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GoGold Announces NPV of US$413M for Los Ricos North Initial PEA

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GoGold Announces NPV of US$413M for Los Ricos North Initial PEA






GoGold Resources Inc. (TSX: GGD) (OTCQX: GLGDF) is pleased to release the results of its initial Preliminary Economic Assessment at its Los Ricos North Project located in Jalisco State, Mexico. This is the Company’s second PEA completed within the Los Ricos District, in addition to the Los Ricos South PEA completed in January 2021, with an updated Mineral Resource Estimate and PEA for Los Ricos South expected to follow this summer.


Highlights of the PEA, with a base case silver price of US$23/oz and gold price of US$1,800/oz are as follows (all figures in US dollars unless otherwise stated):

  • After-Tax NPV (using a discount rate of 5%) of $413 Million with an After-Tax IRR of 29% (Base Case);
  • 13-year mine life producing a total of 110.3 Million payable silver equivalent ounces (“AgEq”), consisting of 68.0 Million silver ounces, 221,700 gold ounces, 22.8 Million pounds of copper, 144.1 Million pounds of lead and 242.2 Million pounds of zinc;
  • Initial capital costs of $221 Million, including $29 Million in contingency costs, over an expected 18 month build, additional expansion capital of $137 Million, and sustaining capital costs of $6 Million over the life of mine;
  • Average LOM operating cash costs of $9.50/oz AgEq, and all in sustaining costs (“AISC”) of $9.68/oz AgEq
  • Average annual production of 8.8 Million AgEq oz in years one through twelve;
  • Approximately 3/4 of LOM production is from four open pits containing oxide mineralization and approximately 1/4 is from a separate open pit which contains only sulphide mineralization.


“This is a first look at the strong economics around our Los Ricos North Mineral Resource with average annual production of 8.8 Million AgEq oz at a first quartile AISC of $9.68/oz AgEq. Los Ricos North forms a pipeline of growth after the construction of Los Ricos South, which we see as a high grade bulk underground mine targeted to be our first deposit advanced to production. We look forward to the updated Los Ricos South Mineral Resource including the Eagle Zone and an updated PEA to be completed this summer,” said Brad Langille, President and CEO. “The release of this PEA represents one of the milestones for the 2023 year in the Los Ricos District. The other key milestones for the 2023 year in the Los Ricos District are an updated Mineral Resource and PEA in Los Ricos South incorporating the Eagle Zone, followed by a Pre-Feasibility Study in Los Ricos South which is anticipated before year’s end. With US$100 Million in cash we are well positioned to develop Los Ricos South pending the results of the upcoming studies.”


PEA Summary


The PEA was prepared by independent consultants P&E Mining Consultants Inc, with metallurgical test work completed by SGS Canada Inc.’s Lakefield office, process plant design and costing by D.E.N.M. Engineering Ltd., and environmental and permitting led by CIMA Mexico.


Table 1 below shows the key economic assumptions and results of the PEA, with Table 2 showing the physical attributes, Table 3 showing a sensitivity analysis based on varying metal prices and assumptions, and Table 4 showing a sensitivity analysis based on changes to operating and capital costs.


Table 1 – Los Ricos North PEA Key Economic Assumptions and Results


Assumption / Result Unit Value Assumption / Result Unit Value
Total Oxide Feed Mined kt 25,557 Net Revenue US$M 2,307
Total Sulphide Feed Mined kt 9,964 Initial Capital Costs US$M 221
Total Plant Feed Mined kt 35,521 Sustaining Capital Costs US$M 143
Total Strip Ratio Ratio 6.0 Mining Costs $/t Mined 2.07
Mine Life Yrs 13 Mining Costs $/t Plant Feed 12.28
Average process rate t/day 8,000 Operating Cash Cost US$/oz AgEq 9.50
Silver Price US$/oz 23.00 All in Sustaining Cost US$/oz AgEq 9.68
Gold Price US$/oz 1,800 After-Tax NPV (5% discount) US$M 413
Copper Price US$/lb 4.00 Pre-Tax NPV (5% discount) US$M 645
Lead Price US$/lb 1.00 After-Tax IRR % 29.1
Zinc Price US$/lb 1.40 Pre-Tax IRR % 39.8
Payable AgEq Moz 110.3 After-Tax Payback Period Yrs 3.0



Table 2 – Los Ricos North PEA Summary of Physical Attributes


Attribute Unit Oxide Sulphide Total
Plant Feed Mined kt 25,557 9,964 35,521
Silver Grade1 g/t 83.2 30.1 68.3
Gold Grade1 g/t 0.29 0.07 0.23
Copper Grade1 % 0.12 0.12
Lead Grade % 0.87 0.87
Zinc Grade % 1.24 1.24
Silver Recovery % 87 88 87
Gold Recovery % 87 76 86
Copper Recovery % 89 89
Lead Recovery % 75 75
Zinc Recovery % 89 89
Payable Silver Moz 59.5 8.5 68.0
Payable Gold koz 205.2 16.5 221.7
Payable Copper Mlb 22.8 22.8
Payable Lead Mlb 144.1 144.1
Payable Zinc Mlb 242.2 242.2
Payable AgEq Moz 75.5 34.8 110.3
1. Grades shown are LOM average plant feed grades. Dilution of approximately 10% was used.



