Golden Minerals Provides an Update on the El Quevar Project Including Results of Favorable Metallurgical Test Work and Announces Plans to Increase the Number of Drills
GOLDEN, CO -- (Marketwire) -- 01/11/11 -- Golden Minerals Company (NYSE Amex: AUMN) (TSX: AUM) ('Golden Minerals' or 'the Company') is pleased to provide an update on its El Quevar project, including the favorable results of metallurgical test work, 2011 project objectives, and expansion of the drilling program focused on further resource expansion and definition. The El Quevar project is located in the Salta Province of Argentina.
Metallurgical Testwork
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Recent metallurgical testing of the West Yaxtché material demonstrated a recovery of approximately 95% for silver and 91% for copper using a single bulk flotation processing technique. Concentrates produced during the test work from West Yaxtché material contain significantly lower concentrate penalty elements (arsenic, bismuth and antimony) than material previously tested. Previous preliminary metallurgical testing of the Central Yaxtché material yielded recoveries of approximately 56% silver and 86% copper using single bulk flotation, and leaching of the tailings product increased the overall recovery of silver to approximately 91%. In the current combined indicated and inferred resource, the ratio of West Yaxtché material to Central Yaxtché material is approximately two to one.
Based on these positive test results, the Company is developing a plan focused on processing a ratio of approximately four to one West Yaxtché material to Central Yaxtché material through a flotation plant in the initial three years of operations, and processing a ratio of approximately one to one West Yaxtché material to Central Yaxtché material through a combined flotation and cyanide circuit commencing in the fourth year of operations. Tailings from the early years of operation from Central Yaxtché would be segregated, reclaimed and processed in the cyanide circuit, increasing silver production from the fourth year of operations. As part of the test work, an autoclave was considered but ultimately rejected due to capital and operational concerns.
As announced in the fourth quarter 2010, the Company has commenced additional drilling, discussed below, to further define the resource and to properly size the proposed processing facility, prior to completing an economic evaluation. The Company also continues to optimize the initial operations plan to increase production and further define the metallurgical process.
El Quevar Project Objectives
The Company's El Quevar project objectives for 2011 include:
- Completion of metallurgical study test work and finalization of the process flow sheet in the second quarter of 2011.
- Continued advancement of the underground decline into the west Yaxtché deposit throughout 2011, which would accelerate the campaigning of West Yaxtché material upon commencement of production.
- Continued drilling of priority targets.
- Reporting of drill results, including the reporting of all initial drill results for the Carmen target during the second quarter.
- The release of updated resource estimates in the second and fourth quarters of 2011.
- Issuance of a Preliminary Economic Assessment mid-2011.
Expanded Drilling Program
The Company controls mineral and surface rights to approximately 63,000 hectares at its 100% controlled El Quevar project. There are currently 11 targets with surface expressions of at least 100 grams per tonne silver identified in the El Quevar project area. The Company began its expanded drilling program during the fourth quarter 2010, and currently has three diamond drills operating at the El Quevar project. A fourth drill is expected to arrive at the site by mid-January, and a fifth drill has been ordered from the drilling contractor.
EL QUEVAR TARGET AREAS
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The drilling program is focused on priority targets at the El Quevar project. Two drills are now operating at the Carmen target, located approximately 300 meters north of the Yaxtché deposit and one drill is providing infill data on the western portion of the Yaxtché deposit. When the fourth drill arrives it will be used at the Mani Sub target, located approximately 500 meters south of the Yaxtché deposit. The Carmen and Mani Sub targets are potentially parallel structures to the Yaxtché deposit. Drilling is also planned during 2011 for the eastern extension of the Yaxtché deposit. Drill hole QVD-217, located on the eastern extension of the Yaxtché deposit, where limited drilling has occurred to date, reported a two meter intercept of 970 grams per tonne silver and a two meter intercept of 489 grams per tonne silver. As previously reported, this intercept suggests that the main Yaxtché deposit may extend farther east than previously believed. The Yaxtché deposit remains open along strike and the West Yaxtché is open both up and down dip.
PRIORITY TARGETS
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Previous drill results reported for the Yaxtché deposit indicated that mineralization continues to the west underneath a post mineral cover. A drill program completed on the west side of the post mineral cover at the Yaxtché deposit encountered zones of strong silicification containing lead mineralization but minimal silver mineralization, similar to the style of mineralization found in holes peripheral to the main zone of mineralization at the Yaxtché deposit. It has not yet been determined how far the mineralized structure continues beneath the cover and where or if the structure continues on the west side of the approximately 2.6 kilometer long covered interval. This may not ultimately be determined until the decline has progressed along strike to the west, although additional surface exploration field work will be conducted in the future on the west side of the post mineral cover.
