GOLDEN, Colo., March 31, 2017 /PRNewswire/ -- Golden
Minerals Company (NYSE MKT and TSX: AUMN) ("Golden Minerals",
"Golden" or "the Company")
announces that Minera Hecla S.A. de C.V. ("Hecla") has exercised
its right to extend the lease of Golden's oxide mill in Durango State,
Mexico for an additional 18
months, through December 31, 2018.
Additionally, Golden announces its
filing of the National Instrument 43-101 ("NI 43-101") compliant
mineral resource estimate for the Santa
Maria silver and gold project, under slightly amended terms
from those announced in February
2017.
Oxide Mill Lease
Golden leased its then-vacant
oxide mill to Minera Hecla S.A. de C.V., a wholly-owned subsidiary
of Hecla Mining Company, in July 2015
for an initial period of 18 months. The lease agreement contained
several lease extension options, and in the third quarter 2016 the
lease was extended through June 2017.
The 2016 extension included an agreement under which Hecla would
construct, at its cost, certain tailings expansion facilities to
accommodate Hecla's increased use of tailings capacity. On
March 24, 2017, Golden was notified of Hecla's exercise of its
option to extend the lease term through December 31, 2018. Tailings expansion work began
earlier this year and is expected to be completed in April 2017. This lease has provided a source of
revenue to the Company during a period in which Golden has not had active mining operations at
its own properties. The lease provided approximately $4.4 million in net cash flow to the Company in
2016, and at Hecla's anticipated average 400 tonnes per day
production rate, Golden
anticipates net cash of approximately $0.4
million per month or $4.8
million annually, in 2017.
Santa Maria Mineral Resource Estimate and PEA Dated
March 30, 2017
On March 31, 2017, Golden Minerals
intends to file on SEDAR the NI 43-101 compliant resource estimate
and related Preliminary Economic Assessment ("PEA") announced in
February 2017, under slightly amended
terms from those previously communicated. Due to an adjustment in
the precise location of the claim, the updated property position
results in an approximate 25 percent reduction to the previously
announced inferred resource estimate, from a reported 160,000
tonnes to approximately 120,000 tonnes. Indicated resources are not
affected by the adjustment and remain the same as previously
communicated. The resource adjustment reduces the net present value
of the project under the PEA by less than three percent, from
$6.4 million to $6.3 million. The
adjustment has not changed the Company's belief that there is
excellent potential for expansion of the Santa Maria project, and that such expansion
could lead to production beyond the initial three-year period
considered in the PEA. Work continues at Santa Maria in support of potential
expansion.
Santa Maria Mineral Resource Estimate Dated March 30, 2017
In conjunction with the PEA, the independent firm of Tetra Tech
prepared an updated NI 43-101 compliant mineral resource
estimate. Indicated and inferred mineral resource estimates
as of March 30, 2017 are shown as
follows:
Classification
|
Cutoff Grade
Recovered AgEq
g/t
|
Tonnes
|
Ag
g/t
|
Au
g/t
|
AgEq
g/t
|
Ag toz
(M)
|
Au
toz
(k)
|
AgEq
toz
(M)
|
Dilution%
|
Indicated
|
175
|
180,000
|
304
|
1.4
|
404
|
1.73
|
8.1
|
2.31
|
10%
|
Inferred
|
175
|
120,000
|
343
|
1.0
|
411
|
1.37
|
3.9
|
1.64
|
19%
|
Notes:
|
|
|
|
|
|
|
|
|
|
(1) Mineral resources
are reported as diluted Tonnes and grade;
|
(2) Cutoff grade and
Ag equivalent calculated using metal prices of $17.30 and $1,222
per troy ounce of Ag and Au with a ratio of 70.6:1, the three year
trailing average as of the end of December 2016;
|
(3) Cutoff applied to
diluted Ag equivalent blocks grades using recoveries of 90% and 80%
Ag and Au;
|
(4) Reported
indicated mineral resources are equivalent to mineralized material
under SEC Industry Guide 7, inferred mineral resource is not a
recognized category under SEC Industry Guide 7; and
|
(5) Columns may not
total due to rounding.
|
PEA Information
The discounted cash flows in the PEA are provided post-tax and
the PEA and updated resource is in compliance with NI 43-101
requirements. Tetra Tech is an independent engineering firm that
served as principal author of the PEA prepared on behalf of the
Company. Geoff Elson, PG is the independent Qualified Person
from Tetra Tech who reviewed and approved the portions of this
press release regarding mineral resources. Mark Horan, P.Eng of Tetra Tech is the
independent Qualified Person who has reviewed and approved the
portions of this press release regarding the results of the PEA.
