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GoGold Resources Inc. Management Reports 2025
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Management Reports
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GoGold
SILVER & GOLD
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the three and six months ended March 31, 2025
GoGold
2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
TABLE OF CONTENTS
TABLE OF CONTENTS 2
OVERVIEW 3
RECENT HIGHLIGHTS 3
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG") 4
SUMMARY OF QUARTERLY RESULTS 5
OPERATIONAL UPDATE - PARRAL 7
LOS RICOS 8
LIQUIDITY AND CAPITAL RESOURCES 14
CONTRACTUAL OBLIGATIONS 15
OUTSTANDING SHARE DATA 15
OFF-BALANCE SHEET ARRANGEMENTS 15
CRITICAL ACCOUNTING ESTIMATES AND CHANGE IN ACCOUNTING POLICIES 16
FINANCIAL INSTRUMENTS AND OTHER RISKS 16
NON-IFRS MEASURES 18
INTERNAL CONTROLS OVER FINANCIAL REPORTING 20
FUTURE OUTLOOK 20
FORWARD-LOOKING STATEMENTS 21
TECHNICAL INFORMATION 21
OTHER INFORMATION 22
GoGold
2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
This Management's Discussion and Analysis ("MD&A") of the financial position and results of operations is prepared as at May 6, 2025 for the quarter ended March 31, 2025 and should be read in conjunction with the unaudited condensed consolidated interim financial statements for the quarter ended March 31, 2025 and the notes thereto for GoGold Resources Inc. (the "Corporation"), as well as in conjunction with the Corporation's annual MD&A and audited annual consolidated financial statements for the year ended September 30, 2024.
The Corporation's unaudited condensed consolidated interim financial statements for the three and six months ended March 31, 2025 have been prepared in accordance with IAS 34, Interim Financial Reporting ("IAS 34"). Except as otherwise disclosed, all dollar figures included therein and in the following MD&A are quoted in thousands of United States dollars ("USD"), with the exception of per ounce costs which are quoted in United States dollars. Additional information relevant to the Corporation's activities can be found on SEDAR+ at www.sedarplus.ca.
This MD&A contains certain Forward-Looking Statements as disclosed on page 20 of this document, and Non-IFRS measures including cash cost per silver ounce, adjusted cash cost per silver ounce, cash cost per silver equivalent ounce, adjusted cash cost per silver equivalent ounce, adjusted all in sustaining cost ("Adjusted AISC"), all in sustaining cost ("AISC"), and Parral free cash flow which are reconciled to IFRS on page 18 of this document.
OVERVIEW
GoGold Resources Inc. is a Canadian corporation principally engaged in the exploration, development, and production of silver and gold in Mexico. The Corporation's common shares are listed on the Toronto Stock Exchange trading under the symbol GGD, and the OTCQX market in the United States under the symbol GLGDF.
The Corporation operates the Parral Tailings mine ("Parral") located in the state of Chihuahua, Mexico, and the Los Ricos district exploration property ("Los Ricos"), which includes two projects approximately 25 kilometres apart – Los Ricos South ("LRS") and Los Ricos North ("LRN"), which are located in the state of Jalisco, Mexico.
RECENT HIGHLIGHTS
On April 4, 2025, the Corporation closed a bought financing deal offering of 47,391,500 common shares at a price of CAD$1.82 per common share, for net proceeds of $57,252 after share issuance costs of $3,476. The net proceeds will be used for the development of the LRS project, for exploration activities at both LRS and LRN, and for general corporate purposes.
On January 16, 2025, the Corporation released the results of its Feasibility Study ("FS") at LRS, which included a re-engineered 2,000 tonne per day underground mine plan compared to the Preliminary Economic Assessment ("PEA") which was released in September 2023 and incorporates an updated Mineral Resource Estimate ("MRE"). The FS technical report was filed on February 28, 2025, and is available on SEDAR+ as well as the Corporation's website.
Ausenco Engineering Canada ULC ("Ausenco") completed the design and cost estimates for the process plant. The exercise also included a Front-End Engineering & Design ("FEED") component which provided more engineering detail on key vendor supply packages. This component is beyond the normal FS level of detail and adds greater technical and engineering data to these specific aspects of the plant design. The FEED component is expected to allow for a quicker transition to the detailed engineering and field execution phases in the future.
GoGold
2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
Highlights of the FS, with a silver price of US$26.80/oz, gold price of US$2,330/oz and copper price of US$4.00/lb (“Base Case”) are as follows:
- After-Tax net present value (“NPV”) (using a discount rate of 5%) of $355,000 with an After-Tax IRR of 28% (Base Case);
- At approximate spot metal silver price of $30.00/oz and gold price of $2,608/oz, NPV (using a discount rate of 5%) of $469,000 with an After-Tax IRR of 34%;
- 15-year mine life producing a total of 80 million payable silver equivalent ounces (“AgEq”), consisting of 41 million silver ounces, 424 thousand gold ounces, and 11 million pounds of copper;
- Initial capital costs of $227,000, including $21,000 in contingency costs, over an expected two year build, and sustaining capital costs of $100,000 over the life of mine (“LOM”);
- Average operating cash costs of $9.94/oz AgEq, and all in sustaining costs (“AISC”) of $11.19/oz AgEq over first 5 years of production, with average AISC of $12.32/oz AgEq over the underground mine life;
- Average annual production of 7.3 million AgEq oz over first 5 years;
- Successful conversion of Mineral Resources to Proven and Probable Mineral Reserves totalling 10.2 million tonnes grading 276 g/t AgEq containing 91 million ounces AgEq, including 7.5 million underground tonnes grading 326 g/t AgEq;
- Average underground mining width of 11 metres using bulk mining method of longitudinal sub-level long-hole mining;
Additional details regarding the updated FS are provided in the Los Ricos section starting on page 8 below.
At Parral, production for the quarter ending March 31, 2025 was 555,479 silver equivalent ounces, a 47% increase from the quarter ending March 31, 2024, and marks the fifth consecutive quarter with increased production. The metal production at Parral has been providing positive cash flows to the Corporation, contributing to the $5,145 in cash from operating activities for the quarter. The SART zinc circuit addition, which completed commissioning in the quarter ending March 31, 2024, has not only provided the benefit of a saleable zinc product and recycling of the associated cyanide, but also has improved the leaching of gold and silver. Additional details regarding Parral are included in the Parral section below.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG")
The Corporation, with oversight by the ESG Committee continues to work towards improving the policies and procedures in the Company focussing on four key pillars – employees, communities, environment, and values and ethics. The Corporation is undertaking research on best practices of industry peers, as well as more senior mining companies and companies external to the industry in an effort to continuously improve in these areas.
The Corporation released on May 23, 2024 the results of its fourth annual sustainability report which sets out the Corporation’s performance and achievements with respect to its ESG practices. The Corporation’s vision, as outlined in the report, is to achieve a balance between economic prosperity, environmental conservation, and social responsibility in all of its operations, and to create a lasting positive impact on the communities in which the Corporation operates. The full report is available for download at www.gogoldresources.com/sustainability/
Highlights of the report are as follows:
- Energy consumption decrease of 44% compared to prior year, including a 25% decrease at Parral.
- Decreased carbon dioxide emissions by 38% compared to the previous year.
- 0.006 tCO2e per oz of silver equivalent produced at Parral.
- 0.006 tCO2e per tonne of ore processed.
GoGold
2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
- Increase of over 8% in safety and professional development training to over 12,000 hours.
- Awarded the ESR distinction (Empresa Socialmente Responsibles – Corporate Social Responsibility)
- $17.2 million USD spent in local purchases, including $422 in community investment.
- Donation of 600 machine hours to nearby towns in order to help with local infrastructure.
- Social impacts in nearby communities include providing food packages to elderly, educational and sports supplies to local children and medical attention to residents.
The Corporation also abides by and has the following ESG policies available on its website:
- Water Resources Policy, reflecting the Corporation’s commitment to water stewardship by protecting and sustainably managing water in the Corporation’s operations and the water shared with local communities.
- Climate Change Policy, which was created to minimize the Corporation’s climate change impact by reducing greenhouse gas emissions from the Corporation’s operations and across the Corporation’s supply chain.
- Environmental Policy, through which the Corporation will reduce and mitigate its environmental impact on soil and water, air, biodiversity and waste.
