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GoGold has cash to advance Los Ricos: Langille

GoGold Resources CEO Brad Langille says the company is in a strong position to continue self-funding "one of the largest drilling programs in Mexico" and advance work on its Los Ricos project after accumulating US$52.7 million of cash on surging revenues and cash flow in the 12 months to the end of September.
GoGold has cash to advance Los Ricos: Langille GoGold has cash to advance Los Ricos: Langille GoGold has cash to advance Los Ricos: Langille GoGold has cash to advance Los Ricos: Langille GoGold has cash to advance Los Ricos: Langille

Mexico-focused GoGold Resources has reported strong FY20 earnings

Staff Reporter

Langille said record production for the year and September quarter from the Parral tailings retreatment project in Chihuahua enabled the company to generate $43.1 million net income for the period, reversing the previous year's $41.1 million impairment, and $12.6 million of free cash flow.

"Parral had an excellent year which resulted in a reversal of a previously recorded impairment of $41.1 million, which really reflects on how strongly that asset is performing now," said Langille.

"With our $52.7 million cash balance and the cash flow from our Parral operation, we are well positioned to continue the rapid advancement of the Los Ricos district."

Parral produced $39.5 million revenues from 2.2Moz silver-equivalent sales at $14.82/oz AISC for the year to September 30.

GoGold has the Los Ricos South and Los Ricos North projects, 25km apart, in a historic mining district about 100km northwest of Gaudalajara in Jalisco state. A maiden 43-101 compliant resource of 63.7Moz silver-eq (at an average 1.99gpt, measured and indicated) on Los Ricos South was announced mid-year.

GoGold expects to publish a preliminary economic assessment on Los Ricos before year-end, and complete about 100,000m of drilling at Los Ricos North in 2021. An initial resource for the northern project is expected to be posted by June next year.

GoGold has a strong following among institutional owners including Sprott Asset Management, Van Eck, Fourth Sail and Merck.

Shares in the company (TSX:GGD) went from a COVID-low of C39c in March to a new 12-month high on Thursday at $1.98. It has a market cap of $502.5 million (US$395 million).