-- Golden Minerals recorded a total net loss of $6.1 million for the
third quarter.
-- At September 30, 2009 the Company had $13.6 million cash and cash
equivalents as compared to $15.7 million at June 30, 2009.
-- The Company's remaining auction rate securities ("ARS") were sold
during the third quarter for $3.0 million.
-- During the third quarter, three mining claims in Mexico were sold for
$1.2 million in cash.
-- Drilling continued during the third quarter at the Company's El Quevar
project in Argentina, with 162 holes totaling approximately 29,000 meters
completed to date. An updated resource estimate was completed during
October. An independent technical report with the new resource estimate
will be issued in November 2009.
-- In addition to El Quevar, Golden Minerals continued to advance
exploration programs at certain of the Company's other projects in Mexico,
Peru and Argentina.
Financial Results, Liquidity and Capital Resources
For the third quarter 2009, Golden Minerals recorded a total net loss of
$6.1 million, which included among other items, $1.5 million in revenue net
of associated costs for management services, interest and other income of
$0.2 million and royalty income of $0.3 million, offset by $2.5 million of
administrative expense, $0.4 million of reorganization costs, $3.6 million
of exploration expense, and a loss of $0.9 million on the sale of the
Company's remaining ARS investments.
At September 30, 2009 Golden Minerals' aggregate cash and short and
long-term investments totaled $14.0 million, which included proceeds from
the sale of the ARS and the sale of three mining claims in Mexico. The
September 30, 2009 amount includes $13.6 million of cash and cash
equivalents and $0.4 million of short term investments. At June 30, 2009
the Company's cash and cash equivalents totaled $15.7 million.
During the third quarter 2009, the Company sold the remaining ARS
investments in a secondary market for $3.0 million and recognized a loss of
$0.9 million. The proceeds are held as cash and cash equivalents. At
September 30, 2009 Golden Minerals had no remaining ARS investments.
Golden Minerals sold three mining claims in Mexico to Capstone Gold SA de
CV during the third quarter of 2009. The mining claims, which are located
on the southern edge of the Zacatecas district, are outside of the
Company's targeted exploration program. The Company received $1.0 million
in cash and recorded a $0.6 million gain on the sale. Golden Minerals also
retained certain sliding scale net smelter return royalties on the
property, based on production quantities and metals prices.
For the remaining three months of 2009, Golden Minerals expects to spend
approximately $3.0 million on general and administrative costs and
approximately $5.0 million on advancing the Company's exploration program,
including $3.5 million on the El Quevar project. The Company plans to fund
these expenditures from existing cash and investment balances, from the
approximately $1.5 million of anticipated net cash flow from the management
services agreement with Minera San Cristóbal, and an anticipated $0.8
million of interest and other cash receipts during the period.
Exploration Update
During the third quarter 2009, Golden Minerals continued to advance the El
Quevar project in northwestern Argentina. Through September 30, 2009 the
Company has drilled a total of 162 holes totaling approximately 29,000
meters with 18 drill holes completed in the third quarter 2009. In October
2009, the Company received an updated resource estimate based on a Canadian
National Instrument 43-101 ("NI 43-101") compliant technical report, which
included results from 141 drill holes completed at the time of the report.
The updated NI 43-101 compliant report demonstrates a resource estimate of
approximately 0.3 million tonnes of indicated resource at an average grade
of 430 grams per tonne of silver and 1.6 million tonnes of inferred
resource at an average grade of 415 grams per tonne of silver, resulting in
4.3 million total contained ounces of silver in the indicated resource
category and 21.9 million total contained ounces of silver in the inferred
resource category, at a cutoff of 100 grams per tonne silver. The current
focus of drilling at El Quevar continues to be on the central and west
extension of the Yaxtché zone, which remains open along strike and at
depth. The Yaxtché zone is one of 13 targets the Company has identified in
the El Quevar project area. Drilling is also planned to test additional
selected targets in the project area, including the Viejo Campo target
area. There are currently three drills operating at the El Quevar project
with the addition of a fourth drill planned before the end of this year.
The Company is proceeding with feasibility work, including permitting,
metallurgical work, preliminary mine and plant design and planning for
underground access to the mineralized zone.
