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Durango State, Mexico

Land Area
316 hectares

Property Description
Two underground Ag/Au mines & two mills (oxide & sulfide)

Silver and gold; lead and zinc byproducts

100% owned

Project Stage
Care and Maintenance

Current Activities & Work
Held for sale

Current and complete


The Velardeña Properties in Durango State, Mexico contain two past-producing underground silver and gold mines and two processing mills. Mining was suspended in November 2015 when a combination of low metals prices, mining dilution and metallurgical challenges rendered operations unprofitable. We subsequently leased one of Velardeña’s two mills to Hecla Mining Company - beginning late 2015 and ending in November 2020 - and this lease arrangement provided cash flow that supported Golden's exploration activities. The oxide mill at Velardeña was used to process gold-silver material from our Rodeo mine from January 2021 to September 2023. The company restarted production in December 2023; however, operations were halted in late February 2024 after determining the initial performance of the mine and processing plant did not achieve the expected mine production ramp-up schedule or initial expected plant concentrate production results. Operational issues at the mine were caused by a combination of insufficient experienced miners, and issues with mine ventilation and mining equipment availability.

On April 29, 2024, two of Golden’s Mexico subsidiaries, Minera William S.A. de C.V. (“Minera William”) and Minera Labri S.A. de C.V. (“Minera Labri”) entered into certain asset purchase and sale agreements with a privately held Mexican company whereby Minera William and Minera Labri agreed to sell certain mining concessions, equipment, land parcels and other assets to the buyer in exchange for an aggregate purchase price of $5.5 million in cash, plus Value-Added Tax (“VAT”). The assets being sold include the Velardeña and Chicago mines, both of the Company’s oxide and sulfide processing plants and related equipment. Under the terms of the purchase and sales agreements:

  • On April 29, 2024, the buyer paid a non-refundable advance payment of $1.0 million in cash to the Company;
  • On May 20, 2024, the buyer shall pay $2.0 million in cash, plus VAT (including VAT on the advance payment), to the Company, and
  • On July 1, 2024, the buyer shall pay $2.5 million in cash, plus VAT, to the Company.

Although the Company believes the transaction will be completed, there can be no assurance that the transaction will be completed on the terms described or at all.

Property History

In recent years we evaluated and tested various mining methods and processing alternatives that could potentially enable sustainable profitable operations at Velardeña. In late 2019, Golden announced it had achieved successful results from testing Velardeña gold concentrate material using Finnish firm Outotec’s bio-oxidation or “BIOX®” process. BIOX is a unique and sustainable technology that was developed to pre-treat refractory ores and concentrates ahead of conventional cyanide leaching. The gold in these types of mineralized material, such as those found at Velardeña, is encapsulated in pyrite and arsenopyrite which prevents the gold from being successfully cyanide leached. BIOX utilizes bacteria to oxidize these sulfide materials, thereby exposing the gold for subsequent cyanide leaching and increasing overall gold recoveries. 2019 BIOX testing of Velardeña material achieved gold recoveries of 92% from pyrite concentrates, compared to sub-30% gold recoveries realized when Golden last operated Velardeña in 2015. 

During 2021, we worked on optimizing Velardeña's mine plan and processing details, as well as conducted bulk sample test-mining and processing, all in advance of making a decision to potentially restart commercial production at Velardeña and install the bio-oxidation circuit. In June 2021, we began limited scale mining activities in the underground mines to obtain further bulk samples for use in final optimization of the bio-oxidation plant design and for use in additional flotation separation studies that would indicate how we could best separate the gold-bearing minerals into the pyrite-arsenopyrite concentrate that was proposed for processing in the bio-oxidation circuit. 

Q2 2022: Test results using the BIOX pre-treatment oxidation process continued to support the use of the technology in future processing at Velardeña. In May 2022 we began additional test-mining activities with a new mining contractor to evaluate productivity and dilution of resue mining on the principal veins accessible from the San Mateo decline. Results of the test mining met expected productivity metrics but did not meet anticipated dilution metrics on some of the veins mined. We therefore continued to evaluate modified mine plans and mining techniques to address dilution issues. 

