It is high time to introduce our next speaker. GoGold Resources, a Canadian-based company focused on the exploration, development, and production of silver and gold, primarily in Mexico. Here to tell us more about that is Brad Langille.
Thank you.
The floor is yours.
Thanks. Good morning and thank you for your interest in GoGold this morning. Just to talk a little bit about the company and, you know what, I'm first going to start with what we always breeze over, which is forward-looking statements. You know, in the mining industry, there's a lot of risks, obviously. I think the people in this room would know that. How do you mitigate those risks? I think what you do is you deal with people who have done it before, people who are able to raise capital, people who have built mines, and can execute. Myself and my team, we've been doing this for a long time, 32 years, 29 of those years in Mexico. These are the four companies that I led, along with a great technical team and financial team.
Gammon Gold was the very first one, started literally in the garage in 1993, went down to Mexico. We acquired the Ocampo project. We built two mines there, 250,000 ounces a year of production from an underground mine, 1,500 ton a day and about 11,000 ton a day heap leach. The company when I left was at $2.2 billion market cap and traded in New York and traded in Toronto. MexGold follows the model that's typical for us in Mexico, where we deal a lot with private families. We acquired the El Cubo asset, which was really, at the end, what it appeared to be. We went in and we doubled the production. We renewed the fleet. MexGold was a shell. The Bank of Montreal did a $45 million financing right out of the gate to finance that company.
With the doubling of production, we sold it three years later for $375 million. Nayarit Gold was a small one. We made a small discovery in 2010. We sold it for $80 million to Capital Gold out of New York. Then we have what we've been doing for the last 14 years, which is GoGold. Now, GoGold currently is at about a $725 million U.S. market cap. We trade on the Canadian exchange, so CAD 1 billion . All the other numbers I'll talk about in this presentation are U.S. dollars, except for our share price. Capital structure, 378 million shares. We have $139 million cash in the bank as of the end of last quarter. We have an operating mine and we have a development project. Our operating mine right now is generating over $3 million . of free cash flow a month.
That's enough to pay for all our exploration, engineering, property payments, G&A, and to add some money to the bank account. I believe at the end of the quarter, we're around $141 million cash in the bank. We're adding money to the bank account as well. Sorry.
Let me make sure I fix here.
OK. Oh, that's better. You can see there the cash balance at $139 million. We're about 50% institutionally held, and insiders hold a lot of the company as well, about 20%. Myself, I'd be about 6% of the company. As far as reporting shareholders, I'd be the largest, just behind Van Eck. What have we been doing in GoGold Resources Inc. over the last 14 years? Typically, what we do in Mexico through our network, we acquired an asset called Santa Gratudes. With that asset, we acquired it for $9 million. We spent $11 million on it, brought it through a pre-feasibility study, and then sold it to Nico for $95 million Parral is our operating asset. There, we developed some technology around treating old mine waste, and that operation is producing about 2 million ounces a year now.
It has about five years of production left in reserves and generates for us over $3 million a month of free cash flow. The real driver of the company is the Los Ricos project. At Los Ricos—I'll just bring it up here. Los Ricos is in the state of Jalisco. It's about a two-hour drive from the third largest city in Mexico, Guadalajara. The infrastructure is really, really good. You're talking about a drive-in, drive-out site. We will not have to have a camp. We have actually started on the execution phase. We have a full definitive feasibility study. We've done front-end engineering design, and we're now doing our detailed engineering, which is part of the execution phase. We're about 20% complete. The detailed engineering will continue through a lot of the execution of the project.
One of the other things we've recently done is we've committed to our power contract. We'll be building a 36 km power line from a local hydro dam. We've secured 15 MW of power. We put $2 million down on that contract, and the total contract would be about $7.5 million. The great thing is there, we're building on existing right-of-ways, so we don't have to go out and negotiate right-of-ways for the line. Backing up a little bit, this project we acquired in March of 2019 from three private individuals. As we typically do through our network in Mexico, we acquired it for $7.5 million. We had 26 concessions. One of the jobs ahead of us then was to consolidate some more concessions, which we did. We're up to about 46 concessions.
