Golden Minerals Announces Restart of Silver and Gold Mining Operations at Velardeña and Provides Update on Capital Resources - Seite 3

If we are successful in raising sufficient capital to restart mining operations at Velardeña during July 2023, and if we are successful in executing the mine plan described above, the forecasted net operating margin from the Velardeña Properties during the twelve-month period ended May 31, 2024 is expected to be between $1.7 million and $2.0 million. This twelve-month period includes one-time costs related to restarting operations. As the mine reaches planned capacity to feed the processing plant approximately 325 tonnes per day, the second half of 2024 is forecast to be more favorable, generating a positive operating margin higher than what is expected during the first eleven months of operations. Net operating margin is defined as revenue from the sale of metals less the cost of metals sold. Our internal estimate for the net operating margin at Velardeña assumes gold prices average $1,900 per ounce and silver prices average $22.50 per ounce. The actual amount received in net operating margin from both Rodeo and Velardeña during the period may vary significantly from the amounts specified above due to, among other things: (i) unanticipated variations in grade, (ii) challenges associated with our proposed mining plans, including difficulties in controlling grade dilution, (iii) decreases in commodity prices below those used in calculating the estimates shown above, (iv) variations in expected recoveries, (v) increases in operating costs above those used in calculating the estimates shown above, or (vi) interruptions in mining.

There is no assurance that the Company will be successful in achieving the positive operating margins at Velardeña described above. Specifically, the anticipated net operating margin from the Velardeña Properties is not based on the results of a full feasibility study. While the Company believes its internal estimates are realistic, the lack of a full feasibility study may increase the uncertainty associated with the estimates.

In addition to the estimates described above, the Company expects to collect approximately $1.5 million in VAT accounts receivable from the Mexican government; however, the timing for receipt of these payments is uncertain.

Update on Unifin dispute

As previously disclosed, the Company is party to a lawsuit in Mexico brought by Unifin Financiera, S.A.B. de C.V. (“Unifin”). Unifin is alleging that a representative of the Company’s subsidiary, Minera William, S.A. de C.V. (“Minera William”) signed certain documents in July 2011 purporting to bind Minera William as a guarantor of payment obligations owed by a third party to Unifin in connection with that third party’s acquisition of certain drilling equipment. At the time the documentation was allegedly signed, Minera William was a subsidiary of ECU Silver Mining prior to the Company’s acquisition of ECU in September 2011. A preliminary hearing on the lawsuit was held on June 2, 2023 and the trial hearing has been scheduled for June 30, 2023. Unifin is seeking recovery for as much as US$12.5 million. Because the Velardeña mine and processing plants are held by Minera William, any adverse outcome of the action may have a material impact on our ability to restart production at Velardeña.