AUMN.TO · 2023-08-22 12:00:00

Updated PEA for Velardeña Properties (Durango, Mexico) Shows $87.6 Million After-Tax NPV

Economic Studies

Updated PEA for Velardeña Properties (Durango, Mexico) Shows $87.6

Million After-Tax NPV

GOLDEN, Colo.--(BUSINESS WIRE)--August 22, 2023--Golden Minerals Company (“Golden

Minerals,” “Golden” or the “Company”) (NYSE-A: AUMN and TSX: AUMN) announced today

that an updated Technical Report (“TR”) has been completed as a Preliminary Economic

Assessment (“PEA”) for its Velardeña Properties (Durango State, Mexico). The TR is prepared

as an update of a previous PEA dated March 1, 2022. The updated TR incorporates additional

information developed by the Company since the 2022 report, including updated pricing and

concentrate sales terms, and the exclusion of a bio-oxidation plant that was formerly

contemplated. The updated PEA estimates an after-tax net present value (“NPV”) of $87.6

million, using a discount rate of 8%.

The TR has been completed in accordance with Canadian National Instrument 43-101 -

Standards of Disclosure of Mineral Projects (“NI 43-101”). The Mineral 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 the Velardeña Properties.

The TR assumes prices of $1,826/ounce (“oz”) gold, $22.71/oz silver, $1.02/pound (“lb”) lead

(“Pb”) and $1.31/lb zinc (“Zn”). Mineral Resources were calculated having an effective date of

June 1, 2023, as diluted to a minimum of 0.7 meters and are reported at a $195 net smelter return

(“NSR”) cutoff.

Economic Analysis - Highlights

An economic model was prepared for the Velardeña Properties using Measured, Indicated and

Inferred Mineral Resources. Mineral Resources are not Mineral Reserves and do not have

demonstrated economic viability. This PEA also considers Inferred Mineral Resources that are

too speculative for use in defining Mineral Reserves. Results of the economic analysis are:

 Mine Life: 10.5 years

 Pre-tax NPV8%: $136.7M, IRR: 1,320.2%

 After-tax NPV8%: $87.6M, IRR: 860.7%

 Payback: Less than one year

Estimated Sulfide Resources

Classification Mineral

Type Tonnes

Grade

g/t

Grade

g/t

Grade

Pb%

Grade

Zn% Ag oz Au oz Pb lb. Zn lb.

Measured Sulfide 203,200 402 6.02 1.71 2.08 2,625,900 39,300 7,680,000 9,306,300

Indicated Sulfide 462,700 402 5.32 1.68 2.08 5,983,000 79,200 17,090,700 21,173,100

Measured +

Indicated Sulfide 665,900 402 5.54 1.69 2.08 8,608,900 118,500 24,770,700 30,479,400

Inferred Sulfide 1,059,900 413 5.1 1.81 2.26 14,067,200 173,700 42,294,600 52,697,800

Notes:

1. Resources are reported as diluted tonnes and grade to 0.7 m fixed width.

2. Metal prices for NSR cutoff are: $22.71/oz-Ag, $1,826/oz-Au, $1.02/lb Pb and $1.31/lb

Zn.

3. Columns may not total due to rounding.

4. Sulfide estimated resources taken from Table 1-1: Velardeña Project Mineral Resources.

Economic Analysis - Details

Economic model results are summarized below. The model includes Measured, Indicated and

Inferred Mineral Resources. Closure and reclamation costs of $1.5 million are assumed to be

offset by salvage value and are therefore not included. The life of mine (“LOM”) is 10.5 years,

with an NPV of $87.6 million using a discount rate of 8%.

Production Summary

Total -

LOM

Financial Summary

Total

($M)

Material Mined and Processed (kt) 1,216 Gross Payable $ 601.70

Grade Au (g/t) 5.44 TCs, RCs and Freight $ (84.80)

Grade Ag (g/t) 359 Penalties $ (3.50)

Grade Pb (%) 2.21 NSR $ 513.40

Grade Zn (%) 1.88 Operating Costs

Lead Concentrate Mining $ (154.40)

Au Recovered (koz) 15.85 Processing $ (33.90)

Ag Recovered (koz) 10,651 G&A $ (49.40)

Pb Recovered (klbs) 37,351 Contingency $ (35.70)

Au Grade in Concentrate (g/t) 9.3 Total Operating Cost $ (273.40)

Ag Grade in Concentrate (g/t) 6,250 Federal Mining Royalty $ (2.70)

Pb Grade in Concentrate (%) 31.96 EBITDA $ 237.40

Zinc Concentrate Capital Costs

Zn Recovered (klbs) 26,724 Mine Equipmen t $ (0.80)

Ag Recovered (koz) 426 Processing Plant $ (0.10)

Zn Grade in Concentrate (%) 50.26 Sustaining Capital $ (3.60)

Ag Grade in Concentrate (g/t) 548.88 Surface Infrastructure and Other $ (0.30)

Pyrite Concentrate Contingency $ (0.70)