Q1 2023: We continued to work through and evaluate modified mine plans and mining techniques to address dilution issues, including new test work on automated ore sorting which showed potential to allow for upgrading mined material by rejecting waste rock after crushing. 

Q2 2023: In April 2023, we announced that improved concentrate market terms for Velardeña's gold-pyrite concentrate had allowed us to consider moving forward with the re-opening of the Velardeña Properties’ mines without the need to build the BIOX plant that was previously contemplated. The new terms pay for enough of the gold and silver in the concentrate to enable us to shelve plans for the BIOX plant and sell our flotation concentrates directly to smelters. We began selling gold-rich pyrite concentrates from its Velardeña Properties on improved terms to a buyer in Manzanillo, Mexico.

The new payable terms for gold-bearing pyrite concentrates are a significant improvement over previous terms offered in 2022 and earlier, and now represent in excess of a 100% increase for gold payables in the concentrate. As noted, we previously planned to construct a BIOX facility at Velardeña in order to recover the gold in the pyrite concentrate. The capital cost of the BIOX facility was initially estimated at approximately US $6.5 million in 2019 (as reported in the May 2020 PEA); however, upon re-estimation in 2021 (as reported in the March 2022 PEA) the cost estimate had more than doubled to $14.5 million. In 2022, detailed costing and design showed a minimum cost of well over $20 million, which was more than could be readily financed for the project. The increase in the BIOX plant costs created uncertainty about the economic feasibility of re-commencing production. With these new concentrate sales terms, the problem of payable gold recovery appears to be solved without the significant capital costs required to build the previously planned BIOX facility. 

We evaluated the economics of a restart of the Velardeña operation without the need for major capital expenditures for the BIOX facility and ancillary equipment. Subsequent to confirmation and Board approval of the start-up plan in late May 2023, the company announced it intends to re-commence production, pending obtaining sufficient financing. After two capital raises in 2023 (see press releases dated June 29, 2023 and November 8, 2023), the company moved forward with restart preparations.

Highlights - August 2023 Velardeña Technical Report Summary

In August 2023, the independent firm of Tetra Tech completed a Technical Report Summary ("TRS") for the Velardeña Properties. The purpose of the report is to summarize the results of an Initial Assessment for the property as defined under the U.S. Securities and Exchange Commission’s Regulation S-K 1300. The TRS is prepared as an update of a previous TRS dated March, 2022. The updated TRS incorporates additional information developed by the company since the 2022 report, including updated pricing and concentrate sales terms, and the exclusion of a bio-oxidation plant that was formerly contemplated. 

Two economic models were prepared for the TRS:  one includes Inferred Mineral Resources in the analysis (MII model), and the second excludes the Inferred material (MI model). The economic model results are based on Mineral Resources that, unlike Mineral Reserves, do not have demonstrated economic viability. Results indicate mining is potentially economically viable both with and without the Inferred Resources. The MII case has a mine life of 10.5 years and a post-tax NPV of $87.6M. The MI case has a mine life of 4.5 years and reports a post-tax NPV of $52.3M. Both cases were discounted at 8%.

For both economic analyses, reclamation costs are assumed to be canceled by salvage value and are therefore not included. The TRS assumes prices of $1,826/oz gold, $22.71/oz silver, $1.02/pound (“lb”) lead (“Pb”) and $1.31/lb zinc (“Zn”).  Mineral resources were calculated having an effective date of June1, 2023, as diluted to a minimum of 0.7 meters and are reported at a $195 NSR cutoff. For the oxide mineralized material, Zn and Pb were previously reported as Resources. It has since been determined they do not have a reasonable expectation of economic extraction at this time and have not been included in this update.

