Agoracom: Small Cap Investment - Golden Minerals Company - After reading the Cannacord writeup, I think many are missing a critical point..

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Golden Minerals is a junior silver producer with a strong growth profile, listed on both the NYSE Amex and TSX.

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Silverbull50

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After reading the Cannacord writeup, I think many are missing a critical point..

posted on May 23, 2012 10:08AM

...at a critical time.

Let me re-list GWR's brief write-up from Canaccord early Tues. morn:

Golden Minerals* (AUM : TSX : $3.67), Net Change: 0.23, % Change: 6.69%, Volume: 130,044

High five for high grade!

Shares of Golden Minerals rallied after the company announced high grade resource estimate for the Velardena Property in Mexico. The measured and indicated resource at Velardena was reported at 2.3 million tonnes at grades of 3.46 grams per tonne of gold and 195 grams per tonne of silver. The new resource estimate demonstrates significantly higher grades (approximately 50% on a gold/silver equivalent basis) than previous estimates. Previously, estimates were for greater tonnes at significantly lower grades and slightly higher total ounces. Jeffrey G Clevenger, President and CEO, commented, "Golden Minerals is fortunate to have a near term cash generating project in this current down turn for the junior sector. Higher grades identified with our new resource estimate at Velardena will only facilitate our goals of becoming financially self sufficient."

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In addition to the fact that AUMN doesn't want to spend millions of dollars drilling more holes within the 500 meter leeway that Micon allowed ECU to include (current firm only allowed 100 meter inclusion which I'm told is more consistent with other firms), what AUMN wants to present to the market is that we have very high grade ore that we are pursuing immediately, as soon as the equipment comes from El Quevar.

Rather than dilute the grade by including other lower grade veins (even though they may still be economical) which might not be mined for many years, this way they are reassuring the market during this difficult, volatile metal period, that the ore they will be mining will be extremely profitable ( 3.46g/ton au and 195 g/ton ag). This accounts for the much higher estimates for Q3-Q4 production and should provide comfort to market.

I think this is a significant oversight by those disappointed with the overall resource comparason in the two reports, but which the Cannacord analyst is impressed by.