Au Recovered (koz) 171.81 Total Capital Costs $ (5.50)

Ag Recovered (koz) 1,886 Change in Working Capital $ (1.40)

Au Grade in Concentrate (g/t) 19.66 Pre-tax Cash Flow $ 230.40

Ag Grade in Concentrate (g/t) 216 NPV8% $ 136.70

IRR 1320%

Smelter Payable Payback (years) <1 year

Payable Au (koz) 143.91 Mexico SMT $ (17.80)

Payable Ag (koz) 12,020 Income Tax $ (64.60)

Payable Pb (klbs) 35,484 After-tax Cash Flow $ 148.00

Payable Zn (klbs) 22,715 NPV8% $ 87.60

IRR 861%

NSR/tonne $ 422.24

Operating Cost Estimates

Item Total

Unit

Cost

($000s)

($/t-

milled)

Mining Costs $154,407 $126.99

Processing Costs $33,921 $27.90

G&A and Overhead $49,375 $40.61

Contingency $35,655 $29.32

Total1 $273,358 $224.82

Mexico Precious Metals Royalty $2,679 $2.20

1 Columns may not total due to rounding.

Run of Mine Production Summary

Conceptual stope shapes for the PEA production plan utilize the weighted average vein width of

0.7 meters. An additional dilution factor of 10% has been applied to the recoverable tonnes to

align with current reconciliation data from the test mining operations at Velardeña.

Description Value Units

ROM Mined 1,216 kt

ROM Grades:

Grade Au 5.44 g/t

Grade Ag 359.31 g/t

Grade Pb 2.21 %

Grade Zn 1.88 %

Contained Metal:

Gold (Au) 213 koz

Silver (Ag) 14,046 koz

Lead (Pb) 59,278 klb

Zinc (Zn) 50,308 klb

Process Summary

Description Units

Total

Conc.

Products

348,940 53,007 24,118 271,816

Recoveries:

Au % 88.2 7.5 - 80.8

Ag % 92.3 75.8 3.0 13.4

Pb % 63.0 63.0 - -

Zn % 53.1 - 53.1 -

Recovered Metals:

Gold (Au) koz 187.7 15.8 - 171.8

Silver (Ag) koz 12,963 10,651 426 1,886

Lead (Pb) klb 37,351 37,351 - -

Zinc (Zn) klb 26,724 - 26,724 -

Sensitivity Analysis

Results of the sensitivity analyses show the project is most sensitive to precious metal prices,

precious metal recoveries and operating costs. A 10% change in operating costs resulted in a

12% change in project NPV. Because of the sensitivity to operating costs, efforts to control or

reduce operating costs are key to the economic success of the project.

Liquidity Update

At July 31, 2023, the Company had current assets of approximately $9.7 million, including cash

and cash equivalents of approximately $2.9 million. On the same date, it had accounts payable

and other current liabilities of approximately $6.6 million. While the Company continues to

explore various financing alternatives and asset sales, the Company has not yet obtained a source

of capital that would permit it to restart production at the Velardeña Properties or fund general

and administrative expenses. The Company has announced a letter of intent for the sale of the

Santa Maria property for initial cash proceeds of $1.5 million; however, if that transaction is

consummated the funds would likely not be received until the end of September 2023 or later. If

the Company is unable to arrange near term capital inflows from financing, asset sales or

otherwise, its cash balance may be depleted during the third quarter of 2023 and the Company

may be forced to liquidate or wind-up its business operations.

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. If the Company is able to

obtain sufficient capital and restart production at the Velardeña Properties, the Company would

do so without completing customary feasibility studies demonstrating the economic viability of

the project. 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 geologically speculative 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 the Velardeña Properties. Mineral Resources that

are not Mineral Reserves do not have demonstrated economic viability. The economic model for

the Velardeña Properties is preliminary in nature and includes inferred Mineral Resources that

are too geologically speculative 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 Velardeña Properties will be realized.

About Golden Minerals

Golden Minerals is a gold and silver producer based in Golden, Colorado. The Company is

primarily focused on initiating production at its Velardeña Properties (Mexico), advancing its

Yoquivo gold-silver property (Mexico), advancing its El Quevar silver property (Argentina)

through partner-funded exploration and on 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, estimated mine life, projected economic analyses associated with the

Velardeña Properties; cash proceeds from the potential sale of the Santa Maria property and the

possibility of the Company being forced to liquidate and wind up its business operations in the

event that the Company is unable to arrange near term capital inflows. These statements are

subject to risks and uncertainties, including the Company’s ability to obtain a source of capital

sufficient to allow it to restart operations at the Velardeña Properties and continue to pay general

and administrative expenses; 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; and the Company’s ability to

successfully mine the Velardeña Properties as contemplated in the PEA. 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, 2022.

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.

https://twitter.com/Golden_Minerals.

SOURCE: Golden Minerals Company

Contacts

For additional information please visit http://www.goldenminerals.com/ or contact:

Golden Minerals Company

Karen Winkler, Director of Investor Relations

(303) 839-5060

← Back to feed