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Golden Minerals Company (NYSE-A: AUMN) (TSX: AUMN) announced Thursday that it has elected to stop silver-gold mining at its Velardeña properties in Mexico just two months after restarting the operation. Located in Durango, Mexico, Velardeña hosts two former underground mines and two processing mills.
On December 18, 2023, the company officially brought the Velardeña properties back into production, with mining occurring in six stopes. The plan was to steadily ramp up daily production to 150 tonnes per day in March, and ultimately reach a full production rate of 325 tonnes in the second quarter.
A month before that, it began producing gold-rich pyrite flotation concentrates from Velardeña, which have been stockpiled at the mines since late 2015, when they were last operational. Afterwards, mining activities were suspended due to combination of low metals prices, mining dilution and metallurgical challenges.
This time around, Golden had hoped the newly restarted Velardeña mines would be able to deliver positive cash flow in the first half of 2024 after progressively increasing the production rate.
However, the performance of the mine and processing plant during the first few months has not achieved the projected results, the miner said in a press release Thursday.
As a result, the company said it will now evaluate potential alternatives for the Velardeña properties, which may include a sale of properties or the winding up of certain Mexico operations.
Golden Minerals said its primary focus now is the exploration-stage Yoquivo property in Chihuahua state, containing an inferred resource of 17.2 million oz. gold equivalent within 937,000 tonnes grading 410 g/t silver and 2.1 g/t gold.
Golden Minerals’ stock plunged 37.5% to C$0.45 by midday Thursday following the announcement. It fell as much as 45.5% to a 52-week low of C$0.37 earlier in the session.
The company’s market capitalization is estimated at $4.4 million.
