Golden Minerals Company
Exploration Properties

Golden Minerals controls a diversified portfolio of approximately 10 precious metals and other mineral exploration properties located primarily in or near historic precious metals producing regions of Mexico. In the second half of 2016 we plan to focus our exploration efforts primarily on the Santa Maria Mine located in the Parral District in Chihuahua State, and the Rodeo property located approximately 80 kilometers west of the Velardeņa Properties in Durango. During 2016 we expect our expenditures for the exploration program to total approximately $2.2 million, with approximately $0.3 million in property holding costs in Mexico and approximately $0.5 million in administrative and general reconnaissance costs in Mexico.

None of these properties have established proven or probable ore reserves.

Santa Maria

In August 2014, we entered into an option agreement giving us the right to acquire for $1.2 million the Santa Maria mine, a privately held property comprised of a single mining claim of 18 hectares west of Hildalgo de Parral, Chihuahua State, Mexico.

Golden Minerals completed a 2,300-meter, 11-hole initial drilling program at the Santa Maria mine in 2014. Highlights include hole SM14-08 that returned an intercept of 568 grams per tonne silver and 2.7 grams per tonne gold over 4.42 meters, hole SM14-04 with an intercept of 222 grams per tonne silver and 2.5 grams per tonne gold over 4.95 meters, and hole SM14-06 which returned intercepts of 411 grams per tonne silver and 2.3 grams per tonne gold over 3.02 meters. Results are summarized in the table below.

Hole No. From (meters) To (meters) Drill Width (meters) True Width (meters) Au
SM14-01 137.17 137.62 0.45 0.39 1.9 1344 3.28 4.39
SM14-04 164.69 169.64 4.95 3.18 2.5 222 2.1 3.3
SM14-06 203.6 206.62 3.02 1.51 2.3 411 0.1 0.35
SM14-08 192.2 196.62 4.42 2.84 2.7 568 1.8 2.5

Based on encouraging drill results, in October 2014 Golden Minerals retained an outside firm to prepare a National Instrument (NI) 43-101 Technical Report on the Santa Maria property. The report was completed in the first quarter of 2015 and outlines a resource as follows:

SANTA MARIA MINE - 43-101 Technical Report Prepared by Tetra Tech, April 2015

  Cut-off Grade AgEq g/t Mineral Type Tonnes
Silver Oz
Gold Oz
  Silver Eq. Oz
Eq. Oz
Indicated 230 Oxide, Mixed & Sulfide 73 710 3 304 1.1   900 15
Inferred 230 Oxide, Mixed & Sulfide 264 2,800 12 331 1.4   3,630 59

1  Resources are reported as diluted tonnes and grade to a minimum 0.8meter (m) width
    with 0.2m dilution added
2  Cut-off grade has been estimated using 90% recovery and 90% payable Ag and Au
    with forward looking prices: US$17 per troy ounce Ag, US$1,200 per troy ounce Au
3  Equivalents calculated at 70:1 silver to gold
4  Silver and gold equivalent ounces are not additive

During the third quarter 2015 we mined approximately 3,000 tonnes of material from the vein as bulk samples at a total cost of about $250,000 and entered into a contract to process the material for metallurgical and process testing purposes at a local third-party toll milling facility at a cost of about $100,000. The extracted material, mined from a high grade portion of the vein, had grades of approximately 500 gpt silver and 0.9 gpt gold. During the first quarter 2016 we mined approximately 3,000 tonnes of material from a mineralized shoot as a bulk sample with grades of approximately 250 grams per tonne (gpt) silver and 0.6 gpt gold. We processed the bulk sample through a toll milling facility, generating approximately 70 tonnes of concentrates containing approximately 15,000 ounces of silver and 26 ounces of gold. The concentrates were sold to a third party for approximately $200,000 in the first quarter 2016 consisting of approximately 14,500 payable ounces of silver and 24 payable ounces of gold, which offset exploration costs.

We continued exploration work during the second quarter 2016, mining approximately 1,500 tonnes of material from a mineralized shoot as a bulk sample. In total for the six months ended June 30, 2016, we mined approximately 4,500 tonnes of material with grades of approximately 235 gpt silver and 0.7 gpt gold. The concentrates were sold to a third party for approximately $300,000 during the six month period ended June 30, 2016 consisting of approximately 21,000 payable ounces of silver and 40 payable ounces of gold, which offset exploration costs. The average grade of 7,500 tons mined and processed in bulk samples since 2015 is 338 gpt silver and 0.7 gpt gold.