- Human Rights Policy, codifying the Corporation’s commitment to uphold the best practices on human rights as informed by the United Nations Guiding Principles on Human Rights.
- Diversity, Equity and Inclusion Policy, which recognizes that a working environment that is free of discrimination and offers everyone equal opportunities to reach their potential is critical to the success of the Corporation’s business, and that diversity, equity and inclusion is a key pathway to create organizational value.
SUMMARY OF QUARTERLY RESULTS
| Quarter ending | Revenue | Cost of Sales | General and Admin. | Other Income (Expense) | Net Income (Loss) | Shareholders’ Equity | Net Income (Loss) per Share |
|---|---|---|---|---|---|---|---|
| Mar 31, 2025 (Q2-25) | $ 17,602 | $ 11,067 | $ 2,755 | $ 877 | $ 3,357 | $ 288,201 | $ 0.010 |
| Dec 31, 2024 (Q1-25) | 19,098 | 13,519 | 1,911 | 212 | (136) | 284,641 | (0.000) |
| Sep 30, 2024 (Q4-24) | 10,406 | 7,139 | 1,969 | 1,653 | 719 | 284,505 | 0.002 |
| Jun 30, 2024 (Q3-24) | 10,358 | 4,590 | 2,168 | (1,003) | (483) | 283,645 | (0.002) |
| Mar 31, 2024 (Q2-24) | 8,940 | 6,517 | 2,546 | 1,292 | 1,152 | 283,876 | 0.004 |
| Dec 31, 2023 (Q1-24) | 6,799 | 6,067 | 2,341 | 2,134 | 192 | 282,274 | 0.001 |
| Sep 30, 2023 (Q4-23) | 5,690 | 5,412 | 1,792 | (2,236) | (4,295) | 281,557 | (0.014) |
| Jun 30, 2023 (Q3-23) | 8,485 | 6,272 | 1,968 | 2,586 | 2,604 | 285,627 | 0.008 |
The Corporation recorded net income of $3,357 in Q2-25, compared to net income of $1,152 in Q2-24. The increase is primarily due to the improved production and profitability at Parral. This is partially offset by an increase in tax expense of $1,283.
Revenue details are provided in the table below with discussion following.
Cost of sales in Q2-25 were $11,067 compared to $6,517 in Q2-24, an increase of 70%. The cost is attributed to a 48% increase in the number of SEO sold from Q2-24 to Q2-25, as well as increase in per ounce costs. The cash costs per SEO, which is a non-IFRS measure (page 19 for reconciliation), increased by 13% from $15.66 to $17.85. Costs are further discussed in the Operational Update – Parral section on page 7.
General and administrative costs were higher in Q2-25 than Q2-24 at $2,755 compared to $2,546, with the increase primarily attributable to a $316 increase in stock based compensation, which is mainly attributed to the movement of the share price of the Corporation.
GoGold
2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
Other income in Q2-25 was $877, compared to $1,408 in Q2-24, with the most significant difference attributed to a loss on the derivative liability – which increased by $342, due to the price of silver increasing – which increases the likelihood of payments made to the town of Parral being made at the maximum rate as it scales with the price of silver. Foreign exchange gains were included in both Q2-25 and Q2-24, which were $107 in Q2-25 and $253 in Q2-24. The foreign exchange changes primarily relate to changes in the USD:MXN exchange rate, which are principally unrealized foreign exchange losses or gains related to the MXN-denominated input tax recoverable.
In Q2-25, the Corporation recorded income tax expense of $1,300, compared to $17 in Q2-24, which is primarily a function of the increased profitability at Parral in Q2-25.
Shareholders' equity was $284,505 at September 30, 2024 and increased to $288,201 at March 31, 2025. The increase is primarily attributed to the net income for the six months ended of $3,220, an increase to share capital of $254 associated with share issuances and an increase to contributed surplus of $517 associated with stock based compensation.
Revenue
| Revenue: | Q2-24 | Q3-24 | Q4-24 | Q1-25 | Q2-25 | YTD 24 | YTD 25 |
|---|---|---|---|---|---|---|---|
| Silver ounces sold | 133,432 | 135,403 | 129,434 | 266,034 | 204,498 | 306,969 | 470,532 |
| Gold ounces sold | 2,194 | 2,341 | 1,962 | 3,743 | 3,202 | 4,226 | 6,945 |
| Copper tons sold | 126 | 83 | 180 | 102 | 155 | 285 | 257 |
| Zinc tons sold | - | 115 | 114 | 135 | 160 | - | 295 |
| SEO sold^{1} | 374,140 | 365,119 | 362,314 | 625,972 | 555,511 | 679,227 | 1,181,483 |
| Realized price per ounce | $23.90 | $28.37 | $28.72 | $30.51 | $31.70 | $23.17 | $31.06 |
| Revenue | $8,940 | $10,358 | $10,406 | $19,098 | $17,602 | $15,739 | $36,700 |
| Average market silver price | $23.36 | $28.81 | $29.44 | $31.40 | $31.91 | $23.28 | $31.66 |
- SEO include gold ounces, copper tonnes, and zinc tonnes sold converted to a silver equivalent based on a ratio of the average market metal price for each period. The ratio of gold:silver for each of the periods presented was: Q2-24 – 89, Q3-24 – 81, Q4-24 – 84, Q1-25 – 85, Q2-25 – 90. The ratio for copper was: Q2-24 – 365, Q3-24 – 341, Q4-24 – 320, Q1-25 – 299, Q2-25 – 317. The ratio for zinc was: Q3-24 – 95, Q4-24 – 94, Q1-25 – 99, Q2-25 – 89.
In Q2-25, the Corporation recorded significant quarterly revenue of $17,602 on the sale of 555,511 SEO sold at an average realized price of $31.70, nearly double the $8,940 of revenue on 374,140 SEO sold at an average realized price of $23.90 in Q2-24. This is due to a 48% increase in ounces sold attributed to the increase in production, as well as a 33% increase in realized price. By comparison, the average market silver price increased by 37% over the same period. For the six months ended March 31, 2025, the Corporation has recorded revenue of $36,700 on the sale of 1,181,483 SEO for a realized price of $31.06. Revenue is up 133% compared to 2024, with this being attributed to a 74% increase in SEO sold and a 34% increase in realized price.
The increase in SEO sold is primarily in line with the production increases which are explained in the Operational update – Parral section below.
The Corporation's revenues are affected by the market price for silver, gold, copper and zinc, which fluctuate on a daily basis and are affected by numerous factors beyond the Corporation's control. The average market price for silver, as published by the London Bullion Market Association ("LBMA"), is provided as a comparison point for the Corporation's realized price per ounce. Realized price per ounce typically varies from market price due to principally two reasons. First, the Corporation sells its copper and zinc precipitates at a discount to market price as it is unrefined. Second, the timing of shipments affects recognized revenue, as the sales price is recorded based on the following month's average market metal price.
GoGold
2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
Cash Flows
| Cash flows (to) from: | Q2-24 | Q3-24 | Q4-24 | Q1-25 | Q2-25 | YTD 24 | YTD 25 |
|---|---|---|---|---|---|---|---|
| Operating activities before change in non-cash working capital | $ 1,573 | $ 2,917 | $ 2,563 | $ 5,204 | $ 5,117 | $ 2,870 | $ 10,321 |
| Non-cash working capital | (6,210) | (5,074) | (3,358) | 2,664 | 28 | (10,535) | 2,691 |
| Operating activities | (4,637) | (2,157) | (795) | 7,868 | 5,145 | (7,665) | 13,012 |
| Investing activities | (2,950) | (1,933) | (2,851) | (3,367) | (3,029) | (6,412) | (6,395) |
| Financing activities | (121) | (136) | (645) | 122 | (79) | (195) | 42 |
| Effect of foreign exchange on cash | (255) | (164) | (51) | (339) | (33) | (137) | (371) |
| Net increase (decrease) | $ (7,963) | $ (4,390) | $ (4,404) | $ 4,284 | $ 2,004 | $ (14,409) | $ 6,288 |
The Corporation generated cash of $5,145 from operations in Q2-25, due to Parral's strong production and realized metal prices. This compares to a use of cash in Q2-24 of $4,637. Non-cash working capital provided some cash - $28, while in Q2-24 it used cash of $6,210. The most significant variance is attributed to inventory – in Q2-25 inventory used cash of $207 compared to $3,058 in Q2-24, as ounces stacked on the heap leach pad were less than produced in Q2-24. Also, input tax recoverable used cash of $916 in Q2-24, compared to generating cash of $1,878 in Q2-25. This is due to the collection of input taxes from prior periods which occurred in the quarter.
