Golden Minerals Reports Additional High Grade Intercepts and Resource Expansion Drilling Program at El Quevar
GOLDEN, CO -- (Marketwire) -- 09/14/10 -- Golden Minerals Company (NYSE Amex: AUMN) (TSX: AUM) ('Golden Minerals' or 'the Company') today announced additional high grade intercepts at holes drilled on the El Quevar Yaxtché deposit and nearby Mani target area. The Company has determined that additional drilling is warranted to further define the extent of the resource before completing the feasibility report. A larger resource base may support a higher production rate than initially contemplated. The El Quevar project is located in the Salta Province of Argentina.
Drilling at El Quevar continues to be focused on the Yaxtché deposit. Two of the most recent drill holes on the Yaxtché deposit for which results have been received and verified are drill hole QVD-211, which is located on the western portion of the Yaxtché deposit, and QVD-217, which is located on the eastern portion of the Yaxtché deposit. Drill hole QVD-211 returned 146 meters of 317 grams per tonne silver, which included 56 meters of 409 grams per tonne and five meters of 1,509 grams per tonne. Drill hole QVD-217 reported a two meter intercept of 970 grams per tonne silver and a two meter intercept of 489 grams per tonne silver. This drill hole is significant because it establishes high grade intercepts to the east of the central Yaxtché deposit where limited drilling has occurred, potentially extending the existing 2.4 kilometer strike length of the Yaxtché deposit.
Drilling is now underway on the west side of post mineral cover at the Yaxtché deposit in order to test the potential western extension of the deposit. If the mineralized zone is established on the west side of the post mineral cover, it could potentially extend the strike length of the Yaxtché deposit by an additional 1.6 kilometers. Results have also been received for a hole recently completed at the Mani target, which is located approximately 500 meters southwest of the Yaxtché deposit. Drill hole QVD-220 reported a five meter intercept of 515 grams per tonne silver and a two meter intercept of 411 grams per tonne silver. Drilling is now also being planned for the Carmen target, located approximately 300 meters north of the Yaxtché deposit, along with additional drilling at the Mani target.
To date there have been over 245 diamond drill holes completed at the El Quevar project, including 182 holes drilled on the Yaxtché deposit. The latest resource estimate based on a Canadian National Instrument 43-101 ('NI 43-101') compliant technical report prepared by Micon International Limited ('Micon') dated August 10, 2010 included the results from 168 holes drilled on the Yaxtché deposit, through July 15, 2010. The Micon resource estimate reported an indicated resource of approximately 9.0 million ounces of silver contained in approximately 0.9 million tonnes and an inferred resource of 51.5 million ounces of silver contained in 4.8 million tonnes. The resource estimate reported by Micon capped the grade at 3,000 grams per tonne of silver for the entire deposit, and also assumed a three meter minimum mining width.
The Yaxtché deposit is one of 11 targets currently identified at the El Quevar project. An initial six hole drill program was previously completed for 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. As part of the ongoing assessment in the district, the Company has terminated the Viejo Campo agreements (Jenna and Pamela targets). These target areas comprised approximately 3,000 hectares of the total 66,000 hectares at the El Quevar project.
Work on the El Quevar feasibility study continues. Construction of the underground decline at the Yaxtché deposit has advanced approximately 97 meters of the 225 meters required to access ore. The production-sized decline will be used to confirm the resource model and mining methods, and take bulk samples for additional metallurgical testing. Other ongoing work includes metallurgical testing and process design. The Company has commenced the additional drilling program, focused on resource expansion and currently estimated to cost up to $5 million, and has deferred completion of the final feasibility report until the additional drilling is completed. A larger resource may support a higher production rate, which would be reflected in the final feasibility report.
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/.
Shelf Registration Statement
The Company has an effective S-3 shelf registration with the U.S. Securities and Exchange Commission ('SEC'). Based on the Company's current public float, SEC rules limit the amount of securities that could be sold under the shelf to approximately $15 million.
Review by Qualified Person, Quality Control and Reports
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.
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 more than 25 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, Canada National Instrument 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 to 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, including planned additional resource expansion drilling; results of exploration activities; planned exploration activities; potential extension of the Yaxtché deposit and potential for a higher production rate than initially contemplated; deferral of completion of the El Quevar feasibility study; 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; effectiveness of the Company's S-3 shelf registration statement and estimates of the amounts of securities that could be sold pursuant to the shelf registration statement. These statements are subject to risks and uncertainties, including results of exploration, including the additional planned resource expansion drilling at El Quevar, and whether the results support extensions of or an increase in the resources at the current Yaxtché deposit, a higher production rate than initially contemplated and 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; 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; financial market conditions; whether the Company is able to sell securities under its shelf registration statement; reduction in the Company's public float resulting from declines in the Company's stock price or an increase in the amount of stock held by affiliates, and thus in the amount of securities that may be sold pursuant to the shelf registration statement; 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:
Golden Minerals Company
Jerry W. Danni
(303) 839-5060
Executive Vice President