Dr. Deepak Malhotra of Resource
Development Inc. is the independent Qualified Person who has
reviewed and approved the metallurgical recoveries.
The PEA is preliminary in nature and includes inferred mineral
resources that are considered too speculative geologically to have
the economic considerations applied to them that would enable them
to be categorized as mineral reserves. Standalone economics have
not been undertaken for the indicated resources and as such no
reserves have been estimated for the Project. There is no certainty
that the economic results described in the PEA will be realized.
Mineral resources that are not mineral reserves do not have
demonstrated economic viability.
About Golden Minerals
Golden Minerals is a Delaware
corporation based in Golden,
Colorado. The Company is primarily focused on acquiring and
advancing mining properties in Mexico with emphasis on areas near its
Velardena processing plants.
Cautionary Note to U.S. Investors concerning Estimates of
Mineral Resources
This press release uses the terms "mineral resources",
"indicated mineral resources" and "inferred mineral resources"
which are defined in, and required to be disclosed by NI
43-101. We advise U.S. investors that these terms are not
recognized by the SEC. The estimation of measured resources and
indicated resources involves greater uncertainty as to their
existence and economic feasibility than the estimation of proven
and probable reserves. Mineral resources are not mineral reserves,
and U.S. investors are cautioned not to assume that mineral
resources will be converted into reserves. The estimation of
inferred resources involves far greater uncertainty as to their
existence and economic viability than the estimation of other
categories of resources. U.S. investors are cautioned not to assume
that estimates of inferred mineral resources exist, are
economically mineable, or will be upgraded into measured or
indicated mineral resources.
Cautionary Statement regarding Mineralized Material
"Mineralized material" as used in this press release, although
permissible under the SEC's Industry Guide 7, does not indicate
"reserves" by SEC standards. We cannot be certain that any deposits
at the Santa Maria project will
ever be confirmed or converted into SEC Industry Guide 7 compliant
"reserves". Investors are cautioned not to assume that all or any
part of the disclosed mineralized material estimates will ever be
confirmed or converted into reserves or that mineralized material
can be economically or legally extracted.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended, and applicable Canadian securities legislation, including
statements regarding anticipated revenue from the Hecla lease and
expectations regarding the tailings expansion, the Santa Maria PEA
results (including cost estimates, development timing, expected
cash flow and life of mine and production expectations), estimates
of mineral resources for the Santa
Maria project, and other expectations regarding the
Santa Maria project, including
operating and exploration plans and expectations. These statements
are subject to risks and uncertainties, including: lower than
expected revenue from the oxide plant lease as a result of delays
or problems at the third party's mine or the oxide plant, the
reasonability of the economic assumptions at the basis of the PEA,
changes in interpretations of geological, geostatistical,
metallurgical, mining or processing information and
interpretations of the information resulting from future
exploration, analysis or mining and processing experience; new
information from drilling programs or other exploration or
analysis; unexpected variations in mineral grades, types and
metallurgy; fluctuations in silver and gold metal prices; failure
of mined material or veins mined to meet expectations; increases in
costs and declines in general economic conditions; and changes in
political conditions, in tax, royalty, environmental and other laws
in Mexico, and financial market
conditions. Golden Minerals assumes no obligation to update
this information. Additional risks relating to Golden
Minerals may be found in the periodic and current reports filed
with the SEC by Golden Minerals, including the Company's Annual
Report on Form 10-K for the year ended December 31, 2016.
For additional information please visit
http://www.goldenminerals.com/ or contact:
Golden Minerals Company
Karen Winkler
Director of Investor Relations
(303) 839-5060
Investor.relations@goldenminerals.com
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SOURCE Golden Minerals Company