For the year, the Corporation has generated cash flow from operations of $13,012 compared to a usage of $7,665 in 2024, with the difference primarily being the significant increase in production at Parral, coupled with the rise in realized metal price. Additionally, the number of ounces in inventory were drawn down in 2025, providing cash flow.
Investing activities in Q2-25 used cash of $3,029, compared to $2,950 in Q2-24. Spending in Q2-24 included $505 spent on the Parral SART Zinc expansion, while there was no similar expenditure in Q2-25, with all of the investing expenditures associated with Los Ricos in 2025. Spending at Los Ricos in Q2-25 consisted mainly of engineering and consulting fees associated with the feasibility study, concession payments, and geological work. There was no significant drilling completed in either 2024 or 2025.
Financing activities in Q2-25 were minimal, using cash of $79, slightly lower than in Q2-24 which used cash of $121. Subsequent to quarter end, the Corporation closed a previously announced bought deal financing on April 4, 2025 for net proceeds of $57,252 after share issuance costs of $3,476.
OPERATIONAL UPDATE - PARRAL
Results
During Q2-25, Parral produced 555,479 SEO consisting of 210,289 silver ounces, 3,279 gold ounces, 155 tonnes of copper and 160 tonnes of zinc. This generated revenue of $17,602 on the sale of 555,511 SEOs at an average price of $31.70 per ounce. This is a significant increase in production from Q2-24, where Parral produced 375,745 SEO consisting of 138,657 silver ounces, 2,184 gold ounces, 93 tonnes of copper, and 92 tonnes of zinc, generating revenue of $8,940 on the sale of 374,140 SEOs at an average price of $23.90 per ounce. The primary reason for the increase in production is the SART zinc circuit addition, which completed commissioning in Q2-24. The circuit has exceeded expectation on both base metal production and has also aided in increasing the leachability of gold and silver, through the removal of zinc from the solution. Parral is generating significant cash flows for the Corporation, as outlined in the cash flow analysis above.
Adjusted cash costs per silver equivalent ounce (a non-IFRS measure, see the explanation and reconciliation of non-IFRS measures on page 19, including an adjustment for the NRV in 2024) were $17.85 in Q2-25, an increase from $17.29 in Q2-24. For the year to date in 2025, cash costs per SEO were $18.64, compared to $17.08 in 2024. This is primarily due to the increase in higher cost silver and gold ounces, while lower cost
GoGold
2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
copper and zinc equivalent ounces have stayed at a consistent level. In 2024, lower cost copper and silver ounces made up 15% of SEO sold, while in 2025, with the increase in silver and gold production, they only made up 9% of SEO sold. As a result, costs per SEO have increased. While copper and zinc equivalent ounces come at a lower cost, they also are sold at a relatively lower price as these precipitates are sold at a discount to market price as it is unrefined.
Adjusted all in sustaining costs per SEO (“AISC”, non-IFRS measure, see page 19) decreased from $24.20 in Q2-24 to $22.98 in Q2-25, primarily due to in the increase in the number of ounces sold. This provides a bigger base to allocate general and administrative costs. For the year to date, the trend is similar, with the AISC decreasing from $24.40 in 2024 to $22.70 in 2025.
Following are key performance indicators of Parral’s operations:
| Key performance indicator: | Q2-24 | Q3-24 | Q4-24 | Q1-25 | Q2-25 | YTD 24 | YTD 25 |
|---|---|---|---|---|---|---|---|
| Silver equivalent production (“SEO”) (oz)^{1} | 375,745 | 400,236 | 406,150 | 551,337 | 555,479 | 676,005 | 1,106,816 |
| Silver production (oz) | 138,657 | 138,708 | 167,001 | 226,343 | 210,289 | 247,673 | 436,632 |
| Gold production (oz) | 2,184 | 2,436 | 2,232 | 3,213 | 3,279 | 4,032 | 6,492 |
| Copper production (tonnes) | 93 | 148 | 132 | 121 | 117 | 188 | 238 |
| Zinc production (tonnes) | 92 | 125 | 100 | 161 | 157 | 92 | 318 |
| Adjusted Cash cost (per SEO)^{2} | $17.29 | $18.54 | $17.71 | $19.33 | $17.85 | $17.08 | $18.64 |
| Adjusted Cash cost (by-product credit, per silver oz)^{2} | $6.42 | $3.41 | $(0.55) | $4.53 | $(5.59) | $6.90 | $0.13 |
| Adjusted AISC per SEO^{2} | $24.20 | $24.59 | $23.26 | $22.45 | $22.98 | $24.40 | $22.70 |
| Fresh tailings placed on leach pad (tonnes) | 423,977 | 425,804 | 363,695 | 415,161 | 377,516 | 797,861 | 792,677 |
| Recoverable silver equivalent ounces stacked^{1,3} | 553,000 | 587,000 | 554,000 | 615,000 | 597,000 | 1,041,000 | 1,212,000 |
- SEO include gold ounces, copper tonnes, and zinc tonnes produced converted to a silver equivalent based on a ratio of the average market metal price for each period. The ratio of gold:silver for each of the periods presented was: Q2-24 – 93, Q3-24 – 86, Q4-24 – 88, Q1-25 – 85, Q2-25 – 90. The ratio for copper was: Q2-24 – 365, Q3-24 – 346, Q4-24 – 320, Q1-25 – 299, Q2-25 – 317. The ratio for zinc was: Q2-24 – 104, Q3-24 – 98, Q4-24 – 94, Q1-25 – 97, Q2-25 – 89.
- Non-IFRS measure, reconciliation on page 18.
- The calculation of recoverable ounces includes estimates of future recovery rates and other assumptions.
LOS RICOS
The Los Ricos property is made up of 46 concessions and covers over 25,000 hectares and is home to several historical mining operations. The property is located roughly 100 km northwest of the city of Guadalajara and is easily accessible by paved road. The property is split into two projects, the Los Ricos South (“LRS”) project and the Los Ricos North (“LRN”) project, which are approximately 25 km apart.
The LRS project was launched in March 2019 and includes the ‘Main’ area, which has focused on drilling around a number of historical mines including El Abra, El Troce, San Juan, and Rascadero. On October 18, 2022 the Corporation announced the acquisition of the Eagle concession, which is adjacent and contains the northern strike extension of the Main area. The LRN project was launched in March 2020 and includes the La Trini, El Favor, Casados, El Orito, Mololoa, and Gran Cabrera targets, among others.
On January 16, 2025, the Corporation released the results of its Feasibility Study (“FS”) at LRS, which included a re-engineered 2,000 tonne per day underground mine plan compared to the Preliminary Economic Assessment (“PEA”) which was released in September 2023 and incorporates an updated Mineral Resource
GoGold
2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
Estimate ("MRE"). An initial NI 43-101 compliant MRE on the LRN project was released on December 7, 2021, with an initial PEA released on May 17, 2023.
The Corporation's focus at both Los Ricos projects is transitioning from exploration to development, although a development decision has yet to be made on either project. At LRS, the Corporation is focused on obtaining an environmental permit, which is the major requirement to make a construction decision. At LRN, the focus is on completing additional technical studies to advance the project.
