Aug. 30, 2012
Golden Minerals Company (NYSE Mkt: AUMN; TSX: AUM)
("Golden Minerals" or "the Company") today provided an update for the Velardena Operations, located in Durango State in
Golden Minerals is continuing to ramp up production at the Velardena Operations to reach a combined oxide and sulfide plant throughput of 850 tonnes per day during the second quarter of 2013. Capital and mine development costs for the 12 month period ending
June 30, 2013
are estimated to be between
$15.0 and $20.0 million
, including approximately
for mine development. At 850 tonnes per day, the Company anticipates an annualized production rate of payable metals in the range from 1.0 to 1.2 million ounces of silver and 12,000 to 16,000 ounces of gold, resulting in 1.6 to 2.0 million ounces of silver equivalent (using a ratio of 50:1, gold to silver). At 850 tonnes per day, the Velardena Operations are expected also to produce approximately 4.0 million pounds of combined payable lead and zinc.
The sulfide and oxide plants at
are currently operating at a combined capacity of approximately 600 tonnes per day. Mine operations are no longer constrained by the lack of underground mining equipment, and mine development should now permit the Company to open access to new stopes for mining commencing in the third quarter 2012. The Company has commenced commissioning of the bulk flotation process in the oxide plant, designed to recover additional gold from pyrite. Based on actual production for July and August to date, and anticipated production in September, the Company expects payable production for the third quarter to be approximately 10% to 20% higher than the average quarterly payable production for the first half of 2012.
The Company intends to further expand its operations to 1,150 tonnes per day throughput, and has recently commenced preliminary design and engineering. The ramp-up to 1,150 tonnes daily throughput could begin as early as the first quarter of 2014, which could result in throughput at the full 1,150 tonne daily capacity being achieved by the fourth quarter of 2014. The Company's preliminary estimate of capital and mine development cost for the 1,150 expansion, most of which would be spent from mid-2013 through 2014, is between
$40.0 and $50.0 million
, of which between
$20.0 and $30.0 million
would be for an autoclave circuit and approximately
would be for mine development. In addition to the autoclave circuit, the expanded facility would also include the replacement of one sulfide ball mill and the addition of flotation and filtration capacity. The Company's preliminary estimates of annualized payable production at 1,150 tonnes per day range from 1.8 to 2.2 million ounces of silver and 25,000 to 35,000 ounces of gold, resulting in 3.0 to 4.0 million ounces of silver equivalent (using a ratio of 50:1, gold to silver). At 1,150 tonnes per day, the Velardena Operations would also produce up to 10.0 million pounds combined payable lead and zinc on an annualized basis. The Company expects cash operating cost per ounce of silver at the 1,150 tonnes per day throughput rate to be lower than average 2011 cash costs of approximately
per ounce of silver as reported by The Silver Institute World Silver Survey 2012 of GFMS-Thomson Reuters, compared to anticipated cash operating cost at the 850 tonnes per day throughput rate which are expected to be higher than such average 2011 cash costs.
As previously reported, the Company would require external funding for most of the capital and mine development costs for the planned ramp-up to 850 tonnes per day and the anticipated subsequent expansion to 1,150 tonnes per day, which may include debt, equity, product, leasing or project financing transactions. There is uncertainty regarding whether the Company will be successful in obtaining sufficient funding on acceptable terms or at all.