I met with the following management of Golden Minerals 9/17/13 in Golden, Co.—CEO Jeff Clevenger, Corp. Counsel Deborah Friedman, CFO Bob Vogels, and Inv. Relations Mgr. Karen Winkler. Areas discussed were (1) the 9/10/13 Business Update press release, and (2) the Algorithm/High Frequency trading suppression on AUMN.

Business Update and Production Plan

Golden Minerals is evaluating an operating plan, referred to as a long hole stoping method, which would allow it to potentially process ore profitably at a silver price of $20/oz. With greater accessibility to the Santa Juana mine due to the completion of the ramp, and with the capability to reach higher grade ore with this stoping method, management is optimistic and believes that they will be processing 600 tpd next year and producing 1.6 million silver-eq. ounces—nearly double the production level before the Q2 shutdown when gold and silver prices collapsed. Management has also implemented cost cutting measures and expects to approve the plan before year end. After the necessary gradual start-up period, production should reach 600 tpd by mid-2014.

Separately, Golden Minerals is aggressively seeking oxide feed from other local mining companies who lack processing capability. This would provide additional revenue to the company. The company also continues to pursue tests to enhance the sulfide ore gold recovery.

El Quevar continues to attract interest among mining companies in Argentina. Several interested companies have reviewed the project as Golden Minerals seeks to secure a partner with whom to advance its El Quevar property.

Algorithm/High Frequency Trading Suppression

We discussed the incessant daily suppression on AUMN as indicated by the phenomenon whereby the stock is capped mid-morning and stair-steps lower till the close, as well as the usual downtick on the final trade of the day (tape-painting). This trading pattern is systematic and correlates with the 2/18/13 “blueprint” report generated by mining analyst John Kaiser titled, “Can the TSX Venture Be Saved?”

Management indicated that they had contacted the NYSE regarding this issue and had been assured that the complaint would be reviewed by the Financial Industry Regulatory Authority (FINRA). The company also held several discussions with independent securities lawyers who advised management that legal proceedings against the (undisclosed) perpetrators would be extremely difficult and costly, and thus, they (prudently) decided against that measure.

I suggested to Clevenger that he make Sentient Group, the Australian-based fund manager with an $80 million (20%) position in AUMN, aware of this illicit suppression and recommend that it place a GTC 2-3 million share position under the market, in an effort to negate this pressure and confuse the Algo/HFT program. Clevenger pointed out that Sentient has a self-imposed limitation to their 20% ownership and that any change would also require the Toronto Stock Exchange (TSX) approval. However, he did point out that Trishield Capital, a NY-based hedge fund with a recently-acquired 6% position, would be a better candidate. Clevenger plans to contact them and I offered to provide trade documentation.

Management disclosed that the 9/16/13 (small) Insider Sale Transactions were merely related to the following:

“The Form 4 transactions are the automatic sales of shares done according to Golden’s 10B5-1 plan. Our executives receive a portion of their compensation in restricted shares that vest over a three year period. Upon each vesting date, tax is due to the IRS on those vesting shares. These sales are executed automatically per the plan purely to fund these tax liabilities.”

CEO Clevenger retains 569,556 shares, while Vogels and Friedman maintain 161,831 and 106,600 shares, respectively.

Lastly, since returning from the meeting, I have forwarded Karen Winkler the recent documentation showing a 709,500 share increase in the official short position of AUM between 9/1-9/15. This figure is striking given the fact that only 132,500 AUM shares traded during that 2-week period! Management is forwarding this onto the NYSE and FINRA.

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