Table 3 – Los Ricos North PEA Metal Price Sensitivities


Sensitivity Base
Silver Price (US$/oz) 17 19 21 23 25 27 30
Gold Price (US$/oz) 1330 1487 1643 1800 1957 2113 2348
Copper Price (US$/lb) 2.96 3.30 3.65 4.00 4.35 4.70 5.22
Lead Price (US$/lb) 0.74 0.83 0.91 1.00 1.09 1.17 1.30
Zinc Price (US$/lb) 1.03 1.16 1.28 1.40 1.52 1.64 1.83
After-Tax NPV (5%) (US$M) 120 222 318 413 508 603 746
After-Tax IRR (%) 13.3 19.2 24.3 29.1 33.6 37.9 44.0
After-Tax Payback (years) 5.4 4.4 3.6 3.0 2.5 2.1 1.8



Table 4 – Los Ricos North Operating Expense and Capital Expense Sensitivities


Sensitivity -20 % -10 % Base
10 % 20 %
Operating Costs – NPV (US$M) 503 458 413 368 323
Operating Costs – IRR (%) 33.4 31.2 29.1 26.8 24.5
Capital Costs – NPV (US$M) 457 435 413 392 370
Capital Costs – IRR (%) 36.3 32.2 28.8 25.9 23.4



Capital and Operating Costs


The Los Ricos North Project has been envisioned as an open pit mining operation, with contract mining comprising five open pits. The first four pits contain oxide mineralization and will be mined over years one to nine of the Project, with the final pit containing sulphide mineralization which will be mined in years 10 to 13.


The processing plant is comprised of conventional crushing, grinding, cyanide tank leaching, tailings filtration (dry stack), and Merrill Crowe precipitation for the oxide mineralization. For the sulphide mineralization, processing will be completed through a flotation circuit which is included in sustaining capital and will be constructed in year eight of the Project.


Water supply to the process plant will be provided by a nearby surface water source and high voltage grid power will be provided by the local utility.


Key components of the capital cost estimate are provided in Table 5 and operating costs are provided in Table 6.


Table 5 – Capital Cost Estimate


Type Initial








Process plant direct costs 141,020 25,864 5,000 171,884
Pre-stripping and haul roads 10,268 88,090 98,358
Project indirect costs 19,108 2,870 21,978
EPCM 13,792 2,328 16,120
Infrastructure 7,680 7,680
Total 191,869 119,151 5,000 316,020
Contingency (15%) 28,780 17,873 750 47,403
Total 220,649 137,024 5,750 363,423
1. Expansion capital is not included in AISC calculations



Table 6 – Operating Costs (Average LOM) 


Operating Costs (Average LOM)  US$/tonne

Plant Feed

Mining 12.28 2.07
Processing 13.81
General and admin 1.02
Total 27.12





The open pit mining will be contracted and carried out by drilling and blasting followed by conventional loading and truck haulage to the waste rock storage facilities and the process plant.




A preliminary metallurgical test program was carried out by SGS Lakefield of Ontario, Canada on four Los Ricos North deposit areas – Favor, Trini, Casados, and Orito. Based on the zone geology, Favor, Trini, and Casados (oxide) were designated for whole mineralized material cyanidation testing. The Orito (sulphide) sample was deemed to be flotation ideal. The subsequent oxide testing included grinding (no comminution testing) and leaching only. The sulphide testing included grinding and bulk flotation to produce a single bulk concentrate with locked cycle (LCT) testing completed. The samples were comprised of four drill core rejects representing the noted zones of the Mineral Resource. This preliminary test program estimated a gold and silver oxide recovery of 87% for both. The sulphide recovery on the Orito sample recovered 76% gold, 88% silver, 89% copper, 89% zinc, and 75% lead.


Mineral Resource Estimate


The basis for the PEA is the Mineral Resource Estimate completed by P&E in the National Instrument 43-101 Technical Report on the Initial Mineral Resource Estimate for the Los Ricos North Project located in Jalisco State, Mexico, which has an effective date of December 1, 2021. A summary of the Mineral Resource Estimate is provided in Table 7.


