Golden Minerals Completes Updated Technical Reports for Two Properties
Golden Minerals Completes Updated Technical Reports for Two Properties
GOLDEN, Colo.--(BUSINESS WIRE)--March 22, 2022--Golden Minerals Company (“Golden
Minerals”, “Golden” or the “Company”) (NYSE-A: AUMN and TSX: AUMN) announces that a
Technical Report (“TR”) has been completed for each of its Rodeo open pit gold-silver mine and
its Velardeña Properties, both located in Durango State, Mexico.
Each TR has been completed in accordance with Canadian National Instrument 43-101 -
Standards of Disclosure of Mineral Projects (“NI 43-101”). The Resources used for each report
were developed by the independent engineering firm of Tetra Tech and comply with the
requirements of NI 43-101. Preliminary results of each economic analysis are shown in pre-tax
U.S. Dollars. The Company also plans to file a technical report summary pursuant to Subpart
1300 of Regulation S-K for each of the Rodeo mine and the Velardeña Properties in connection
with its annual report on Form 10-K.
Rodeo
The Rodeo mine is currently in operation and the Rodeo TR assumes a life of mine (“LOM”)
starting point of November 1, 2021. The TR assumes prices of $1,800/ounce (“oz”) gold (“Au”)
and $25.00/oz silver (“Ag”). Mineral resources were calculated having an effective date of
October 31, 2021 with a cutoff grade of 1.6 grams per tonne (“g/t”) for processing and 1.0 g/t for
stockpiling.
Estimated Resources
Classification
Cutoff Au (g/t)
Tonnes
Grade
Au g/t
Au (oz)
Grade
Ag g/t
Ag (oz)
Low-Grade (Stockpile)
Measured 1.0 208,500 1.24 8,350 10.03 67,200
Indicated 1.0 56,400 1.18 2,140 5.18 9,400
Measured + Indicated 1.0 264,900 1.23 10,500 9.00 76,600
Inferred 1.0 1,500 1.20 58 4.09 198
High-Grade
Measured 1.6 310,700 3.11 31,100 13.10 131,000
Indicated 1.6 43,700 3.17 4,500 10.67 15,000
Measured + Indicated 1.6 354,400 3.12 35,600 12.80 146,000
Note: Columns may not total due to rounding
Capital and Operating Costs
Required capital costs for the Rodeo mine consist of an estimated $0.4 million for closure and
reclamation. No additional capital is required at the mine. No capital costs are estimated for Plant
2 for the life of the Project. Estimated operating costs are shown below.
Description LOM Cost
($000s)
Unit Cost
($/t-milled)
Mining $3,790 $10.79
Processing $18,278 $52.04
G&A $1,352 $3.85
Total $23,421 $66.68
Economic Analysis
The LOM (life of mine) consists of 24 months of operation and assumes 12 months to perform
closure and reclamation. The starting point for the LOM is November 1, 2021. The pre-tax net
present value (“NPV”) of the project is $22.9 million using a discount rate of 8%. Royalties are
calculated at 2% for La Cuesta and 0.5% for the Mexico precious metals royalty.
Description
Unit Cost
($/t-milled)
Total Value
($000s)
NSR1
$141.70 $49,767
Net Revenue $141.70 $49,767
Operating Costs
Mining $10.79 ($3,790)
Processing $52.04 ($18,278)
G&A $3.85 ($1,352)
Operating Costs $66.68 ($23,421)
Operating Margin $75.01 $26,346
Capital Costs
Mining - $0
Process Plant
$0
Infrastructure - $0
Closure - ($447)
Capital Costs - ($447)
La Cuesta Royalty - ($995)
Mexico Precious Metals Royalty - ($249)
Pre-Tax Cash Flow - $24,655
Pre-Tax NPV 8% - $22,928
1 Net smelter revenue
Sensitivity Analysis
Sensitivity analyses on metal price and operating costs were performed on the economic model
results. Due to the lack of capital cost requirements, no sensitivity analysis was conducted on
capital costs. Results of sensitivity analyses show that a reduction in gold price of $100/oz would
result in a 10% reduction in NPV, while an increase in operating costs of 10% would result in a
9% decrease in NPV.
Velardeña
The Velardeña Technical report (TR) assumes prices of $1,744/oz gold, $23.70/oz silver,
$0.97/pound (“lb”) lead (“Pb”) and $1.15/lb zinc (“Zn”). Mineral resources were calculated
having an effective date of February 28, 2022, as diluted to a minimum of 0.7 meters and are
reported at a $175 NSR cutoff. A federal precious metal royalty of 0.5% is assumed.
