GOLDEN, Colo., Feb. 26, 2015 /PRNewswire/ -- Golden Minerals Company ("Golden Minerals" or the "Company") (NYSE MKT: AUMN) (TSX: AUM) announced today the results of a National Instrument (NI) 43-101-compliant Preliminary Economic Assessment (the "PEA") for its Velardena Properties which are located in Durango State, Mexico.
Key highlights from the PEA include:
- Significantly higher grades of silver and gold than reported in the Velardena Properties' 2012 NI 43-101 report
- Cash costs, after by-product credits, per payable ounce of silver (see 'Non-GAAP Financial Measures' below) averaging $9-$10 for the Company's current four year mine plan
The first table below shows the mineral resource estimate as at December 31, 2014 with a net smelter return (NSR) cutoff calculated using three year trailing average prices for silver, gold, zinc and lead. The second table shows the mineral resource estimate as at December 31, 2014 calculated using December 2014 prices.
|Tonnes (M)||Silver (Moz)||Gold (Moz)||Silver Eq. (M oz)||Silver g/t||Gold g/t|
|Measured + Indicated||1.79||15.65||0.222||28.94||272||3.8|
- This resource estimate assumed a three year trailing average silver price of $25 per troy ounce and a gold price of $1,446 per troy ounce and a cutoff grade that generates a minimum $100 per tonne NSR
- Silver equivalents are calculated at 60:1
|Tonnes (M)||Silver (Moz)||Gold (Moz)||Silver Eq. (M oz)||Silver g/t||Gold g/t|
|Measured + Indicated||1.37||13.83||0.192||27.25||314||4.4|
- This resource estimate assumed current prices as of December 2014 of $17 per troy ounce of silver and $1250 per troy ounce of gold and a cutoff grade that generates a minimum $100 per tonne NSR
- Silver equivalents are calculated at 70:1
Golden Minerals has issued the following guidance estimates for calendar year 2015:
|Q1 2015||Q2 2015||Q3 2015||Q4 2015||Full Year|
|Payable AgEq||100 - 150||200 - 250||250 - 300||250 - 300||800 - 1,000|
|Cash Costs/oz||$20 - 30||$15 - 20||$10 - 15||$10 - 15||$12 - 15|
- Payable production in '000 of silver equivalent ounces (AgEq oz), including silver and gold but excluding lead and zinc. Silver equivalents calculated at 70:1.
- Cash costs, after by-product credits, per payable ounce of silver (see 'Non-GAAP Financial Measures' below). By-product credits include forecasted revenues from gold, lead and zinc. These amounts assume a $1,250 per ounce gold price.
Tetra Tech is an independent engineering firm that served as principal author of the PEA and prepared the PEA on behalf of the Company. Nick Michael is the independent Qualified Person from Tetra Tech who reviewed and approved this press release.
An NI 43-101-compliant technical report which will include the PEA will be filed on SEDAR (www.sedar.com) and made available on the Golden Minerals website within 45 days.
About Golden Minerals
Golden Minerals is a Delaware corporation based in Golden, Colorado. The Company is primarily focused on operations at its Velardena Properties and the exploration of properties in Mexico and Argentina.
Cautionary Note to U.S. Investors concerning Estimates of Measured, Indicated and Inferred Resources
This press release uses the terms "measured resources", "indicated resources" and "inferred resources" which are defined in, and required to be disclosed by NI 43-101. We advise U.S. investors that these terms are not recognized by the United States Securities and Exchange Commission (the "SEC"). The estimation of measured resources and indicated resources involves greater uncertainty as to their existence and economic feasibility than the estimation of proven and probable reserves. Mineral resources are not mineral reserves, and U.S. investors are cautioned not to assume that measured mineral resources or indicated mineral resources will be converted into reserves. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources. U.S. investors are cautioned not to assume that estimates of inferred mineral resources exist, are economically mineable, or will be upgraded into measured or indicated mineral resources.
The PEA is preliminary in nature; it includes inferred mineral resources that are considered to be too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Non-GAAP Financial Measures
Cash costs, after by-product credits, per payable ounce of silver is a non-GAAP financial measure that is widely used in the mining industry. Under generally accepted accounting principles in the United States (GAAP), there is no standardized definition of cash cost, after by-product credits, per payable ounce of silver, and therefore the Company's forecasted cash costs may not be comparable to similar measures reported by other companies.
Forecasted cash costs for the Velardena Properties were calculated based on the mining plan, and include all forecasted direct and indirect costs associated with the physical activities that would generate concentrate products for sale to customers, including mining to gain access to mineralized materials, mining of mineralized materials and waste, milling, third-party related treatment, refining and transportation costs, on-site administrative costs and royalties. Forecasted cash costs do not include depreciation, depletion, amortization, exploration expenditures, reclamation and remediation costs, sustaining capital, financing costs, income taxes, or corporate general and administrative costs not directly or indirectly related to the Velardena Properties. By-product credits include forecasted revenues from gold, lead and zinc contained in the products sold to customers. Cash costs, after by-product credits, were divided by the quantity of payable silver forecasted for the period to arrive at cash costs, after by-product credits, per payable ounce of silver. Cost of sales is the most comparable financial measure, calculated in accordance with GAAP, to cash costs. As compared to cash costs, cost of sales includes adjustments for changes in inventory and excludes net revenue from by-products and third-party related treatment, refining and transportation costs, which are reported as part of revenue in accordance with GAAP.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and applicable Canadian securities legislation, including statements regarding estimates of measured, indicated and inferred resources and forecasts of payable metals to be produced and cash costs, after by-product credits, per payable ounce of silver at the Velardena Properties in 2015. 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 future mining and processing experience; new information from drilling programs; reliability of metallurgical testing results and changes in interpretation based on processing results; delays or problems in mining or processing or the ramp-up at the Velardena Properties; variations in ore grade and metallurgical characteristics of processed material; delays or failures in receiving government approvals or permits or suspensions of existing approvals and permits; failure to achieve anticipated metal recoveries or anticipated mining or processing results including expected quantities of anticipated saleable products; failures of new mine plan, stope development and slusher techniques to meet expectations; mining and processing costs in excess of those anticipated; unexpected variations in mineral grades, types and metallurgy; fluctuations and continuing declines in silver and gold metal prices; technical, permitting, mining, metallurgical, recovery or processing issues; problems that delay or reduce underground mine and stope construction; operational changes or problems; failure of mined material to meet expectations; failure of veins mined to meet expectations; increases in costs and declines in general economic conditions; and changes in political conditions, in tax, royalty, environmental and other laws in Mexico, and financial market conditions. 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 Exchange Commission by Golden Minerals, including the Company's Annual Report on Form 10-K for the year ended December 31, 2013.