Expenditures
During the three months ended March 31, 2025, the Corporation capitalized $3,117 of exploration and evaluation expenditures to Los Ricos, of which $497 related to LRN and $2,620 related to LRS. Most of the spending in the quarter were costs associated with the feasibility study at LRS, as well as a concession payment at LRN. Following is the breakdown showing the additions to the projects for the six months ended including the ending capitalized balances:
| LOS RICOS NORTH | LOS RICOS SOUTH | TOTAL | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Cash Settled | Share Settled | Total | Cash Settled | Share Settled | Total | Cash Settled | Share Settled | Total | |
| At September 30, 2024 | $ 46,046 | $ 3,434 | $ 49,480 | $ 39,216 | $ 9,082 | $ 48,298 | $ 85,262 | $ 12,516 | $ 97,778 |
| Concession requirements | 1,151 | - | 1,151 | 330 | - | 330 | 1,481 | - | 1,481 |
| Drilling, exploration and consulting | 588 | 28 | 616 | 4,650 | 28 | 4,678 | 5,238 | 56 | 5,294 |
| At March 31, 2025 | $47,785 | $3,462 | $51,247 | $44,196 | $9,110 | $53,306 | $91,981 | $12,572 | $104,553 |
Resources
On a combined basis, as of the most recent Mineral Resource Estimate ("MRE") update on January 16, 2025, the Los Ricos district contains 196 million ounces of measured & indicated silver equivalent ounces, and over 89 million ounces of inferred silver equivalent ounces, as a result of the drilling on the property completed since acquisition in March 2019. Following is a summarized version of the combined resources, see details relating to the individual LRN and LRS resources in the following pages.
| Deposit | Tonnes | Average Grade | Contained Metal | ||
|---|---|---|---|---|---|
| AuEq | AgEq | AuEq | AgEq | ||
| (Mt) | (g/t) | (g/t) | (koz) | (koz) | |
| LRS Measured | 5.5 | 3.79 | 320 | 651 | 55,013 |
| Indicated: | |||||
| LRN Oxide | 14.5 | 1.71 | 127 | 801 | 59,100 |
| LRS Oxide | 5.6 | 3.50 | 296 | 632 | 53,549 |
| LRN Sulfide | 7.8 | 1.55 | 114 | 389 | 28,708 |
| Total Indicated | 27.9 | 2.03 | 158 | 1,822 | 141,357 |
| Measured & Indicated | 33.2 | 2.32 | 184 | 2,473 | 196,370 |
| Inferred: | |||||
| LRN Oxide | 15.0 | 1.52 | 112 | 734 | 54,191 |
| LRS Oxide | 2.2 | 2.70 | 229 | 191 | 16,191 |
| LRN Sulfide | 5.5 | 1.46 | 108 | 258 | 19,007 |
| Total Inferred | 22.7 | 1.62 | 122 | 1,183 | 89,389 |
GoGold
2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
Los Ricos South Feasibility Study
The Corporation announced their FS for LRS on January 16, 2025. The FS was completed on the basis of the mineral resource estimate which is shown below and was also updated on January 16, 2025. The FS is based on a 2,000 tonne per day underground mine plan and the process plant design included a FEED component which provided more engineering detail on key vendor supply packages. This component is beyond the normal FS level of detail and adds greater technical and engineering data to these specific aspects of the plant design. The FEED component is expected to allow for a quicker transition to the detailed engineering and field execution phases in the future.
Highlights of the FS, with a silver price of US$26.80/oz, gold price of US$2,330/oz and copper price of US$4.00/lb ("Base Case") are as follows:
- After-Tax net NPV (using a discount rate of 5%) of $355,000 with an After-Tax IRR of 28% (Base Case);
- At approximate spot metal silver price of $30.00/oz and gold price of $2,608/oz, NPV (using a discount rate of 5%) of $469,000 with an After-Tax IRR of 34%;
- 15-year mine life producing a total of 80 million payable SEO consisting of 41 million silver ounces, 424 thousand gold ounces, and 11 million pounds of copper;
- Initial capital costs of $227,000, including $21,000 in contingency costs, over an expected two year build, and sustaining capital costs of $100,000 over the life of mine ("LOM");
- Average operating cash costs of $9.94/oz SEO, and AISC of $11.19/oz SEO over first 5 years of production, with average AISC of $12.32/oz SEO over the underground mine life;
- Average annual production of 7.3 million SEO oz over first 5 years;
- Successful conversion of Mineral Resources to Proven and Probable Mineral Reserves totalling 10.2 million tonnes grading 276 g/t SEO containing 91 million ounces SEO, including 7.5 million underground tonnes grading 326 g/t SEO;
- Average underground mining width of 11 metres using bulk mining method of longitudinal sub-level long-hole mining;
For additional details, please refer to the press release dated January 16, 2025.
Following are tables and figures showing key assumptions, results, and sensitivities.
LRS FS Underground Key Assumptions and Results
| Assumption / Result | Unit | Value | Assumption / Result | Unit | Value | |
|---|---|---|---|---|---|---|
| Total UG Ore Mined | kt | 7,512 | UG Mining Costs | $/t Plant Feed | 44.04 | |
| UG Silver Grade^{1} | g/t | 170 | Operating Cash Cost | $/oz AgEq | 11.22 | |
| UG Gold Grade^{1} | g/t | 1.65 | All in Sustaining Cost | $/oz AgEq | 12.32 | |
| UG SEO Grade^{1} | g/t | 326 | Underground Mine Life | Yrs | 12 | |
| Silver Recovery | % | 86 | Average Mining Width | m | 11 | |
| Gold Recovery | % | 93 |
- Grades shown are LOM average process plant feed grades including underground external dilution of approximately 18%.
- The underground mining method is longitudinal sub-level long-hole mining.
- SEO includes gold converted at a ratio of 86.05:1 and copper % converted at a ratio of 103.4:1.
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2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
LRS FS Life of Mine Key Assumptions and Results
| Assumption / Result | Unit | Value |
|---|---|---|
| Total Plant Feed Mined | kt | 10,233 |
| Average process rate | t/day | 2,000 |
| Silver Recovery | % | 86 |
| Gold Recovery | % | 93 |
| Silver Price | $/oz | 26.80 |
| Gold Price | $/oz | 2,330 |
| Copper Price | $/lb | 4.00 |
| Payable Silver Metal | Moz | 41.1 |
| Payable Gold Metal | koz | 423.6 |
| Payable Copper | Mlb | 11.2 |
| Payable SEO¹ | Moz | 79.9 |
| Mine Life | Yrs | 15 |
| Assumption / Result | Unit | Value |
| --- | --- | --- |
| Net Revenue | $M | 2,099 |
| Initial Capital Costs | $M | 227 |
| Sustaining Capital Costs | $M | 100 |
| Mining Costs | $/t Plant Feed | 42.92 |
| Processing Costs | $/t Plant Feed | 39.63 |
| General and Admin Costs | $/t Plant Feed | 6.88 |
| Operating Cash Cost | $/oz SEO | 11.59 |
| All in Sustaining Cost | $/oz SEO | 12.78 |
| After-Tax NPV (5%) | $M | 355 |
| Pre-Tax NPV (5%) | $M | 553 |
| After-Tax IRR | % | 28.0 |
| Pre-Tax IRR | % | 38.6 |
| After-Tax Payback Period | Yrs | 2.6 |
Los Ricos South Mineral Resource
The Corporation announced their updated MRE for the LRS project on January 16, 2025. Readers are referred to that news release for additional technical details relating to the MRE, which is shown below and includes notations 1-8 providing further details on the resource estimate.
| Classification | Tonnage | Average Grade | Contained Metal | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Ag | Au | Cu | AgEq | Ag | Au | Cu | AgEq | ||
| (kt) | (g/t) | (g/t) | (%) | (g/t) | (koz) | (koz) | (Mlb) | (koz) | |
| Underground | |||||||||
| Proven | 3,902 | 187.1 | 1.61 | 0.09 | 334.3 | 23,472 | 202 | 7.5 | 41,939 |
| Probable | 3,611 | 152.0 | 1.70 | 0.18 | 317.8 | 17,647 | 197 | 14.6 | 36,895 |
| Subtotal Underground | 7,512 | 170.2 | 1.65 | 0.13 | 326.4 | 41,119 | 399 | 22.1 | 78,834 |
| Open Pit | |||||||||
| Proven | 580 | 94.8 | 0.72 | 0.02 | 159.0 | 1,768 | 13 | 0.3 | 2,965 |
| Probable | 2,140 | 72.1 | 0.64 | 0.03 | 129.7 | 4,961 | 44 | 1.4 | 8,924 |
| Subtotal Open Pit | 2,720 | 76.9 | 0.66 | 0.02 | 135.9 | 6,728 | 57 | 1.7 | 11,889 |
| Total | |||||||||
| Proven | 4,482 | 175.2 | 1.49 | 0.08 | 311.6 | 25,240 | 215 | 7.7 | 44,904 |
| Probable | 5,751 | 122.3 | 1.31 | 0.13 | 247.8 | 22,607 | 241 | 16.1 | 45,819 |
| Total Proven & Probable | 10,233 | 145.4 | 1.39 | 0.10 | 275.7 | 47,847 | 457 | 23.8 | 90,723 |
1) Mineral Reserves are based on Measured and Indicated Mineral Resource Classifications only.
