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Golden
Minerals Company (NYSE Amex: AUMN) (TSX: AUM) ("Golden Minerals" or
"the Company") is pleased to provide an update on its El Quevar
project, including the favorable results of metallurgical test work, 2011
project objectives, and expansion of the drilling program focused on further
resource expansion and definition. The El Quevar project is located in the
Salta Province of Argentina.
Metallurgical
Testwork
Recent
metallurgical testing of the West Yaxtche material demonstrated a recovery of
approximately 95% for silver and 91% for copper using a single bulk flotation
processing technique. Concentrates produced during the test work from West
Yaxtche material contain significantly lower concentrate penalty elements
(arsenic, bismuth and antimony) than material previously tested. Previous
preliminary metallurgical testing of the Central Yaxtche material yielded
recoveries of approximately 56% silver and 86% copper using single bulk
flotation, and leaching of the tailings product increased the overall
recovery of silver to approximately 91%. In the current combined indicated
and inferred resource, the ratio of West Yaxtche material to Central Yaxtche
material is approximately two to one.
Based
on these positive test results, the Company is developing a plan focused on
processing a ratio of approximately four to one West Yaxtche material to
Central Yaxtche material through a flotation plant in the initial three years
of operations, and processing a ratio of approximately one to one West
Yaxtche material to Central Yaxtche material through a combined flotation and
cyanide circuit commencing in the fourth year of operations. Tailings from
the early years of operation from Central Yaxtche would be segregated,
reclaimed and processed in the cyanide circuit, increasing silver production
from the fourth year of operations. As part of the test work, an autoclave
was considered but ultimately rejected due to capital and operational
concerns.
As
announced in the fourth quarter 2010, the Company has commenced additional
drilling, discussed below, to further define the resource and to properly
size the proposed processing facility, prior to completing an economic
evaluation. The Company also continues to optimize the initial operations
plan to increase production and further define the metallurgical process.
El
Quevar Project Objectives
The
Company's El Quevar project objectives for 2011 include:
Completion
of metallurgical study test work and finalization of the process flow sheet
in the second quarter of 2011. Continued advancement of the underground decline into the west
Yaxtche deposit throughout 2011, which would accelerate the campaigning of
West Yaxtche material upon commencement of production. Continued drilling of
priority targets. Reporting of drill results, including the reporting of all
initial drill results for the Carmen target during the second quarter. The
release of updated resource estimates in the second and fourth quarters of
2011. Issuance of a Preliminary Economic Assessment mid-2011.
Expanded Drilling Program
The Company controls mineral and surface
rights to approximately 63,000 hectares at its 100% controlled El Quevar
project. There are currently 11 targets with surface expressions of at least
100 grams per tonne silver identified in the El Quevar project area. The
Company began its expanded drilling program during the fourth quarter 2010,
and currently has three diamond drills operating at the El Quevar project. A
fourth drill is expected to arrive at the site by mid-January, and a fifth
drill has been ordered from the drilling contractor.
EL QUEVAR TARGET AREAS (SEE IMAGE 1)
The drilling program is focused on priority
targets at the El Quevar project. Two drills are now operating at the Carmen
target, located approximately 300 meters north of the Yaxtche deposit and one
drill is providing infill data on the western portion of the Yaxtche deposit.
When the fourth drill arrives it will be used at the Mani Sub target, located
approximately 500 meters south of the Yaxtche deposit. The Carmen and Mani
Sub targets are potentially parallel structures to the Yaxtche deposit.
Drilling is also planned during 2011 for the eastern extension of the Yaxtche
deposit. Drill hole QVD-217, located on the eastern extension of the Yaxtche
deposit, where limited drilling has occurred to date, reported a two meter
intercept of 970 grams per tonne silver and a two meter intercept of 489
grams per tonne silver. As previously reported, this intercept suggests that
the main Yaxtche deposit may extend farther east than previously believed.
The Yaxtche deposit remains open along strike and the West Yaxtche is open
both up and down dip.
