Charting Golden Minerals- http://schrts.co/KRINFzDW
Emerged from the Apex Silver Mines bankruptcy.
Merger with ECU Silver in 2011.
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 at Velardena because of low silver prices. The stock crashed to 50 cents a share.
Income of $3 to $4 million expected in 2020 from leasing the Velardena oxide mill to Hecla Mining.
Info from GoldStockData.com
Don's Summary (from last analysis - 04/13/2020) TOP 25 PICK
Golden Minerals is one of the few pure silver mining companies. They were doing great in 2011 with a share price high of $28. They had 50 properties on 800,000 acres, including two flagship projects. Velardena in Mexico and El Quevar in Argentina (now a JV with Barrick Gold).
Velardena (60 million oz at 300 gpt) was in production with plans to ramp up to 4 million oz of production. Then the silver 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 crashed 99% from $28 to 19 cents. Today it's at 30 cents, but there has been significant dilution of shares.
El Quevar is a JV with Barrick Gold. It is a 50 million oz (400 gpt) mine that could add another 1 million oz of annual production (their share). A PEA was released in 2018 to produce 4.8 million oz annually for 6 years. The capex is $97 million. It still requires a feasibility study and permitting. Expect production in about 3 or 4 years.
Plus, they have an early exploration project in Nevada (Sand Canyon). It's a big property (8,000 acres) with several drill targets, but they only have an option for 60%. They will drill it in 2020 and 2021. A few good drill holes would help the stock.
They are strongly positioned to rebound once silver prices rise. They have about $4 million in cash and no debt, plus $3 to $4 million in expected annual income in 2020 for leasing the Valardena mill to Hecla Mining. Velardena has two mills. One (oxide) is leased to Hecla, but Hecla has the right to cancel it with a 60-day notice. The other (sulfide) mill is 300 tpd and can be used to resume production.
When they merged with ECU Silver in 2011, I thought they would have about 300 million oz of silver resources. In fact, 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 60 million oz of silver resources, 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 than the current listed 60 million oz.
They could become a 4 million oz producer and are currently valued at $38 million. Clearly, investors are not impressed with management. So, that is a big red flag. That said, it might not be a bad speculation stock. One shareholder (Sentient) holds 39% of the shares and is not going to give the company away for small premium. I'm hoping that Sentient has big paper losses (like most of their shareholders) and refuses to sell at any price.
10/18/2020: Spoke to the CEO on the phone. They plan to mine Rodeo for 2 years starting in 2021 at 20,000 oz annually, for $15 million in annual free cash flow. The capex is only $1.5 million and all they need is a permit to begin production. They plan to restart Valardena in Q3 2021 at 2 million oz of AGEQ (mostly silver and gold), with the plant at 300 tpd. This capacity can be increased as silver prices rise, potentially doubling production. The capex is only $10 million to restart Valardena.
Sand Canyon is early exploration and not a discovery. They will likely drill a bit more on the property, but nothing exciting yet. El Quevar is being drilled by Barrick and Barrick can take their time, which will delay development. I would expect Valarena to increase to 3 million or 4 million oz of annual production, but not for a few years. If silver jumps to $50, I would expect them to expand production to 3 million oz of annual production in 2022 or 2023.