A drill hole location map and listing of all drill intercepts for the holes
at El Quevar for which the Company has received and verified results are
available at http://www.goldenminerals.com. Results of the Company's
drilling program have been reviewed, verified, and compiled under the
direction of the Company's Senior Vice President of Exploration, Robert
Blakestad, M.Sc., P.Geo, L.P.G., a Qualified Person for the purpose of NI
43-101. Mr. Blakestad has over 35 years of mineral exploration experience,
is a professional Geoscientist registered in Nova Scotia, and is a Licensed
Professional Geologist in the state of Washington.
In addition to the El Quevar Project, Golden Minerals continued to advance
field evaluations of certain of the Company's more interesting projects and
has initiated or conducted drilling at several properties. Among these
properties are the high-grade vein targets in the Zacatecas district of
central Mexico, where the Company has identified four target areas that
contain silver and base metal values in quartz veins and as disseminations
in sedimentary rocks. In Peru, Golden Minerals has developed another
high-grade vein target at the Company's Palca project in southern Peru,
where at least four veins exhibit silver values greater than 100 grams per
tonne with associated lead, zinc and gold values. At the La Pinta project
located in central Mexico, a field evaluation, including a magnetic survey,
has been completed and a drilling program is now being planned. Golden
Minerals is also currently conducting initial drill tests of the Panuco
project in the Zacatecas district and is awaiting results from recently
completed drill programs at the Antofalla project in Argentina and at the
Elisa de Bordos project in Chile.
Mine Management Services
Operations at the San Cristóbal mine, managed by the Company pursuant to a
management services agreement with Sumitomo Corporation, have generated
positive operating cash flow for the quarter ended September 30, 2009 and
achieved average concentrator throughput of approximately 47,300 tonnes per
day, exceeding the 40,000 tonnes per day designed capacity. Golden
Minerals continues to seek other opportunities to leverage the Company's
management capabilities by providing mine management services.
About Golden Minerals
Golden Minerals is a Delaware corporation based in Golden, Colorado,
primarily engaged in the advancement of its exploration projects and in
providing mine management services. The Company has a portfolio of 35
exploration projects, primarily located in Argentina, Peru and Mexico,
including the advanced stage El Quevar project in the Salta Province of
northwestern Argentina. The Company's experienced management team has
proven in house ability to explore, develop and operate mining projects.
Golden Minerals operates the San Cristóbal mine in Bolivia for Sumitomo
Corporation under a Management Services Agreement.
Cautionary Note to U.S. Investors concerning Estimates of Indicated and
Inferred Resources: This press release uses the terms "indicated resources"
and "inferred resources" which are defined in, and required to be disclosed
by, NI 43-101. We advise U.S. investors that these terms are not recognized
by the United States Securities and Exchange Commission (the "SEC"). The
estimation of indicated resources involves greater uncertainty as to their
existence and economic feasibility than the estimation of proven and
probable reserves. U.S. investors are cautioned not to assume that
indicated mineral resources will be converted into reserves. The estimation
of inferred resources involves far greater uncertainty as to their
existence and economic viability than the estimation of other categories of
resources. U.S. investors are cautioned not to assume that estimates of
inferred mineral resources exist, are economically minable, or will be
upgraded into measured or indicated mineral resources. Disclosure of
"contained ounces" in a resource is permitted disclosure under Canadian
regulations, however the SEC normally only permits issuers to report
mineralization that does not constitute "reserves" by SEC standards as in
place tonnage and grade without reference to unit measures. Accordingly,
the information contained in this press release may not be comparable to
similar information made public by U.S. companies that are not subject NI
43-101.
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,
including statements regarding the exploration results and programs at El
Quevar, planned drilling and feasibility work at El Quevar, planned
exploration activities on other properties, the expected zone of
mineralization at the El Quevar project, and the expectation that cash on
hand and anticipated revenues and cash receipts will be sufficient to fund
general and administrative costs and exploration expenses for the next 3
months. These statements are subject to risks and uncertainties, including
the ability and success of the Company in raising adequate capital to
implement its plans, results of exploration and whether the results support
engineering and other feasibility work on El Quevar, changes in geological
interpretations, unexpected variations in ore grade, types and metallurgy,
financial market conditions, our ability to continue to operate the San
Cristóbal mine under the Management Services Agreement, fluctuations in
silver and zinc prices, and technical and permitting issues. Golden
Minerals Company assumes no obligation to update this information.
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 of its
predecessor for reporting purposes, Apex Silver Mines Limited, for the year
ended December 31, 2008.
For additional information please visit http://www.goldenminerals.com/ or
contact:
Contact Information: Golden Minerals Company Jerry W. Danni (303) 839-5060 Sr. Vice President, Corporate Affairs