Innovative Project Heap Leaches Tailings in Parral

Q: What is the status of the Parral project and how have you increased its profitability?

A: The project is named after the city of Parral in Chihuahua where it is located. Parral is a unique project because it has a large grid treatment of 300-year-old tailings. It is a good environmental project because we are moving 20 million tons of those tailings from the center of the city to the outskirts, away from people, and putting them on a 21st century-designed, environmentally-sound, double-lined pad that complies with contemporary regulations.

We also employ approximately 200 people. One of our partners is the municipality of Parral, and we pay them US$50,000 a month for the right to access and process those tailings. With the tailings, we have done something different by heap leaching them. By doing this we obtain a lower processing operation cost.

The Parral project has a 60 percent value in silver and a 40 percent value in gold. This makes it is primarily a silver project. The process begins when we employ contract trucking, pick up the tailings, drop them at our new site, then mix them with cement to make a paste. Soon after, we put them on a PVC liner and then we process them with sodium cyanide. Afterward, the process moves to a mineral plant where we produce concentrate.

There is a little bit of copper left in the ore and that copper consumes a lot of cyanide and becomes ineffective. With our new SART plant, the cyanide is recycled and released back into our closed loop where it can be effective again in leaching, saving us a lot of money. When the plant is opened to commercial production, it will recycle nine tons of cyanide a day to start and produce a copper precipitate.

By leaching mine tailings, we are doing something quite different in the industry. There are many heap leaching companies in the world, but none for tailings at such a large scale. When we started, we faced issues as we were the first ones to experiment with this method. We experienced a lot of trial and error over a period of two and a half years. We finally were able to optimize the leaching process and find a balance in cyanide, among other things. Currently, the operation generates US$700,000 of free cash flow per month.

Q: Cyanide is one of GoGold’s most significant costs. How do you mitigate this cost?

A: We consume 14 tons of cyanide a day, so the cost per ton is a big factor. Fortunately, we have a good supply and a reliable product. We spend approximately US$2.4 million a month in Mexico and maybe US$300,000 outside of the country. For our operations in Mexico, we have approximately 200 employees.

Additionally, the vast majority of our suppliers are comprised of local providers. We choose our providers with the condition that they have to be competitive. We primarily favor Mexican providers as they usually give us reliable services and supplies.

Q: How does the GoGold project in Jalisco fit the company’s strategy and what are its main characteristics?

A: In March 2019, the company acquired the rights to an agreement that provides the option to acquire 100 percent of the concessions of the Los Ricos project. The Los Ricos property, located in Jalisco state, is comprised of 29 concessions, covers an area over 22,000ha, and is home to several historic mining operations. The property is located roughly 100km northwest of the city of Guadalajara and is easily accessible by paved roads.

There are 65 historical drill holes on the property that were done drilled between 2003 and 2004. The majority intercepted mineralization from near-surface. There are numerous historical underground workings on the property, but those are primarily from operations from the early 20th century when Marcus Daly Jr., the son of the founder of the Anaconda Copper Company, and James Watson Gerhard developed them into a modern mine producing up to 500 tons of ore per day by the time it closed in 1930. Closure happened due to the stock market crash.

In August 2019, GoGold agreed to accelerate the acquisition of the 29 concessions. The concession agreements replace the option agreement GoGold had for the Los Ricos property and saved GoGold $US5.4 million dollars.

Currently, GoGold is undertaking a 29,000m diamond drilling program of HQ-size core in conjunction with a field program of geological mapping, sampling and trenching on the property. The core drilling campaign is focused on defining the mineralized halo around the historical high-grade ore shoots as defined by the underground workings and the 65 historical RC drill holes on the property.

GoGold Resources is a Canadian-based silver and gold producer with the Parral project in Chihuahua and Los Ricos project in the state of Jalisco. The company focuses on mine development and operations in Mexico.