Golden Minerals Company
Velardeña Properties


Velardeña Property
Golden's main Velardeña Property includes four interconnected mines: Santa Juana, San Juanes, San Mateo and Terneras. The veins and vein packages in the Velardeña Property are very continuous and typically have demonstrated lateral continuity of up to one kilometre in addition to vertical continuity of over 500 metres.

Santa Juana
Access to the Santa Juana Mine is via a 1,400 metre adit from surface to the deck of the Santa Juana winze. This access is located on the 6th level of the Terneras Mine, corresponds to the 12th level of the Santa Juana mine. The winze allows access from the 12th level to the 17th level. A ramp has been driven from the 15.5 level (which corresponds with the 1,600 metre elevation above sea level (ASL) or 400 metres below surface) to the 18th level and extensive development has been completed below the 17th level down to the 19th level.

Santa Juana veinThe Santa Juana system consists of both northwest and east-west striking vein sets. The northwest oriented sets are comprised of two types, both of which are northeast dipping. The Santa Juana Vein and the A5, A6, and A7 veins represent northwest striking, curvilinear veins, whereas, the CO, CC, C1, G1, B's, A4, A3, A2, A1, D1, DD, and E veins are linear in form, dipping steeply (65º to 85º) to the northeast.

The Santa Juana veins generally vary in width from 0.2 metre to 1 metre with the more continuous veins extending over a strike length of 450 metres. The Santa Juana Vein has been mined historically over a strike length of 350 metres and a vertical extent in excess of 400 metres.

Numerous packages of high grade veins have been discovered within a Mineralized Corridor (the “MC”). The overall shape and size of the MC is approximately 100 metres wide, extends 230 metres from level 12 to level 18 and drilling has confirmed that it continues below level 18 for at least another 250 metres. The MC has been followed along strike for over 500 metres. This suggests that the vein packages are potentially amenable to bulk mining applications.

San Mateo
Significant grades of gold and silver have been discovered at San Mateo.

The San Mateo Vein is present for a distance of 600 metres whereupon it continues to the east. It strikes 263º and dips 70º to 80º north. It occurs mainly within the intrusive rocks and the skarn, as the contact with the limestone is situated near the property boundary. The vein has been mined from surface to level 12, a vertical distance of 300 metres.

Grade is extremely variable. Calcite rich zones are generally low grade. Seven hundred samples from the database indicate a high of 16.5 g/t Au and 6,485 g/t Ag with an average of 2.82 g/t Au and 443 g/t Ag. Furthermore, there are consistent values of lead and zinc but only the most recent portion of the database has information on the base metals contents.

San Juanes
The San Juanes Vein has been traced on surface for a distance of 950 metres. The vein is sub-parallel to the Terneras and San Mateo veins and dips 80º to 87º north. Six drill holes have tested the vein at depth as deep as 1640 m ASL. The eastern portion of the vein is hosted by intrusive rocks, whereas the western part is hosted by limestones. The vein is generally very narrow, ranging from 5 cm to 30 cm in width but is typically high grade, with values up to 228.9 g/t Au and 9,880 g/t Ag.

The Terneras vein is the most prominent vein in the Velardeña district and is located approximately 460 metres south of the Santa Juana mine. It strikes 260º and dips 70º to 85º north. It is hosted by both limestone and intrusive rocks. Historically, mining has been carried out over a strike length of approximately 1,100 metres and 550 metres vertically. The vein width varies from 0.3 metre to 2 metres. The vein is truncated to the west by the 70º west dipping Buenaventura fault and to the east it is offset less than 10 metres by the Las Tres Aguilas fault.

The Company’s exploration efforts have found the western and eastern extension of the Terneras vein that has eluded historical exploration efforts for over a century. Drilling was carried out yielding assay results with up to 3,130 g/t of silver. The drilling assay results are consistent with the historical assays from the Terneras vein which was extremely rich in silver and lead, close to the surface, with gold mineralization increasing at depth. The sample width of 0.4 metres is also consistent with the historical widths observed and mined at the Terneras mine. The Terneras west extension has lateral continuity of 900 metres and vertical continuity of 600 metres and remains open laterally and at depth. The eastern extension of the Terneras Vein shows evidence of ongoing high grades and excellent lateral and depth continuity. Work to date has shown that widths are getting wider as we trend eastwards and downwards.

The Hiletas Veins correspond to two or more parallel veins having the same strike as the Terneras and San Mateo veins. Past workings in those veins exceeded 100 metres vertically in underground developments. The material is normally sulphide, similar to San Juanes, with mainly chalcopyrite, pyrite and bornite corresponding to high assays in copper, gold and silver over narrow widths.

