Subject to the receipt of sufficient capital, the move was primarily based on vastly improved sales terms for the gold-rich pyrite concentrate produced from the flotation processing of Velardeña-mineralised material.
Golden Minerals expects the improved terms to restart operations at the Velardeña properties while eliminating the significant expense of the previously planned bio-oxidation facility.
The Velardeña properties comprise two past-producing underground silver-gold mines and two processing mills.
Mining operations were suspended in November 2015 due to reduced profits as a result of low metals prices, mining dilution and metallurgical challenges.
According to the new plan, underground mining is planned with four active stopes and processing at Velardeña’s Plant I flotation facility.
Since the beginning of this year, Golden Minerals has processed 3,000 tonnes (t) of material mined in its test mining activities last year. The company sold 600t of these concentrates under the improved terms.
Golden Minerals CEO Warren Rehn said: “These recent sales augur well for the potential success of our restart plans.
“We anticipate that we can start mining operations with a minimal initial capital of approximately $500,000. Our internally developed mine plan projects the production of approximately 400,000 silver-equivalent ounces during 2023, with the potential to ramp up to approximately 1.6 million silver-equivalent ounces per year thereafter.”
Golden Minerals said it plans to raise additional cash “in the very near term” either through the non-core assets sale or equity financing. In the event of an unsuccessful cash raise, the company anticipates cash balance depletion early in Q3 2023, which could force it to liquidate its business.