Golden Minerals Provides First Half 2012 Production Results for Velardena Operations
GOLDEN, CO -- (Marketwire) -- 07/19/12 -- Golden Minerals Company (NYSE MKT: AUMN) (NYSE Amex: AUMN) (TSX: AUM) ("Golden Minerals" or "the Company") today provided production results for the three and six month periods ending June 30, 2012 as well as an update for the Velardeña Operations, located in Durango State in Mexico.
During the second quarter 2012, the Velardeña Operations had payable production of 1,500 ounces of gold and 90,000 ounces of silver, as compared to 1,700 ounces of gold and 110,000 ounces of silver in the first quarter 2012. First quarter payable production included a positive adjustment of 10,000 ounces of silver from prior periods. In the first half of 2012, payable production was 3,200 ounces of gold and 200,000 ounces of silver. Additionally, the Velardeña Operations had payable production of 200,000 pounds of lead and 300,000 pounds of zinc in the second quarter, and 400,000 pounds of lead and 600,000 pounds of zinc in the first half of 2012. The Company does not plan to provide further production guidance until additional mine development has been completed.
Production during the first six months was negatively impacted by less than planned mine development due primarily to delays in the arrival of underground mine equipment from Argentina and by plant optimization efforts. Nearly all of the equipment from Argentina has now arrived at Velardeña or has been shipped, and the Velardeña Operations are no longer constrained by the lack of underground mining equipment. Mine development, which should permit the Company to open new stopes for mining in the fourth quarter 2012, and ramp-up of production are underway as planned.
As previously announced, the new Canadian National Instrument 43-101 ("NI 43-101") compliant mineral resource estimate for the Velardeña Operations prepared during the quarter by Chlumsky, Armbrust and Meyer ("CAM") demonstrates significantly higher grades with fewer tonnes than previous estimates, resulting in relatively the same measured and indicated resource gold and silver ounces as the prior estimate. The new estimate of inferred resource is reduced from the previous estimate as a result of a conservative geostatistical approach for classifying the inferred category. Most of the previous inferred resource is now classified in the potential category.
Although the range in the potential category is similar to the previous estimate of inferred resource, potential cannot be considered in a NI 43-101 Preliminary Economic Assessment ("PEA"). The Company is also considering various options for the long term expansion of Velardeña. The Company has therefore determined that preparing a PEA at this time would not accurately reflect what management believes to be the potential of the Velardeña deposit.
Golden Minerals is continuing to ramp up production at the oxide and sulfide plants to achieve the combined design capacity of 850 tonnes per day, anticipated during the second quarter of 2013. Studies to determine the optimal plant throughput and to evaluate alternatives and timing for possible expansion beyond 850 tonnes per day are ongoing. Potential plant expansion is subject to the availability of funding.
About Golden Minerals
Golden Minerals is a Delaware corporation based in Golden, Colorado, primarily engaged in the ramp-up and expansion of existing production at the Velardeña Operations in Mexico and advancement of the evaluation stage El Quevar project in Argentina.
Forward-Looking Statements
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 laws, including statements regarding of the timing of anticipated mine development and production ramp-up at the Velardeña Operations, the timing of anticipated opening of new stopes for mining, plant optimization efforts, the sufficiency of mobile mining and other equipment on site for mine development activities, increased mine dilution and reduced head grades; the potential expansion of Velardeña Operations production; the requirement for external funding for an expansion. These statements are subject to risks and uncertainties, including unexpected events at the Velardeña Operations, including further delays or problems in mine development and plant optimization; operational changes or problems; variations in ore grade and relative amounts, grades and metallurgical characteristics of oxide and sulfide ores; delays or failure in receiving required board or government approvals or permits; technical, permitting, mining, metallurgical or processing issues; failure to achieve anticipated production and improvements in head grades, recoveries and concentrate production and quality at the Velardeña Operations; delays in or failure to realize anticipated benefits of plant optimization efforts; timing and availability of external funding on acceptable terms to construct expanded production facilities; unfavorable interpretations of geologic information; failure to realize anticipated gold production increases from the addition of the bulk flotation process being installed at the oxide plant; failure to realize anticipated production increases from the anticipated increase in mine development; loss of and inability to adequately replace skilled mining and management personnel; possible disputes with customers or joint venture partners; failure of undeveloped ore or veins to meet expectations; interpretations and changes in interpretations of geologic information; volatility or other changes in the U.S. and Canadian securities markets; availability and cost of materials, supplies and electrical power required for mining operations and exploration; fluctuations in silver, gold, zinc and lead prices, costs and general economic conditions; changes in political conditions, tax, environmental and other laws; and diminution of physical safety of employees in Mexico, and other conditions in the countries in which the Company operates. Additional risks relating to Golden Minerals Company may be found in the periodic and current reports filed with the Securities Exchange Commission by Golden Minerals Company, including the Annual Report on Form 10-K for the year ended December 31, 2011.
For additional information please visit http://www.goldenminerals.com/ or contact:
Golden Minerals Company
Jerry W. Danni
(303) 839-5060
Executive Vice President