GoGold (GGD, TSX)

“I think 2020 will be a very exciting year.” – Brad Langille, CEO

GGD looks to have carved out a nice support base at 60 cents, 3 x higher than where it started the year, and closed the week at 65 cents (up 7%).

The Parral Tailings Project continues to deliver quarter after quarter.  GoGold’s basically got this operation running at a steady state of 1.8+ million ounces Silver equivalent annually with all-in costs below $14.

Cash flow from Parral is allocated toward exploration drilling at Los Ricos, a high-impact project for GGD, and it should continue to fund Los Ricos for the foreseeable future.

Los Ricos is a past producer that’s seen little to no concerted exploration effort in decades (if ever).  Based on what GoGold and Langille know now (in-house estimates), they feel they’ve got “millions of ounces” sitting within 3 km of a 30 km trend.

Within the industry Langille’s name isn’t as well known as Beatty or Lundin, but there’s no reason it shouldn’t be.  Over the last few decades he’s created substantial wealth for himself and shareholders.  Exiting Gammon Gold for $2.2 billion near the peak of the previous cycle would be Langille’s biggest score so far, and with Los Ricos he sees an opportunity that’s just as big – if not bigger.

Right now GoGold has 3 drill rigs on site, and a 4th is coming soon.  Recent results like 3.3 g/t AuEq over 21 m, 3.3 g/t over 20 m, 2.7 g/t over 23 m, and 2.9 g/t over 26 m, might not have that WOW factor, but people who are in-the-know and really understand this situation have been wowed by those 20+ m intercepts averaging around 3 g/t Gold equivalent.

Here’s why – and it’s real simple – GoGold’s internal models previously had that as “waste material”, when in fact that rock is going to be considered “ore” (someday).  When you start running the numbers on a mining scenario, all this lower grade material surrounding the higher grade reduces the strip ratio.

Don’t forget, earlier in the year GoGold was nailing the high-grade zones and publishing numbers like 71 g/t AuEq over 6.9 m and 32 g/t AuEq over 3 m.

The first resource estimate for Los Ricos should be published between February and April.

GoGold has approximately $9 million (U.S.) in working capital and a market cap of $120 million.

Insider ownership is close to 30% and Langille says the market shouldn’t be expecting any dilution anytime soon.