MII Model

The MII model includes Measured, Indicated, and Inferred resources. Reclamation costs are assumed to be canceled by salvage value and are therefore not included. The LOM is 10.5 years, with a post-tax NPV of $87.6M million and a post-tax IRR of 861%, using a discount rate of 8%. Due to the minimal capital investment required for the project, the payback period is less than one year.

Economic Analysis, Capital and Operating Costs

  Total - LOM   Financial Summary Total
Material Mined and Processed (kt) 1,216   Gross Payable 601.7
Grade Au (g/t) 5.44   TCs, RCs and Freight (84.8)
Grade Ag (g/t) 359   Penalties (3.5)
Grade Pb (%) 2.21   NSR 513.4
Grade Zn (%) 1.88   Operating Costs  
Lead Concentrate     Mining (154.4)
Au Recovered (koz) 15.85   Processing (33.9)
Ag Recovered (koz) 10,651   G&A (49.4)
Pb Recovered (klbs) 37,351   Contingency (35.7)
Au Grade in Concentrate (g/t) 9.30   Total Operating Cost (273.4)
Ag Grade in Concentrate (g/t) 6,250   Federal Mining Royalty (2.7)
Pb Grade in Concentrate (%) 31.96   EBITDA 237.4
Zinc Concentrate     Capital Costs  
Zn Recovered (klbs) 26,724   Mine Equipment (0.8)
Ag Recovered (koz) 426   Processing Plant (0.1)
Zn Grade in Concentrate (%) 50.26   Sustaining Capital (3.6)
Ag Grade in Concentrate (g/t) 548.88   Surface Infrastructure and Other (0.3)
      Closure and Reclamation (1.5)
Pyrite Concentrate     Contingency (0.9)
Au Recovered (koz) 171.81   Total Capital Costs (7.2)
Ag Recovered (koz) 1,886   Change in Working Capital (1.4)
      Salvage 1.7
Au Grade in Concentrate (g/t) 19.66   Pre-tax Cash Flow 230.4
Ag Grade in Concentrate (g/t) 216   NPV8% 136.7
      IRR 1,320.2%
Smelter Payable     Mexico SMT (17.8)
Payable Au (koz) 143.91   Income Tax (64.6)
Payable Ag (koz) 12,020   After-tax Cash Flow 148.0
Payable Pb (klbs) 35,484   NPV8% 87.6
Payable Zn (klbs) 22,715   IRR 860.7%

ROM Production – MII Plan

Description Value Units
Material Mined 1,216 kt
ROM Grades    
Au 5.44 g/t
Ag 359 g/t
Pb 2.21 %
Zn 1.88 %
Metal Contained in ROM    
Au 213 koz
Ag 14,046 koz
Pb 59,278 klb
Zn 50,308 klb

Note:  MII Plan Sensitivity - A 10% increase in operating costs results in a 12% reduction in project NPV.

MI Model

The MI model includes only Measured & Indicated resources. The LOM is 4.5 years, with a post-tax NPV of $52.3 million and a post-tax IRR of 1,267%, using a discount rate of 8%. Due to the low capital investment required, the payback period for the Project is less than one year.

Under the MI model, payable production is estimated just under 2 million silver equivalent oz/year, based on gold and silver only. (Lead and zinc production is not included in this figure.)  The composition is estimated at 57% silver and 43% gold at assumed recoveries.

