Golden Minerals cancels sale of Mexican assets

2019-09-11 07:32 ET - News Release

Mr. Warren Rehn reports

GOLDEN MINERALS ANNOUNCES TERMINATION OF SALES AGREEMENT

Golden Minerals Company's previously announced purchase and sale agreement with Compania Minera Autlan SAB de CV regarding the sale of certain of its Mexican properties has been terminated. The agreement was previously announced in a company news release dated June 27, 2019.

Warren Rehn, Golden Minerals' president and chief executive officer, commented: "While it is unfortunate we could not come to terms with Autlan, we are now in a position to consider future options for the properties that were included in the Autlan agreement. Due to the recent increases in gold and silver prices, we believe the value of these assets has increased substantially."

The company will continue to hold the Velardena properties and lease its oxide mill to a subsidiary of Hecla Mining Company, which is expected to result in net operating margin to the company of approximately $5-million per year. This lease has been continuing since 2015, and Hecla is permitted to continue processing its San Sebastian material at the oxide mill through 2020. Similarly, the company will continue to hold the Santa Maria, Rodeo and Mogotes precious metals exploration properties in its portfolio of assets.

Upon execution of the Autlan agreement, Autlan paid a deposit of $1.5-million (U.S.) to the company which would have been applied to the purchase price upon closing. In accordance with the terms of the agreement, the company has the option to repay the deposit within 90 days following termination or elect to convey the Rodeo concessions to Autlan in full settlement of the deposit.

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