December 7, 2010 / 2:51 PM / in 7 years

Goldgroup shares rise sharply on drill results

* Finds significant gold mineralization at San Jose site

* Shares up 13 pct in early trade in Toronto (In U.S. dollars, unless noted)

TORONTO, Dec 7 (Reuters) - Shares of Vancouver-based Goldgroup Mining (GGA.TO) rose 13 percent on Tuesday morning after initial drill results at its San Jose de Gracia project in Mexico indicated significant gold mineralization in one of its drill holes.

The company said the drill hole indicated a yield of 332.86 grams of gold per tonne of ore over a 5.50 metre interval at a depth of between 70.65 metres and 76.15 metres.

The company said it has put a third drill into operation at San Jose de Gracia to expand on the results. Goldgroup said it plans to release additional drill results in the near future.

The project is 100-percent owned by DynaResource de Mexico. Goldgroup, through completing the first stage of an earn-in agreement, currently owns 25 percent of DynaMexico. It is in the process of acquiring an additional 25 percent of DynaMexico by spending $4.5 million on project-related work by March 15, 2011. The remainder of DynaMexico is owned by DynaUSA.

Shares of Goldgroup rose 15 Canadian cents to C$1.30 on the Toronto Stock Exchange.

$1=$1.00 Canadian Reporting by Euan Rocha; editing by Peter Galloway

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