Golden Minerals Begins Mining Operations at Velardeña Silver-Gold Properties
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Insights
The resumption of mining operations at Golden Minerals' Velardeña Properties is a significant development, signaling a potential increase in the company's production capacity and revenue streams. The strategic decision to ramp up to 325 tonnes per day by the second quarter reflects a confidence in the underlying value of the assets and the metals market. It is crucial to assess how this operational scaling might affect the company's market position, especially considering the historical context where previous low metal prices and operational inefficiencies halted production. The market will likely monitor the sustainability of these operations closely, particularly in light of the fluctuating metals market prices and the potential risks associated with mining dilution and metallurgical challenges that the company has faced in the past.
Investors should note the financial implications of Golden Minerals' operational restart. The initial mining of stockpiled material, which has been dormant since 2015, could provide a quicker revenue stream before the full-scale mining operations take root. However, it is essential to consider the capital expenditure involved in restarting operations and the ongoing costs to reach the projected full production rate. The anticipated production rates suggest an increase in future cash flows, but these must be weighed against the investment and operational costs. Additionally, the impact on the company's balance sheet and potential financing needs should be analyzed, as well as the effect on the stock's valuation.
The technical aspects of Golden Minerals' decision to restart mining operations after evaluating various mining methods and processing alternatives highlight the company's commitment to operational efficiency and profitability. The transition from producing pyrite concentrates from stockpiled material to mining new material for lead-silver, zinc and pyrite-gold concentrates could indicate improved metallurgical processes. This could potentially reduce previous issues with mining dilution and enhance the quality of the extracted ore. The long-term success of these operations will depend on the company's ability to maintain consistent production rates and manage the complex logistics associated with mining and processing multiple types of concentrates.
The Company has begun mining in six stopes and is steadily ramping up daily production to reach a rate of approximately 150 tonnes per day (“tpd”) in March, and ultimately a full production rate of approximately 325 tpd in the second quarter.
The restart of mining operations follows the Company’s announcement in November 2023 that it had also begun producing gold-rich pyrite flotation concentrates from Velardeña. The concentrates come from material that has been stockpiled at the Velardeña Properties since the fourth quarter of 2015, when the mines were last operational. At that point, mining activities were suspended when a combination of low metals prices, mining dilution and metallurgical challenges rendered operations unprofitable. The Company elected to preserve the asset for future use, and since that time has evaluated a number of mining methods and processing alternatives that could enable sustainable profitable operations. The December 2023 restart of mining represents the culmination of that work. The Company anticipates continuing to produce the pyrite concentrates until such time that mine production can sustain continuous operation of the flotation plant to produce the three concentrates, lead-silver, zinc, and pyrite-gold from newly mined material.
About Golden Minerals
Golden Minerals is a gold and silver mining company based in
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and applicable Canadian securities legislation, such as statements regarding the Velardeña Properties, including tpd production projections in February 2024 and by the end of the first quarter of 2024, plans to continue processing previously stockpiled pyrite concentrates until such time that mine production can sustain continuous operation of the flotation plant to produce concentrates from newly mined material. These statements are subject to risks and uncertainties, including increases in costs and declines in general economic conditions; changes in current payable terms for gold and silver bearing pyrite concentrates; changes in political conditions, in tax, royalty, environmental and other laws in
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Golden Minerals Company
Karen Winkler, Director of Investor Relations
(303) 764-9170
Source: Golden Minerals Company
FAQ
When did Golden Minerals Company begin silver-gold mining operations at Velardeña Properties?
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Why were mining activities suspended at Velardeña Properties in 2015?
What is the company currently producing from the stockpiled material at Velardeña Properties?
What does the December 2023 restart of mining represent for Golden Minerals Company?
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