PRIORITY TARGETS (SEE IMAGE 2)
Previous drill results reported for the
Yaxtche deposit indicated that mineralization continues to the west
underneath a post mineral cover. A drill program completed on the west side
of the post mineral cover at the Yaxtche deposit encountered zones of strong
silicification containing lead mineralization but minimal silver
mineralization, similar to the style of mineralization found in holes
peripheral to the main zone of mineralization at the Yaxtche deposit. It has
not yet been determined how far the mineralized structure continues beneath
the cover and where or if the structure continues on the west side of the
approximately 2.6 kilometer long covered interval. This may not ultimately be
determined until the decline has progressed along strike to the west,
although additional surface exploration field work will be conducted in the
future on the west side of the post mineral cover.
Six holes (2,000 meters) were completed at the
Sharon target during 2010. The Sharon target is located in the Quevar Norte
area of the El Quevar project, approximately three kilometers north of the
Yaxtche deposit. Drill hole QVD-236 intercepted 333 grams per tonne of silver
over two meters. Additional exploration activities may be conducted in the
Quevar Norte area in the future; however the current focus will be on the
higher priority targets in the Quevar Sur area.
Golden Minerals is experiencing a significant
backlog of assays from the outside laboratory. To date there have been 16
drill holes completed at the Carmen target with assays pending for 10 of the
drill holes. Assays received to date for the Carmen target include drill hole
QVD-228, which averaged 524 grams per tonne of silver and 0.29 grams per
tonne of gold over two meters, and drill hole QVD-231, which averaged 383
grams per tonne of silver over nine meters. Two drills are continuing to
operate at the Carmen target. Four holes have been drilled at the Mani Sub
target, including drill hole QVD-220, which averaged 411 grams per tonne over
two meters and 463 grams per tonne over six meters, and drill hole QVD-237,
which averaged 297 grams per tonne over five meters. Assays are pending for
one drill hole at the Mani Sub target. Assays are also pending for one infill
drill hole at the Yaxtche deposit. Every effort is being made to expedite the
turnaround in drill results. The Company has purchased an X-Ray Fluorescence
Analyzer which will permit on-site analysis and reduce the number of samples
sent to the off-site laboratory. Additional off-site laboratories are also
being evaluated. The Company plans to build a laboratory at El Quevar. The
laboratory would be independently operated and is expected to be completed by
mid-2011.
Over 60,000 meters in 275 diamond drill holes
have been completed to date at the El Quevar project, including over 200
holes drilled on the main Yaxtche deposit. Micon International Limited
("Micon") used data from 168 drill holes from the Yaxtche deposit
in its August 10, 2010 Canadian National Instrument 43-101 ("NI
43-101") compliant resource estimate. The Micon resource estimate
reported 8.9 million ounces of silver in the indicated category at a grade of
310 grams per tonne, and 51.5 million ounces of silver in the inferred
category, at a grade of 336 grams per tonne of silver. The Micon resource
estimate was constrained in that it assumed a minimum three meter mining
width and capped the silver grade at 3,000 grams per tonne. Micon will
prepare an unconstrained global resource estimate, based on the same data
used for the existing resource estimate. In addition, the Company plans to
update its NI 43-101 resource estimate with additional drilling results
during the second quarter of 2011, following receipt of pending and new drill
hole results.
The production-sized underground decline at
the Yaxtche deposit has been advanced more than 375 meters to date and has
intersected the Yaxtche central hanging wall and footwall mineralized zones.
Approximately 70 meters of development drift has been completed along the
footwall zone. To date, more than 1,500 tonnes of vein material have been
mined. Channel and stock pile assay results on that material are pending.
Both zones were intersected as predicted by the geologic model. The Company
plans to continue mine and subsequent vein development during 2011 for
further confirmation of the resource model; to collect bulk samples for
metallurgical testing; to confirm mining methods; and to develop the mine to
accelerate the campaigning of West Yaxtche material. The decline support
infrastructure, including maintenance facility, power, ventilation, fuel
storage, and a camp that now houses up to 125 personnel are all in place.
Preparation of a Preliminary Economic
Assessment ("PEA") is now underway and is expected to be completed
mid-2011. The PEA is being prepared by Micon with Samuels Engineering
providing the metallurgical and processing information.