Economic Analysis, Capital and Operating Costs

Production Summary Total - LOM   Financial Summary Total
Material Mined and Processed (kt) 501   Gross Payable 266.3
Grade Au (g/t) 5.64   TCs, RCs and Freight (37.2)
Grade Ag (g/t) 396   Penalties (1.4)
Grade Pb (%) 2.32   NSR 227.7
Grade Zn (%) 2.20   Operating Costs  
Lead Concentrate     Mining (63.6)
Au Recovered (koz) 6.77   Processing (14.0)
Ag Recovered (koz) 4,840   G&A (20.3)
Pb Recovered (klbs) 16,122   Contingency (14.7)
Au Grade in Concentrate (g/t) 8.74   Total Operating Cost (112.6)
Ag Grade in Concentrate (g/t) 6,250   Federal Mining Royalty (1.2)
Pb Grade in Concentrate (%) 30.36   EBITDA 113.9
Zinc Concentrate     Capital Costs  
Zn Recovered (klbs) 12,928   Mine Equipment (0.8)
Ag Recovered (koz) 193   Processing Plant (0.1)
Zn Grade in Concentrate (%) 50.26   Sustaining Capital (1.7)
Ag Grade in Concentrate (g/t) 515.60   Surface Infrastructure and Other (0)
      Closure and Reclamation (1.5)
Pyrite Concentrate     Contingency (0.6)
Au Recovered (koz) 73.39   Total Capital Costs (4.6)
Ag Recovered (koz) 857   Change in Working Capital (1.4)
      Salvage 1.7
Au Grade in Concentrate (g/t) 19.66   Pre-tax Net Cash Flow 109.7
Ag Grade in Concentrate (g/t) 230   NPV8% 81.8
      IRR 1,950.0%
Smelter Payable     Mexico SMT (8.5)
Payable Au (koz) 61.47   Income Tax (30.9)
Payable Ag (koz) 5,462   After-tax Net Cash Flow 70.2
Payable Pb (klbs) 15,316   NPV8% 52.3
Payable Zn (klbs) 10,988   IRR 1266.8%

ROM Production - MI Plan

Description Value Units
Material Mined 501 kt
ROM Grades    
Au 5.64 g/t
Ag 396 g/t
Pb 2.32 %
Zn 2.20 %
Metal Contained in ROM    
Au 91 koz
Ag 6,383 koz
Pb 25,587 klb
Zn 24,337 klb
MI Plan Sensitivity - A 10% increase in operating costs results in a 11% reduction in project NPV.

Other Velardeña Information

Location, Access and Facilities

The Velardeña Properties are comprised of two underground silver and gold mines (Velardeña and Chicago) and two processing plants, located within the Velardeña mining district approximately 65 kilometers southwest of the city of Torreón and 140 kilometers northeast of the city of Durango. The properties are accessed by a seven-kilometer road from the village of Velardeña, which is reached by highway from Torreón and Durango.

Power is provided through substations connected to the national grid. Water is provided by wells located in the valley adjacent to the Velardeña Properties. We hold title to three wells located near our sulfide plant and certificates of registration to three wells located near our oxide plant. We are licensed to pump water from all six wells up to a permitted amount.

Title and Ownership

The Velardeña Properties are subject to the Mexican ejido system requiring us to contract with the local communities, or ejidos, surrounding our properties to obtain surface access rights needed in connection with our mining and exploration activities. We currently have contracts with two ejidos to secure surface rights for the Velardeña Properties: one that provides surface rights to certain roads and infrastructure through 2031, and a second that provides exploration access and access rights for roads and utilities until 2038.

We hold 29 mineral concessions covering 316 hectares in the Velardeña Properties. We also own the land surface rights to 144 hectares that contain the oxide plant, tailings area and access to the Chicago mine, along with surface lands that may be required for potential plant expansions.

Property History

Exploration and mining in the Velardeña district extends back to at least the late 1500s or early 1600s, with large scale mining beginning in 1888 with the Velardeña Mining and Smelter Company. In 1902, the mining properties were acquired by ASARCO, who mined the property until 1926 when the mines were closed. For the next 35 years, the mines were operated from time to time by small companies and local miners. The property was nationalized in 1961, and in 1968 the sulfide processing plant was built by the Mexican government. In 1994, William Resources acquired the concessions comprising the Velardeña Properties. In 1997, ECU Gold (the predecessor to ECU Silver Mining Inc.) purchased from William Resources the subsidiaries that owned the concessions and the oxide processing plant. The sulfide processing plant was acquired in 2004.

