Golden Minerals was one of my favorite stocks in 2011. They had 50 properties on 800,000 acres, including two flagship projects: Velardena in Mexico and El Quevar in Argentina. Velardena was in production with plans to ramp up to 4 million oz of silver production. Then the gold price correction began in 2011 and they fell apart. In June 2013, they stopped production at Velardena because of high cash costs. They went into crisis mode and sold all of their Peru properties at fire-sale prices. The stock has crashed 99% from $28 to 25 cents. What a mess.
The good news is they are positioned to rebound once silver prices rise. They have $3 million in cash and no debt, plus $4 million in expected annual income in 2017 and 2018 for leasing the Valardena mill. My expectation is they should be back in production in 2018.
They have the potential to get Velardena ramped up to 4 million oz of production, with 80,000 oz of gold offsets. Plus, they have two other projects (Rodeo and Santa Maria) in Mexico for future growth. And they want to find a JV partner for El Quevar (60 million oz). My guess is they will option or sell El Quevar and focus on Mexico.
When they merged with ECU Silver in 2011, I thought they would have about 300 million oz of silver resources. In fact, even their 2012 Annual Report claimed 340 million oz of inferred silver equivalent. However, they hired a company in 2012 to redo the Valardena 43-101 resource estimate. The outcome was a much more conservative result. Now they claim to have only 70 million oz of silver resources and 600,000 oz of gold (although they list the “high” estimate at Velardena as 187 million oz of silver and 3 million oz of gold). I think their resources will end up being much higher at Velardena.
They have been on a selling spree (2012 and 2013) of many of their 80+ properties on 1.5 million acres. They expect to consolidate down to 20 properties. Currently they have 40 properties on 320,000 acres.
Stopped production in June 2013 because of low silver prices. The stock crashed to 50 cents a share.
Resumed production at Velardena in July 2014. Then stopped again in October 2015.
Annual income of $4 million expected in 2017 and 2018 from leasing a mill.
Gold Price (last analysis) ($)
Silver Price (last analysis) ($)
Stock Price (last analysis) ($)
1 Yr Stock Price High ($)
Stock Price Change From 1 Yr High (%)
Stock Price USA 5-Year High ($) (including date)
$28 - 11/8/2010
Stock Price USA 5-Year Low ($) (including date)
19 cents - 7/23/2015
Management has done a poor job in the past few years. The stock has dropped 96% since 2010. From $28 to 19 cents.
Local Issues (wag)
100%, except the 40% Celaya JV.
Country of Incorporation
40 properties (gold and silver) on 350,000 acres.
150,000 oz at .6 gpt
Significant gold offsets at Valardena.
Focusing on 2 projects in Mexico / 1 in Argentina
Velardena resumed production in July 2014, but stopped again in October 2015. It should ramp up to 3 or 4 million oz of silver equivalent once silver prices rise and provide cash flow for exploration and expansion.
Cash costs at Velardena are expected to be between $12 and $15.
They got Velardena from ECU Silver. I thought Valardena had at least 200 million oz of silver, but they are only claiming 60 million oz of total silver resources. The said that ECU's 43-101 was too conservative and had it redone in 2012. However, they are stating that it has "potentially" much more gold and silver. My guess is they just need more drilling.
Santa Maria (Mexico)
3.3 million oz at 330 get
PEA to mine 2 million oz over 3 years
$1 million capex
$8 million in free cashflow
Celaya is a 40% JV.
El Quevar (Argentina): This mine (60 million oz) is advanced stage and high grade. Close to a PEA decision. Looking for a partner.
Shareholder Friendly (wag)
Low dilution, but a low share price can create dilution quickly.
Ore Grade (wag)
150 gpt on average for silver.
El Quevar is very high grade 300 gpt
10/31/2015: Decreased rating from 3.5 to 3 after stopped production again at Velardena.
11/14/2014: Increased rating from 3 to 3.5 after they resumed production at Velardena.
12/10/2013: Decreased to 3 after they stopped production.