Estimated Resources
Classification Mineral
Type
NSR
Cutoff Tonnes Grade
Ag g/t
Grade
Au g/t
Grade
Pb%
Grade
Zn% Ag oz Au oz Pb lb Zn lb
Measured Oxide 175 128,800 268 5.69 1.74 1.53 1,108,000 23,500 4,936,000 4,333,400
Indicated Oxide 175 280,300 262 5.06 1.73 1.45 2,361,200 45,600 10,681,500 8,936,600
Measured +
Indicated Oxide 175 409,100 264 5.26 1.73 1.47 3,469,200 69,100 15,617,500 13,270,000
Inferred Oxide 175 351,400 417 4.95 2.55 1.45 4,714,600 56,000 19,729,500 11,248,200
Measured Sulfide 175 256,200 357 5.52 1.56 1.91 2,942,800 45,500 8,819,300 10,769,700
Indicated Sulfide 175 603,500 341 4.79 1.46 1.91 6,619,400 92,900 19,475,600 25,408,900
Measured +
Indicated Sulfide 175 859,700 346 5.01 1.49 1.91 9,562,200 138,400 28,294,900 36,178,600
Inferred Sulfide 175 1,357,700 348 4.76 1.52 1.97 15,179,000 207,800 45,534,200 58,952,900
Measured All 175 385,000 327 5.58 1.62 1.78 4,050,800 69,000 13,755,300 15,103,100
Indicated All 175 883,800 316 4.88 1.55 1.76 8,980,600 138,500 30,157,100 34,345,500
Measured +
Indicated All 175 1,268,800 319 5.09 1.57 1.77 13,031,400 207,500 43,912,400 49,448,600
Inferred All 175 1,709,200 362 4.8 1.73 1.86 19,893,600 263,800 65,263,700 70,201,100
Notes:
(1) Resources are reported as diluted Tonnes and grade to 0.7 metres fixed width
(2) Metal prices for NSR cutoff are: US$23.70/troy ounce Ag, US$1,744/troy ounce Au, US$0.97/lb Pb, and
US$1.15/lb Zn
(3) Columns may not total due to rounding
Economic Analysis
Economic model results are summarized below. The model includes Measured, Indicated, and
Inferred resources. Reclamation costs are assumed to be canceled by salvage value and are
therefore not included. The LOM is 11 years, with a pre-tax NPV of $119 million using a
discount rate of 8%.
Item Total
($000s)
Pb
Concentrate
Zn
Concentrate
Doré
Gross Payable $556,905 $311,680 $59,772 $185,453
TCs, RCs and penalties ($35,939) ($19,791) ($14,663) ($1,485)
Freight & Insurance ($14,512) ($5,885) ($5,195) ($3,432)
NSR $506,454 $286,004 $39,914 $180,536
Operating Costs
Mining Costs - Stoping ($131,261)
Mining Costs -
Development ($33,653)
Milling costs ($105,234)
Contingency and Other ($27,015)
Federal Mining Royalty ($2,532)
($299,695)
$/t-milled ($242.23)
Operating Margin $206,759
Capital Costs Full LOM Pre-
Production
LOM
Pre-Production
Development ($788) ($788) $0
Process Plant ($17,248) ($14,498) ($2,750)
Contingency and Other ($3,130) ($1,755) ($1,375)
Cash Flow $185,594
Pre-Tax NPV8% $118,933
IRR 114%
Payback (years) 1
Sensitivity Analysis
Results of the sensitivity analyses show the project is most sensitive to operating costs and gold
price. A 10% increase in operating costs results in a 16% reduction in project NPV. Due to the
sensitivity to operating costs, efforts to control or reduce the operating costs are material to the
economic success of the project.
Cautionary Note Regarding Inferred Resources
The discounted cash flows shown above are prepared in compliance with NI 43-101. There is no
certainty that the economic results described above will be realized. The Company proceeded to
production at the Rodeo project without completion of customary feasibility studies
demonstrating the economic viability of the Rodeo project, and may elect to do likewise at the
Velardeña Properties. A mine production decision that is made without a feasibility study carries
additional potential risks which include, but are not limited to, (i) increased uncertainty as to
projected initial and sustaining capital costs and operating costs, rates of production and average
grades, and (ii) the inclusion of Inferred Mineral Resources, as defined by NI 43-101 that are
considered too speculative geologically to have the economic considerations applied to them that
would enable them to be converted to a Mineral Reserve, as defined by NI 43-101. Mine design
and mining schedules, metallurgical flow sheets and process plant designs may require additional
detailed work and economic analysis and internal studies to ensure satisfactory operational
conditions and decisions regarding future targeted production.
No mineral reserves have been estimated for either the Rodeo mine or the Velardeña Properties.
Mineral resources that are not mineral reserves do not have demonstrated economic viability.
The economic model for each of the Rodeo project and the Velardeña Properties is preliminary
in nature and includes inferred mineral resources that are too speculative geologically to have
economic considerations applied to them that would enable the inferred mineral resources to be
classified as mineral reserves, and there is no certainty that the preliminary economic model for
the Rodeo project, the Velardeña Properties, or both, will be realized.
About Golden Minerals
Golden Minerals is a growing gold and silver producer based in Golden, Colorado. The
Company is primarily focused on producing gold and silver from its Rodeo Mine and advancing
its Velardeña Properties in Mexico and, through partner funded exploration, its El Quevar silver
property in Argentina, as well as acquiring and advancing selected mining properties in Mexico,
Nevada and Argentina.
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
estimated resources and projected economic analyses associated with the Rodeo mine and the
Velardeña Properties. These statements are subject to risks and uncertainties, including changes
in interpretations of geological, geostatistical, metallurgical, mining or processing information,
and interpretations of the information resulting from exploration, analysis or mining and
processing experience. 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, 2020.
Qualified Person:
The following Qualified Persons from Tetra Tech will co‐author the technical report that will be
filed on SEDAR within 45 days of this news release: Dr. Guillermo Dante Ramírez Rodríguez,
Mr. Randolph P. Schneider, and Ms. Kira Lyn Johnson. Each of these Qualified Persons has
reviewed and approved the information presented in this news release that was derived from the
sections of the PEA study for which they were responsible. Each of the named Qualified Persons
is independent of Golden Minerals.
Contacts
For additional information please visit http://www.goldenminerals.com/ or contact:
Golden Minerals Company
Karen Winkler, Director of Investor Relations
(303) 839-5060