GOLDEN, Colo., Oct. 17, 2019 (GLOBE NEWSWIRE) -- Golden Minerals Company (NYSE American and TSX: AUMN) (“Golden Minerals”, “Golden” or “the Company”) announced today that it has entered into an option agreement (the “Transaction”) to sell its right to acquire a 100% interest in the Santa Maria silver and gold project located in southern Chihuahua State, Mexico to Magellan Gold Corporation (OTCQB: MAGE) (“Magellan”).
The agreement provides for a period of up to 150 days during which Magellan will complete its due diligence review and secure adequate financing for the project. Prior to the end of such period, Magellan will have the right to exercise its option to acquire the Company’s interests in the project. If Magellan exercises its option, Magellan will pay $1.0 million cash to Golden Minerals at closing. Golden Minerals will retain a 6.5% NSR royalty from all production at Santa Maria until a total of $3.0 million has been paid to the Company under the royalty agreement. Thereafter, Golden will retain a 3.0% NSR royalty for the balance of the mine’s life. If Magellan fails to achieve commercial production from the project within one year following closing, Golden Minerals will not be obligated to convey its interests in the project to Magellan and the Company will retain its interest in the project with no obligation to return any payments to Magellan.
Golden Minerals’ President and Chief Executive Officer, Warren Rehn, notes, “We feel this is a very positive transaction for Golden Minerals. It will let us monetize Santa Maria’s value while keeping our risk to a minimum. The ongoing cash stream that this transaction presents will be used to further some of Golden’s other exploration projects.”
About Magellan Gold Corporation
Magellan Gold Corporation is a US public enterprise focused on acquiring gold and silver properties that could be close to development state in Nayarit and Sinaloa States, Mexico. It is an aspiring metals producer and its principal business is the acquisition and development of mineral resources. Magellan controls several precious metals projects in Mexico and Arizona.
About Golden Minerals
Golden Minerals is a Delaware corporation based in Golden, Colorado. The Company is primarily focused on advancing its El Quevar silver property in Argentina and on acquiring and advancing mining properties in Mexico and Nevada.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, and applicable Canadian securities legislation, including statements regarding the proposed transaction with Magellan, including the anticipated timing for closing the transaction. These statements are subject to risks and uncertainties, including the results of Magellan’s due diligence investigation; the timing or outcome of third party or governmental consents (if any); increases in costs and declines in general economic conditions; changes in political conditions, in tax, royalty, environmental and other laws in the United States or Mexico and other market conditions; and fluctuations in silver and gold prices. 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 SEC by Golden Minerals, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.
SOURCE: Golden Minerals Company