Goldgroup Acquires San Francisco Mine

Goldgroup Mining completed the acquisition of Molimentales del Noroeste, securing 100% ownership of the San Francisco Mine in Sonora. The company considers the acquisition as strategic, as it is close to its operating Cerro Prieto mine and its mineralization potential.

GoldGroup Mining noted that the transaction was finalized through a Concurso Mercantil (Commercial Insolvency Proceeding) process, a Mexican legal proceeding similar to Chapter 11 bankruptcy in the United States. The Second District Court for Commercial Bankruptcy Matters in Mexico issued a judgment in favor of Goldgroup Mining’s Plan of Arrangement, concluding the restructuring of Molimentales effective Dec. 23, 2025. The acquisition includes the transfer of the San Francisco Mine concessions, processing plants, and related infrastructure to Goldgroup Mining, free of prior liens and liabilities.

The San Francisco Mine is an open-pit operation located approximately 150km north of Hermosillo and 44km from Goldgroup Mining’s operating Cerro Prieto gold mine. The asset includes 2 previously producing pits, San Francisco and La Chicharra, along with heap leach processing facilities and a crushing circuit with a capacity of 22,000t/d.

Financial Terms of the Restructuring

Before filing the Plan of Arrangement, Goldgroup Mining purchased 60.24% of the recognized debt owed to major creditors for US$8.5 million. Of this amount, US$7.5 million has been paid, with the remaining US$1.02 million due upon completion of the acquisition.

Under the approved plan, Goldgroup committed to paying US$2.56 million to the remaining creditors, who hold 39.76% of the recognized debt. These payments will occur in three equal installments in December of 2026, 2027, and 2028. Additionally, the company assumes responsibility for outstanding mining concession fees, taxes, and debts to the National Water Commission (CONAGUA) and suppliers, currently estimated at MX$170 million (US$9.3 million). To facilitate the transaction, Goldgroup paid MX$100,000 for the Molimentales shares and capitalized the entity with MX$99.9 million.

Management identified the acquisition as a step toward consolidating the district and increasing production capacity. Ralph Shearing, CEO, Goldgroup Mining, stated that the company intends to launch a drilling campaign in the coming months to confirm resources and test for additional mineralization. “Over the coming months, we will launch an aggressive drilling campaign aimed at confirming and upgrading these resources, while also testing for additional mineralization both within and beyond the current open-pit footprint. Our goal is to unlock the full potential of this asset and advance a robust, long-term mine plan that can reshape the future of Goldgroup,” he said.

The project’s most recent technical report outlines measured and indicated resources of 1.4Moz gold contained within 99.7Mt at an average grade of 0.446g/t. The company notes that approximately 119,589oz have been depleted through mining since that report was issued and currently treats these figures as historical estimates. “San Francisco represents one of the lowest capital costs, near term potential gold production projects available in today’s junior mining space,” Shearing added.

The mine was in production as recently as 2022. Goldgroup projects that a restart of operations could potentially triple its annual gold production to over 60,000oz. A formal decision to restart mining will follow the completion of confirmation and expansion drilling.

Molimetales del Noroeste’s Bankruptcy

In March 2023, Molimentales del Noroeste, then a subsidiary of Canada-based Magna Gold, initiated a Bankruptcy proceeding to seek judicial protection while negotiating with creditors. The filing was admitted by the Second District Court for Commercial Bankruptcy Matters amid severe liquidity challenges, according to Reforma.

By the end of September 2022, Magna Gold reported US$94,000 in cash against liabilities totaling US$75 million. During the first nine months of 2022, the company recorded a net loss of US$21 million, driven by lower gold production and increased costs. At the time of the filing, the company faced demands from three Mexican creditors claiming US$6.4 million and a US$13 million arbitration process with Spanish mining services firm Grupo Peal.

Magna Gold had acquired the San Francisco mine in March 2020 from Alio Gold. The operation also faced safety challenges, including a collapse in February 2022 that resulted in the death of three miners.