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Canaccord Genuity Reiterates Buy Recommendation for Goldgroup Mining (TSX:GGA) (OTC:GGAZF)

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Junior gold producer, Goldgroup Mining, symbol GGA on the Toronto Stock Exchange, is adding to its portfolio of Mexican gold properties, by entering into a binding agreement with Oroco Resource Corp (TSXV:OCO) to acquire a 100% interest in the Cerro Prieto Project in Sonora State.

Additional Information:

Company: Goldgroup Mining
Website: http://www.goldgroupmining.com/s/Home.asp
Stock Symbol: TSX: GGA
Date Published: Feb 1, 2013
Transcript: Available

Video Transcript:

I’m Megan Edwards for InvestmentPitch.com
Junior gold producer, Goldgroup Mining, symbol GGA on the Toronto Stock Exchange, is adding to its portfolio of Mexican gold properties, by entering into a binding agreement with Oroco Resource Corp (TSXV:OCO) to acquire a 100% interest in the Cerro Prieto Project in Sonora State.
Goldgroup will be making an initial payment of US$4.5 million, a US$1 million private placement, and additional payments of US$13.5 million from future production.
Investment firm Canaccord Genuity, has reiterated their buy recommendation for Goldgroup, with analyst Nicholas Campbell maintaining his 12-month target price at $1.30.
The 7,000-hectare Cerro Prieto project hosts measured and indicated resources of 14.7 million tonnes grading 0.81 grams per tonne gold and 12.82 grams per tonne silver, containing 383,833 ounces of gold and 6.08 million ounces of silver.
There are also inferred resources of 281,000 tonnes grading 0.66 grams per tonne gold and 12.6 grams per tonne silver.
The 2010 Preliminary Economic Report outlines a 1,500 tonne per day heap leach operation producing an monthly average of roughly 27,000 ounces of gold over a four-year initial mine life.
In 2012, Oroco received all of the required permits for construction, including the Environmental Impact Statement and the Authorization of Change of Land Use for the property.
Prior to this acquisition, the company had 3 properties in Mexico, and was currently producing 18,000 ounces of gold per year.
Analyst Nicholas Campbell stated, “Given the proximity to Goldgroup’s Cerro Colorado mine, we believe there is the potential for Goldgroup to realize significant synergies developing the project. With Cerro Prieto online, we believe Goldgroup could potentially move back into a positive cash flow position in 2014.”
This agreement is subject to receipt of regulatory and Oroco shareholder approvals.
Oroco will pay goldgroup a break fee of US$500,000 if the transaction is not completed by June 30, 2013.
Goldgroup currently trades at $0.37 and with 131 million shares outstanding the company is capitalized at $48.5 million.
For more information please visit the company’s website www.goldgroupmining.com, or call Travis McPherson at 1-877-655-6928 or email tmcpherson@goldgroupmining.com.
For more information about Canaccord Genuity or to obtain a copy of their research report, contact your nearest Canaccord Genuity office. Their branches are listed on their website at www.canaccord.com.
I’m Megan Edwards for InvestmentPitch.com
For more video news, and to view our disclaimer, be sure to visit our website www.investmentpitch.com.
This video is for information purposes only and it is not a recommendation to buy or sell any securities.