Contact Information: For additional information please visit http://www.goldenminerals.com/ or contact: Golden Minerals Company Jerry W. Danni (303) 839-5060 Sr. Vice President Corporate Affairs
Golden Minerals Reports Second Quarter 2009 Results
| Source: Golden Minerals Company
GOLDEN, CO--(Marketwire - August 10, 2009) - Golden Minerals Company ("Golden Minerals" or
the "Company") (TSX : AUM ) (PINKSHEETS : GDMN ) today announced results for
the second quarter 2009.
Overview
Golden Minerals Company is primarily engaged in the advancement of its
exploration projects and in providing mine management services for the San
Cristobal silver and zinc mine in Bolivia for Sumitomo Corporation. The
Company has a large portfolio of exploration projects, primarily located in
Argentina, Peru and Mexico and is focusing on its advanced stage El Quevar
Project in northern Argentina. The Company's common stock commenced
trading on the Toronto Stock Exchange on July 16, 2009 under the ticker
symbol "AUM."
For the second quarter 2009, the Company recorded a total net loss of $6.5
million, which included among other items, $1.8 million in revenue net of
associated costs for management services, a loss of $1.3 million on the
mark down of its auction rate security (ARS) investments, $3.0 million of
administrative expense, $3.0 million of exploration expense, and $0.6
million of reorganization cost.
Golden Minerals is the successor to Apex Silver Mines Limited ("ASML") for
purposes of reporting under the U.S. federal securities laws, upon
emergence from Chapter 11 bankruptcy on March 24, 2009. All of the Chapter
11 claims have now been substantially resolved. ASML is in liquidation in
the Cayman Islands that will include cancellation of ASML ordinary shares.
Exploration Update
During the second quarter, the Company continued its drilling program on
the El Quevar silver project in northwestern Argentina. The Company
recently completed a 63 hole core drilling program totaling about 8,000
meters. The drill program focused on providing infill drill intercepts in
the central area and defining strike extensions of the high-grade Yaxtche
mineralized zone to support an updated resource estimation and provide
information for preliminary engineering studies. These holes were primarily
designed to provide additional intercepts within the original drill
pattern, which was spaced about 50 meters apart. This new drilling will
provide intercepts spaced 25 to 30 meters apart and provide more
information about the continuity and grade of the known mineralization.
This drill program also tested extensions to the east and west of the main
mineralized zone. Results confirm that the zone extends at least 450
meters further west and 350 meters further east of the previously defined
750 meter long central zone, and is still open in both directions.
Of the last 37 holes drilled in the central part of the Yaxtche zone at El
Quevar as of July 29, 2009, 27 hit significant silver mineralization of
better than 100 grams per tonne, with assays pending on six holes. Eight
of the last 37 holes in the central part of the zone intersected greater
than 1.0 kilogram per tonne of silver, with grades up to 8.6 kilograms per
tonne, including a 22 meter intercept of 932 grams per tonne of silver. A
total of 26,000 meters in 141 holes have been drilled at El Quevar to date.
The field work at El Quevar has also identified several more target areas
believed to have potential for the discovery of additional silver
mineralization. The Company plans to drill test the areas believed to be
more promising in the coming months. The Company plans to update the
mineral resource at El Quevar in the third quarter of 2009 and has
initiated engineering studies in support of a preliminary economic
assessment for the project.
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
National Instrument 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.
In addition to El Quevar, the Company continues to advance field
evaluations of certain other interesting prospects in preparation for
possible drill testing later in the year. Among these prospects are the
high-grade vein targets in the Zacatecas district of central Mexico, where
the Company has identified four areas, through drilling and surface
sampling, that contain significant silver and base metal values in quartz
veins and as disseminations in sedimentary rocks. In Peru, the Company has
developed another potential high-grade vein target at the 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, identified
through surface sampling and mapping.
Liquidity and Capital Resources
At June 30, 2009 Golden Minerals' aggregate cash and short and long-term
investments totaled $20.5 million, which included $15.7 million in cash and
cash equivalents and ARS investments recorded at a fair value of $4.6
million. During the second quarter, the Company received $600,000 on the
sale of an office building in La Paz, Bolivia. The Company expects to
receive the final $50,000 of the sale price in the third quarter. In July,
the Company sold for approximately $2.5 million ARS investments with a face
value of $41.5 million and a carrying value of approximately $3.8 million
at March 31, 2009. The Company continues to hold ARS with a face value of
$10.5 million and net book value of $2.1 million as of June 30, 2009, which
earn interest at a rate of 2.5% over LIBOR. The Company is also negotiating
with potential buyers the sale of exploration properties in Bolivia and
Mexico, that are outside of Golden Minerals' specific area of interest,
that have carrying values of $2.5 million and $0.6 million, respectively.
The Company anticipates that cash on hand, together with interest and other
cash receipts and management services revenues will provide enough cash to
continue the exploration program and to pay general and administrative
expenses for at least the next twelve months. In the longer term,
continuing operations are dependent upon the Company's ability to raise
sufficient capital and to generate future profitable operations. For
example, the Company anticipates that an additional $10 to $15 million
would be required in 2010 to complete a feasibility study and begin
development work at the El Quevar property in Argentina.
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 and, planned commencement of a preliminary economic assessment for
El Quevar, planned exploration on other properties, the expected dimensions
of the zone of mineralization at the El Quevar project, 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 12 months; anticipated spending on reorganization,
general and administrative and exploration costs and expected management
services fees and other cash receipts and, the expectation that we will not
be required to make further cash payments to the former holders of ASML's
subordinated notes. These statements are subject to risks and
uncertainties, including financial market conditions, whether operations
will continue at the San Cristobal mine and under the Management Services
Agreement, increases in costs of materials and supplies used in mining and
exploration activities, future results of exploration and the preliminary
economic assessment and other work at El Quevar, variations in ore grade
and types, fluctuations in silver and zinc prices, technical and permitting
issues, and the ability and success of the Company in raising adequate
capital and implementing its plans to pursue growth opportunities. 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.