GOLDEN, CO, Sep. 8, 2009 (Marketwire) -- Golden Minerals Company ("Golden Minerals" or the "Company") (TSX: AUM) (PINKSHEETS: GDMN) today announced the sale of three mineral claims in Mexico to Capstone Gold SA de CV ("Capstone"), a wholly owned subsidiary of Capstone Mining Corp. The three claims are immediately adjacent to Capstone's Cozamin Mine in Zacatecas State, Mexico.
The three claims are being acquired from Minera Largo S de RL de CV, a wholly owned subsidiary of Golden Minerals. The purchase price comprises:
a. an upfront payment of $1.0 million,
b. future cash payments pursuant to a net smelter return of 1.5% on
metals produced from the first one million tonnes of ore mined from
the claims sold, and
c. cash payments equivalent to a 3.0% net smelter return on metals
produced from ore mined from the claims in excess of one million
The net smelter return on metals produced from ore mined from the claims in excess of one million tonnes escalates by 0.5% for each US$0.50 increment by which the quarterly average copper price exceeds US$3.00 per pound.
Definitive agreements have been executed and the initial cash payment of US$1.0 million has been paid. Title to the claims is now being transferred.
"Golden Minerals will continue to evaluate opportunities to generate value from exploration properties held by the Company that are outside of our specific area of interest, through sale, farm-out or retaining of a royalty interest," commented Jeffrey Clevenger, Chairman, President and CEO of Golden Minerals. "The sale of these three claims provided just such an opportunity to generate value for the Company."
In addition to the three claims included in this transaction, Golden Minerals currently owns 178 additional claims covering about 14,500 hectares in the Zacatecas district, where the Company's ongoing district evaluation has identified nine potential target areas for further detailed exploration.
About Golden Minerals
Golden Minerals is primarily engaged in the advancement of its exploration projects and in providing mine management services. The Company has a large portfolio of exploration projects, primarily located in Argentina, Peru and Mexico and is focusing on its advanced stage El Quevar Project in northern Argentina.
The Company currently has two diamond drill rigs operating at the El Quevar Project, with two additional drill rigs planned to be on site within the next few weeks. The drill program is primarily designed to expand the current mineral resource and to provide infill drill intercepts in the west extension of the Yaxtche Zone to support an updated resource estimation, and to test some of the remaining thirteen target areas contained within the El Quevar property. The Company expects to update the resource estimate for the El Quevar Project in September. A drill hole location map and listing of all drill intercepts for the holes at El Quevar for which the Company has received and verified results are available at http://www.goldenminerals.com/.
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 net smelter return on metals produced from the mineral claims in Mexico sold by the Company to Capstone Mining Corp. focus of the drilling program at the El Quevar project in Argentina and the expected update of the El Quevar resource estimate. These statements are subject to risks and uncertainties, including uncertainties regarding whether metals will be produced from the claims sold to Capstone and whether net smelter return payments will be made, future results of exploration drilling at El Quevar and the possible delay in or failure to complete an update of the El Quevar resource estimate. 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 Annual Report on Form 10-k of its predecessor for reporting purposes, Apex Silver Mines Limited, for the year ended December 31, 2008.
For additional information please visit http://www.goldenminerals.com/.