GOLDEN, Colo., Aug. 11, 2016 /PRNewswire/ -- Golden Minerals Company ("Golden Minerals" or the "Company") (NYSE MKT: AUMN and TSX: AUM) today provided an update on its recent exploration property activities.
At the Santa Maria mine west of Hildalgo de Parral, Chihuahua, which the Company has the right to acquire under an option agreement, Golden Minerals has recently completed an underground drilling program of 2,200 meters in 24 drill holes. Assay results are complete and the Company is evaluating the results to update the resource estimate and complete a Preliminary Economic Assessment during the second half of 2016.
Significant drill results including all intercepts of the Santa Maria vein of at least 0.5 meters true width are reported below:
Management believes that drill results support the results of its previous resource estimation at Santa Maria and should allow greater confidence in the location of the higher grade ore shoots. Complete results will be reported on the Golden Minerals website www.goldenminerals.com with a location map.
On August 2, 2016, the Company entered into an earn-in agreement with a wholly-owned subsidiary of Electrum Global Holdings, L.P. ("Electrum") related to the Company's Celayaexploration project in Mexico. Golden Minerals received an upfront payment of $200,000 and Electrum has agreed to incur at least $0.5 million in exploration expenditures in the first year, reduced by costs previously incurred in its ongoing surface exploration program on the property. Electrum can elect to acquire an undivided 60 percent 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. Electrum would be the manager of the joint venture. If the Company did not contribute to additional exploration or development expenditures after the initial earn-in period, Electrum would have the right to earn an additional 20 percent interest in the joint venture company 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 could maintain its 20 percent interest or its interest could ultimately be converted into a 10 percent net profits interest.
The 6,200-hectare silver and gold Celaya project contains a strongly developed alteration system on the main Mexico Silver belt trend, located 10 kilometers east of Plata Latina'sNaranjillo silver and gold discovery and 45 kilometers southeast of and on trend with the historic Guanajuato District. Golden has conducted mapping and sampling activities at Celayasince 2012. The Company completed a 2,000 meter, three-hole drilling program in 2015 that identified epithermal gold and silver mineralization beneath a portion of the widespread clay-silica alteration on the claims comprising the project.
Warren Rehn, President and Chief Executive Officer of Golden Minerals, stated, "We are very pleased to have Electrum as a partner in this exploration project. The consummation of this agreement with a company of Electrum's standing confirms our views regarding the importance of this exploration discovery and the prospective nature of the property to potentially contain a significant epithermal silver deposit. Combined with the recently reported agreement between Fresnillo and Plata Latina on the neighboring property, Naranjillo, we are seeing momentum toward the emergence of a new mining camp with similarities to the historic Guanajuato District, 45 kilometers to the northwest."
In June 2016, Golden Minerals began a 2,000-meter core drilling program at the Rodeo gold project located approximately 80 kilometers west of the Velardena Properties in Durango State, Mexico, at an estimated cost of $0.3-$0.4 million.
San Luis del Cordero
Golden Minerals began a 20-hole, 4,600-meter exploration drilling program at the Santa Rosa vein of the San Luis del Cordero project in the first quarter 2016. The program was concluded in June 2016 with the final assessment of results available in July. Results did not expand or advance the resource estimate of the previous owner and the Company's evaluation indicated that further work on the project is not likely to meet near-term objectives. Golden Minerals intends to terminate the farm-in arrangement for the property in August 2016.
On August 2, 2016, the Company sold its 50 percent interest in the San Diego silver exploration property to Golden Tag Resources Ltd., the party holding the other 50 percent interest in the property. Golden Minerals received approximately $0.38 million in cash, 2.5 million shares of Golden Tag and a 2 percent net smelter return royalty on production from the San Diego property. Following this transaction, and including 5 million Golden Tag shares acquired in previous transactions, the Company holds approximately 10 percent of Golden Tag'soutstanding shares.
About Golden Minerals
Golden Minerals is a Delaware corporation based in Golden, Colorado. The Company is primarily focused on acquiring and advancing mining properties in Mexico with emphasis on areas near its Velardena processing plants.
Review by Qualified Person and Quality Control
The technical contents of this press release have been reviewed by Warren M. Rehn, M.Sc., a Qualified Person for the purposes of Canadian National Instrument 43-101. Mr. Rehn has over 33 years of mineral exploration experience and is a QP member of the Society for Mining Metallurgy and Exploration.
To ensure reliable sample results, Golden Minerals uses a quality assurance/quality control program that monitors the chain-of-custody of samples and includes the insertion of blanks, duplicates and reference standards in each batch of samples. Core is photographed and sawn in half with one half retained in a secured facility for verification purposes. Sample preparation (crushing and pulverizing) is performed at an independent ISO 9001:2001 certified laboratory in Chihuahua, Mexico. Prepared samples are direct-shipped to an ISO 9001:2001 certified laboratory in Canada.
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 including the Company's Santa Maria drill results and planned second half 2016 evaluation of those drill results, resource estimate update and completion of a Preliminary Economic Assessment; management's belief that the Santa Maria drill results support its previous resource estimate and should allow greater confidence in the location of higher grade ore shoots; management's belief that the Celaya properties contain a strongly developed alteration system on the main Mexico Silver belt trend, and that the Company's agreement with Electrum confirms the importance of the Celaya exploration discovery and the prospective nature of the property to potentially contain a significant epithermal silver deposit; momentum toward the emergence of a new mining camp near Celaya and Naranjillo with similarities to the historic Guanajuato District; planned drilling programs and expenditures at the Rodeo project; and planned August 2016 termination of the farm-in arrangement regarding the San Luis del Cordero project. These statements are subject to risks and uncertainties, including: unfavorable or less favorable than anticipated results from exploration at the Santa Maria, Celaya or Rodeo or other exploration properties and whether we will be able to advance these or other exploration properties; potential delays in our exploration activities, including drilling at the Rodeo project and evaluation of drill results, resource update and preparation of a Preliminary Economic Assessment at the Santa Maria project, or other activities to advance properties towards mining resulting from environmental events or permitting delays or problems, accidents, problems with contractors, disputes under agreements related to exploration properties, unanticipated costs and other unexpected events; increases in costs and declines in general economic conditions; unfavorable results of exploration at Santa Maria, which could reduce our previous resource estimate and confidence in the location of higher grade ore shoots; unfavorable exploration results at the Rodeo property, the Celaya property (which could result in termination of the agreement with Electrum), or other properties; inability to raise external financing on acceptable terms or at all; 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, 2015.
For additional information please visit http://www.goldenminerals.com/ or contact:
Golden Minerals Company
Director of Investor Relations
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SOURCE Golden Minerals Company