GoGold breaks ground at Los Ricos South — fully funded, no dilution
GoGold has begun construction at its Los Ricos South underground silver-gold mine in Mexico, a 24-month build targeting a first pour in June 2028. With ~$284M in cash, an inflation-adjusted ~$260M US capex envelope, and a free-cash-flowing Parral operation, management says the build needs no new equity raise and no debt package.
Investor angle
The build is funded internally and timed to ride a precious-metals tailwind. The risk for investors is execution — underground development is the critical path — but management has bought time by front-loading engineering, ordering long-lead equipment, and pre-stocking ore from the portal cut. Watch the SAG mill arrival, ramp descent in January, and the Q1 permit application for Los Ricos North.
The company has moved from permitting into construction at Los Ricos South. On August 25 it announced that ground had been broken, with contractors on site and long-lead equipment on order. CEO Brad Langiel told The KE Report the team is now powering ahead on a 24-month schedule, with a first pour targeted for June 2028.
The capital plan is fully covered from the balance sheet. The original feasibility study, completed 18 months ago, priced the build at $227M US including contingency. Langiel is now guiding to an inflation-adjusted figure of roughly $260M, with about $7M spent to date. The rest is already in the bank: cash at quarter-end was $284M, and the Parral operation has been adding to it.
Langiel says interest income on that cash alone is covering corporate G&A — general and administrative overhead — so the build needs no new equity raise and no debt package. "We're in a real great position to build this and no need to do additional financing," he told the host.
Parral is doing the heavy lifting on the cash-flow statement. The legacy tailings-recovery operation in Mexico is producing roughly 1.8 to 2 million silver-equivalent ounces per year (silver-equivalent = total metal production translated into silver ounces using relative prices), split about 60% silver and 40% gold by value at current prices. Operating cost runs roughly $4M a month, and Langiel pegs after-tax free cash flow at about $60M US per year. The Parral cash cost (the direct cost of producing an ounce, before corporate overhead) sits at around $20 per silver-equivalent ounce. Parral has about four years of reserves remaining.
The Q3 results, for the quarter ended June 30, told the same story. Record quarterly operating cash flow of just over $26M came against revenue of about $27.8M — the kind of cash margin that reflects Parral's low stripping cost.
Los Ricos South is where the growth thesis sits. Once commissioned, the underground mine is forecast to add 7.2 million silver-equivalent ounces a year at an AISC (all-in sustaining cost — the fully-loaded cost of producing an ounce) of under $12. Combined with Parral, that lifts group production above 9 million silver-equivalent ounces. Underground reserves underpin 12 years of mining at Los Ricos South, with a total life of mine of about 15 years on today's resource.
Los Ricos North is the next leg. A PEA (preliminary economic assessment — an early-stage scoping study) projects another 8.8 million silver-equivalent ounces a year and 13 years of mine life in that study. Management is targeting a permit application in Q1 next year, with the mine plan still being scoped as a hybrid of underground and open pit. Water supply is the key gating item; Langiel pointed to old underground workings on the North as a likely source.
Put together, the company frames the build as a district strategy: 15 to 17 million silver-equivalent ounces per year across the district at roughly $12 AISC, which would put GoGold into mid-tier silver-producer territory.
Management has done meaningful de-risking work before the build officially started. Detailed engineering was 85% complete when the permit came through, several months ahead of where it would normally be at that stage. Long-lead items including the SAG mill (a large grinding mill used to process ore) — which carries a 54-week delivery time — were ordered six months ago. Power line work, earthworks, road building, and portal preparation are now underway, with Langiel expecting the main portal to be built by year-end and ramp descent to begin in January.
One operational tweak could pull ounces forward. A planned hill-slope cut near the portal turns out to sit on ore. Blasting that slope for stabilization will also generate several months of mill feed. An additional portal is being added to access a very high-grade zone — Langiel calls it the Eagle zone — that he says would generate about $500M US after-tax over an 18-month mining window at current prices.
Exploration upside has not been carved up yet. In Los Ricos South, the company has identified a second mineralized horizon about 250 meters below current reserves that historical operators reached between 1908 and 1929. Once underground access is in place, that target can be drilled from workings. At Los Ricos North, an infill program is planned alongside the permit work, and the northern part of the North area remains essentially unexplored — old workings exist but the company has had only a brief look.
The team argues it has the build experience to execute. Langiel says the Mexico-based team has built four mines previously and has worked together for 20 years; Los Ricos South would be mine number five (six if Los Ricos North proceeds). Langiel has spent roughly 30 years operating in Mexico.
The market has noticed. Langiel noted shares were up more than 50% in the month leading into the interview.
Generated by Pixys from the source video below. Not investment advice.