2) Mineral Reserves are reported using the 2014 CIM Definition Standards and 2019 Best Practices Guidelines and have an effective date of January 14, 2025.
3) Mineral Reserves are defined within mine plans and incorporate mining dilution and ore losses.
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2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
4) Open Pit Mineral Reserves are based on metal prices of $23.75/oz Ag, $1,850/oz Au and $4.00/lb Cu, and are constrained within optimized pit shells and designs that use 45–48° overall wall slopes, and process recoveries of 86% Ag, 95% Au and 51% Cu.
5) An Open Pit cut-off grade of 46.4 g/t AgEq is estimated to differentiate ore from waste and is based on cost assumptions of $26.22/t processing, $4.11/t site general and administrative, and 0.5% government mining tax on net revenue. Mining costs are estimated at $2.10/t of ore and waste rock.
6) Underground Mineral Reserves are based on metal prices of $23.75/oz Ag, $1,850/oz Au and $4.00/lb Cu, and are constrained within a mine design, and use process plant recoveries of 86% Ag, 95% Au and 77% Cu.
7) An Underground marginal cut-off grade of 150 g/t AgEq is estimated to differentiate ore from waste, and is based on cost assumptions of $34.93/t processing, $4.46/t site general and administrative, and mining costs of $41.93/t. An Underground economic cut-off grade of 210 g/t AgEq is estimated to account for capital development costs of $53.86/t in addition to those used to calculate the marginal cut-off grade.
8) Totals may not sum due to rounding.
Los Ricos North Preliminary Economic Assessment
The Corporation announced their initial PEA for LRN on May 17, 2023, with the 43-101 Technical Report filed and available on SEDAR+ on June 30, 2023. The PEA was completed on the basis of the MRE which is shown below.
The LRN project has been envisioned as an open pit mining operation, with contract mining comprising five open pits. The first four pits contain oxide mineralization and will be mined over years one to nine of the Project, with the final pit containing sulphide mineralization which will be mined in years 10 to 13. Highlights of the PEA, with a base case silver price of US$23/oz and gold price of US$1,800/oz are as follows:
- After-Tax NPV (using a discount rate of 5%) of $413,000 with an After-Tax IRR of 29% (Base Case);
- 13-year mine life producing a total of 110.3 Million payable silver equivalent ("AgEq") ounces, consisting of 68.0 Million silver ounces, 221,700 gold ounces, 22.8 Million pounds of copper, 144.1 Million pounds of lead and 242.2 Million pounds of zinc;
- Initial capital costs of $220,649, including $28,780 in contingency costs, over an expected 18 month build, additional expansion capital costs of $137,024, and sustaining capital costs of $5,750 over the life of mine ("LOM");
- Average LOM operating cash costs of $9.50/oz AgEq, and all in sustaining costs ("AISC") of $9.68/oz AgEq
- Average annual production of 8.8 Million AgEq oz in years one through twelve;
- Approximately 3/4 of LOM production is from four open pits containing oxide mineralization and approximately 1/4 is from a separate open pit which contains only sulphide mineralization.
The PEA was prepared by independent consultants P&E Mining Consultants Inc ("P&E"), with metallurgical test work completed by SGS Canada Inc.'s Lakefield office ("SGS"), process plant design and costing by D.E.N.M. Engineering Ltd., and environmental and permitting led by CIMA Mexico. The following table shows the key economic assumptions and results of the PEA:
| Assumption / Result | Unit | Value | Assumption / Result | Unit | Value | |
|---|---|---|---|---|---|---|
| Total Oxide Feed Mined | kt | 25,557 | Net Revenue | US$M | 2,307 | |
| Total Sulphide Feed Mined | kt | 9,964 | Initial Capital Costs | US$M | 221 | |
| Total Plant Feed Mined | kt | 35,521 | Expansion and Sustaining Capital Costs | US$M | 143 | |
| Total Strip Ratio | Ratio | 6.0 | Mining Costs | $/t Mined | 2.07 |
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2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
| Assumption / Result | Unit | Value |
|---|---|---|
| Mine Life | Yrs | 13 |
| Average process rate | t/day | 8,000 |
| Silver Price | US$/oz | 23.00 |
| Gold Price | US$/oz | 1,800 |
| Copper Price | US$/lb | 4.00 |
| Lead Price | US$/lb | 1.00 |
| Zinc Price | US$/lb | 1.40 |
| Payable AgEq | Moz | 110.3 |
| Assumption / Result | Unit | Value |
| --- | --- | --- |
| Mining Costs | $/t Plant Feed | 12.28 |
| Operating Cash Cost | US$/oz AgEq | 9.50 |
| All in Sustaining Cost | US$/oz AgEq | 9.68 |
| After-Tax NPV (5% discount) | US$M | 413 |
| Pre-Tax NPV (5% discount) | US$M | 645 |
| After-Tax IRR | % | 29.1 |
| Pre-Tax IRR | % | 39.8 |
| After-Tax Payback Period | Yrs | 3.0 |
Los Ricos North Mineral Resource
The Corporation announced their initial mineral resource estimate for the LRN project on December 7, 2021. Readers are referred to that news release for additional technical details relating to the mineral resource estimate. The 43-101 compliant technical report was filed on SEDAR+ on January 21, 2022. Details of the estimate are shown below, including notations 1 to 11.
| Deposit | Tonnes | Average Grade | Contained Metal | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Au | Ag | Cu | Pb | Zn | AuEq | AgEq | Au | Ag | Cu | Pb | Zn | AuEq | AgEq | ||
| (Mt) | (g/t) | (g/t) | (%) | (%) | (%) | (g/t) | (g/t) | (koz) | (koz) | (Mlb) | (Mlb) | (Mlb) | (koz) | (koz) | |
| Indicated: | |||||||||||||||
| El Favor | 7.7 | 0.27 | 98 | - | - | - | 1.61 | 119 | 68 | 24,413 | - | - | - | 399 | 29,454 |
| Casados | 3.2 | 0.42 | 124 | - | - | - | 2.09 | 154 | 43 | 12,871 | - | - | - | 218 | 16,061 |
| La Trini | 3.1 | 0.54 | 74 | - | - | - | 1.54 | 114 | 54 | 7,428 | - | - | - | 155 | 11,424 |
| Mololoa | 0.4 | 0.36 | 130 | - | - | - | 2.12 | 157 | 5 | 1,788 | - | - | - | 29 | 2,161 |
| Silver-Gold Oxide Zone | 14.5 | 0.37 | 100 | - | - | - | 1.71 | 127 | 171 | 46,500 | - | - | - | 801 | 59,100 |
| El Orito Sulfide Zone1 | 7.8 | 0.06 | 28 | 0.11 | 0.88 | 1.33 | 1.55 | 114 | 15 | 7,011 | 19 | 151 | 229 | 389 | 28,708 |
| Total Indicated | 22.3 | 1.66 | 122 | 186 | 53,510 | 1,190 | 87,808 | ||||||||
| Inferred: | |||||||||||||||
| El Favor | 12.4 | 0.27 | 89 | - | - | - | 1.47 | 108 | 106 | 35,505 | - | - | - | 587 | 43,350 |
| Casados | 1.8 | 0.35 | 108 | - | - | - | 1.82 | 135 | 21 | 6,323 | - | - | - | 106 | 7,843 |
| La Trini | 0.1 | 0.43 | 108 | - | - | - | 1.89 | 139 | 1 | 201 | - | - | - | 4 | 260 |
| Mololoa | 0.7 | 0.39 | 94 | - | - | - | 1.66 | 122 | 9 | 2,102 | - | - | - | 37 | 2,739 |
| Silver-Gold Oxide Zone | 15.0 | 0.28 | 91 | - | - | - | 1.52 | 112 | 136 | 44,131 | - | - | - | 734 | 54,191 |
| El Orito Sulfide Zone1 | 5.5 | 0.06 | 28 | 0.12 | 0.74 | 1.20 | 1.46 | 108 | 11 | 4,888 | 15 | 90 | 146 | 258 | 19,007 |
| Total Inferred | 20.5 | 1.51 | 111 | 148 | 49,019 | 992 | 73,198 |
- El Orito is a silver-base metal sulfide zone, all other deposits are silver-gold oxide zones.
