Golden Minerals Corp - President and CEO, Warren M Rehn
President and CEO, Warren M Rehn
Source: The View From The C-Suite
  • Golden Minerals Company (TSX:AUMN) has revealed the initial results from the Preliminary Economic Assessment of its Rodeo Gold Mine in Durango, Mexico 
  • Life of Mine assessment shows a cash flow from the site is valued at C$24.9 million 
  • The company hopes to use the resulting cash to advance the Velardena project 
  • The company has now contracted Mineral Resources Engineering to complete the report, which is expected next quarter
  • Golden Minerals (AUMN) is down 2 per cent, with share trading for $0.43 and a market cap of $32 million 

Golden Minerals Company (TSX:AUMN) has revealed the initial results from the Preliminary Economic Assessment of its Rodeo Gold Mine in Mexico.

The company’s full assessment is due to drop next quarter.

The initial results show the total production the company can extract C$24.9 million from Rodeo, over nine quarters.

The cash flow values are based on preliminary data, and the company concedes that it may be subject to change.

The company’s full PEA is due to drop next quarter.

The company has stated it may push ahead with production without a feasibility study, something that carries significant additional risk.

However, this also puts the estimate for pre-production costs at only total $1.5 million.

The mineral resource estimates at the site is 41,000 ounces of gold and 118,000 ounces of silver. The estimated tonnage per day is 480 tonnes.

The average expected grades are 3.31 grams per tonne gold and 9.65 grams per tonne silver.

Golden Minerals President and CEO, Warren M. Rehn said the company has purposely held onto the Rodeo mine waiting for the opportunity to monetise the asset.

“With the Hecla lease coming to an end this year, we intend to bring Rodeo into production in 2021.

“This PEA indicated that Rodeo presents us with the opportunity to realise over $24 million of after tax cash flow in two years time with very low capital requirements, which will in turn support our work at Velardena and other exploration projects,” he said.

The company has also announced it has signed an earn-in agreement with Barrack Gold, for 70 per cent of the companies El Quevar Project in Argentina.

The agreement will see Barrick purchase $1 million worth of Golden Minerals shares at 21 cents per share.

To earn the stake, Barrick have agreed to fund $10 million of exploration work at the Argentine site, with the spend timeline extending for 8 years.

Barrick also need to deliver a pre-feasibility study describing a potentially profitably project with mineral resources of not less than two million gold equivalent ounces by the end of the 8th year. 

Golden Minerals Company (AUMN) is down 2 per cent and trading for $0.43 per share at 11:40 pm EST. 

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