SOURCE: Golden Minerals Company

Golden Minerals Company

August 19, 2010 07:00 ET

Golden Minerals Announces a Significant Increase in the El Quevar Project Resource Estimate

GOLDEN, CO--(Marketwire - August 19, 2010) -  Golden Minerals Company (NYSE Amex: AUMN) (TSX: AUM) ("Golden Minerals" or "the Company") is pleased to provide an updated resource estimate for the Yaxtché deposit of its 100% controlled El Quevar project located in the Salta Province of northwestern Argentina. The new resource estimate shows an increase of 42% from the January 2010 resource estimate. The new resource estimate is based on a Canadian National Instrument 43-101 ("NI 43-101") compliant technical report prepared by Micon International Limited ("Micon") dated August 10, 2010. 

Presented in the table below is the current resource estimate for the Yaxtché deposit at the El Quevar Project, at a 100 gram per tonne silver cut-off grade:

Category Tonnage Avg. Silver Grade (g/t) Silver Ounces
Indicated 902,000 310 8,991,000
Inferred 4,768,000 336 51,514,000

This latest estimate is an update to the previous report issued by Chlumsky, Armbrust and Meyer ("CAM") in a NI 43-101 Technical Report dated January 2010. The major differences in the two estimates include the use in the Micon estimate of data from 12 drill holes that was not available when the CAM estimate was prepared and the geostatistical method by which the resource was estimated. In addition, the Micon resource estimate assumes a three meter minimum mining width, which results in a partially diluted resource grade, while the CAM resource estimate used the entire mineralized envelope and did not assume a minimum mining width. The Micon resource estimate also capped the grade at 3,000 grams per tonne of silver for the entire deposit. The CAM resource estimate did not cap the grade. This capping technique tends to reduce the overall grade and contained ounces. In addition, the Micon resource estimate uses an updated specific gravity (density) value, which is higher than the density value used in the CAM estimate and has resulted in an increase in total tonnes and contained ounces of silver.

Over 245 diamond drill holes have been completed to date at the El Quevar project, including 185 holes drilled on the Yaxtché deposit. Micon used data from 168 drill holes (through Hole QVD-204) from the Yaxtché deposit in the new resource estimate. The Yaxtché deposit remains open along strike and both up and down dip.

Previous drilling established that mineralization extends under a post mineral cover on the western extension of the Yaxtché zone. Hole QVD-195, drilled through the post mineral cover, included approximately seven meters of greater than 1,000 grams silver per tonne. Preparations are now underway to drill on the west side of the post mineral cover in order to test the potential extension of the Yaxtché deposit through the post mineral cover. If the mineralized zone is established on the west side of the post mineral cover, the Yaxtché deposit could more than double in length from the current 2.4 kilometer strike length.

The Company controls mineral and surface rights to approximately 64,000 hectares at the El Quevar project. Drilling to date has primarily been focused on the Yaxtché deposit, which is one of at least13 targets in the El Quevar project area. An initial six hole drill program was previously completed at the Quevar Norte target located approximately three kilometers north of the Yaxtché zone, with three of the six holes intersecting silver mineralization of greater than 100 grams per tonne, including Hole QND-002, which averaged 1,289 grams per tonne over an intercept of 28 meters. 

Construction of the underground decline at the Yaxtché deposit has advanced approximately 85 of the 225 meters required to access ore and remains on schedule, with completion of the feasibility study anticipated at the end of 2010. The production sized decline will be used to confirm the mine model and mining methods, take bulk samples for metallurgical testing, and to support the feasibility study currently underway. 

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/

Review by Qualified Person, Quality Control and Reports

The new 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.

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 indicated and inferred resource estimates at the El Quevar project; the exploration results and programs at the El Quevar project; results of exploration activities; planned exploration activities; planned feasibility work, the schedule for the construction of the underground decline at the Yaxtché deposit and completion of the planned feasibility study, and planned uses of the underground decline. These statements are subject to risks and uncertainties, including 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 Yaxtché deposit including the interpretations regarding the westward extension, continuity and strike length of the Yaxtché 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/ or contact:

Contact Information

  • Golden Minerals Company
    Jerry W. Danni
    (303) 839-5060
    Executive Vice President