GOLDEN, Colo., July 15, 2015 /CNW/ -- Golden Minerals Company (NYSE MKT: AUMN;TSX: AUM) ("Golden Minerals" or "the Company") announced today that its wholly-owned subsidiary, Minera William S.A. de C.V. ("William"), owner of the Velardena Properties in Durango State, Mexico, has entered into a lease agreement with Minera Hecla, S.A. de C.V. ("Hecla"), a wholly-owned subsidiary of Hecla Mining Company.
Hecla has leased the currently idle Velardena oxide plant (Plant 2) for an initial term of 18 months beginning July 1, 2015 with potentially two additional six-month extensions beyond the initial 18-month term. Hecla may extend the lease for six months at its option, and then for a subsequent six months unless William elects to use the plant to process material from its own sources. Hecla will make nominal monthly payments to William beginning July 1, 2015 until production begins, anticipated to be around January 1, 2016. Once Hecla reaches its intended capacity of approximately 400 tonnes per day, monthly payments to William will be approximately $400,000 per month or nearly $5 million annually. Should required licenses and permits not be obtained by March 31, 2016, either party has the right to terminate the agreement. The lease contains typical covenants and termination rights. Hecla is responsible for all costs associated with the start up, operation and maintenance of Plant 2.
Jeffrey G. Clevenger, Chairman and Chief Executive Officer of Golden Minerals, said, "We are pleased to see this asset put to beneficial use with revenues to support the property as we continue to develop alternative feed for our oxide plant."
About Golden Minerals
Golden Minerals is a Delaware corporation based in Golden, Colorado. The Company is primarily focused on mining its Velardena Properties and the exploration of properties in Mexico and Argentina.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and applicable Canadian securities legislation, including statements regarding the terms of the oxide plant lease, including the lease term, extension options, amounts of anticipated payments to be received under the lease based on among other things Hecla's anticipated use of the plant , covenants, termination rights, and responsibility for costs associated with the startup, operation and maintenance of the plant. These statements are subject to risks and uncertainties, including: delay or inability to obtain required licenses and permits; termination of the lease prior to expiration of the initial term or otherwise earlier than anticipated due to delay or inability to obtain required licenses and permits by March 31, 2016, damage to the plant that makes it unusable or that requires repairs in excess of $1 million or for other reasons with resulting reductions in or elimination of anticipated lease payments; lower quantities of material processed by Hecla than anticipated due to permit and license delays, Hecla processing less material through the plant than anticipated due to operating or other problems at Hecla's mine or for other reasons; operating or technical problems at the plant or insufficient water or other operating problems or delays that could result in lower than anticipated lease payments; ; increases in costs and declines in general economic conditions; and changes in political conditions, in tax, royalty, environmental and other laws in Mexico, and financial market conditions. Golden Minerals assumes no obligation to update this information. Additional risks relating to Golden Minerals may be found in the periodic and current reports filed with the Securities Exchange Commission by Golden Minerals, including the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
For additional information please visit http://www.goldenminerals.com/ or contact:
Golden Minerals Company
Director of Investor Relations
SOURCE Golden Minerals Company