dimensions of approximately 2.5 metres wide
by 2.8 metres tall and was being driven horizontally northeast at 25
degrees, approximately in-line with the interpreted strike of the La
Paila mineralized zone.  The west crosscut tunnel was driven from the
main tunnel at 293 degrees and has similar dimensions to the main
tunnel.

As expected, the main tunnel initially encountered approximately 20
metres of non-mineralized andesite before passing into the mineralized
zone at the La Paila Zone.  Gold mineralization is predominantly hosted
by vuggy silica, massive silica, and brecciated massive silica.  The
main tunnel finished within the La Paila mineralized zone.  The west
crosscut tunnel finished in unmineralized andesite from 47.6 metres to
51.2 metres as expected based on previous drill hole logs.

The tunnel was advanced by drilling and blasting rounds of approximately
1.5 metres in length.  The blasted material was removed using a
mechanical scoop and divided into mineralized and non-mineralized
storage piles near the tunnel entrance.  After each blast, channel
samples were cut using a diamond blade equipped rock saw in both the
east and west walls, in addition to the ceiling of the tunnel. 
Representative samples were also taken from the material generated from
each blast.

The three channel samples from the sides and roof of the tunnel were
assayed separately, with the results averaged together to arrive at the
grade for each channel sample interval. The representative samples from
the material from each blast were assayed separately, with the results
averaged together to arrive at the grade for the blast material
interval.  The channel samples from the walls and ceiling are
considered to be more representative of the tenor of mineralization due
to the difficulty of taking representative samples from the large piles
of blasted material.

About Caballo Blanco

Goldgroup owns 100% of the Caballo Blanco gold project which consists of
a series of fully oxidized gold zones located in the State of Veracruz
in eastern Mexico. The property consists of fourteen mineral claims
covering an area of 54,732 hectares. Two large areas of epithermal gold
mineralization have been discovered within the Caballo Blanco property,
referred to as the Northern Zone, where the La Paila Zone is situated,
and the Highway Zone. Both zones are prominent high-sulphidation,
epithermal gold prospects that occur within extensive areas of clay and
silica alteration. The gold is fine and occurs within a vuggy and
brecciated silica alteration of an original andesite host rock in the
upper levels of the surrounding epithermal system.

The principal known gold zone at Caballo Blanco is the La Paila Zone,
which is located on the northern portion of a large ‘magnetic high’
ring structure that measures approximately three kilometres in
diameter. At least four other large induced polarization (IP)
resistivity high anomalies occur in the Northern Zone, with similar
silica alteration to La Paila, are identified along the inner flanks of
this magnetic feature.

As estimated in the Caballo Blanco Technical Report of February 7, 2012,
current mineral resources at the La Paila Zone consist of 575,000
ounces of gold in the indicated category (28,890,000t at a grade of
0.62g/t Au) and 419,000 ounces in the inferred category (24,020,000t at
a grade of 0.54g/t Au).

Goldgroup filed the Preliminary Economic Assessment (“PEA”) for the
Caballo Blanco on May 10, 2012.  Based on the PEA, the Caballo Blanco
project is expected to generate a 66.4% pre-tax internal rate of return
(“IRR”) and a US$283.8 million pre-tax net present value (“NPV”) at a
5% discount rate, over an approximate 7.5-year mine life and produce
687,000 ounces of gold and 1.3 million ounces of silver, based on the
current mineable resource determined from the Whittle-pit optimization
model.

Goldgroup has recently submitted responses to the list of comments
received on March 13, 2012 from the Secretaría de Medio Ambiente y
Recurso Naturales (“SEMARNAT”), also known as the Ministry of
Environmental and Natural Resources, regarding its previously submitted
Environmental Impact Statement (“EIS”).  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.

Goldgroup is currently addressing the comments received from SEMARNAT on
its Estudio Técnico Justificativo para Cambio de Uso de Suelo” (“ETJ”)
permit, 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 are currently anticipated
to be in the third quarter of 2012, however, extensions by SEMARNAT may
occur. Based on recent results from the PEA 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.

Assaying and Qualified Person

The channel samples and blast material samples were collected and bagged
separately with unique identification for each sample.  Samples were
then collected by ALS Minerals and transported to their Guadalajara
preparation facility where they were dried and crushed to -2mm.  A 250
gram split of the coarse material was then pulverized to -200 mesh. 
The rejects were stored at the prep facility and the pulps were air
couriered to the ALS Minerals North Vancouver facility and analyzed for
gold by 30 g fire assaying with an AA finish.  In addition, a 35
element ICP analysis was conducted on all samples.

A QA/QC program was implemented as part of the sampling procedure for
the tunneling program.  Standard and blank were regularly inserted into
the sample stream.  Goldgroup’s QAQC program is supplemental to the
internal laboratory QAQC program. The information in this news release has been approved by Marc Simpson,
P. Geo., the Company’s Qualified Person under National Instrument
43-101 standards.

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