Online extras: naturalresourcesmagazine.com | NR33

THREE PART HARMONY

“ We recognize each other’s talent,” said Fred George, the largest shareholder in GoGold and one of the three men behind the deal that merged Absolute Gold Holdings Incorporated with GoGold.

LEADERSHIP

Founded by Terry Coughlan, GoGold is a Halifax-based mineral resources company listed on the TSX Venture exchange. It owns the Rambler property in Newfoundland (a past-producing gold, copper and zinc mine in Baie Verte), but is concentrating its near-term efforts on the Parral tailings project in Mexico while trying to prove up resources at the promising San Diego project it purchased from Absolute. Absolute Gold Holdings, a private company initiated by Fred George

and Brad Langille, was exploring for precious metals in Mexico when it was purchased by GoGold.

The mutual recognition of talent, and the willingness to work as a team, is all-important, George said of his relationship with GoGold president and CEO Terry Coughlan and strategic advisor Brad Langille. “Most companies, everybody wants to be the boss and they keep fighting and they work against each other and that’s why many of these companies never make it,” he said.

NR34 | Natural Resources Magazine | November/December 2012

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The trio had previously worked together with Gammon Lake Resources Inc., and like a band that wants to put on another big concert, they reunited with GoGold.

Langille is reportedly a virtuoso when it comes to finding wealth in rocks. “Brad’s skill is living in the mountains of the Sierra Madre of Mexico,” George said. “He is the best prospector you will ever meet.”

Coughlan provides the steady beat as president and CEO; he runs the office and takes care of the sometimes unsung tasks

of running a publicly – traded company. Coughlan is also a geologist and has almost 30 years of experience in the mining industry. “He runs a nice tight office,” George said. “…He makes sure every single penny gets spent the right way.”

As principal owner, George is the front man and public face of the company; he goes to boardrooms and raises money for the company in New York. He’s so talented, in fact, that he was able to raise $30 million from investors during a global economic meltdown.

“My skills are, I know how to raise money for a great project and to make sure that everything goes as planned,” George said.

When George and Langille started privately-held Absolute Gold Holdings Incorporated, they purchased two

properties in Mexico: the Parral tailings project in Chihuahua and the San Diego prospect in Durango. Absolute sold the San Diego property to GoGold two years ago and that became the f lagship project for publicly-traded GoGold (TSX-V: GGD).

George and Langille acquired the Parral project after the town approached them because it wanted to do something about the tailings from the 200-year-old gold and silver mine. The tailings created a huge dust problem during the dry season and especially during windstorms. Langille and George tested the tailings and saw a chance to make some money.

“Most of the open-pit mines, they’re happy if they get 0.5 grams per tonne,” George said. “We tested (the tailings) and we got over one gram per tonne.”

Terry Coughlan provides the steady beat as president and CEO; he runs the office and takes care of the sometimes unsung tasks of running a publicly – traded company.

NR34 | Natural Resources Magazine | November/December 2012

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As an added bonus, they didn’t have to sink a lot of capital into the project to get the ore out of the ground or to crush it. “That’s about $200 million worth of mining that’s already taken place,” Coughlan said.

The previous owners of the mine had used a f lotation mill to get about 80 to 90 per cent of the gold and silver out of the ore, he said. Tests showed that there is 741,000 gold equivalent ounces in the sand and that it can be recovered using a heap leach process – a simple and cheap recovery method that could yield 412,000 gold equivalent ounces.

At today’s prices for gold, George estimates GoGold can make $1,000 an ounce net profit from the Parral tailings project.

“The cap ex is only $20 million and then we make $50 million for the next eight

years — net profit,” George said. “What’s wrong with that picture?”

They have to give the town 12 per cent of the profit, but that’s a significant amount of money to be wringing out of a pile of sand. George said he and Langille could have kept it private, but he likes to operate a different way.

He said including the Parral tailings project with the GoGold-Absolute deal was his “most brilliant idea” and he explains why. “My friends, my investors, my family, they’re not going to be out of money because I’m going to create cash f low of $400 million out of the Parral mine for the next eight years,” George said. That cash f low will help finance work at the promising San Diego project.

All three believe they can develop a mine at San Diego that could be immensely

profitable and might even be in the same league as the Ocampo mine. A former Gammon Lake property, Ocampo is now owned by Halifax-based AuRico Gold. Opened in 2007, the mine employs 3,000

“ Brad Langille’s skill is living in the mountains of the Sierra Madre of Mexico. He is the best prospector you will ever meet.”

NR38 | Natural Resources Magazine | November/December 2012

people and is one of the largest gold-silver mines in Chihuahua, Mexico.

With Parral providing the cash f low to develop San Diego, patient investors will be rewarded, George said and that’s part of why he does what he does. “I always enjoy creating wealth for those who are around me,” said George, a generous philanthropist who has donated money to schools and hospitals.

When Coughlan started up GoGold, he had $6 million in his treasury and the Rambler project I Newfoundland. He approached his former colleagues about finding a project in Mexico for him. “I realized that they had a couple of projects for themselves, so I assumed that they were probably the best ones that they had available if they were keeping them,” said Coughlan, who studied geology with

Langille at Saint Mary’s University in Halifax.

Coughlan saw this as a huge opportunity for the shareholders of GoGold and was eager to work with Langille and George again.

“We enjoy the challenge of discovery,” Coughlan said. “It’s almost like treasure hunting in a way. We’re always waiting for that next drill hole to come in to see what’s in it. It’s an exciting business. It’s a lot of fun, but it’s a lot of hard work.”

Now, the Rambler project is on hold while GoGold focuses on the two Mexican properties and GoGold’s front man makes sure they deliver on what they are promising.

When they owned Gammon Lake, that company’s market capitalization soared from $5 million to $2.4 billion and the company earned its way on to the New York

Stock Exchange. With that kind of track record, the trio is well received wherever they go in Mexico and have developed good relationships with government officials.

George admits that 80 per cent of gold mining is finding the gold, but notes there are other tasks that require subtle skills. “You need the other guy who knows how to deal with the government of Mexico, who doesn’t take no for an answer,” he said. “So, I know how to get him his permit, I know how to get him the money. I know how to get things done on time, I know how to deliver to our investors in the U.S. That’s what makes us a great team.”

Like musicians that have had hit records before, George, Langille and Coughlan are heading back to their studio in the Sierra Madre to make more music that will, they hope, GoGold. | NRM

“ My skills are, I know how to raise money for a great project and to make sure that everything goes as planned.”

Fred George, principal owner, GoGold Resources Inc.