Golden Minerals announces improved terms for Velardena Properties concentrates

Golden Minerals announced that it is selling gold-rich pyrite concentrates from its Velardena Properties on improved terms to a buyer in Manzanillo, Mexico. Warren Rehn, Golden’s President and CEO, commented, "Recently improved and updated terms for the purchase of our gold-rich pyrite concentrates allow us to consider moving forward with the re-opening of the Velardena Properties’ mines without the need to build the BIOX plant, as we had previously planned. The new terms pay for enough of the gold and silver in the concentrate to enable us to shelve plans for the BIOX plant and sell our flotation concentrates directly to smelters. We made our first shipment of 142 tonnes of previously produced and stockpiled gold-rich pyrite concentrate under the new terms last week and we are currently processing 3,000 tonnes of previously mined and stockpiled mineralized material from the Santa Juana mine for future shipments. The economic benefit of the new payable terms bodes well for a restart of the Velardena mines." The new payable terms for gold-bearing pyrite concentrates are a significant improvement over previous terms offered in 2022 and earlier, and now represent in excess of a 100% increase for gold payables in the concentrate. The Company had previously planned to construct a BIOX facility at Velardena in order to recover the gold in the pyrite concentrate. The capital cost of the BIOX facility was initially estimated at approximately US $6.5 million in 2019 (as reported in the May 2020 PEA); however, upon re-estimation in 2021 (as reported in the March 2022 PEA) the cost estimate had more than doubled to $14.5 million. In 2022, detailed costing and design showed a minimum cost of well over $20 million, which was more than could be readily financed for the project. The increase in the BIOX plant costs created uncertainty about the economic feasibility of re-commencing production. With these new concentrate sales terms, the problem of payable gold recovery appears to be solved without the significant capital costs required to build the previously planned BIOX facility. The company is now evaluating the economics of a restart of the Velardena operation without the need for major capital expenditures for the BIOX facility and ancillary equipment. Pending confirmation and Board approval of the start-up plan, the company believes that it could commence production as soon as mid-2023. To address the concerns related to mining dilution at Velardena, the company anticipates that it would schedule initial production from those veins that showed the best results from test mining in 2022. Ore-sorting, while showing promise to help reduce dilution, would not be required for the currently envisioned plan to resume production given the improved revenue projected from the new concentrate sales terms.