GOLDEN, CO, Jan 11, 2012 (MARKETWIRE via COMTEX) –Golden Minerals Company (NYSE Amex: AUMN) (TSX: AUM) (“Golden
Minerals” or “the Company”) is pleased to report significant
operating improvements at the Velardena Operations, located in the
State of Durango, Mexico, since the merger with ECU Silver on
September 2, 2011. The Company also announced plans to rationalize
its extensive exploration portfolio.
Velardena Operations
Payable metals production for September through year-end 2011
exceeded guidance previously provided in September by approximately
30% for gold and 114% for silver, primarily due to the increase in
head grades resulting from reduced dilution. The following table
shows actual production compared to the previous forecast for
September through December 2011. Also shown is the updated 2012
forecast production for gold and silver.
Full
Sep-Dec Sep-Dec Year
’11 Fcst ’11 Act Q1 2012 Q2 2012 Q3 2012 Q4 2012 2012
——– ——– ——– ——– ——– ——– ——–
Production (payable metals)
Gold (oz) 1,000 1,300 1,300 2,000 2,600 3,100 9,000
Silver (oz) 42,000 90,000 90,000 150,000 230,000 270,000 740,000
The 2012 Forecasted Production chart shows gold and silver production
in silver equivalent ounces. Lead and zinc production are not
included. Amounts shown are September through December 2011 actual
gold and silver production compared to the previous forecast
production, and forecast production for 2012.
Since the merger with ECU Silver, Golden has made significant
operating improvements at the Velardena Operations. Golden’s primary
focus has been on improving head grade in the feed supplied to the
mills and on moving underground mine development outside the mineral
veins. The December average head grade for gold and silver in
material supplied to the oxide mill has improved by approximately 70%
over the August average head grade (from approximately 1.5 grams per
tonne to 2.5 grams per tonne for gold and approximately 90 grams per
tonne to 150 grams per tonne for silver). The December average head
grade in material supplied to the sulfide mill has also improved
significantly to approximately 2.0 grams per tonne gold, 174 grams
per tonne silver, 1.7% lead and 2.0% zinc. The improvements are
primarily related to moving underground development outside the vein,
resulting in reduced dilution of plant feed. The Company has
completed approximately 1,200 meters of mine development since early
September and has commenced excavation on the San Mateo Ramp, the
main production ramp that will access six major ore zones.
Golden has also commenced plant optimization and other work to
improve recoveries and product quality in both the oxide and sulfide
plants. The Company plans to add a flotation circuit ahead of the
current oxide plant to recover and divert to the sulfide plant more
of the sulfide material that is currently mixed with the oxides.
Based on these efforts, the Company expects the Velardena Operations
to be operationally cash flow positive in mid-year 2012 at current
metals prices.
Safety related improvements at the Velardena Operations have included
the installation of 15 face ventilation fans, establishment of three
trained and equipped mine rescue teams and safety refresher training
for all personnel.
In addition, the Company has commenced engineering studies for a
phased expansion of the sulfide plant by adding an additional ball
mill, flotation cells and concentrate handling equipment. The phased
expansion is expected to increase the sulfide plant’s capacity from
320 to 650 tonnes per day which, along with operational improvements
to the existing 500 tonne per day oxide plant, could result in annual
production rates of up to 2 million ounces of silver and 29,000
ounces of gold by 2013. Expenditures for this phased expansion will
be available later in the first quarter and are expected to be in the
range of $10.0 million. The phased expansion would allow for an
interim production increase pending completion of the proposed 2,000
tonne per day plant, which might occur as early as 2015. The 2,000
tonne per day sulfide plant could result in annual production of up
to approximately 4 million ounces of silver and 80,000 ounces of
gold.
As was previously announced, the Company expects to complete an
updated NI 43-101 compliant resource estimate for the Velardena
Operations towards the end of the first quarter 2012. The independent
consulting firm of Chlumsky Armbrust and Meyer (CAM) has been
retained to provide the updated resource estimate.
The Company also expects to complete a Preliminary Economic
Assessment (PEA) by the end of the third quarter 2012. The PEA will
be based on the updated resource estimate and proposed expansion
plans for the Velardena Operations.
Exploration Portfolio
Golden has commenced a process of rationalizing the Company’s current
exploration portfolio of approximately 80 projects in Mexico, Peru
and Argentina. The Company expects the potential monetization of
selected assets to generate value as well as significantly reduce
greenfield exploration expenditures in 2012 and going forward.
