GOLDEN, Colo., Aug. 03, 2017 (GLOBE NEWSWIRE) -- Golden Minerals Company (“Golden Minerals”, “Golden” or “the Company”) (NYSE American:AUMN) (TSX:AUMN) is pleased to announce it has granted Hecla Mining Company (“Hecla”) an option to secure the use of the Company’s oxide plant for an additional two years, for (US) $2.0 million.
Under the terms of the new agreement dated August 2, 2017, Hecla shall have the right to extend the existing lease term for up to two years, ending no later than December 31, 2020, by providing Golden written notice no later than October 3, 2018. In consideration for such option, Hecla has paid Golden Minerals $1.0 million cash, and shall purchase $1.0 million or approximately 1.8 million shares of Golden Minerals common stock. The shares will be issued within 30 days of signing and priced at an undiscounted 30-day volume weighted average price of $0.55 as of the day immediately preceding the signing date.
The fixed fees and volume related charges for Hecla’s use of the oxide plant remain the same as under the original lease. Hecla will have the right to terminate the lease during the extension period for any reason with 120 days’ notice.
Golden leased its then-vacant oxide mill to Minera Hecla S.A. de C.V., a wholly-owned subsidiary of Hecla Mining Company, in July 2015 for an initial period of 18 months. Hecla has exercised options to extend the lease several times since 2015, and prior to today’s agreement the lease was slated to run through December 31, 2018.
Golden Minerals President and Chief Executive Officer Warren M. Rehn commented, “We are very pleased to further cement Golden’s strategic relationship with Hecla through the extension of our lease agreement. Hecla’s investment in Golden demonstrates confidence in our future. Extending this lease will provide Golden with a steady stream of cash for the next three-plus years, which allows us to continue efforts on other development and exploration projects, including locating material to run through the oxide mill after the lease with Hecla concludes.”
About Golden Minerals
Golden Minerals is a Delaware corporation based in Golden, Colorado. The Company is primarily focused on acquiring and advancing mining properties in Mexico with emphasis on areas near its Velardena processing plants.
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 relating to expectations regarding Hecla’s purchase of shares of our common stock and expectations regarding our cash outlook. These statements are subject to risks and uncertainties, including delayed listing approval, lower than anticipated revenue from the oxide plant lease as a result of delays or problems at Hecla’s mine or the oxide plant or earlier than expected termination of the lease, fluctuations in silver and gold metal prices, 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 and Exchange Commission by Golden Minerals, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.