Exploration and Mining Activity

Golden Minerals Company mined oxide and mixed oxide/sulfide material from the Velardeña and Chicago mines during the years 2011 to 2013. Between November 2014 and November 2015, we mined from the Velardeña mine’s San Mateo, Terneras, and Santa Juana vein systems, as well as from the Chicago mine. We suspended mining activities in November 2015 when a combination of low metals prices, dilution and metallurgical challenges resulted in continued operating losses. We placed the mine and sulfide mill on care and maintenance to enable a re-start when mining and processing plans and metals prices indicate mining activities may be conducted profitably, or until we are able to locate and develop alternative mineral sources that may be economically mined and transported to the Velardeña Properties for processing.

We continued to search for and evaluate other oxide and sulfide feed sources, focusing on sources within haulage distance of our sulfide and oxide mills at Velardeña. Additionally, as noted above we have evaluated and tested various mining methods and processing alternatives that could result in sustained profitable operations. 


We own a 300 tonne per day flotation mill situated near the town of Velardeña, which accounted for 100% of our revenue from saleable metals during 2014 and 2015. The mill includes three flotation circuits in which we can process the sulfide material to make lead, zinc and pyrite concentrates. Most of the silver and gold sold in 2014 and 2015 was contained in the lead concentrate. During 2015 we processed all our mined material through the sulfide plant.

We also own a conventional 550 tonne per day cyanide leach mill with a Merrill-Crowe precipitation circuit which is located adjacent to our Chicago mine. We previously used this mill to process oxide and mixed sulfide/oxide material from the Velardeña Properties. Subsequently, the mill was leased to Hecla Mining Co between late 2015 and November 2020. The mill was used to process Rodeo's gold-silver material (January 2021 - September 2023).

Velardeña Properties – Summary of Silver and Gold Mineral Resources at December 31, 2023

based on $22.71/troy ounce Ag, $1,826/troy ounce Au, $1.02/lb. Pb, and $1.31/lb. Zn (1)(2)(3)

Estimated mineral resources for the Velardeña Properties are shown in Table 1 from the Technical Report Summary update completed by Tetra Tech in August 2023.

Classification Mineral NSR Tonnes Grade Grade Grade Grade Ag oz Au oz Pb lb. Zn lb.
Type Cutoff Ag g/t Au g/t Pb% Zn%
Measured Sulfide 195 203,200 402 6.02 1.71 2.08 2,625,900 39,300 7,680,000 9,306,300
Indicated Sulfide 195 462,700 402 5.32 1.68 2.08 5,983,000 79,200 17,090,700 21,173,100
Measured + Indicated Sulfide 195 665,900 402 5.54 1.69 2.08 8,608,900 118,500 24,770,700 30,479,400
Inferred Sulfide 195 1,059,900 413 5.1 1.81 2.26 14,067,200 173,700 42,294,600 52,697,800
Measured Oxide 195 95,200 318 6.62     973,000 20,300    
Indicated Oxide 195 194,000 323 6.01     2,016,800 37,500    
Measured + Indicated Oxide 195 289,200 321 6.21     2,989,800 57,800    
Inferred Oxide 195 269,400 500 5.56     4,326,400 48,200    
Measured All 195 298,400 375 6.21 1.71 2.08 3,598,900 59,600 7,680,000 9,306,300
Indicated All 195 656,700 379 5.53 1.68 2.08 7,999,800 116,700 17,090,700 21,173,100
Measured + Indicated All 195 955,100 378 5.74 1.69 2.08 11,598,700 176,300 24,770,700 30,479,400
Inferred All 195 1,329,300 430 5.19 1.81 2.26 18,393,700 221,900 42,294,600 52,697,800


  1. Tetra Tech was the qualified person for the preparation of the mineral resource estimate for the Velardeña Properties..
  2. Resources are reported as diluted tonnes and grade to 0.7 m fixed width.
  3. Columns may not total due to rounding.