Six holes (2,000 meters) were completed at the Sharon target during 2010. The Sharon target is located in the Quevar Norte area of the El Quevar project, approximately three kilometers north of the Yaxtché deposit. Drill hole QVD-236 intercepted 333 grams per tonne of silver over two meters. Additional exploration activities may be conducted in the Quevar Norte area in the future; however the current focus will be on the higher priority targets in the Quevar Sur area.
Golden Minerals is experiencing a significant backlog of assays from the outside laboratory. To date there have been 16 drill holes completed at the Carmen target with assays pending for 10 of the drill holes. Assays received to date for the Carmen target include drill hole QVD-228, which averaged 524 grams per tonne of silver and 0.29 grams per tonne of gold over two meters, and drill hole QVD-231, which averaged 383 grams per tonne of silver over nine meters. Two drills are continuing to operate at the Carmen target. Four holes have been drilled at the Mani Sub target, including drill hole QVD-220, which averaged 411 grams per tonne over two meters and 463 grams per tonne over six meters, and drill hole QVD-237, which averaged 297 grams per tonne over five meters. Assays are pending for one drill hole at the Mani Sub target. Assays are also pending for one infill drill hole at the Yaxtché deposit. Every effort is being made to expedite the turnaround in drill results. The Company has purchased an X-Ray Fluorescence Analyzer which will permit on-site analysis and reduce the number of samples sent to the off-site laboratory. Additional off-site laboratories are also being evaluated. The Company plans to build a laboratory at El Quevar. The laboratory would be independently operated and is expected to be completed by mid-2011.
Over 60,000 meters in 275 diamond drill holes have been completed to date at the El Quevar project, including over 200 holes drilled on the main Yaxtché deposit. Micon International Limited ('Micon') used data from 168 drill holes from the Yaxtché deposit in its August 10, 2010 Canadian National Instrument 43-101 ('NI 43-101') compliant resource estimate. The Micon resource estimate reported 8.9 million ounces of silver in the indicated category at a grade of 310 grams per tonne, and 51.5 million ounces of silver in the inferred category, at a grade of 336 grams per tonne of silver. The Micon resource estimate was constrained in that it assumed a minimum three meter mining width and capped the silver grade at 3,000 grams per tonne. Micon will prepare an unconstrained global resource estimate, based on the same data used for the existing resource estimate. In addition, the Company plans to update its NI 43-101 resource estimate with additional drilling results during the second quarter of 2011, following receipt of pending and new drill hole results.
The production-sized underground decline at the Yaxtché deposit has been advanced more than 375 meters to date and has intersected the Yaxtché central hanging wall and footwall mineralized zones. Approximately 70 meters of development drift has been completed along the footwall zone. To date, more than 1,500 tonnes of vein material have been mined. Channel and stock pile assay results on that material are pending. Both zones were intersected as predicted by the geologic model. The Company plans to continue mine and subsequent vein development during 2011 for further confirmation of the resource model; to collect bulk samples for metallurgical testing; to confirm mining methods; and to develop the mine to accelerate the campaigning of West Yaxtché material. The decline support infrastructure, including maintenance facility, power, ventilation, fuel storage, and a camp that now houses up to 125 personnel are all in place.
Preparation of a Preliminary Economic Assessment ('PEA') is now underway and is expected to be completed mid-2011. The PEA is being prepared by Micon with Samuels Engineering providing the metallurgical and processing information.
Review by Qualified Person, Quality Control and Reports
The Micon 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.
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.
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 the results of El Quevar metallurgical test work including silver and copper recoveries; expected timing of 2011 activities at El Quevar including drill results, resource updates, the Preliminary Economic Assessment, metallurgical test work, construction of a metallurgical laboratory at El Quevar, and advancement of the underground decline; plan for development and operation of the El Quevar deposit; indicated and inferred resource estimates at the El Quevar project; the exploration results and programs at the El Quevar project; 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 delays in receiving assay results; 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/.
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Contact:
Jerry W. Danni
Executive Vice President
Golden Minerals Company
(303) 839-5060
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