Halifax-based GoGold Silver and Gold (TSX: GGD) has closed a bought deal financing worth C$28.8 million to support work at its Los Ricos North and South projects in Jalisco state, Mexico.
The original offering was for 10 million common shares at a price of C$2.50 each for gross proceeds of C$25 million. The underwriters took up an overallotment of 1.5 million shares at the same price for an additional C$3.75 million.
GoGold completed a preliminary economic assessment in January 2021 for Los Ricos South outlining both pit-constrained and out-of-pit resources. The total measured and indicated resources are 10 million tonnes at 0.91 g/t gold and 119 g/t silver. The inferred portion is 3 million tonnes at 0.99 g/t gold and 112 g/t silver. Almost all (98%) of the M&I material is within the pit.
More than 100,000 metres drilling is planned at Los Ricos North in fiscal 2021 to produce an initial resource this year.
At $12/oz. silver and $1,550/oz. gold, the PEA puts the after-tax net present value (5% discount) at C$295 million and the internal rate of return at 46%. Initial capital expenditure of C$125 million would create a mine and mill that produce 70 million silver equivalent oz. annually over an 11-year life.
GoGold acquired Los Ricos in 2019 and launched the South project. It includes the main area focused about a number of historical mines (El Abra, El Troce, San Juan and Rascadero) as well as three additional vein (Cerro Colorado, Las Lamas and East) targets.
Drilling is already underway at the North project on the El Favor, La Trini, Casados and El Orito targets.
(This article first appeared in the Canadian Mining Journal)