Goldgroup gains 100 per cent of San Francisco gold mine

Executive Summary

• Goldgroup Mining Inc. has secured ownership of the San Francisco gold mine in Sonora, Mexico, by acquiring 100% of Molimentales del Noroeste, S.A. de C.V. through a Mexican bankruptcy restructuring process (Concurso Mercantil).
• The acquisition is subject to final approval from the TSX Venture Exchange and the settlement of outstanding liabilities, including creditor payments and government fees.
• The San Francisco mine is a formerly producing open-pit asset with existing infrastructure, historically producing ~1.3 million ounces of gold (2010–2022), with potential to triple Goldgroup’s current production capacity to over 60,000 ounces annually.

Key Details

• Transaction Structure: Goldgroup acquired all Series A shares (fixed capital) and Series B shares (variable capital) of Molimentales del Noroeste, S.A. de C.V. via a Concurso Mercantil (restructuring proceeding equivalent to US Chapter 11).
• Court Approval: The Second District Court for Commercial Bankruptcy Matters approved the plan of arrangement on December 23, 2025.
• Consideration & Debt Settlement:
  • Goldgroup acquired 60.24% of recognized debts for $8,523,216 USD; $7,496,092 USD has been paid, with a balance of $1,027,124 USD remaining to complete the acquisition.
  • Goldgroup agreed to pay $2,566,098 USD in three equal installments in December 2026, 2027, and 2028 to remaining creditors (39.76% of recognized debt).
  • Additional costs include outstanding mining concession fees, taxes, National Water Commission fees, supplier debts, and Concurso proceedings expenses estimated at 170 million Mexican pesos (~$9.3 million USD).
  • Share transfer facilitated by paying owners 100,000 Mexican pesos and capitalizing Molimentales with 99.9 million Mexican pesos (total 100 million pesos).
• Asset Details (San Francisco Mine):
  • Location: Sonora, Mexico, ~150 km north of Hermosillo; 44 km from Goldgroup’s Cerro Prieto mine.
  • Concessions: 13 concessions totaling 33,667 hectares plus 13,284 hectares of regional concessions.
  • Infrastructure: Two previously producing open pits (San Francisco and La Chicharra), heap leach processing facilities, twin ADR plants, assay lab, workshops, and grid power.
  • Throughput Capacity: Up to 22,000 tonnes per day (two parallel circuits: 15,000 tpd + 7,000 tpd).
  • Historical Production: ~1.3 million ounces of gold produced between 2010 and 2022.
  • Metallurgy: Historic recoveries between 67% and 72%.
• Resource Estimates (Historical NI 43-101, Micon International Ltd., Aug 8, 2020):
  • Measured & Indicated: 1.43 million ounces of gold at 0.446 g/t.
    • Measured: 34,675,000 tonnes at 0.46 g/t (515,000 oz).
    • Indicated: 65,025,000 tonnes at 0.45 g/t (914,000 oz).
  • Depletion: Historical resources depleted by approximately 119,589 ounces due to prior mining.
  • Status: Company treats this as historical information, not a current resource estimate.
• Future Plans: Aggressive drilling campaign to confirm/upgrade resources and test for additional mineralization. Goal is to restart production, potentially tripling current capacity to >60,000 ounces annually.

Notable Quotes

• "This transaction marks a truly transformational milestone for Goldgroup... The San Francisco mine... represents a unique opportunity to consolidate a highly prospective gold district." — Ralph Shearing, CEO
• "In management's opinion, San Francisco represents one of the lowest capital costs, near-term potential gold production projects available in today's junior mining space." — Ralph Shearing, CEO