GOLDEN, Colo., Sept. 10, 2013 /PRNewswire/ -- Golden Minerals Company (NYSE MKT: AUMN; TSX: AUM) ("Golden Minerals" or "the Company"), a precious metals mining company with primary assets in Mexico and Argentina, reports continued progress with its work at the Velardena Operations in Durango State, Mexico. The Company previously announced it suspended operations at the Velardena mine on June 19, 2013 due to depressed silver and gold prices, and that the suspension was enacted to best conserve the asset until operating plans and metals prices indicate sustainable and profitable operations.
The Company is evaluating an operating plan that would use a modified long hole stoping method to extract ore at the Velardena Operations and is currently engaged in testing to validate the viability of this operating plan. Results of both the testing program and gold recovery testing should be available before year end and will be used in conjunction with precious metals price forecasts to determine the Company's 2014 plan for Velardena.
The long hole stoping method is expected to reduce the requirement for skilled mining labor and should significantly lower mining costs. The use of this method is being considered due to the identification of high-grade shoots within the Velardena vein systems. The higher grade should enable the operation to maintain an economic head grade after the dilution that typically accompanies the long hole stoping method, assuming silver prices in the plus $20 per ounce range. Golden Minerals is currently verifying the resource components used to construct this mining and operating plan, including detailed mapping and sampling of accessible underground high grade shoot locations. The long hole stoping plan contemplates an initial nine month development period to establish the new stopes, followed by a ramp up in production. Processing would increase up to 600 tonnes per day with both sulfide and oxide plants operating, and estimated payable production of up to approximately 1.6 million silver equivalent ounces per annum following the ramp up period. Exclusive of working capital, this plan would have expected initial development and capital costs in the $3 million to $5 million range.Additionally, the Company continues to actively search for oxide feed from outside sources and to work on gold recovery. To date, the Albion and bio leach processes have been rejected based on unsatisfactory economics. Tests are currently underway for ferric chloride and roasting technologies. These results should be available during the third quarter 2013. An autoclave process has not been rejected but would require significantly greater throughput and confidence in the continuity of ore than is currently indicated.