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 2016 we plan to focus our exploration efforts primarily on the Santa Maria Mine located in the Parral District in Chihuahua State, the Santa Rosa vein located in the San Luis del Cordero District in Durango State, and possibly the Rodeo property located 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.

San Luis del Cordero

We acquired the mining rights for the Santa Rosa vein in the San Luis del Cordero Project in Durango State in November 2015 pursuant to an exploration and exploitation agreement with a wholly-owned Mexican subsidiary of Prospero Silver Corp. The Santa Rosa vein is approximately two meters wide and as currently defined extends for about 400 meters on strike. Silver grades as reported from previous limited drilling average between 700 and 800 gpt over a two meter width in the Santa Rosa vein below the historic stopes. Records show that the Santa Rosa vein has been mined to a depth of about 100 meters.

We started a $0.5 million drilling program in February 2016 to test extensions of the Santa Rosa vein on strike and to complete infill drilling. Our objective is to increase the size and improve the certainty of estimates of the tonnes and grade of the deposit. If our exploration results are successful, we expect to issue an estimate of mineralized material and an NI 43-101 resource estimate and preliminary economic analysis in 2016. The preliminary results of our initial metallurgical testing of material from the Santa Rosa vein indicate that the material is suitable for concentration by flotation.

If the results of our exploration and metallurgical work are successful, we could mine the vein from the existing underground mine following completion of certain rehabilitation and access projects. We would use primarily mining equipment from our shutdown Velardeña Properties and truck mined material less than 100 kilometers on paved roads to our recently idled Velardeña sulfide mill for processing. We may require external financing to fund capital and working capital costs associated with mining the Santa Rosa vein, preliminarily estimated at approximately $3 to $4 million.

Under our agreement with Prospero, we paid Prospero $140,000 on signing and are required to pay $100,000 annually until production begins. We must complete a minimum of 2,000 meters of drilling within the next 18 months and commence production within three years. Once mining and processing begin, we would be required to pay Prospero 15% of net proceeds from the sale of concentrates from the property and an underlying 2% net smelter return royalty to a third party. We would be responsible for all of the costs of exploration, preparation for mining, mining, processing and sales, for which we would receive a credit in the net proceeds calculation.

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 of 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 do not have sufficient drilling data to predict the ultimate size of this higher grade zone and how long we may continue to mine bulk samples from this property, however, an underground drill program of about 1,500 meters (18 drill holes) has commenced with complete results expected by early in the third quarter 2016. Upon completion of the drill program we expect to update the resource estimate and complete a preliminary economic assessment.


We acquired the Rodeo and Rodeo 2 claims comprising 1,866 hectares 80 kilometers west of the Velardeña Properties in Durango, Mexico where previous exploration by other companies has identified a gold-bearing epithermal system exposed at the surface. We plan to conduct a 2,000 meter core drilling program in 2016 or early 2017 at an estimated cost of $300,000 to $400,000.

If our exploration efforts are successful, material from these properties 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.


Our Celaya properties total 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. We completed during the second quarter of 2015 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. The Company has entered into discussions with a third party regarding a potential farm-out of the project.


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 43-101resource 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 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.

San Diego

We own a 50% interest in the San Diego silver exploration property, which is subject to a joint venture agreement between ECU and Golden Tag Resources Ltd., with each company holding 50% of the joint venture. The property consists of four concessions and the exploration activities of the joint venture are currently managed by Golden Tag. Until March 2017, Golden Tag has the option to earn an additional 10% 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.


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