Jeffrey Clevenger, Golden Minerals Chairman, President and CEO,
commented, “Management’s primary focus is on growing production and
establishing the company as an emerging producer.” In addition, Mr.
Clevenger noted, “This business strategy should allow Golden Minerals
to more quickly become self-sufficient and less dependent on raising
capital.”
El Quevar
An updated NI 43-101 compliant mineral resource estimate on El Quevar
is being prepared by the independent consulting firm of Pincock,
Allen and Holt (PAH). The updated resource estimate for the El Quevar
project is now expected by the end of first quarter 2012. PAH has
been asked to include an additional 23 drill holes for which assays
have just been received.
About Golden Minerals
Golden Minerals is an emerging precious metals producer with a large
silver and gold resource base in Mexico and a large silver resource
base in Argentina. The Company, which is a Delaware corporation, is
listed on both the NYSE Amex and TSX. Golden Minerals is primarily
engaged in the ramp-up and expansion of existing production at the
Velardena Operations in Mexico and advancement of the El Quevar
project in Argentina. The Company also has a large portfolio of
exploration projects, including the advanced stage Zacatecas project
in Mexico.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act, and applicable Canadian securities laws, including
statements regarding forecasts of production from the Velardena
Operations and the effects on such forecasts of development work,
mining and process improvements, operational changes, processing
facility improvements, planned phased expansion of the existing
sulfide plant and the planned construction of a new sulfide plant;
anticipated improvements in feed head grades, metal recoveries, and
concentrate production and quality; anticipated progress and rates of
progress on the San Mateo ramp and its effectiveness in providing
haulage access to undeveloped ore; planned construction of a new
sulfide plant and the timing thereof; anticipated updates of resource
estimates for the Velardena properties and El Quevar and the timing
thereof; anticipated achievement of cash flow positive operations at
Velardena by mid-year 2012; interpretation of the results of drilling
programs and other geological information; planned rationalization of
the Company’s exploration portfolio for value and reduction of
Greenfield exploration efforts and costs. These statements are
subject to risks and uncertainties, including unexpected events at
the Velardena Operation, including lower than anticipated production
or greater than anticipated costs; unexpected events at the El Quevar
project or the exploration properties; variations in ore grade and
relative amounts, grades and metallurgical characteristics of oxide
and sulfide ores; delays or failure in receiving required board or
government approvals or permits; technical, permitting, mining,
metallurgical or processing issues; failure to achieve anticipated
increases in production and improvements in head grades, recoveries
and concentrate production and quality at the Velardena Operation;
delays in or failure to realize anticipated benefits of plant
optimization efforts; timing and availability of external funding on
acceptable terms to construct the planned sulfide plant, advance the
development of El Quevar and other efforts; unfavorable
interpretations of geologic information; inability to complete the
phased expansion of the sulfide plant on time or at all or failure to
realize anticipated production improvements from the phased
expansion; unfavorable results of new resource estimates; loss of and
inability to adequately replace skilled mining and management
personnel; possible disputes with customers or joint venture
partners; unanticipated difficulties or delays in completing the San
Mateo ramp and failure of the ramp or the undeveloped ore accessed by
the ramp to meet expectations; delays in the arrival of or loss of
equipment being procured for the Velardena operation; development of
unfavorable information or conclusions regarding the economic or
technical aspects of the planned sulfide plant for the Velardena
Operation, the amenability of the El Quevar deposit to bulk mining,
or interpretations of geologic information; inability to generate
value from the Company’s exploration portfolio; failure to reduce
greenfield exploration activities or costs; volatility or other
changes in the U.S. and Canadian securities markets; availability and
cost of materials, supplies and electrical power required for mining
operations and exploration; fluctuations in silver, gold, zinc and
lead prices, costs and general economic conditions; changes in
political conditions, tax, environmental and other laws, diminution
of physical safety of employees in Mexico, and other conditions in
the countries in which the Company operates. Additional risks
relating to Golden Minerals Company may be found in the periodic and
current reports filed with the Securities Exchange Commission by
Golden Minerals Company, including the Annual Report on Form 10-K for
the year ended December 31, 2010.
For additional information please visit
http://www.goldenminerals.com.
