Gold

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Overview

Goldgroup Mining Inc. (TSX:GGA) is a well-funded Canadian-based gold production, development and exploration company with a significant upside in a portfolio of projects in Mexico, one of the world’s best mining jurisdictions. Goldgroup’s goal is to produce 100,000+ ounces of gold per year at its flagship project, Caballo Blanco, to sustain production at its operating mine, Cerro Colorado, and to continue exploration and development at San José de Gracia.

Goldgroup’s 100% ownership of the Caballo Blanco gold project and 50% interest in the San José de Gracia project, represents an estimated mineral resource (NI 43-101 compliant) totaling approximately 650,000 oz Au of Indicated Resources and 900,000 oz Au of Inferred Resources, plus the potential to considerably increase these estimated resources through continued drilling and exploration. Goldgroup is led by a team of highly successful individuals with extensive expertise in exploration, corporate finance, and mine development in Mexico.

Investment Highlights

• Developing Caballo Blanco into production in 2013
• Caballo Blanco PEA highlights: (@ $1,500 gold)
• $284MM Pre-tax NPV
• 66.4% Pre-tax IRR
• Average annual gold production: 95,000 ounces
• 1.5 year payback period
• 80.7% recovery
• Well-funded and no debt: Raised $40 million at $1.40 in last equity financing
• Undervalued relative to peers
• Highly experienced management team with proven operating and mine production experience in Mexico (combined 100+ years
• Significant management (17%) and institutional (51%) ownership
• Growth in shareholder value through:
• Leverage to the gold price
• Increasing Production
• Increasing Resources
• Mexico: Highly-prospective and mining friendly region

Key Projects

Caballo Blanco Project – Veracruz, Mexico

Caballo Blanco, Goldgroup’s 100%-owned advanced stage flagship gold project, is located 65km northwest of Veracruz, Mexico’s largest port city. The project consists of two large areas of epithermal gold mineralization: Northern Zone, where the main La Paila Zone is located, and the Highway Zone. The project currently consists of 15 mineral concessions covering over 54,000 hectares. Caballo Blanco has easy port access, as well as paved roads and access to power on-site and clean water. Goldgroup has also developed a large on-site metallurgical and assay facility.

In February 2012, the Company announced an updated NI 43-101 mineral resource estimate on the La Paila Zone at Caballo Blanco and in April 2012, the Company completed a Preliminary Economic Assessment (“PEA”). Based on a base case of $1,500 per ounce gold, the Caballo Blanco project is expected to generate a 66.4% pre-tax internal rate of return (“IRR”), and a US$283.8 million pre-tax net present value (“NPV”) at a 5% discount rate, and produce nearly 687,000 ounces of gold and 1.3 million ounces of silver, based on current mineral resources. At a higher gold price of US$1,700 per ounce, the project’s IRR increases significantly to 83.7% with a pre-tax NPV of US$387.6 million at a discount rate of 5%. Initial production at Caballo Blanco is expected to commence in 2013 at an average annual rate of approximately 100,000 ounces of gold.

In 2012, the Company is continuing with an additional 30,000 metre diamond drill program. The drill program in 2012 is designed to expand the mineralization of the Northern and Highway Zones and extend the projected mine life of the Caballo Blanco project. In the updated mineral resource estimate released in February 2012, approximately 36,000 metres in 145 holes of additional diamond drilling was completed at the La Paila Zone from October 2010 to December 2011 expanding the indicated resource significantly by 314%. Based on a 0.20 g/t Au cut-off grade, the Company’s indicated mineral resources at the La Paila Zone at Caballo Blanco grew from 139,000 to 575,000 ounces of gold (28.9 million tonnes grading 0.62 g/t Au).

The inferred mineral resources summed to 419,000 ounces of gold (24.0 million tonnes grading 0.54 g/t Au). Furthermore, this updated mineral resource estimate added silver resources to the mineral resource estimate at Caballo Blanco, including 2,150,000 ounces of silver indicated resources (28.9 million tonnes grading 2.32 g/t Ag) and 1,930,000 ounces of silver (24.0 million tonnes grading 2.5 g/t).

The Caballo Blanco gold project consists of a series of vuggy silica breccias, high sulphidation, fully oxidized epithermal gold zones. The gold is very fine and occurs within a vuggy and brecciated silica alteration of an original Andesite host rock in the upper levels of the surrounding epithermal system. Two large areas of epithermal gold mineralization have been discovered within the current Caballo Blanco property, referred to as the Northern Zone and Highway Zone. The La Paila Zone currently remains open to the south, southwest and northeast.

