Golden Minerals Company (“Golden Minerals”, “Golden” or “the
Company”) (NYSE American:AUMN) (TSX:AUMN) is pleased to share a
business update, including:
- New property acquired expanding the footprint of the Santa
Maria project holdings
- 2,000 meters drilling planned to test the strike extension of
the Santa Maria vein system
- Manager of Operations hired for Mexico
- Results from Celaya project show, in three of seven holes
recently drilled, intercepts of quartz vein material carry gold and
silver grades that are within the range of economic interest
- New option agreement recently announced with Hecla to extend
the lease of the oxide processing plant at the Company’s Velardena
Properties
Golden Minerals President and Chief Executive
Officer Warren M. Rehn commented, “With nearly $5 million in the
bank and a steady income stream projected from the lease of our
oxide plant, Golden Minerals is poised to re-emerge as a silver
producer in Mexico. We are continuing exploration at our Santa
Maria project with excellent potential for additional resources
along the strike of the vein system on our newly acquired ground.
We are very pleased that Ing. Martinez has joined our team, adding
his extensive operational expertise and Mexico experience.
Our sulfide mill in Velardena remains in excellent condition, ready
to operate, and Ing. Martinez will be evaluating potential
operating scenarios for near term production either from our
Velardena mines or other nearby sources. And finally, the recent
drilling success at our Celaya project bodes well for the future as
our partner continues drill testing."
Santa Maria
Golden Minerals has recently acquired three
additional claims totaling approximately 77 hectares on strike and
downdip along the Santa Maria vein system. The additional ground
adds significantly to the expansion potential of the existing
deposit, which will be tested in an upcoming drill program. Golden
plans to begin a 2,000 meter, 10 hole drill program from surface in
the third quarter 2017. The Company has the right to acquire
the three additional claims by paying $0.7 million over four years
with an initial payment of $50,000 on signing and $30,000 in six
months. Golden Minerals has received the permit necessary for
step-out drilling on strike along the Santa Maria vein. The Company
has also completed the environmental study necessary to obtain the
permit to operate the Santa Maria underground mine under the
general plan presented in the Santa Maria preliminary economic
assessment (“PEA”).
In March 2017, the PEA was completed by the
engineering firm Tetra Tech, prepared pursuant to Canadian National
Instrument 43-101, based on an updated estimate of mineralized
material. The PEA presents a base case assessment of developing
Santa Maria’s mineral deposit. The PEA contemplates a 38-month
underground mining operation at a mining rate of 200 tonnes per day
using a combination of cut and fill and other mining techniques,
and custom milling at a local third-party flotation mill. Based on
the assumptions in the PEA, the Company believes there is potential
to develop a small mining operation at Santa Maria.
Manager of Operations Hired
Golden is pleased to announce that Ing.
Telesforo Martinez Patino has joined the Company as Manager of
Operations in Mexico. Mr. Martinez will serve as general manager at
Velardena, and will additionally direct and support other mining
operations the Company may develop in Mexico.
Mr. Martinez has more than 30 years of mining
experience, most recently serving as General Manager at Fresnillo
PLC’s San Julian mine located on the Chihuahua/Durango state border
in Mexico. Mr. Martinez has also held leading operational roles in
Mexico for companies including Capstone, Endeavour Silver and Pan
American Silver.
Celaya
Celaya is a 5,600 hectare silver and gold
project located in Guanajuato State, Mexico approximately 10
kilometers east of Plata Latina’s Naranjillo silver and gold
discovery and 45 kilometers southeast of the historic Guanajuato
District. In the third quarter 2016, Golden Minerals entered into
an earn-in agreement with a subsidiary of Electrum Global Holdings
L.P. (“Electrum”), through which Electrum may acquire up to a 60
percent interest in the property by incurring exploration
expenditures of $0.5 million in the first year and $2.5 million in
the first three years of the agreement.
Electrum has met the first year’s earn-in
spending requirement. Additionally, during the second quarter 2017
Electrum received drilling results related to an ongoing drilling
program. Results to date from 5,600 meters drilled in seven holes
show intercepts of epithermal quartz vein mineralization with
grades for gold, silver, lead and zinc that warrant further drill
testing. In three of the seven holes, intercepts of quartz
vein material carry gold and silver grades that are within the
range of economic interest, if sufficient volumes can be found in a
configuration amenable to exploitation.
Oxide Mill Lease at
Velardena
On August 2, 2017, the Company further cemented
its strategic relationship with Hecla Mining Company (“Hecla”) when
it granted Hecla an option to extend the lease of Golden’s oxide
plant for an additional period of up to two years, ending no later
than December 31, 2020, in exchange for a $1.0 million cash payment
and the purchase of $1.0 million or approximately 1.8 million
shares of the Company’s common stock. Hecla must exercise the
option to extend the lease no later than October 3, 2018.
Fixed fees and volume-related charges for use of the plant will
remain the same as under the current lease, and Hecla has the right
to terminate the lease for any reason with 120 days’ notice.
This lease is expected to provide Golden with a
continuous stream of cash for the next three-plus years, which will
enable Golden to continue its work on other exploration and
development projects including identifying a viable ore source for
the now-idled sulfide mill at Velardena. During the first six
months of 2017, Golden reported a net operating margin of
approximately $2.3 million from the lease.
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.
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 relating to expectations
regarding future cash flow from the oxide plant lease, general
expectations regarding the Celaya property, including expectations
for exploitation, expectations related to our Santa Maria property,
including the PEA results (including life of mine and production
expectations) and future drilling plans and operational
expectations, expectations regarding the potential future use of
our sulfide mill, and general expectations regarding the Company’s
financial outlook. These statements are subject to risks and
uncertainties, including lower than anticipated revenue from the
oxide plant lease as a result of delays or problems at the third
party’s mine or the oxide plant, earlier than expected termination
of the lease or other causes, the reasonability of the economic
assumptions at the basis of the Santa Maria 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, 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 Securities
and Exchange Commission 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 CompanyKaren WinklerDirector of
Investor Relations(303)
839-5060Investor.relations@goldenminerals.com
SOURCE: Golden Minerals Company
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