The mineral resource estimate shown above has been tabulated using a $195/t NSR cutoff grade based on the price assumptions shown in Table 4. The resource tabulation is presented based on based on long-term average consensus prices from 22 banks from April 2023. The prices used are $22.71/troy ounce Ag, $1,826/troy ounce Au, $1.02/lb. Pb, and $1.31/lb. Zn. We believe those price assumptions remain reasonable as of December 31, 2023.

For additional details see the Technical Reports page

Geology & Mineralization

The precious metal deposits in the Velardeña and Chicago mines are narrow epithermal to mesothermal quartz-calcite to quartz-sulfide veins that follow three distinct trends.  In the Velardeña mine east-west striking steeply north-dipping veins include the Terneras and San Mateo vein groups and the north-west striking, steeply northeast dipping Santa Juana veins.  In the Chicago mine, the veins strike north-east and dip steeply to the southeast.  Most veins carry recoverable lead and zinc values in galena and sphalerite as well as silver either in galena or in freibergite and gold hosted in pyrite and arsenopyrite.

The Velardeña district is located at the boundary between the Sierra Madre Oriental to the east and the Mesa Central sub-province to the west. The regional geology is characterized by a thick sequence of limestone and calcareous clastic sediments of Cretaceous age, intruded by Tertiary plutons. During the Laramide Orogeny, the sediments were folded into symmetrical anticlines and synclines that were modified into a series of asymmetrical overturned folds by a later stage of compression.

A series of Tertiary stocks have intruded the Cretaceous limestone over a distance of approximately 15 kilometers along a northeast to southwest trend. The various mineral deposits of the Velardeña mining district occur along the northeast southwest axis and are spatially associated with the intrusions and their related alteration.

Several types of Tertiary intrusive rocks are present in the Velardeña district. The largest of these intrusions outcrops on the western flank of the Sierra San Lorenzo and underlies a portion of the Velardeña Properties. It forms a northeast oriented, elongated body of diorite composition that outcrops over a distance of about 2.5 kilometers. The intruded limestone has been altered by contact metamorphism (exoskarn), and locally the intrusive has been metamorphosed (endoskarn).

Velardeña Mine

The Santa Juana, Terneras, and San Mateo vein groups on the Velardeña property are hosted by Cretaceous Aurora Formation limestone, a diorite intrusion and related skarn.

Two main vein systems are present in the Velardeña mine. The first is the northwest striking, steeply north-dipping Santa Juana group of veins which include over 20 individually named veins, the most important of which are the A1, A4, CC, C1, and Santa Juana veins. The second vein system is east-west trending and steeply north-dipping and is represented by the Terneras and San Mateo vein groups. The Terneras group of veins includes the Roca Negra, Terneras Norte, Terneras Sur, Hiletas, and San Juanes veins. The San Mateo group includes San Mateo Oeste and San Mateo Este.

The most extensive of these is the Terneras vein, which was mined in the past over a strike length of 1,100 meters. All of these veins are observed to have extensive strike lengths and vertical continuity for hundreds of meters. The mineralogy of the east west system is somewhat different in that it contains less arsenic than the Santa Juana veins.

Vein widths in minable portions of the vein systems vary from 0.2 meters to 4 meters but average widths for most veins is 0.3 to 0.5 meters.  Vein widths generally decrease where veins cut skarn.

Chicago Mine

On the Chicago property, the oldest rocks outcropping are Cretaceous limestone of the Aurora Formation which are highly folded. This limestone is locally metamorphosed by the intrusion of the Tertiary dioritic stocks and dykes. The general geology of the Chicago property is very similar to the geology of the Velardeña property. The Chicago veins strike northeast and dip steeply southeast. The main veins of interest at Chicago are the Chicago and Escondida veins.  Chicago veins tend to be higher in lead and zinc than the Santa Juana or Terneras veins.  Vein widths at Chicago are variable and tend to be narrower than at the Santa Juana deposit, especially in the skarn host.

Velardeña Drill Results

Velardeña 2014 Drilling Results