Gold mid-tiers’ Q3 2024 fundamentals
All-time-high gold prices combined with relatively-contained costs catapulted unit earnings to another epic record.
Barrick Gold (TSX: ABX, NYSE: GOLD) has entered an option to acquire a 70% interest in Golden Minerals’ (NYSE: AUMN, TSX: AUMN) El Quevar silver project in the Salta province of Argentina.
As part of the agreement, Barrick will purchase one million Golden Minerals shares pursuant to a private placement transaction at $0.21 a share.
To earn an undivided 70% interest in the El Quevar project, Barrick must spend $10 million on exploration, deliver an NI 43-101-compliant pre-feasibility study describing a potentially profitable operation with mineral resources of not less than two million gold equivalent ounces, and deliver a written notice of exercise to Golden Minerals within eight years.
“Barrick’s interest in exploring the El Quevar district underscores the excellent potential of the high sulphidation epithermal systems at El Quevar to host additional important discoveries,” Golden Minerals president and CEO Warren Rehn said in a statement.
Golden Minerals will form a new entity that will hold the El Quevar properties. Upon earn-in by Barrick, the joint venture will be 70% owned by Barrick and 30% owned by Golden Minerals.
In 2018, Golden Minerals released a preliminary economic assessment that outlined the potential for a six-year mining operation producing 29 million oz. of payable silver at an average LOM grade of 409 g/t. The PEA shows a $45 million net present value at a price of $16.66/Ag oz.
In late March 2019, the company began a 3,000-metre drill program to further define the potential for additional mineralized material in the Yaxtché deposit and surrounding area. That program identified a new area of high-grade silver.
Golden Minerals also announced on Monday that it has suspended mining activities at its Velardeña silver-gold properties in Mexico, in compliance with the Mexican government’s directive to suspend all non-essential activities until April 30 in response to the covid-19 pandemic.
Golden Minerals’ stock traded up 4.8% at midday Monday on the NYSE. The company’s market value is $28.8 million.