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2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
- Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
- The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.
- The Mineral Resources in this news release were estimated in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines (2014) prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council and CIM Best Practices (2019).
- Historically mined areas were depleted from the Mineral Resource model.
- Approximately 98.9% of the indicated and 91.3% of the Inferred contained AgEq ounces are pit constrained, with the remainder out-of-pit. See tables 4 and 6 for details of the split between pit constrained and out-of-pit deposits.
- The pit constrained AgEq cut-off grade of 29 g/t Ag was derived from US$1,550/oz Au price, US$21/oz Ag price, $3.66$/lb Cu, $0.90$/lb Pb, $1.26$/lb Zn, 93% process recovery for Ag and Au, 90% process recovery for Cu, 80% process recovery for Pb and Zn, US$18/tonne process and G&A cost. The constraining pit optimization parameters were $2.00/t mineralized mining cost, $1.50/t waste mining cost and 50-degree pit slopes.
- The out-of-pit AuEq cut-off grade of 119 g/t Ag was derived from US$1,550/oz Au price, US$21/oz Ag price, $3.66$/lb Cu, $0.90$/lb Pb, $1.26$/lb Zn, 93% process recovery for Ag and Au, 90% process recovery for Cu, 80% process recovery for Pb and Zn, $57/t mining cost, US$18/tonne process and G&A cost. The out-of-pit Mineral Resource grade blocks were quantified above the 119 g/t AgEq cut-off, below the constraining pit shell within the constraining mineralized wireframes and exhibited sufficient continuity to be considered for cut and fill and longhole mining
- No Mineral Resources are classified as Measured.
- AgEq and AuEq calculated at an Ag/Au ratio of 73.8:1.
- Totals may not agree due to rounding
LIQUIDITY AND CAPITAL RESOURCES
The Corporation's objective when managing capital is to maintain adequate levels of funding to support the acquisition, exploration and development of resource properties and maintain the necessary corporate and administrative functions to facilitate these activities. This is done primarily through equity financing and funds from operations. Future financings are dependent on market conditions and there can be no assurance the Corporation will be able to raise funds in the future. The Corporation invests all capital that is surplus to its immediate operational needs in interest bearing accounts in USD, CAD, or MXN based on future spending requirements and consensus foreign exchange estimates.
Working Capital
A summary of the Corporation's working capital is as follows:
| Mar 31, 2025 | Sep 30, 2024 | |
|---|---|---|
| Current assets | $ 109,325 | $ 107,683 |
| Current liabilities | (17,955) | (15,488) |
| Working capital | $ 91,370 | $ 92,195 |
Working capital decreased in the period predominantly due to the cash used in investing activities at Los Ricos and Parral, as well as the investment into long-term inventory at Parral. The working capital of $91,370 is expected to be more than sufficient to fund the operating, exploration and initial development activities of the Corporation for the upcoming twelve months.
Subsequent Financing
On April 4, 2025, the Corporation closed a bought deal whereby a syndicate of underwriters purchased 47,391,500 common shares at a price of $1.82 CAD per share for net proceeds of $57,252 after share issuance costs of $3,476.
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2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
CONTRACTUAL OBLIGATIONS
Commitments
The Corporation has the following minimum annual commitments for the next five years:
| Description | 2026 | 2027 | 2028 | 2029 | 2030 |
|---|---|---|---|---|---|
| Minimum royalty and land payments – Parral | $ 570 | $ 570 | $ 570 | $ 570 | $ 570 |
| Los Ricos agreements | 1,538 | - | - | - | - |
| Total commitment | $ 2,108 | $ 570 | $ 570 | $ 570 | $ 570 |
Parral
The Corporation, through its subsidiary Coanzamex, has an agreement with the Municipality of Parral, Mexico ("Town") to mine and process tailings material for precious metal recovery. The Corporation makes payments of $48 per month to the Town which increases based on the average market silver price, with payments continuing until tailings are completely mined. As the monthly royalty payment increases based on the average market silver price, from a minimum of $48 per month to a maximum of $88 per month, the variable payment portion of the obligation is accounted for as an embedded derivative liability. The fair value of the liability has been accounted for using a Monte Carlo simulation based on the spot price of silver at March 31, 2025 of $34.06 (September 30, 2024 - $31.08), as well as the historical volatility of silver market prices. The fair value of the derivative liability under this method at March 31, 2025 was $1,581 (September 30, 2024 - $1,443).
Los Ricos agreements
The Corporation has entered into multiple agreements related to the Los Ricos projects. This includes option agreements whereby the Corporation has exclusive exploration and drilling rights on certain concessions, and the Corporation has the right to terminate the agreements at any point with no further payment. The rights to certain concessions transfer to the Corporation after completion of payments under the option agreements. This also includes agreements related to infrastructure associated with the projects.
OUTSTANDING SHARE DATA
At March 31, 2025, the Corporation had a total of 330,973,461 common shares issued and outstanding with a carrying amount of $312,412, 8,204,250 stock options, 5,290,500 deferred share units, and 2,270,796 restricted share units which could potentially be converted to common shares issued and outstanding. Comparative figures for September 30, 2024, the Corporation had a total of 329,527,261 common shares issued and outstanding with a carrying amount of $311,556, 9,330,583 stock options, 4,997,500 deferred share units, and 1,477,796 restricted share units which could potentially be converted to common shares issued and outstanding.
As of the date of this document, the Corporation had a total of 378,364,961 common shares, 8,204,250 stock options, 5,290,500 deferred share units, and 2,270,796 restricted share units which could potentially be converted to common shares issued and outstanding.
OFF-BALANCE SHEET ARRANGEMENTS
At the date of this document, the Corporation had no off-balance sheet arrangements.
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2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
CRITICAL ACCOUNTING ESTIMATES AND CHANGE IN ACCOUNTING POLICIES
The preparation of the consolidated financial statements requires the Corporation's management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Judgment is used mainly in determining whether a balance or transaction should be recognized in the consolidated financial statements. Estimates and assumptions are used mainly in determining the measurement of recognized transactions and balances. However, judgments and estimates are often interrelated. Actual results may differ from these estimates.
The critical estimates and judgments applied in the preparation of the Corporation's Condensed Consolidated Interim Financial Statements for the three and six months ended March 31, 2025 are consistent with those applied and disclosed in the Corporation's Annual Consolidated Financial Statements for the year ended September 30, 2024. For details of these estimates and judgments please refer to the Corporation's Consolidated Annual Financial Statements and Management's Discussion and Analysis for the year ended September 30, 2024, which are available on the Corporation's website at www.gogoldresources.com or on SEDAR+ at www.sedarplus.ca.
Except for the new accounting standard adopted as described below, these condensed consolidated interim financial statements were prepared using the same accounting policies and methods of computation and are subject to the same use of estimates and judgments, as the Corporation's consolidated annual financial statements for the year ended September 30, 2024.
IAS 7 – Statement of Cash Flows and IFRS 7 – Financial Instruments: Disclosures
In May 2023, the IASB issued an amendment to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures relating to supplier finance agreements. The amendment requires additional disclosure of supplier finance arrangements, including the terms and conditions, carrying amounts, and payment due dates. The amendment is effective for annual periods beginning on or after January 1, 2024, with earlier adoption permitted. The Corporation adopted the amended standard on October 1, 2024, with no financial impact.
FINANCIAL INSTRUMENTS AND OTHER RISKS
Financial Instruments
The following table provides the disclosures of the fair value and the level in the hierarchy for financial instruments valued at fair value through profit or loss on a recurring basis.
| March 31, 2025 | September 30, 2024 | |||
|---|---|---|---|---|
| Level 1 | Level 2 | Level 1 | Level 2 | |
| Long-term obligations | - | $ 1,011 | - | $ 1,192 |
| Derivative liabilities | - | 1,581 | - | 1,443 |
Long-term obligations are valued based on the discounted present value of the future cash flows.
Derivative liabilities are valued at fair value through profit or loss on a recurring basis. For both, the Corporation performs valuations internally and calculates a debt valuation adjustment or a credit valuation adjustment by considering the risk of non-performance by the counterparties and the Corporation's own credit risk. Valuations are based on forward rates considering the market price, rate of interest and volatility, and take into account the credit risk of the financial instrument, and are therefore classified within Level 2 of the fair value hierarchy.
