DDH 11 CBN 127: 144.00 m @ 0.89 g/t Au
DDH 11 CBN 120: 126.25 m @ 0.69 g/t Au
DDH 11 CBN 125: 57.33 m @ 1.16 g/t Au

VANCOUVER, Oct. 20, 2011 /CNW/ - Goldgroup Mining Inc. ("Goldgroup" or the "Company") (TSX:GGA) is pleased to announce that additional diamond drill holes at its Caballo Blanco gold project in Veracruz, Mexico have yielded significant gold intercepts, extending the La Paila oxide gold zone to the west, east and southwest. All the drill holes reported below (see Tables 1 and 2 and the drill the hole location map) are exploration holes. Drilling remains ongoing to define and to expand the eastern, western and southwestern flanks of the La Paila gold zone as the zone currently remains open in these directions.

Keith Piggott, President and CEO of Goldgroup, stated: "These diamond drill results yielded significant gold intercepts above the cut-off grade and which continue to be contained in completely oxidized, vuggy and siliceous rock occurring inside and peripheral to the existing La Paila zone. These results continue to give better definition to the design of the first open pit and its extension in almost all directions. The current drilling program, together with the on-going column-leach metallurgical testing, environmental and sociological studies as well as the run of mine heap-leach pad design and other engineering, form the basis for targeting to bring Caballo Blanco into production in late 2012."

Table 1. Drill-Hole Results for the Caballo Blanco Project, Mexico

For a drill hole location map, click the link at the end of this release.

All the holes presented above that intersected gold mineralization are in excess of the 0.2 g/t Au cut-off grade used in estimating the inferred mineral resource presented in the current Caballo Blanco NI 43-101 technical report available on SEDAR. The results presented today are part of the current drill program and are intended to be used in the preparation of an updated mineral resource estimate. A complete summary of the assay results from diamond drill holes DDH 10 CBN 54 to DDH 11 CBN 128 as well as a drill-hole location map of the La Paila zone detailing the relative locations of the drill holes will be posted on the Goldgroup website under "Projects - Caballo Blanco" at www.goldgroupmining.com.

Table 2. Drill Hole Location Data, Caballo Blanco Project, Mexico

m.a.s.l = metres above sea level; Coord = Coordinate; na = not applicable

About Caballo Blanco

Goldgroup owns 100% of Caballo Blanco. The Caballo Blanco project consists of a series of oxide gold zones located in the Veracruz province of eastern Mexico. The principal gold zone at Caballo Blanco is the La Paila prospect located within a cluster of high-sulphidation epithermal alteration zones referred to as the Northern Zone. The 43-101 compliant estimated mineral resource for La Paila consists of 139,000 ounces of gold (6.7 million tonnes grading 0.65 g/t Au) contained in the category of indicated resources and 517,000 ounces of gold (27.6 million tonnes grading 0.58 g/t Au) contained in the category of inferred resources. This estimate was compiled from 32 diamond drill holes totaling approximately 7,000 metres completed by NGEx Resources Inc. prior to Goldgroup's acquisition of its interest in the project in November, 2009. Subsequently, Goldgroup has drilled an additional 61 diamond drill holes totaling approximately 15,000 metres. Other known gold zones at Caballo Blanco occur approximately 7 km to the southeast at the Highway Zone. These gold zones have yet to be drill tested.

Assaying and Qualified Person

After project geologists logged and marked the core, technicians cut the individual lengths with a diamond saw, then tagged the bags and secured them with security clips. The samples were then collected by Inspectorate America Corp. ("Inspectorate") and transported to their preparation facility at Durango, Mexico where they were dried and crushed to -150 mesh. The rejects remained with Inspectorate while the pulps were air couriered to Inspectorate's Richmond, BC, Canada facility and analyzed for gold by fire assay with Atomic Absorption ("AA") finish. In addition, a 30 element Inductively Coupled Plasma ("ICP") analysis (aqua regia digest) was conducted on all samples up to drill hole 11 CBN 113. From drill hole 11 CBN 114 onwards, the samples were collected by ALS Minerals and transported to their Guadalajara preparation facility where they were dried and crushed to -2mm. A 250 gram split of the coarse material was then pulverized to -200 mesh. The rejects remained at the prep facility and the pulps were air couriered to ALS Minerals North Vancouver facility and analyzed for gold by 30g fire assay with an AA finish. In addition, a 35 element ICP analysis was conducted on all samples. A QA/QC program was implemented as part of the sampling procedure for the drill program. One standard, one blank or one duplicate was inserted per group of 10 samples sent to the laboratory. The information in this news release has been approved by Marc Simpson, P. Geo., the Company's Qualified Person under National Instrument 43-101 standards.

About Goldgroup

Goldgroup is a well-funded Canadian-based gold production and exploration Company focused exclusively on Mexico, targeting growth in gold production, mineral resources, profitability and cash flow from a portfolio of production, development and exploration stage projects. The Company owns and operates the Cerro Colorado Gold Mine in Sonora, Mexico. Goldgroup's property portfolio includes its flagship project, Caballo Blanco in Veracruz and its 50% interest in the San José de Gracia project in Sinaloa.

Goldgroup is lead by a team of highly successful and seasoned individuals with extensive expertise in exploration, corporate finance and mine development in Mexico.