San José de Gracia Project – Sinaloa, Mexico

San José de Gracia is a high-grade advanced stage gold exploration project that hosts a NI 43-101 compliant Indicated Resource of 147,000 oz Au and an Inferred Resource of 963,000 oz Au in four veins:  Tres Amigos, San Pablo, La Union, and  La Purisima. Updated in November 2011, the resource estimate includes an Indicated Resource at Tres Amigos of 913,000 tonnes grading 5.00 g/t Au (or 147,000 ounces of gold), and an aggregate Inferred Resource at all four veins of 5,813,000 tonnes grading 5.16 g/t Au (or 963,000 ounces of gold). Goldgroup earned a 50% interest in the San José de Gracia Project in March 2011 upon satisfying its required earn-in expenditures. San José de Gracia was recognized as the ‘Most Significant Gold Project’ in the state of Sinaloa.

In 2011, the 21,000 metre diamond drill program at San José  de Gracia focused on the San Pablo and Tres Amigo vein systems. The program mainly consisted of infill drilling to upgrade the resource category and step-out drilling to expand the known mineralized zones. Goldgroup delineated the San Pablo shoot to a configuration of approximately 550 m down plunge, 170 m along strike, and an average width of 5 m. Tres Amigos is an estimated 800 m along strike on the same structure to the north and is currently open down plunge and showing bigger dimensions than San Pablo. Two other shoots at Purisima and La Union also returned positive results and are open in several directions.

Drilling at San José de Gracia has encountered many high-grade gold intercepts including: 883.91 g/t Au over 0.40 m and 13.93 g/t Au over 4.75 m at Tres Amigos, and 144.08 g/t Au over 1.24 m at La Union. Mapping and sampling of vein structures, as well as environmental base line studies and surface land acquisitions, is ongoing which together with the updated resource estimate completed in Q4 2011 will provide the basis for a Preliminary Economic Assessment (PEA).

Drilling highlights at San José de Gracia include:

Cerro Colorado Mine – Sonora , Mexico

• 100% owned by Goldgroup Mining Inc.
• ~20,000 oz Au production projected in 2012
• Installed new crushing system to increase recoveries
• Ongoing exploration drilling to increase resources

Management

Dr.Hans von Michaelis, Ph.D – CEO and President
Dr. von Michaelis holds a Ph.D in Geochemistry from the University of Cape Town. Dr. von Michaelis was appointed as the Company’s Lead Director on March 26, 2012. He spent two decades conducting multi-client surveys of innovations in extractive metallurgy of gold, silver and uranium. He has organized numerous international conferences on gold and silver extraction and recovery on global and Mexican mining opportunities. Dr. von Michaelis is a former director of Glamis Gold Ltd. and several other junior resource companies. He is currently President of Randol International Ltd., a company he founded in 1977 to provide business development services, mostly to the mining industry. Dr. von Michaelis also serves on the advisory board of Strathmore Minerals Corp. He has been successful in advancing HPGR technology acceptance by the mineral processing industry. Among other business development achievements was his introduction of the Mulatos gold project to Alamos Minerals Ltd. He is the author of numerous technical and mineral economic publications and has presented at numerous international conferences.

Michael Clark, CA – CFO
Michael Clark has been with Goldgroup since May 1, 2010 as Controller and Treasurer for the Company. He was formerly the interim CFO and Controller for Grosso Group Management, which managed five publicly-listed mining companies primarily focused on exploration in North and South America.

Kevin Sullivan, B.Sc, MAusIMM – Vice-President of Exploration
Mr. Sullivan is a graduate geologist from Victoria University of Wellington, New Zealand and a member of the Australasian Institute of Mining and Metallurgy. He has twenty years of gold exploration experience in Australia, during which time he was instrumental in the discovery of the Mt. Leyshon gold deposit which subsequently produced in excess of 2.5m oz of gold. For the past ten years, Mr. Sullivan has worked in Mexico, Nevada, Arizona and Chile exploring for and assessing various gold projects, two of which he has helped put into production.

Dustin VanDoorselaere, B.Sc, B.Eng – Vice President of Operations
Mr. VanDoorselaere brings 17 years of mining experience with a diverse background in both open pit and underground operations in a variety of jurisdictions, including Canada, Australia, Ghana and Mexico. He provides extensive expertise in starting up new mines and streamlining existing operations.Mr. VanDoorselaere has been with Goldgroup since May 2011 as Projects Manager, principally working on the design and permitting of the Caballo Blanco project. Prior to joining Goldroup Mr.VanDoorselaere worked as a Technical Services Manager with AuRico Gold Inc. at both its El Cubo and Ocampo operations in Mexico, as Mining Manager at Red Back Mining Inc.’s Akwaaba Deeps underground mine in Ghana, and has had operations and engineering roles in open pit and underground mines in both Australia and Canada for Norilsk Nickel Mining and Metallurgical Co., Inco Ltd., Placer Dome Canada Ltd., Orica Canada Ltd. and Consbec Inc. Mr. VanDoorselaere holds a Mining Engineering and Biology degree from Laurentian University.