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2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
Risk
The Corporation is exposed to a number of risks and uncertainties that are common to other mineral exploration and development companies. The mining industry is capital intensive at all stages and is subject to variations in commodity prices, market sentiment, exchange rates for currency, inflation and other risks.
Additional detail on risks and uncertainties is discussed in the Corporation's Annual Information Form dated December 11, 2024, a copy of which may be obtained on the SEDAR+ website at www.sedarplus.ca, as well as other continuous disclosure materials filed from time to time with Canadian securities regulatory authorities.
The Corporation's financial risk exposures and the impact on the Corporation's financial instruments are summarized below:
Commodity price risk
The profitability of the Corporation's mining operations is significantly affected by changes in the market price for silver, gold, copper and zinc ("Metal"). Metal prices fluctuate on a daily basis and are affected by numerous factors beyond the Corporation's control. The supply and demand for Metal, the level of interest rates, the rate of inflation, investment decisions by large holders of Metal including governmental reserves, and the stability of exchange rates can all cause significant fluctuations in Metal prices. Such external economic factors are in turn influenced by changes in international investment patterns and monetary systems, and political developments.
Credit Risk
The Corporation's credit risk is primarily attributable to cash, input tax recoverable and trade receivables. Input tax recoverable consists of harmonized sales tax due from the Federal Government of Canada of $159 and value added tax ("VAT") receivable from the Federal Government of Mexico of $17,905. Timing of collection on VAT receivables is uncertain as VAT refund procedures require a significant amount of information and follow-up. The Corporation assesses the recoverability of amounts receivable at each reporting date. Changes in these estimates can materially affect the amount recognized as VAT receivable and could result in a change in net income. As at March 31, 2025, the Corporation determined the full balance to be recoverable. Significant judgment is required to determine the presentation of current and non-current input tax recoverable. Exposure on trade receivables is limited as all receivables are with two customers who the Corporation has a strong working relationship with and are reputable large international companies with a history of timely payment. Management believes the risk of loss with respect to financial instruments consisting of cash, input tax recoverable and trade receivables to be low.
Foreign Currency Risk
The Corporation's major purchases are transacted in Canadian dollars ("CAD"), US dollars ("USD"), and Mexican Pesos ("MXN"). The Corporation funds certain operations, exploration and administrative expenses in Mexico using USD and MXN currency converted from its CAD and USD bank accounts. Excess cash is invested predominantly in USD, although also held in CAD and MXN based on future spending requirements. The Corporation's subsidiaries in Mexico have a functional currency of USD, and therefore net monetary assets held in MXN in those entities are affected by foreign exchange fluctuations and will affect the Corporation's net income. At March 31, 2025, the Corporation had net monetary assets in MXN of approximately $15,253 (September 30, 2024 – $16,841) for which a 10% change in MXN exchange rates would change net income by approximately $1,525.
As GoGold Resources Inc., the parent corporate entity, has a functional currency of CAD, net monetary assets held in USD are affected by foreign exchange fluctuations recorded through the Corporation's net income. At March 31, 2025, GoGold Resources Inc. had net monetary assets in USD of $81,749 (September 30, 2024 – $71,839), for which a 10% change in USD exchange rates would change net income by approximately $8,175. As the Corporation's reporting currency is USD, these changes to net income attributed to fluctuations in the US exchange rates would be offset by an equal opposite change to other comprehensive income. Net monetary assets held in CAD by the parent corporation are affected by foreign exchange
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2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
fluctuations recorded through other comprehensive income. At March 31, 2025, the parent corporation held net monetary assets in CAD of $586 (September 30, 2024 - $2,757), for which a 10% change in CAD exchange rates would change other comprehensive income by approximately $59.
Interest Rate Risk
The Corporation has cash balances and the current policy is to invest excess cash in Canadian bank high interest savings accounts and GICs. Excess cash is invested in USD, CAD, or MXN based on future spending requirements and consensus foreign exchange estimates. Fluctuations in market interest rates could impact the amount of interest income earned on funds held in savings accounts. The Corporation has no interest bearing liabilities.
Liquidity Risk
The Corporation's general objective when managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at March 31, 2025, the Corporation had cash balances of $78,318 current input tax recoverable of $10,818, and trade receivables of $6,105 for settling current liabilities of $17,955, and therefore liquidity is expected to be sufficient to fund the operations of the Corporation for the next twelve months.
NON-IFRS MEASURES
The following provides a reconciliation of non-IFRS measures used within this document, including cash cost per silver equivalent ounce, cash cost per silver ounce net of gold credits, all in sustaining costs per silver equivalent ounce, and Parral free cash flows. These non-IFRS measures are reconciled to the most directly comparable financial measure on the consolidated financial statements. Each of these non-IFRS measures are not a standardized financial measure under the financial reporting framework used to prepare the Corporation's financial statements, and might not be comparable to similar financial measures disclosed by other entities.
Cash cost per SEO and cash costs per silver ounce, net of by-products
Cash costs per SEO and cash costs per silver ounce, net of by-products are non-IFRS measures used by the Corporation to manage and evaluate operating performance at Parral, and are widely reported in the mining industry as benchmarks for performance, but do not have a standardized meaning and are disclosed in addition to IFRS measures. The measures provide useful information by comparing the Corporation's cost of sales relative to the number of ounces sold in the period.
Adjusted cash cost per SEO and adjusted cash costs per silver ounce, net of by-products
An adjustment to the cash costs per SEO and adjusted cash costs per silver ounce, net of by-products is shown which reverses the effects of inventory net realizable value adjustments. These inventory adjustments are excluded to provide a meaningful comparison to prior periods for costs associated with the current quarter.
All-in sustaining cost per SEO
All-in sustaining cost ("AISC") is a non-IFRS measure and was calculated based on guidance provided by the World Gold Council ("WGC"). WGC is not a regulatory industry organization and does not have the authority to develop accounting standards for disclosure requirements. Other mining companies may calculate AISC differently as a result of differences in underlying accounting principles and policies applied, as well as differences in definitions of sustaining versus expansionary capital expenditures. AISC is a more comprehensive measure than cash cost per ounce for the Corporation's operating performance by providing greater visibility, comparability and representation of the total costs associated with producing SEOs from its current operations.
The calculation of AISC includes sustaining capital expenditures, which are included in the Corporation's financial statements as additions to property, plant and equipment. The Corporation defines sustaining capital expenditures as, "costs incurred to sustain and maintain existing assets at current productive capacity and constant planned levels of productive output without resulting in an increase in the life of assets, future
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2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
earnings, or improvements in recovery or grade. Sustaining capital includes costs required to improve/enhance assets to minimum standards for reliability, environmental or safety requirements. Sustaining capital expenditures excludes all expenditures at the Company's new projects and certain expenditures at current operations which are deemed expansionary in nature."
Adjusted AISC per SEO
An adjustment to the AISC is shown which reverses the effects of inventory net realizable value adjustments. These inventory adjustments are excluded to provide a meaningful comparison to prior periods for costs associated with the current quarter.
Parral free cash flow
Parral free cash flow is a non-IFRS measure which the Corporation uses to manage and evaluate operating performance at Parral by determining those cash flows directly attributable to the operation. Free cash flow is a non-standardized measure which is used in the industry and is disclosed in addition to non-IFRS measures. The measure provides useful information by calculating the cash flows at mine site level generated at Parral and comparing those relative to the Corporation's cash flows from operations.
