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Durango State, Mexico

Land Area
557 hectares

Property Description
Former operating property with two underground mines & two mills. Oxide mill leased to Hecla Mining Co. since 2015.

Silver and gold; lead and zinc byproducts

100% owned

Project Stage
Care and maintenance

Current Activities & Work
Mine plan study, resource and metallurgical studies and review

Current and complete


The Velardeña Properties in Durango State, Mexico contain two underground silver and gold mines and two processing mills. We have leased one of the Properties’ two mills to Hecla Mining Company since mid-2015, and Hecla has secured use of the mill through 2020. This lease provides cash flow that in turn supports our various exploration activities. We continue to search for alternative sources of material that may be economically mined and transported to Velardeña for processing at the second mill, and for ore that can be processed at the oxide mill once Hecla’s lease expires at the end of 2020.

Location, Access And Facilities

The Velardeña Properties are comprised of two underground silver and gold mines (Velardeña and Chicago) and two processing plants, located within the Velardeña mining district approximately 65 kilometers southwest of the city of Torreón and 140 kilometers northeast of the city of Durango. The properties are accessed by a seven-kilometer road from the village of Velardeña, which is reached by highway from Torreón and Durango.

Power is provided through substations connected to the national grid. Water is provided by wells located in the valley adjacent to the Velardeña Properties. We hold title to three wells located near our sulfide plant and certificates of registration to three wells located near our oxide plant. We are licensed to pump water from all six wells up to a permitted amount.

Title And Ownership

The Velardeña Properties are subject to the Mexican ejido system requiring us to contract with the local communities, or ejidos, surrounding our properties to obtain surface access rights needed in connection with our mining and exploration activities. We currently have contracts with two ejidos to secure surface rights for the Velardeña Properties: one that provides surface rights to certain roads and infrastructure through 2021, and a second that provides exploration access and access rights for roads and utilities until 2038.

We hold 29 mineral concessions covering 557 hectares in the Velardeña Properties.  We also own the land surface rights to 144 hectares that contain the oxide plant, tailings area and access to the Chicago mine, along with surface lands that may be required for potential plant expansions.

Property History

Exploration and mining in the Velardeña district extends back to at least the late 1500s or early 1600s, with large scale mining beginning in 1888 with the Velardeña Mining and Smelter Company. In 1902, the mining properties were acquired by ASARCO, who mined the property until 1926 when the mines were closed. For the next 35 years, the mines were operated from time to time by small companies and local miners. The property was nationalized in 1961, and in 1968 the sulfide processing plant was built by the Mexican government. In 1994, William Resources acquired the concessions comprising the Velardeña Properties. In 1997, ECU Gold (the predecessor to ECU Silver Mining Inc.) purchased from William Resources the subsidiaries that owned the concessions and the oxide processing plant. The sulfide processing plant was acquired in 2004.

Exploration And Mining Activity

Golden Minerals Company mined oxide and mixed oxide/sulfide material from the Velardeña and Chicago mines during the years 2011 to 2013. Between November 2014 and November 2015, we mined from the Velardeña mine’s San Mateo, Terneras, and Santa Juana vein systems, as well as from the Chicago mine. Due to continuing net operating losses and low silver prices, we suspended mining activities in November 2015 to best conserve the future value of these assets. We placed the mine and sulfide mill on care and maintenance to enable a re-start when mining and processing plans and metals prices indicate mining activities may be conducted profitably, or until we are able to locate and develop alternative mineral sources that may be economically mined and transported to the Velardeña Properties for processing. We continue to actively search for and evaluate other oxide and sulfide feed sources, focusing on sources within haulage distance of our sulfide and oxide mills at Velardeña.

Oxide Mill Lease

We have leased Velardeña’s oxide mill to a Hecla Mining Company subsidiary since July 2015. The cash generated from this lease has in turn supported our exploration activities. The lease has been extended several times since its inception and Hecla has secured an option to utilize the mill through December 2020.

Hecla is responsible for ongoing operation and maintenance of the oxide plant and pays fixed fees, direct plant charges and other reimbursable costs to us as well as a variable fee based on throughput under the terms of the lease. During 2016, Hecla processed approximately 136,000 tonnes of material through the oxide plant, providing Golden with revenue of $6.4 million and a net margin of $4.4 million. During 2017, Hecla processed approximately 131,000 tonnes of material through the plant, resulting in $6.7 million in revenue and $4.5 million in net margin. At Hecla’s intended processing throughput of approximately 400 tonnes per day, net cash payments to us (net of reimbursable costs) should continue to total between $0.3 and $0.4 million per month.

In the first half of 2017, Hecla completed an expansion of the tailings impoundment at Velardeña, as part of an agreement related to its continued use of the facility. Hecla will fund any required future tailings expansions, leaving unused at the end of the lease term an agreed amount of capacity.


