2010 News Releases

October 05, 2010

Goldgroup Begins Drilling at Caballo Blanco

Vancouver, British Columbia (October 5, 2010)-- Goldgroup Mining Inc., TSX:GGA, ("Goldgroup" or the "Company") is pleased to announce that, further to its news release dated September 14, 2010, a 30,000 metre multi-phase drilling and exploration program at its Caballo Blanco gold project in Veracruz, Mexico has commenced. Goldgroup's 500 km² Caballo Blanco property hosts multiple mineralized zones comprising numerous geological targets. The Company expects initial assay results by mid-Q4, 2010.

The following initiatives are also part of this extensive exploration program at Caballo Blanco:

  • Ground geophysics - a 63 km IP (induced polarization) survey-prospecting started September 10, 2010
  • Geochemical analysis of surface chip samples, is in progress
  • Metallurgical testing will start in October, 2010
  • Construction of several underground adits for bulk sampling and to assess structural geology
  • An environmental impact study, including the environmental baseline and impact statement, the socio-economical study and a risk analysis, is in progress

The 30,000 metre multi-drill program, using diamond and reverse circulation drilling, is designed to expand and upgrade the current NI 43-101-compliant mineral resource estimate at the La Paila anomaly (contained in the technical report dated March 22, 2010) and to test other highly prospective areas for mineralization, including other targets at the Northern Zone as well as targets at the Red Valley and Highway zones. The current estimated indicated mineral resource of 139,000 ounces of gold (6.7 million tonnes grading 0.65 g/t Au) and inferred resource of 517,000 ounces of gold (27.6 million tonnes grading 0.58 g/t Au) covers only the La Paila area in the Northern Zone. It was compiled from 32 diamond drill holes totaling approximately 7,000 meters completed by NGEx Resources Ltd. ("NGEx"), prior to Goldgroup's acquisition of its interest in the project in November 2009.

About Caballo Blanco

The Company purchased the option to acquire a 70% interest in Caballo Blanco from NGEx, a member of the Lundin Group, for CDN$6.0 million in cash and 9 million Goldgroup shares. The remaining 30% interest in Caballo Blanco is owned by Almaden Minerals Ltd. NGEx is the Company's second largest shareholder, currently holding approximately 10.5% of the outstanding Goldgroup shares. NGEx also holds a 1.5% NSR royalty on Goldgroup's portion of future mine production. Upon commercial production, NGEx will receive a one-time advance royalty payment in the amount of CDN$5.0 million.

Resignation of Michael Farrant as President

The Company also announces that,effective September 30, 2010, Michael Farrant has resigned from the position of President. The Company wishes to thank Mr. Farrant for his contributions to Goldgroup. Mr. Farrant will continue to serve as a director of the Company.

About Goldgroup

Goldgroup is a well-funded Canadian-based gold production and exploration Company focused exclusively on Mexico, targeting growth in gold production, mineral resources, profitability and cash flow from a portfolio of production, development and exploration stage projects. The Company owns and operates the Cerro Colorado Gold Mine in Sonora, Mexico. All gold production is un-hedged and the Company expects to produce approximately 25,000 ounces of gold in 2010. The Company's property portfolio includes its interests in the Caballo Blanco project in Veracruz and the San José de Gracia high-grade gold project in Sinaloa.

Goldgroup is led by a team of highly successful and seasoned individuals with extensive expertise in exploration, corporate finance and mine development in Mexico. Kevin Sullivan, B.Sc., M.AusIMM, the Company's Vice President, Exploration and a qualified person, as defined by NI 43-101, has reviewed the technical information contained in this news release.

For further information on Goldgroup and Caballo Blanco, please visit www.goldgroupmining.com or contact:

Keith Piggott, CEO
T: 604-682-1943

David Fry, Corporate Development
TF: 1-877-655-ozAu (6928)