The Buenaventura Veins are located on the western side of the Buenaventura fault in a block that was displaced vertically for an unknown distance. They outcrop for a length of 600 metres and were worked underground over a length of 180 metres to a 50 metre depth. They are included in limestones, striking N 60º W with a dip of 45º to the north-east. The potential of these veins is interesting as they represent the upper portion of the mineralized system and can be expected to continue at depth for at least 600 metres.

Roca Negra
The Roca Negra Vein is very continuous on surface, more than 700 metres, and is located 100 metres north of the Terneras Vein, running parallel to it. Its width varies from 0.15 to 1.15 metres and the vein is intruded in a fault zone cutting a diorite/skarn intrusive. The samples taken in the La Chona adit yielded between 0.11 and 5.92 g/t gold, 108 and 825 g/t silver, 0.56 and 2.53% lead and 0.08 and 10% zinc.

The two Ordenanza Veins are located on the eastern side of the Buenaventura fault, trending N70ºW and dipping 75º to 85º to the north. They were mined from surface to level 5 with an average grade of 444 g/t silver. Exploration drilling will be needed to determine the continuity of this zone at depth.

The Chicago Property
The Chicago Property is located less than 500 metres south from the Company's Velardeña Property boundary. On surface, several veins are well identified, varying in known length from 250 metres to 1,300 metres and in width from 0.20 to 6.0 metres. The best known vein, the Los Muertos - Chicago Vein (the "Chicago Vein"), has historically been followed for 1,300 metres horizontally including underground development for 390 metres horizontally and 240 metres vertically.

All drill intercepts below the 300 metre level have revealed good to excellent values in gold, silver, lead and zinc and represented cuts in the thin portions of the Chicago Vein. The deepest drill intercept was at a vertical depth of 556 metres.

The Chicago Vein has now been confirmed at depth over a strike length of 850 metres relative to the total 1,300 metres followed on surface. It has also been confirmed that the Chicago Vein continues to a depth of 560 metres and likely goes significantly deeper as the grades encountered in the deepest cut are amongst the best assayed from that vein.

San Diego Property (50% interest)
The San Diego property is located approximately 10 kilometres to the northeast of Santa Juana and has an estimated historic resource of 1.4 million tonnes of near-surface silver-lead-zinc mineralization, with lower grade gold values. In November 2005, ECU signed a joint venture agreement with Golden Tag Resources whereby Golden Tag has acquired a 50% interest in the San Diego Property.

The main veins on the San Diego claim block are the La Cruz, La Rata, Cantarranas, Del Jal, and Montañez veins. The San Diego structures are thought to be related to a separate hydrothermal system than the Velardeña district. They are distinguished from the latter by lower gold and higher silver contents.

Pajaro Azul
Veins that outcrop on the Pajaro Azul claim are similar to the extensions of the Terneras Vein system. The veins have been mapped on surface for 350 metres with a width of 0.2 to 2 metres. Hosted by intrusive rocks, the mineralization consists of limonite, goethite, sphalerite, galena, pyrite and chalcopyrite. Several other veins exist on the claim including the Pajaro Pinto Vein which has returned variable assays in the limited work carried out to date.

La Cruz
The La Cruz Vein extends for a minimum horizontal distance of 650 metres. The vein varies in width from 0.1 to 1.7 metres, averaging 0.5 metres. The eastern portion is poorly defined as outcrops are scarce and old mine workings are not accessible. Extensive mining is reported to have been carried out on this vein with historic production in the order of 1.5 million ounces of silver. The mineralization is reported to extend vertically over a minimum of 350 metres. The La Cruz Vein is predominately hosted by limestone, although minor intrusive bodies have apparently been encountered underground.

The vein strikes approximately east-west, and dips south at 50º to 65º near surface and 70º to 90º at depth. Post-mineralization faults do not significantly affect the geometry of the vein. At greater depth, a stockwork zone with disseminated sulphides has been observed (Pinet, 1999).

La Rata
La Rata Vein has been traced on surface for approximately 600 metres, and over an elevation difference of about 100 metres. It varies from 0.2 to 1.9 metres in width and averages 0.6 metres. The western vein segment, hosted by limestone, strikes 280º whereas the eastern segment strikes 250º and is mainly hosted by intrusive rocks. The vein dips subvertically. The extent of the old underground workings is poorly known.

The Cantarranas Vein has been mapped on surface for a distance of approximately 250 metres.

The Cantarranas Vein strikes 090º and dips 80º south. Its width averages 0.45 metres. The main workings along the vein do not exceed 40 metres in depth, and are located near the limestone-intrusive contact. The transition zone between the oxide and sulphide material is located within the limestone host, approximately 40 metres from the contact.

La Montañez
The La Montañez Vein has been traced on surface for approximately 400 metres. A low-grade oxidized vein that strikes 115º and dips sub-vertically (0.1 g/t Au and 71 g/t Ag) could represent the eastward extension on the vein. Most of the old working are on the western portion of the vein and do not exceed 20 metres in depth.


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