Goldgroup Refutes Groundless Claim by Sonoran Resources
VANCOUVER, March 31, 2014 /PRNewswire/ - Goldgroup Mining Inc. ("Goldgroup" or the "Company") (TSX:GGA, OTC:GGAZF, BMV SIX:GGAN.MX) advises that Sonoran Resources LLC and its Mexican subsidiary, SR Servicios Mineros, S.A. de C.V. (jointly, "Sonoran"), have filed a lawsuit in Arizona, USA against Oroco Resource Corp. ("Oroco"), Minas de Oroco Resources S.A. de C.V. ("Minas de Oroco") and Goldgroup. The lawsuit arises from Oroco's sale of the Cerro Prieto project to Goldgroup (the "Acquisition") and pertains to certain contracts (the "Sonoran Contracts") that were in place between Oroco, Minas de Oroco and Sonoran prior to the Acquisition.
Sonoran alleges that Goldgroup breached contracts between Sonoran and Oroco and Minas de Oroco, to which Goldgroup was not a party, and that it intentionally interfered with Sonoran's business expectations, causing the loss of net profits from the fees claimed to be payable pursuant to the Sonoran Contracts if they had been carried out. Goldgroup is protected by an indemnity agreement between it and Oroco, which includes all damages and costs that relate to a lawsuit such as this. Sonoran is seeking damages in an amount to be determined at trial, but claimed to be in excess of US$3,000,000.
Goldgroup maintains that the Sonoran Contracts were terminated in accordance with the terms of those contracts. It is Oroco's position that this lawsuit, and the various claims being advanced in it by Sonoran, is an ill-advised legal strategy intended to force Oroco to pay a net US$177,066.43 (after deduction for double-billing by Sonoran) in unsupported, post-closing invoices.
Keith Piggott, Chairman and CEO of Goldgroup, commented: "We believe this to be an opportunistic claim brought forth by Sonoran against Goldgroup. The Acquisition agreement with Oroco fully indemnifies Goldgroup against any claims made by Sonoran. Overall, we are of the opinion that Sonoran's claims are completely without merit."
Goldgroup is a Canadian-based gold production, development, and exploration Company with significant upside in a portfolio of projects in Mexico, including its flagship 100%-owned advanced stage gold development project Caballo Blanco in the state of Veracruz, and a 50% interest in DynaResource de Mexico, S.A. de C.V., which owns 100% of the high-grade gold exploration project, San José de Gracia located in the state of Sinaloa. The Company also operates its 100%-owned Cerro Prieto and Cerro Colorado heap-leach gold mines, both in the state of Sonora.
Goldgroup is led by a team of highly successful and seasoned individuals with extensive expertise in mine development, corporate finance, and exploration in Mexico. Goldgroup's mission is to increase gold production, mineral resources, profitability and cash flow, building a leading gold producer in Mexico.
For further information on Goldgroup, please visit www.goldgroupmining.com
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
Certain information contained in this news release, including any information relating to future financial or operating performance, may be considered "forward-looking information" (within the meaning of applicable Canadian securities law) and "forward-looking statements" (within the meaning of the United States Private Securities Litigation Reform Act of 1995). These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Actual results could differ materially from the conclusions, forecasts and projections contained in such forward-looking information. These forward-looking statements reflect Goldgroup's current internal projections, expectations or beliefs and are based on information currently available to Goldgroup. In some cases forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "estimate", "projects", "potential", "scheduled", "forecast", "budget" or the negative of those terms or other comparable terminology. Certain assumptions have been made regarding the Company's plans at the Cerro Prieto project. Many of these assumptions are based on factors and events that are not within the control of Goldgroup and there is no assurance they will prove to be correct. Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to materially differ from those reflected in the forward-looking information, and are developed based on assumptions about such risks, uncertainties and other factors including, without limitation: uncertainties related to actual capital costs, operating costs and expenditures, production schedules and economic returns from Goldgroup's projects; uncertainties associated with development activities; uncertainties inherent in the estimation of mineral resources and precious metal recoveries; uncertainties related to current global economic conditions; fluctuations in precious and base metal prices; uncertainties related to the availability of future financing; potential difficulties with joint venture partners; risks that Goldgroup's title to its property could be challenged; political and country risk; risks associated with Goldgroup being subject to government regulation; risks associated with surface rights; environmental risks; Goldgroup's need to attract and retain qualified personnel; risks associated with potential conflicts of interest; Goldgroup's lack of experience in overseeing the construction of a mining project; risks related to the integration of businesses and assets acquired by Goldgroup; uncertainties related to the competitiveness of the mining industry; risk associated with theft; risk of water shortages and risks associated with competition for water; uninsured risks and inadequate insurance coverage; risks associated with potential legal proceedings; risks associated with community relations; outside contractor risks; risks related to archaeological sites; foreign currency risks; risks associated with security and human rights; and risks related to the need for reclamation activities on Goldgroup's properties, as well as the risk factors disclosed in Goldgroup's Annual Information Form and MD&A. Any and all of the forward-looking information contained in this news release is qualified by these cautionary statements. Although Goldgroup believes that the forward-looking information contained in this news release is based on reasonable assumptions, readers cannot be assured that actual results will be consistent with such statements. Accordingly, readers are cautioned against placing undue reliance on forward-looking information. Goldgroup expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise, except as may be required by, and in accordance with, applicable securities laws.
SOURCE Goldgroup Mining Inc.