San José de Gracia, Goldgroup's 50%-owned high grade gold project, is located in the northeast portion of Sinaloa State, Mexico. In March 2011, Goldgroup completed its Earn-In/Option agreement for San José de Gracia with DynaResource de Mexico SA de CV for its 50% equity interest in the project by reaching the expenditure funding requirement of $18,000,000. The project currently consists of 34 mineral concessions covering approximately 69,000 hectares with no outstanding royalty or other interest. In 2009, San José de Gracia was recognized as Sinaloa State's "Most Significant Gold Project"

On November 23, 2011, Goldgroup announced an updated NI 43-101 Compliant Mineral Resource Estimate on the San Jose de Gracia Project. This updated NI 43-101 Technical Report hosts an Indicated Resource of 147,000 oz Au and an Inferred Resource of 963,000 oz Au. The Company has drilled an additional 135 holes since the initial Resource Estimate in July 2009 and the recently updated Resource Estimate is based on drilling completed up to Sept 5, 2011. This updated Mineral Resource Estimate will be used to support a Preliminary Economic Assessment (PEA) for mining. The Company is targeting a resource estimate sufficient to sustain 100,000 ounces of annual gold production.

The 21,000 metre drill program in 2011 has now been completed. A total of over 300 holes have been drilled at San José de Gracia to date. The San Pablo shoot has shown positive results and has been mainly delineated to a configuration approximately 550 metres down plunge, 170 metres along strike and a true width averaging approximately 5 metres. The Tres Amigos shoot is approximately 800 metres 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 have shown positive results and are open in several directions. Mapping and sampling of vein structures in other areas of the concessions is continuing.

The Company will be commencing environmental base line studies and surface land acquisitions which will be used together with the updated NI 43-101 compliant Resource Estimate to form the basis for a Preliminary Economic Assessment. The majority of this drilling was located in the San Pablo and Tres Amigos vein systems and was a mixture of infill drilling to improve the resource category, and step out drilling to define more resources.
 

• Indicated Mineral Resource: 147,000 oz Au (NI 43-101 Compliant)
• Inferred Mineral Resource: 963,000 oz Au (NI 43-101 Compliant)
• Recognized as Sinaloa's "Most Significant Gold Project" (2009)
• Historic production of over 1 million+ oz Au with potential for further multi-million ounces of gold, averaging 30-60 g/t
• 300+ holes drilled to date
• Drilled only 5 of 50 highly prospective anomalies
• Low sulphidation epithermal system
• Located 400-700m above sea level (allows for horizontal tunnel access)
• GGA's interest = 50%
• Significant potential for ~10 g/t Au over 5-10m in quartz stockwork

Drill Results

• San Jose de Gracia - Compiled Drill Data (Dec 2011)