Review by Qualified Person, Quality Control
and Reports
The Micon resource estimation was performed by
William J. Lewis, BSc., P.Geo, and Ing. Alan J. San Martin, MAusIMM,
Qualified Persons as defined by NI 43-101, who are independent of Golden
Minerals. The mineral resources in this estimate were calculated using the
Canadian Institute of Mining, Metallurgy and Petroleum (CIM), Standards on
Mineral Resources and Reserves, Definitions and Guidelines, prepared by the
CIM Standing Committee on Reserve Definitions and adopted by CIM Council on
December 11, 2005.
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 a Licensed Professional Geologist in the state
of Washington.
Drill intercept lengths are down-hole lengths
reflecting apparent widths of mineralization with true widths estimated to be
from 90% to 95% of the reported down-hole lengths.
To ensure reliable sample results, Golden
Minerals uses a quality assurance/quality control program that monitors the
chain-of-custody of samples and includes the insertion of blanks, duplicates,
and certified reference standards in each batch of samples. Core is
photographed and sawn in half with one half retained in a secured facility
for verification purposes. Sample preparation (crushing and pulverizing) is
performed at an independent ISO 9001:2001 certified laboratory in Mendoza,
Argentina. Prepared samples are direct-shipped to ISO 9001:2001 certified
laboratories in Santiago, Chile or Vancouver, B.C. Pulp splits of mineralized
intervals are re-assayed at certified independent referee laboratories in
Chile and Canada.
The independent NI 43-101 technical reports
and related information are available on the Company's website,
http://www.goldenminerals.com/.
About Golden Minerals Golden Minerals is a
Delaware corporation based in Golden, Colorado, primarily engaged in the
advancement of its pipeline of exploration projects in Mexico and South
America. The Company has a portfolio of 30 exploration projects, including
the feasibility stage El Quevar project in the Salta Province of northwestern
Argentina and advanced stage drilling projects in Mexico and Peru. The
Company's experienced management team has proven in house ability to explore,
develop and operate mining projects.
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 results
of El Quevar metallurgical test work including silver and copper recoveries;
expected timing of 2011 activities at El Quevar including drill results,
resource updates, the Preliminary Economic Assessment, metallurgical test
work, construction of a metallurgical laboratory at El Quevar, and
advancement of the underground decline; plan for development and operation of
the El Quevar deposit; indicated and inferred resource estimates at the El
Quevar project; the exploration results and programs at the El Quevar
project; planned exploration activities; planned feasibility work, the
schedule for the construction of the underground decline at the Yaxtche
deposit and completion of the planned feasibility study, and planned uses of
the underground decline. These statements are subject to risks and
uncertainties, including delays in receiving assay results; results of
exploration and whether the results support engineering and other feasibility
work on El Quevar; changes in geological, geostatistical and other
interpretations of the Yaxtche deposit including the interpretations
regarding the westward extension, continuity and strike length of the Yaxtche
deposit, which may include changes resulting from additional drilling,
exploration and feasibility work; availability of drills; unexpected
variations in ore grade, types and metallurgy; whether the resources reported
will be converted to reserves and whether the resources reported, including
information regarding contained ounces, will be reduced as additional
exploration and feasibility work is completed, including feasibility work on
processing alternatives, projected recovery rates and costs including capital
costs, operating costs and taxes; results of El Quevar feasibility work and
uncertainties regarding whether El Quevar project feasibility will be
supported; financial market conditions; unexpected increases in costs of
materials, supplies and personnel used in exploration or mining activities; fluctuations
in silver and other metal prices; technical and permitting issues; changes in
applicable law that might increase the cost or otherwise negatively affect
the Company in advancing the El Quevar project; and the ability and success
of the Company in raising adequate capital and implementing its plans. 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 Company's Annual Report on Form 10-K for the
year ended December 31, 2009.
For additional information please visit
http://www.goldenminerals.com/.
SOURCE: Golden Minerals Company
Jerry W. Danni
Executive Vice President
Golden Minerals Company
(303) 839-5060
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