Table 7: Los Ricos North Mineral Resource Estimate (1-11)


Deposit Tonnes Average Grade Contained Metal
Au Ag Cu Pb Zn AuEq AgEq Au Ag Cu Pb Zn AuEq AgEq
(Mt) (g/t) (g/t) ( %) ( %) ( %) (g/t) (g/t) (koz) (koz) (Mlb) (Mlb) (Mlb) (koz) (koz)
El Favor 7.7 0.27 98 1.61 119 68 24,413 399 29,454
Casados 3.2 0.42 124 2.09 154 43 12,871 218 16,061
La Trini 3.1 0.54 74 1.54 114 54 7,428 155 11,424
Mololoa 0.4 0.36 130 2.12 157 5 1,788 29 2,161
Oxide Zone
14.5 0.37 100 1.71 127 171 46,500 801 59,100
El Orito Sulphide
7.8 0.06 28 0.11 0.88 1.33 1.55 114 15 7,011 19 151 229 389 28,708
Total Indicated 22.3 1.66 122 186 53,510 1,190 87,808
El Favor 12.4 0.27 89 1.47 108 106 35,505 587 43,350
Casados 1.8 0.35 108 1.82 135 21 6,323 106 7,843
La Trini 0.1 0.43 108 1.89 139 1 201 4 260
Mololoa 0.7 0.39 94 1.66 122 9 2,102 37 2,739
Oxide Zone
15.0 0.28 91 1.52 112 136 44,131 734 54,191
El Orito Sulphide
5.5 0.06 28 0.12 0.74 1.20 1.46 108 11 4,888 15 90 146 258 19,007
Total Inferred 20.5 1.51 111 148 49,019 992 73,198
1. El Orito is a silver-base metal sulphide zone, all other deposits are silver-gold oxide zones.
2. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
3. The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.
4. The Mineral Resources in this news release were estimated in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines (2014) prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council and CIM Best Practices (2019).
5. Historically mined areas were depleted from the Mineral Resource model.
6. Approximately 98.9% of the Indicated and 91.3% of the Inferred contained AgEq ounces are pit constrained, with the remainder out-of-pit. See tables 4 and 6 for details of the split between pit constrained and out-of-pit deposits.
7. The pit constrained AgEq cut-off grade of 29 g/t Ag was derived from US$1,550/oz Au price, US$21/oz Ag price, US$3.66/lb Cu, US$0.90/lb Pb, US$1.26/lb Zn, 93% process recovery for Ag and Au, 90% process recovery for Cu, 80% process recovery for Pb and Zn, US$18/tonne process and G&A cost. The constraining pit optimization parameters were US$2.00/t mineralized mining cost, US$1.50/t waste mining cost and 50-degree pit slopes.
8. The out-of-pit AuEq cut-off grade of 119 g/t Ag was derived from US$1,550/oz Au price, US$21/oz Ag price, US$3.66/lb Cu, US$0.90/lb Pb, US$1.26/lb Zn, 93% process recovery for Ag and Au, 90% process recovery for Cu, 80% process recovery for Pb and Zn, US$57/t mining cost, US$18/tonne process and G&A cost. The out-of-pit Mineral Resource grade blocks were quantified above the 119 g/t AgEq cut-off, below the constraining pit shell within the constraining mineralized wireframes and exhibited sufficient continuity to be considered for cut and fill and longhole mining
9. No Mineral Resources are classified as Measured.
10. AgEq and AuEq calculated at an Ag/Au ratio of 73.8:1.
11. Totals may not agree due to rounding



The Preliminary Economic Assessment Technical Report will be filed on SEDAR within 45 days of this news release.


Qualified Persons


Robert Harris, P.Eng. and David Duncan, P.Geo. are the GoGold Qualified Persons and Eugene Puritch, P.Eng., FEC, CET, President of P&E Mining Consultants Inc. and David Salari, P. Eng., DENM Engineering Ltd. are Independent Qualified Persons all as defined by National Instrument 43-101 and whom are responsible for the technical information in this press release.


VRIFY Slide Deck and 3D Presentation


VRIFY is a platform being used by companies to communicate with investors using 360° virtual tours of remote mining assets, 3D models and interactive presentations. VRIFY can be accessed by website and with the VRIFY iOS and Android apps.


The VRIFY 3D Slide Deck for GoGold can be viewed at: and on the Company’s website at:


Los Ricos District Exploration Projects


The Company’s two exploration projects at its Los Ricos Property are in Jalisco state, Mexico. The Los Ricos South Project began in March 2019 and an initial Mineral Resource Estimate was announced on July 29, 2020, which disclosed a Measured & Indicated Mineral Resource of 63.7 Million ounces AgEq grading 199 g/t AgEq contained in 10.0 Million tonnes, and an Inferred Mineral Resource of 19.9 Million ounces AgEq grading 190 g/t AgEq contained in 3.3 Million tonnes. An initial PEA on the Project was announced on January 20, 2021, indicating an after-tax NPV5% of US$295M. The Eagle Concession was acquired in October 2022 and is adjacent to the Main Area which contains the initial Mineral Resource.


The Los Ricos North Project was launched in March 2020 and an initial Mineral Resource Estimate was announced on December 7, 2021, which disclosed an Indicated Mineral Resource of 87.8 Million ounces AgEq grading 122 g/t AgEq contained in 22.3 Million tonnes, and an Inferred Mineral Resource of 73.2 Million ounces AgEq grading 111 g/t AgEq contained in 20.5 Million tonnes.


About GoGold Resources


GoGold Resources 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 Projects in the state of Jalisco. Headquartered in Halifax, NS, GoGold is building a portfolio of low cost, high margin projects.



Figure 1: Los Ricos North Block Model Visualization (CNW Group/GoGold Resources Inc.)

Posted May 17, 2023

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