Golden Minerals Signs Earn-In Agreement With Barrick Gold Corporation at El Quevar

GOLDEN, Colo., April 13, 2020 (GLOBE NEWSWIRE) -- Golden Minerals Company (NYSE American and TSX: AUMN) (“Golden Minerals”, “Golden” or “the Company”) announced today that it has entered into an earn-in agreement (the “Agreement”) with Barrick Gold Corporation (“Barrick”) (TSX: ABX and NYSE: GOLD) whereby Barrick has acquired an option to earn a 70% interest in Golden’s El Quevar project located in the Salta Province of Argentina.

As part of the Agreement, Barrick will purchase US$1.0 million of Golden Minerals shares pursuant to a private placement transaction at a price of $0.21 per share, which is equal to the 20-day VWAP of the Company’s common shares on the NYSE American exchange on the date of the agreement. The shares will be subject to applicable restrictions on transfer under U.S. and Canadian securities laws.

In order to earn an undivided 70% interest in the El Quevar project, Barrick must:

1. Spend US$10 million on exploration,
2. Deliver an NI 43-101-compliant Pre-Feasibility Study (“PFS”) describing a potentially profitable operation with mineral resources of not less than 2 million gold equivalent ounces, and
3. Deliver a written notice of exercise to Golden within eight years.

Barrick’s US$10 million in defined work expenditures must be incurred over a total of 8 years. Requirements include US$0.5 million per year in years 1 and 2; US$1.0 million per year in years 3, 4 and 5; and US$2.0 million per year in years 6, 7 and 8, although amounts may be spent earlier than required. The PFS must be delivered by Barrick by the end of year 8.

Barrick may withdraw from the Agreement at any time after spending US$1.0 million in work expenditures, upon providing 30 days notice.

During the earn-in period, in addition to the exploration spending, Barrick will fund the holding costs of the property, which will qualify as work expenditures. Barrick will reimburse Golden for expenses related to maintaining the exploration camp which will initially be run by Golden under a service agreement, which will also qualify as work expenditures.

Golden will form a new entity (“NewCo”) that will hold the El Quevar properties.  Upon earn-in by Barrick, the NewCo will be 70% owned by Barrick and 30% owned by Golden. Funding of NewCo will be split in proportion to ownership of each shareholder, and industry standard dilution mechanisms will apply in the case of funding shortfalls by either shareholder. Dilution below 10% interest will result in conversion to a 1.5% NSR royalty applicable to all recovered products, excluding silver during the term of the Silver Royalty. Golden will retain a 5% NSR Silver Royalty payable on the recovered silver from production from the project, capped at the 29 million total payable silver ounces as estimated in Golden Minerals’ 2018 Preliminary Economic Assessment (Amec Foster Wheeler E&C Services Inc., a Wood company, NI 43-101 Technical Report on Preliminary Economic Assessment, September 4, 2018).