Cash-strapped Golden Minerals selling Argentine project

Due to a lack of liquidity, US company Golden Minerals signed a sale agreement for its subsidiary Silex Argentina, owner of the El Quevar silver project in Salta province, for US$3.5mn to Canada’s Butte Energy.

“While the company initially planned to conduct additional drilling and complete an updated technical report at El Quevar, the company believes that the sale of Silex is the most effective strategy for alleviating the company’s short-term financial pressures,” Golden Minerals said in a statement.

The deal is expected to be finalized at the end of October, amid a complex financial situation following Barrick Gold’s withdrawal from the initiative in April, after having participated for almost four years in El Quevar.

Golden Minerals' budget contraction is aggravated by an outstanding payment from Minera William, with which it completed the sale of its Velardeña gold-silver project in Mexico’s Durango state.

In mid-July, Golden Minerals said it had received only a small percentage of the total US$2.8mn committed to the sale, which includes an oxide processing plant and water wells.

Golden Minerals closed its Rodeo mining operation last year, located in the same area in Mexico, in order to focus on  Argentine initiatives El Quevar and Sarita Este.

Development of Sarita Este, also in Salta, is the company’s only project in the pipeline and is subject to the availability of financing.

Orestone Mining

Canadian companies Orestone Mining and Cascadero Copper announced the transfer of 75% of the Las Burras-Incahuasi copper, gold and molybdenum project in Argentina’s Salta province to the former company.

The agreement provides for Orestone to obtain a 51% stake in Las Burras in the first three years, through a cash payment of US$100,000 and a commitment to assume expenses of US$1.9mn.

The remaining 24% can be acquired by covering expenses of US$3mn over two years. Cascadero will keep the other 25% stake.

Orestone plans to conduct a feasibility study to estimate resources for the project, which is close to a national highway, power lines, a gas pipeline and a railway that runs between the cities of Salta and Antofagasta in Chile.