Following are the quantitative calculations and reconciliations of the above non-IFRS measures:
| Non-IFRS Measures Reconciliations | Q2-24 | Q3-24 | Q4-24 | Q1-25 | Q2-25 | YTD 24 | YTD 25 |
|---|---|---|---|---|---|---|---|
| Production costs, except amortization and depletion | $ 6,468 | $ 6,768 | $ 6,415 | $ 12,103 | $ 9,918 | $ 11,604 | $ 22,020 |
| Net realizable value adjustment | (683) | (2,957) | - | - | - | (319) | - |
| Less: non-cash portion of NRV adjustment | 75 | 324 | - | - | - | 36 | - |
| Cash costs, including NRV adjustment | 5,860 | 4,135 | 6,415 | 12,103 | 9,918 | 11,321 | 22,020 |
| SEO sold¹ | 374,140 | 365,119 | 362,314 | 625,972 | 555,511 | 679,227 | 1,181,483 |
| Cash cost per SEO | $15.66 | $11.32 | $17.71 | $19.33 | $17.85 | $16.66 | $18.64 |
| Production costs, except amortization and depletion | 6,468 | 6,768 | 6,415 | 12,103 | 9,918 | 11,604 | 22,020 |
| SEO sold¹ | 374,140 | 365,119 | 362,314 | 625,972 | 555,511 | 679,227 | 1,184,483 |
| Adjusted cash cost per SEO | $17.29 | $18.54 | $17.71 | $19.33 | $17.85 | $17.08 | $18.64 |
| Cash costs, including NRV adjustment per above | $ 5,860 | $ 4,135 | $ 6,415 | $ 12,103 | $ 9,918 | $ 11,321 | $ 22,020 |
| By-product credits: | |||||||
| Gold sales | (4,765) | (5,456) | (5,101) | (9,866) | (9,724) | (8,123) | (19,590) |
| Copper sales | (846) | (670) | (1,218) | (779) | (1,066) | (1,846) | (1,845) |
| Zinc sales | - | (181) | (167) | (253) | (271) | - | (524) |
| Total cash costs, net of by-product credits | 249 | (2,172) | (71) | 1,205 | (1,143) | 1,352 | 61 |
| Silver ounces sold | 133,432 | 135,403 | 129,434 | 266,034 | 204,498 | 236,725 | 470,532 |
| Cash cost per silver ounce, net of by-products | $1.86 | ($16.04) | ($0.55) | $4.53 | ($5.59) | $5.70 | $0.13 |
| Production costs, except amortization and depletion | $ 6,468 | $ 6,768 | $ 6,415 | $ 12,103 | $ 9,918 | $ 11,604 | $ 22,020 |
| By-product credits: | |||||||
| Gold sales | (4,765) | (5,456) | (5,101) | (9,866) | (9,724) | (8,123) | (19,590) |
| Copper sales | (846) | (670) | (1,218) | (779) | (1,066) | (1,846) | (1,845) |
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GoGold
2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
| Non-IFRS Measures Reconciliations | Q2-24 | Q3-24 | Q4-24 | Q1-25 | Q2-25 | YTD 24 | YTD 25 |
|---|---|---|---|---|---|---|---|
| Zinc sale | - | (181) | (167) | (253) | (271) | - | (524) |
| Total cash costs, net of by-product credits | 857 | 461 | (71) | 1,205 | (1,143) | 1,635 | 61 |
| Silver ounces sold | 133,432 | 135,403 | 129,434 | 266,034 | 204,498 | 236,725 | 470,532 |
| Adjusted cash cost per silver ounce, net of by-products | $6.42 | $3.41 | ($0.55) | $4.53 | ($5.59) | $6.90 | $0.13 |
| Cash costs, including NRV adjustment per above | $ 5,860 | $ 4,135 | $ 6,415 | $ 12,103 | $ 9,918 | $ 11,321 | $ 22,020 |
| General and administrative costs | 2,546 | 2,168 | 1,969 | 1,911 | 2,755 | 4,887 | 4,666 |
| Sustaining capital expenditures | - | - | - | - | 51 | - | 51 |
| Accretion expense | 42 | 42 | 42 | 41 | 41 | 84 | 82 |
| All in sustaining costs | 8,448 | 6,345 | 8,426 | 14,055 | 12,765 | 16,292 | 26,819 |
| SEO sold | 374,140 | 365,119 | 362,314 | 625,972 | 555,511 | 679,227 | 1,181,483 |
| AISC per SEO | $22.58 | $17.38 | $23.26 | $22.45 | $22.98 | $23.98 | $22.70 |
| Production costs, except amortization and depletion | $ 6,468 | $ 6,768 | $ 6,415 | $ 12,103 | $ 9,918 | $ 11,604 | $22,020 |
| General and administrative costs | 2,546 | 2,168 | 1,969 | 1,911 | 2,755 | 4,887 | 4,666 |
| Sustaining capital expenditures | - | - | - | - | 51 | - | 51 |
| Accretion expense | 42 | 42 | 42 | 41 | 41 | 84 | 82 |
| All in sustaining costs | 9,056 | 8,978 | 8,426 | 14,055 | 12,765 | 16,575 | 26,819 |
| SEO sold | 374,140 | 365,119 | 362,314 | 625,972 | 555,511 | 679,227 | 1,181,483 |
| Adjusted AISC per SEO | $24.20 | $24.59 | $23.26 | $22.45 | $22.98 | $24.40 | $22.70 |
| Net cash provided (used) by operating activities | $ (4,637) | $ (2,157) | $ (857) | $ 7,868 | $ 5,117 | $ (7,665) | $ 13,012 |
| Change in non-cash operating working capital | 6,210 | 4,974 | 3,458 | (2,664) | (28) | 10,535 | (2,691) |
| Interest income | (1,246) | (1,397) | (760) | (982) | (1,189) | (2,668) | (2,171) |
| General and administrative costs | 2,546 | 2,168 | 1,969 | 1,911 | 2,755 | 4,887 | 4,666 |
| Stock based compensation | (552) | (633) | (582) | (361) | (868) | (1,318) | (1,229) |
| Parral free cash flow | $ 2,321 | $ 2,955 | $ 3,228 | $ 5,772 | $ 5,787 | $ 3,771 | $ 11,587 |
- See Revenue table on page 6 for reconciliation of SEO sold.
INTERNAL CONTROLS OVER FINANCIAL REPORTING
There have been no changes in the Corporation’s disclosure controls and procedures and internal controls over financial reporting during the six months ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Corporation’s disclosure control and procedures and internal controls over financial reporting.
FUTURE OUTLOOK
At LRS, the Corporation is focused on obtaining an environmental permit, which is the major requirement to make a construction decision. At LRN, the focus is on completing additional technical studies to advance the project. At Parral, the focus will be on continuing to operate the project effectively.
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2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
FORWARD-LOOKING STATEMENTS
Certain information included in this discussion may constitute forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Examples of such statements include the intention to complete an acquisition or disposition or financing transaction, the Corporation's plans for its mineral projects, and reference to the Corporation's internal forecasts. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this document. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the ability of the Corporation to obtain necessary financing, satisfy conditions under any agreements, satisfy any requirements of the Toronto Stock Exchange; consumer interest in the Corporation's services and products; competition; and anticipated and unanticipated costs. The forward-looking statements contained in this document are made as of the date of this document and the Corporation does not undertake to update publicly or revise the forward-looking information contained in this document, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. These forward-looking statements should not be relied upon as representing the Corporation's views as of any date subsequent to the date of this document. Although the Corporation has attempted to identify factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements include exploration and development risks, the failure to establish estimated mineral resources or mineral reserves, volatility of commodity prices, variations of recovery rates, and global economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect the Corporation. Additional factors are noted under "Risk Factors" in the Corporation's Annual Information Form for the year ended September 30, 2024 a copy of which may be obtained on the SEDAR+ website at www.sedarplus.ca, as well as other continuous disclosure materials filed from time to time with Canadian securities regulatory authorities.
Any financial outlook or future-oriented financial information in this document, as defined by applicable securities legislation, has been approved by management of the Corporation as of the date of this document. Such financial outlook or future-oriented financial information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that such outlook or information should not be used for purposes other than for which it is disclosed in this document.
TECHNICAL INFORMATION
Mr. Robert Harris, P. Eng, who is a qualified person as defined by National Instrument 43-101, Standard of Disclosure for Mineral Projects, is responsible for, and has reviewed and approved, the scientific and technical information contained in this document pertaining to Parral.
Mr. David Duncan, P. Geo. who is a qualified person as defined by National Instrument 43-101, Standard of Disclosure for Mineral Projects, is responsible for, and has reviewed and approved, the scientific and technical information contained in this document pertaining to Los Ricos.
GoGold
2025 SECOND QUARTER MANAGEMENT'S DISCUSSION AND ANALYSIS
OTHER INFORMATION
Additional information regarding the Corporation, including the Corporation’s Annual Information Form dated December 11, 2024, is available on SEDAR+ at www.sedarplus.ca.
Dated: May 6, 2025
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