Goldgroup starts first gold production from Cerro Prieto mine in Mexico

12 January 2014 (Last Updated January 12th, 2014 18:30)

Mexico-based Goldgroup has produced 285oz of gold in December 2013 from its Cerro Prieto heap leach mine in Sonora, Mexico.

Mexico-based Goldgroup has produced 285oz of gold in December 2013 from its Cerro Prieto heap leach mine in Sonora, Mexico.

The company successfully completed the phase one development of the Cerro Prieto mine and is set to produce gold.

Goldgroup chairman, president and CEO Keith Piggott said that Cerro Prieto mine has met its target levels gold recovery in the time the company has been leaching.

"Coming off a corrective year in 2013 for the gold sector, we are optimistic about the fundamentals for gold as well as Goldgroup's prospects into 2014 and beyond," Piggott said.

"We are optimistic about the fundamentals for gold as well as Goldgroup's prospects into 2014 and beyond."

The company noted that it is not basing its production decision on a preliminary economic assessment (PEA) demonstrating the potential viability of mineral resources, or a feasibility study (FS) of mineral reserves demonstrating economic and technical viability.

This decision presents an increased uncertainty and many technical and economic risks of failure, the company said.

Goldgroup added that the areas will be analysed in detail in a PEA or FS, such as applying economic analysis to resources or reserves and more detailed metallurgy.

Cerro Prieto project mine has mineral concessions totalling about 7,000ha and contains about 17.5km of strike length of the mineralised structure hosting the current resource.

Goldgroup acquired the Cerro Prieto project in 2013 through a $18m deal in which it acquired Oroco Resource.

Goldgroup's Cerro Colorado mine is in the same state and continues to leach gold. The company expects this to continue this year.

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