We own a 300 tonne per day flotation mill situated near the town of Velardeña, which accounted for 100% of our revenue from saleable metals during 2014 and 2015. The mill includes three flotation circuits in which we can process the sulfide material to make lead, zinc and pyrite concentrates. Most of the silver and gold sold in 2014 and 2015 was contained in the lead concentrate. During 2015 we processed all our mined material through the sulfide plant.

Hecla is currently leasing our second mill, a conventional 550 tonne per day cyanide leach mill with a Merrill-Crowe precipitation circuit which is located adjacent to our Chicago mine. We previously used this mill to process oxide and mixed sulfide/oxide material from the Velardeña Properties.

NI 43-101 Compliant Mineral Resource Estimate

(M oz)
('000 oz)
Silver Eq.
(M oz)
Velardeña Properties
Measured 0.4 4.3 65.0 8.9 321 4.9
Indicated 1.0 9.5 126.0 18.4 311 4.1
Inferred 1.6 16.4 239.0 33.2 320 4.7
  • Source:  Tetra Tech, NI 43-101 Technical Report and Preliminary Economic Assessment, February 20, 2015
  • Assumes metal prices for NSR cutoff are current as of December 2014: US$25/troy ounce Ag, US$1,446/troy ounce Au, US$0.96/lb Pb, and US$0.91/lb Zn
  • For additional details see the Technical Reports page

Geology & Mineralization

The precious metal deposits in the Velardeña and Chicago mines are narrow epithermal to mesothermal quartz-calcite to quartz-sulfide veins that follow three distinct trends.  In the Velardeña mine east-west striking steeply north-dipping veins include the Terneras and San Mateo vein groups and the north-west striking, steeply northeast dipping Santa Juana veins.  In the Chicago mine, the veins strike north-east and dip steeply to the southeast.  Most veins carry recoverable lead and zinc values in galena and sphalerite as well as silver either in galena or in freibergite and gold hosted in pyrite and arsenopyrite.

The Velardeña district is located at the boundary between the Sierra Madre Oriental to the east and the Mesa Central sub-province to the west. The regional geology is characterized by a thick sequence of limestone and calcareous clastic sediments of Cretaceous age, intruded by Tertiary plutons. During the Laramide Orogeny, the sediments were folded into symmetrical anticlines and synclines that were modified into a series of asymmetrical overturned folds by a later stage of compression.

A series of Tertiary stocks have intruded the Cretaceous limestone over a distance of approximately 15 kilometers along a northeast to southwest trend. The various mineral deposits of the Velardeña mining district occur along the northeast southwest axis and are spatially associated with the intrusions and their related alteration.

Several types of Tertiary intrusive rocks are present in the Velardeña district. The largest of these intrusions outcrops on the western flank of the Sierra San Lorenzo and underlies a portion of the Velardeña Properties. It forms a northeast oriented, elongated body of diorite composition that outcrops over a distance of about 2.5 kilometers. The intruded limestone has been altered by contact metamorphism (exoskarn), and locally the intrusive has been metamorphosed (endoskarn).

Velardeña Mine

The Santa Juana, Terneras, and San Mateo vein groups on the Velardeña property are hosted by Cretaceous Aurora Formation limestone, a diorite intrusion and related skarn.

Two main vein systems are present in the Velardeña mine. The first is the northwest striking, steeply north-dipping Santa Juana group of veins which include over 20 individually named veins, the most important of which are the A1, A4, CC, C1, and Santa Juana veins. The second vein system is east-west trending and steeply north-dipping and is represented by the Terneras and San Mateo vein groups. The Terneras group of veins includes the Roca Negra, Terneras Norte, Terneras Sur, Hiletas, and San Juanes veins. The San Mateo group includes San Mateo Oeste and San Mateo Este.

The most extensive of these is the Terneras vein, which was mined in the past over a strike length of 1,100 meters. All of these veins are observed to have extensive strike lengths and vertical continuity for hundreds of meters. The mineralogy of the east west system is somewhat different in that it contains less arsenic than the Santa Juana veins.

Vein widths in minable portions of the vein systems vary from 0.2 meters to 4 meters but average widths for most veins is 0.3 to 0.5 meters.  Vein widths generally decrease where veins cut skarn.

Chicago Mine

On the Chicago property, the oldest rocks outcropping are Cretaceous limestone of the Aurora Formation which are highly folded. This limestone is locally metamorphosed by the intrusion of the Tertiary dioritic stocks and dykes. The general geology of the Chicago property is very similar to the geology of the Velardeña property. The Chicago veins strike northeast and dip steeply southeast. The main veins of interest at Chicago are the Chicago and Escondida veins.  Chicago veins tend to be higher in lead and zinc than the Santa Juana or Terneras veins.  Vein widths at Chicago are variable and tend to be narrower than at the Santa Juana deposit, especially in the skarn host.

Velardeña Drill Results

Velardeña 2014 Drilling Results