Golden Minerals pours first gold, shares up 15%

Golden Minerals Co. [AUMN-TSX, NYSE American] shares rallied Monday after the company announced the first gold pour at its Rodeo gold project in Durango State, Mexico.

The company said the pour occurred on January 30, 2021, on schedule and roughly three weeks after the first loads of material were trucked from the Rodeo site to the company’s Velardena oxide plant for processing. It produced approximately 150 gold equivalent ounces. Additional pours are planned for early February.

“This first pour represents a tremendous milestone for Golden Minerals,” said Golden Minerals President and CEO Warren Rehn. “Not only have we bought Rodeo online amidst the many challenges presented by Covid-19, but we have brought it to production both on time and on budget,” he said.

Golden Minerals advanced on the news, rising 15% or $0.16 to $1.22 on volume of 642,937. The shares are currently trading in a 52-week range of $1.12 and 20 cents.

Golden Minerals is a Colorado-based precious metals producer with a pipeline of exploration projects in Mexico, Argentina and Nevada. With the commencement of production at Rodeo, the company has successfully transitioned from exploration firm to gold-silver producer.

Rodeo is an open pit mine that is expected to generate US$25 million in free cash flow, money that can be used in part to finance the start of production at the larger silver/gold Velardena properties, which are also located in Durango State, Mexico.

The company says it plans to start production at Velardena, either in late 2021 or early 2022.

According to an updated mineral resource estimate and preliminary economic assessment (PEA) released in April, 2020, the 100%-owned Velardena Properties are expected to produce 10.7 million ounces of silver equivalent over a projected mine life of 10 years.

“The most difficult challenged we previously faced at the Velardena mines was the low payable gold recovery, a challenge which we believe is solved with the addition of a relatively low-cost bio-oxidation circuit at the existing processing facility,” the company said.

“Because we already have most of what is required for recommencing mining and processing, the capital needs for the project are modest.”

The PEA envisaged a total pre-production capital cost of US$10.27 million, including a 10% contingency.

Initially, Rodeo material will be processed at a rate of 200 tonnes per day, running through the currently operational ball mill. Golden is in the process of installing an additional ball mill at Velardena, which is designed to increase processing throughput by increasing grinding capacity for the silicified material at Rodeo.

This second ball mill will operate in series after the primary ball mill, the company said. Golden estimates that the regrind mill will be complete and ready to run near the end of the first quarter of 2021, at which point daily mill throughput is expected to increase to 450 tonnes per day.

The dore produced at Rodeo is expected to be comprised of approximately 25% gold and 65-70% silver, and to be of a readily marketable and saleable quality.

Rodeo is expected to produce payable production of 43,700 ounces of silver and 13,200 ounces of gold this year, rising to 47,800 ounces of silver and 14,400 ounces of gold next year.