Golden Minerals Company
PROJECT PIPELINE – Exploration Properties

Golden Minerals controls a diversified portfolio of approximately 30 precious metals and other mineral exploration properties located primarily in or near historic precious metals producing regions of Mexico and Argentina. During 2012 and 2013, the Company completed exploration property sales totaling approximately $9.0 million and relinquished other properties that were no longer of interest, thus reducing our portfolio from about 80 properties at the beginning of 2012 to about 30 properties as of early 2014. We expect to focus future exploration efforts on a few selected targets in Argentina and Mexico.


Golden Minerals currently controls six active exploration projects: Los Azules, Santa Isabel, Ruby Esmeralda, Zacatecas, Celaya, and San Diego (a 50 percent owned joint venture property with Golden Tag Resources).

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

Los Azules

The Los Azules gold property is located approximately 20 kilometers west of San Francisco de Oro in southernmost Chihuahua, Mexico and about 45 kilometers west of Hidalgo del Parral. Los Azules hosts a 2-kilometer, north-south trending and gold-bearing epithermal quartz vein system cutting Tertiary felsic volcanic rocks and a felsic hypabyssal stock. Historic mining on the vein system at Los Azules reportedly produced 500,000 tonnes of gold ore averaging 11 g/t gold (Servicio Geologico Mexicano, p. 411 of Monografia Geologico-Minero del Estado de Chihuahua).

Golden Minerals holds 233 hectares of concessions in the Los Azules property through its wholly owned Mexican subsidiary Minera de Cordilleras, S. De R.L. de C.V under a purchase option agreement. The purchase agreement requires a series of option payments over a four-year period totaling $2.0 million, with $0.1 million required during each of the first and second years and a 5 percent net smelter return royalty, half of which may be repurchased for $1.0 million.

Golden Minerals conducted an initial drill program at Los Azules in the fourth quarter 2013/first quarter 2014. The 2,000-meter drill program tested down dip targets on the previously mined vein system. Drill holes were collared both underground and at surface in this program. As part of the drill program, Golden Minerals rehabilitated about 650 meters of underground drifts, and the Company continues these rehabilitation efforts to access the northern portion of the vein system which depicts better widths and higher silver grades in surface sampling.

Significant results from the initial drill program include 2.0 meters assaying 8.2 g/t (grams per tonne) gold, 1.0 meters assaying 35.2 g/t gold, 0.9 meters assaying 11.1 g/t gold and 0.5 meters assaying 10.5 g/t gold.

Selected Results from Initial Drill Program

Hole No. From (meters) To (meters) Drill Width (meters) True Width (meters) Au
AZ13-05 125.87 126.40 0.53 0.41 1.40 9 0.13 0.30
AZ13-06 124.82 125.72 0.50 0.43 10.47 28 1.50 2.91
AZ14-07 155.77 157.32 1.55 1.27 1.06 29 1.24 1.20
AZ14-08 141.85 143.83 1.98 1.71 8.20 60 1.42 1.52
AZ14-09 149.95 151.20 1.25 1.13 3.24 34 1.12 2.01
AZ14-10A 159.50 160.38 0.88 0.67 11.10 43 1.19 3.03
AZ14-11 116.25 118.30 2.05 1.78 6.84 42 1.30 1.93
AZ14-12 142.00 143.00 1.00 0.71 35.20 22 0.18 0.92

Based upon the initial drill program's encouraging results, the Company authorized additional 2014 drilling focused on definition of a target gold and silver resource within the first 250 vertical meters along the strike of the vein beneath the historic mined areas.

Zacatecas (Mexico)

Our 100 percent controlled Zacatecas silver and base metals project in Mexico is in an advanced stage of exploration. Although we believe that the Zacatecas project may contain significant silver and other mineralization, we have not completed a feasibility study on the property, and the property may not advance further.

The Zacatecas Mining District is located in the central part of Mexico, in the Faja de Plata mineral belt. Our Zacatecas project surrounds the municipalities of Zacatecas, Veta Grande, Guadalupe, Pánuco, and Morelos in the state of Zacatecas, Mexico. We own approximately 194 concessions totaling approximately 8,600 hectares in the Zacatecas project.

To maintain all of the concessions in the Zacatecas project, we pay approximately $120,000 per year to the Mexican government. We are party to a finder's fee agreement with an individual, which requires that we pay a 1 percent net smelter return royalty on any mineral production from certain of our Zacatecas claims. We also have the obligation to pay a 1 percent net smelter return royalty on the San Sabino concession, which we may buy back for $1.0 million and a 2 percent net smelter return royalty on the San Gil concession. For the San Gil concession, on the first anniversary of production, we will be required to purchase the San Gil royalty for $575,000. At that time we will no longer be obligated to pay the 2 percent royalty.

San Diego (Mexico)

We own a 50 percent interest in the San Diego silver and gold exploration property, which is subject to a joint venture agreement between ECU and Golden Tag Resources Ltd., with each company holding 50 percent of the joint venture. The property consists of four concessions and the exploration activities of the joint venture are currently managed by Golden Tag. Golden Tag has the option to earn an additional 10 percent interest in this joint venture by making expenditures related to further exploration drilling and completing an updated resource assessment. We hold the concessions in the San Diego property through our wholly-owned Mexican subsidiary Minera William S.A. de C.V.

The San Diego property, located in the State of Durango, Mexico, is situated approximately nine kilometers northeast of the Velardeña Properties and contains the La Cruz-La Rata and El Trovador mines as well as a number of other shallower shafts which were sunk on narrower veins such as the Cantarranas, Montanez and El Jal. The mineralization at San Diego is similar in many respects to that at our Velardeña Properties but appears to contain less gold.


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