Golden Minerals Company (NYSE-A: AUMN, TSX: AUMN) announced on Friday it has sold its primary assets in Mexico comprising the Velardeña properties in Durango state that it briefly brought back to production.
Assets included in the sale are the Velardeña and Chicago underground mines, both of the company’s oxide and sulfide processing plants, and related equipment. Total consideration is $5.5 million cash, plus value-added tax. The buyer is a privately held company based in Mexico.
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In December, Golden Minerals brought the Velardeña mines back into production and had hoped to generate positive cash flow in the first half of this year. However, just two months later, it stopped mining due to underperformance.
In addition to the asset sale, Golden has also settled a court case with Unifin Financiera for $250,000. Last year, the Mexican financier launched a lawsuit against the company for payments owed on certain drilling equipment, and was seeking recovery of as much as $12.5 million.
“We are pleased to have negotiated this cash sale for the Velardeña assets in such a timely manner. The sale will enable us to divest of our production assets and related liabilities in Mexico and allow us to focus on exploration and development, principally of our Argentina assets,” Golden Minerals CEO Warren Rehn said in a statement.
The company currently owns 100% of the El Quevar project located in Argentina’s Salta province. This 56.7-sq.-km. property was subject to significant exploration between 2004-2012, and was recently the subject of an earn-in agreement with Barrick Gold.
A 2018 preliminary assessment on El Quevar outlined the potential for a six-year mining operation producing 29 million oz. of payable silver at an average grade of 409 g/t. The PEA estimated a $45 million net present value at a 5% discount rate at a price of $16.66/oz. silver.
In addition to El Quevar, Golden also has an option to acquire 51% of the Sarita Este project, also in Salta province. It is an exploration-stage gold-silver-copper project situated near First Quantum’s Taca Taca project.