Santa Maria: 2016 Drilling Program

El Quevare Conceptual Plan  
Santa Maria
Drill Hole Results
August 2016
Santa Maria
Drilling Plan View
Santa Maria Long Section August 2016  


In 2015, we acquired the Rodeo and Rodeo 2 claims comprising 1,866 hectares 80 kilometers west of the Velardeņa Properties in Durango, Mexico where previous exploration by other companies has identified a gold-bearing epithermal system exposed at the surface. In June 2016, we initiated a 2,000 meter core drilling program at the Rodeo property at an estimated cost of $300,000 to $400,000. The partial results from our first round of drilling, released in September 2016, show a gold and silver bearing epithermal vein and breccia system with encouraging gold and silver values over an approximate 50 to 70 meter true width. The system is exposed at the top of a northwesterly striking ridge and dips steeply to the northeast. This could provide the possibility of open pit mining if we discover a deposit with sufficient tonnage of an appropriate grade and other characteristics to justify mining. The drill holes reported previously are spaced about 25 meters apart along 100 meters of the crest of the mineralized ridge. The drill holes are angle holes oriented at 55° to the southwest and cut the vein and breccia system at an angle of approximately 50°. Previous work has shown the mineralized system to be exposed at surface over about one kilometer of strike length. We expect to complete the drill program in Q4 2016 and quantify and evaluate the resource.

If our exploration efforts are successful, material from this property could be trucked to the Velardeña oxide plant for processing after the third party lease has terminated. Our cost to maintain the Rodeo properties includes advance royalty payments to La Cuesta International of $5,000 in 2015 and $10,000 in 2016. La Cuesta holds a 2% net smelter return royalty on production from the claims up to a total payable amount of $5.0 million. Our agreement requires a minimum program of 1,000 meters of drilling before May 2017. Payments to the Mexican government to maintain the claims totaled approximately $20,000 in 2015 and are expected to total about $30,000 in 2016.


The Celaya project totals 6,200 hectares encompassing a strongly developed alteration system on the main Mexico Silver Belt trend located approximately 10 kilometers east of the Plata Latina Naranjillo discovery and 45 kilometers southeast of and on trend with the historic Guanajuato District. Since 2012 we have been conducting mapping and sampling exploration activities on the properties. During the second quarter 2015, we completed a 2,000 meter, three-hole drilling program which identified epithermal gold and silver mineralization beneath a portion of the widespread clay-silica alteration on the claims comprising the Celaya project.

On August 2, 2016, the Company, through its wholly owned Mexican subsidiary, entered into an earn-in and joint venture agreement with a 100% owned Mexican subsidiary of Electrum Global Holdings, L.P., a privately owned company (together "Electrum"), related to the Company's Celaya exploration property in Mexico. The Company received an upfront payment of $200,000 and Electrum has agreed to incur exploration expenditures totaling at least $0.5 million within the first year of the agreement, reduced by certain costs Electrum previously incurred on the property since December 2015 in its ongoing surface exploration program. Electrum, at its option, can elect to acquire an undivided 60% interest in a joint venture company to be formed to hold the Celaya project after incurring exploration expenditures totaling $2.5 million during the first three years of the agreement. Following the initial three year earn-in period the joint venture Company would be formed to hold all project assets and a management committee would be formed with one representative of the Company and two representatives of Electrum. Electrum would serve as manager of the project. The Company would have the right to maintain its 40% interest in the Celaya project by funding its share of additional exploration or development expenditures. If the Company were to elect not to contribute to additional exploration or development expenditures after the initial earn-in period, Electrum, at its option, would have the right to earn an additional 20% interest in the joint venture company, for a total interest of 80%, by incurring an additional $2.5 million of exploration or development expenditures over a second three year period. Following the second earn-in period the Company would have the right to maintain its 20% interest in the Celaya project by funding its share of additional exploration or development expenditures or its interest can ultimately be converted into a 10% net profits interest. The Company has previously expensed all of its costs associated with the Celaya property and accordingly will recognize a gain of $0.2 million from the farm-out of the property in the third quarter 2016.


Our 100% controlled Zacatecas silver and base metals project in Mexico is an exploration stage property that we have drilled in the past. Although we believe that the Zacatecas project may contain significant silver and other mineralization, we have not completed a mineralized material estimate or NI 43-101 resource study on the property.

The Zacatecas Mining District is located in the central part of Mexico, in the main Mexico Silver Belt. Our Zacatecas project surrounds the municipalities of Zacatecas, Veta Grande, Guadalupe, Pánuco, and Morelos in the state of Zacatecas, Mexico. We own approximately 149 concessions totaling approximately 7,900 hectares in the Zacatecas project.

On April 28, 2016, Golden Minerals entered into an option agreement under which Santa Cruz Silver Mining Ltd. may acquire its interest in certain nonstrategic mineral claims located in the Zacatecas Mining District, Zacatecas, Mexico for a series of payments totaling $1.5 million. Santa Cruz paid $0.2 million on signing the agreement. In order to maintain its option and acquire the Zacatecas Properties, Santa Cruz is required to pay an additional $0.2 million in October 2016, six months after signing, plus additional amounts of $0.3 million, $0.3 million and $0.5 million due 12, 18 and 24 months after signing respectively. Santa Cruz has the right to terminate the option agreement at any time, and the agreement will terminate if Santa Cruz fails to make a payment when due.


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