In Los Ricos South and Los Ricos North, for scale, that line would be about 35 km, that black line. Everything in the red are our claims. In Los Ricos South and North, we did 250,000 m of drilling. We took it from 0 ounces to about 280 million ounces of silver equivalent. We completed three economic studies. In Los Ricos South, we completed first a PEA, or a preliminary economic assessment, or the lowest level study. We took that to a full definitive feasibility study. It is now shovel-ready to build, awaiting a permit. We have Los Ricos North as well, where in Los Ricos North, we completed a PEA. In Los Ricos North, there's 160 million ounces.
Our objective here, once we have the permit, which we do believe we should have before the end of the year and be ready in January to break ground and start building this, it's a $227 million CAPEX. While we're building it, which will take 24 months to build and another six months to ramp up to full commercial production, we want to be moving to the North and completing infill drilling, completing engineering, and get to a final feasibility study in the North and to have a permit, to apply for a permit and get a permit.
At a high level, the objective of the company going forward is to increase from where we are today, which is 2 million ounces of production silver equivalent in our Parral operation, which has been continually producing now for 11 years, to build Los Ricos South, which I mentioned will take 24 months. That'll add about another 7.2 million ounces of production, so bring us over 9 million ounces of production in the company. With Los Ricos North coming online after that, our hope would be that with the completion of the build in the South, we'd be in a position to take the build team and move up to the North. We'd have a permit and all the engineering done. That's projected to add about 8.8 million ounces of production.
Over the next five years, the company should be moving from 2 million ounces of production all the way to 15 million- 17 million ounces. It's a high-margin project. The all-in sustaining cost is projected to be at $12 an ounce silver equivalent. With the production rates, it will make us a very, very significant mid-tier in the silver space. You ask maybe how much of it is silver, how much of it is gold. With the current prices, by revenue, you'd have about 55% of the production being silver, which really makes us a true silver producer, albeit with a GoGold name. Maybe not the best branding, but we've kind of changed ourselves to GoGold, silver and gold. The company has raised a lot of money, and especially a lot of institutional money over the years. We're well known as really primarily a silver producer.
To talk a little bit about the highlights of Los Ricos South, which is going to be the first project built, it's a 2,000-ton a day underground mine. It's bulk mining. You're talking sub-level long-hole mining, so very productive mining, no problem reaching 2,000 tons a day. It'll be a mill where we produce a doré bar, not a concentrate. The difference being, if you're producing a doré bar, you're dealing with a bar that you can sell to the final refiner and get paid 99.5% of the spot price. If you're producing like from a typical flotation mill in a concentrate, you could be getting paid anywhere from 60% - 80% of the spot price for that product that still has to be refined quite a bit with the smelter. $227 million CapEx to build.
We have about 12 years underground mining here, a total mine life of 15 years. The first five years, about 7.3 million ounces of production, and the average for the mine life about 6.5 million. The study was published last February. At that time, the commodity prices used were $26.80 for silver and $2,330 for gold. Now, closer to current prices at $41 silver and $2,360 gold, the NPV moves up from about $355 million - $860 million If you look at Los Ricos South, we also have to consider the fact that we also have Los Ricos North, where we have that PEA. The PEA, just a few of the highlights from that PEA would be that it's $413 million at those lower commodity prices. It's 8.8 million ounces of production a year, about $280 million CapEx. This study is a little older. It's about two years old.
We'd expect some inflation. If we did a sensitivity analysis on it at $41 silver and about $2,360 gold, and we took some of the NPV off for additional inflation, being that the study is two years old, we'd be looking at about close to $1.2 billion. The whole district has over $2 billion of NPV at $41 silver and $2,360 gold. You know valuation, and everybody looks at all the companies out there and say, the values have moved up a lot since the first of the year. Now, we would make the case that with GoGold, at the first of the year, we were trading at about 0.35 times the NAV of the company, which the NAV is the Los Ricos District, at about $2 billion now at those prices.
