Vancouver – High-grade silver intercepts extending the Yaxtch deposit along strike in both directions are making Golden Minerals (AUM-T, AUMN-N) rethink its feasibility study plans – the company has postponed completion of the study to complete more drilling in an attempt to grow the resource significantly – and investors love the plan.
Yaxtch is the main deposit at El Quevar, the company’s high-grade silver project in Salta province, Argentina. With 245 holes already drilled to define the current 60-million oz. indicated and inferred silver resource at Yaxtch, Golden Minerals is now focusing on step-out drilling along strike to the east and west.
Hole 211, drilled into the western end of the resource block, returned a long hit: 146 metres grading 317 grams silver per tonne, including 56 metres of 409 grams silver and 5 metres of 1,509 grams silver. Near the eastern end of the deposit, hole 217 cut 2 metres grading 970 grams silver followed by 2 metres of 489 grams silver.
Both hits are significant. Hole 211 shows the strength of the system at its western end, just before the Yaxtch system disappears under postmineral cover. The system seems to reappear 1.6 km along strike to the west where an alteration zone comes to surface, but the zone and the covered area in between have only seen limited drilling. One hole through the cover returned a 7-metre intercept carrying more than 1,000 grams silver. It is this potential for significant strike extension at the western end that has prompted Golden Minerals to postpone the project feasibility study.
And hole 217 is one of the first to establish high-grade mineralization east of the central Yaxtch deposit. The potential strike extension to the east has also seen only limited drilling.
In addition, Golden Minerals is probing the Mani target, an area 500 metres southwest of Yaxtch. Hole 220 pulled a 5-metre intercept from Mani grading 515 grams silver and a 2-metre hit carrying 411 grams silver. The company continues to drill at Mani and is also planning to test the Carmen target, located 300 metres of Yaxtch.
Mani and Carmen are two of ten targets at El Quevar where Golden Minerals sees potential for additional mineralization. Earlier this year the company punched six holes into the Quevar Norte target, which is 3 km north of Yaxtch, and three of the holes returned mineralization grading better than 100 grams silver, including a 28-metres interval averaging 1,289 grams silver.
The only downside of a successful drill program is that it makes the decisions involved in a feasibility study more difficult. At El Quevar, Golden Minerals started a feasibility study based on an 800-tonne-per-day operation. Now, with drills indicating good potential for expansion, the company has postponed that study and instead kicked off an additional $5-million drill program.
“The company has determined that additional drilling is warranted to further define the extent of the resource before completing the feasibility report,” said the company in a statement. “A larger resource base may support a higher production rate than initially contemplated.”
In the meantime, Golden Minerals continues to advance a production-sized underground decline towards the Yaxtch deposit. Roughly 100 metres of the decline are now complete, leaving the company with another 125 to go before reaching mineralization. Golden Minerals will use the decline to confirm the resource model and mining methods and to take bulk samples for metallurgical testing and process design.
In August Golden Minerals boosted the resource at Yaxtch by 42%, compared to the previous estimate completed just eight months prior. The deposit is now home to 902,000 indicated tonnes grading 310 grams silver plus 4.8 million inferred tonnes averaging 336 grams silver.
The project sits in a Tertiary volcanic complex within the Andean Cordillera. Mineralization is associated with argillic alteration, with the best grades occurring in hydrothermal breccia zones showing strong silicification.
Golden Minerals debuted on the Toronto Stock Exchange in March 2009 as the new form of bankrupted Apex Silver. Apex Silver filed for bankruptcy in early 2009, proposing to relieve its main lender, Sumitomo, by handing over its 65% stake in the San Cristobal mine for $27.5 million. The courts agreed.
Golden Minerals was then incorporated to take on Apex Silver’s portfolio of 45 exploration-stage properties in South America and Mexico. The new company also signed a management services agreement for the San Cristobal mine, taking on responsibility for certain services on a fee basis.
A year later, having advanced El Quevar through several resource updates, Golden Minerals raised $35.3 million. The March financing saw the company sell 4 million shares at $8.50 a piece.
Investors loved the recent Yaxtch drill results. In the four days following the news Golden Minerals’ share price gained $4.69 or 54% to reach $13.34. The company has a 52-week share price range of $5.20 to $15.50 and has 9.3 million shares outstanding.
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