Our operating mine, which would have about a $100 million NPV, and also we have about $141 million of cash in the bank. In January, we're trading at about 0.35. As the prices have moved up, our share price has moved up, but so have the NPVs, obviously. If you looked at it today, most of the analysts would agree that we're trading at about 0.35. If we were in Canada or if we were in the U.S., we'd be trading with about 0.6 in this market or 0.7. There have been some delays in permits in Mexico, primarily with the last president, Lopez Obrador. His administration just really delayed the permits, and they had a big backlog of permits. We've had a new president in Mexico for a year now, Claudia Sheinbaum.
There was a very important meeting we had last November with the Secretary of Economy's Office and the Director of Mines. They laid out her agenda for the coming year. They said that she was focused on the mining industry. She understood that it's important to their economy and that they would focus first on clearing the backlog of permits that had been delayed for ongoing operations, which also was one of our permits for Parral. We needed that permit for ongoing operations. You have to renew every 10 years. We received that. So far this year, they issued 80 of those permits in the backlog. They were going to move to new permits for new operations. That's where we are right now. She has publicly stated under the last administration, there was some discussion about no open pits, and they were going to change the law.
In reality, she said publicly, no, there would be open pits and that they would issue permits because it's strategically important to the economy. We're right on the cusp of having new permits issued in Mexico. We believe there's a shortlist, which GoGold is on. Those new permits should be coming imminently. We believe we'll have ours by the end of the year and be able to break ground in the spring, which is going to be an enormous catalyst for the company. We think that should move us potentially from 0.35 to 6 or 7 NPV. A potential doubling of the stock with that permit. It's still an enormous catalyst for us. We look forward to that before the end of the year. As I mentioned, we're still a producer. We develop new technology, cleaning up old tailings in Mexico.
We do what's an agglomerated heap leach with SART technology. It works very well, generates over $3 million a month for the company, so that means we're really funding the company's G&A, exploration, and engineering. I don't know if we have any time for questions.
Yes, absolutely.
Yeah.
We will just see. We have the mic here, so just raise your hand. I will start by exposing my ignorance here because you are producing. Tell us, how does it work when you sell? Do you have an off-take agreement, or do you sell at spot? What's the clientele like?
Yeah. On this project, we have about a 1.5% net smelter royalty. On our new project that we're going to build, because we have such a strong balance sheet and we do have production with over $140 million in the bank, we need $227 million to build. We have people falling all over us to give us a debt financing package to build the mine. Our objective here is to build it without having off-takes, without having any hooks into the project, and really no royalties. We're in a position we can do that.
Do we have any, you have an impressive shareholder list here. My question is, who found whom here? Did they knock on the door, or did you knock on their doors?
You know, it's been 32 years and built four mines. This will be mine number five and the Los Ricos North, mine number six. We have these institutional shareholders, mostly gold funds that have done business with us so much in the past. We endeavor to be very transparent with them, to execute, to deliver on what we say. Mining is not an easy business. Sometimes there's a few bumps in the road. They understand that. They're sophisticated investors, and they keep on coming back and backing us in all our deals.
I'll carry on here by asking you, you also make some acquisitions here. Who do you compete with? I mean, the sector is getting hotter and hotter, as we can see at this conference here. Who do you meet in the door when you bid on a project?
You know, we have.
Who did you meet, anyone at the door?
Yeah, we've competed for projects like the Santa Gratudes on that project. When we bought that, the original bid we made was $3 million for this little company in Vancouver. Once we jumped into the bid, others came, and they bid it up to $9 million. Typically, I'd say one thing that we've been very successful at is seeing projects very early that we believe can be mines. We're not always right. Sometimes we can never guarantee a project will work. We've always guaranteed the company will work. We've done that. We've been successful at that. That's why we have such a good retail following and such a good institutional following. I would say the biggest part of value is created from discovery to building. We're very good. We have a strong, strong team, technical team. We're very good at doing that.
Yeah. If one looked at the pedigree with the number of years you have in the business and the rest, it's really a bet on that, I would say.
Sorry, say again?
It's really a bet on the competence here.
I think so. You bet on our ability to pick the right projects. You bet on our ability for our technical team to maneuver and find the ways to make the projects work most economically. You also know that we'll be able to get the capital, because you obviously spend a lot of capital in this business before you ever generate a dollar. You have to be able to have the backing of those investors.
Brad, it's been educational and very interesting. Thank you so much.
Thank you.