Ms. Karen Winkler reports

UPDATED PEA FOR VELARDENA PROPERTIES (DURANGO, MEXICO) SHOWS $87.6 MILLION AFTER-TAX NPV

Golden Minerals Company has completed an updated technical report (TR) as a preliminary economic assessment (PEA) for its Velardena properties (Durango state, Mexico). The TR is prepared as an update of a previous PEA dated March 1, 2022. The updated TR 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. The updated PEA estimates an after-tax net present value (NPV) of $87.6-million, using a discount rate of 8 per cent.

The TR has been completed in accordance with National Instrument 43-101, Standards of Disclosure of Mineral Projects. The mineral resources used for each report were developed by the independent engineering firm of Tetra Tech and comply with the requirements of NI 43-101. Preliminary results of each economic analysis are shown in pretax U.S. dollars. The company also plans to file a technical report summary pursuant to Subpart 1300 of Regulation S-K for the Velardena properties.

The TR assumes prices of $1,826 per ounce gold, $22.71 per ounce silver, $1.02 per pound lead and $1.31 per ounce zinc. Mineral resources were calculated having an effective date of June 1, 2023, as diluted to a minimum of 0.7 metre and are reported at a $195 net smelter return (NSR) cut-off.

Economic analysis -- highlights

An economic model was prepared for the Velardena properties using measured, indicated and inferred mineral resources. Mineral resources are not mineral reserves and do not have demonstrated economic viability. This PEA also considers inferred mineral resources that are too speculative for use in defining mineral reserves. Results of the economic analysis are:

• Mine life -- 10.5 years;
• Pretax net present value (discounted at 8 per cent) -- $136.7-million; internal rate of return -- 1,320.2 per cent;
• After-tax net present value (discounted at 8 per cent) -- $87.6M; internal rate of return -- 860.7 per cent;
• Payback -- less than one year.

Economic analysis -- details

Economic model results are summarized in an attached table. The model includes measured, indicated and inferred mineral resources. Closure and reclamation costs of $1.5-million are assumed to be offset by salvage value and are therefore not included. The life of mine (LOM) is 10.5 years, with a net present value of $87.6-million using a discount rate of 8 per cent.

Run-of-mine production summary

Conceptual stope shapes for the PEA production plan utilize the weighted average vein width of 0.7 metre. An additional dilution factor of 10 per cent has been applied to the recoverable tonnes to align with current reconciliation data from the test mining operations at Velardena.

Sensitivity analysis

Results of the sensitivity analyses show the project is most sensitive to precious metal prices, precious metal recoveries and operating costs. A 10-per-cent change in operating costs resulted in a 12-per-cent change in project net present value. Because of the sensitivity to operating costs, efforts to control or reduce operating costs are key to the economic success of the project.

Liquidity update

At July 31, 2023, the company had current assets of approximately $9.7-million, including cash and cash equivalents of approximately $2.9-million. On the same date, it had accounts payable and other current liabilities of approximately $6.6-million. While the company continues to explore various financing alternatives and asset sales, the company has not yet obtained a source of capital that would permit it to restart production at the Velardena properties or to finance general and administrative expenses. The company has announced a letter of intent for the sale of the Santa Maria property for initial cash proceeds of $1.5-million; however, if that transaction is consummated the funds would likely not be received until the end of September, 2023, or later. If the company is unable to arrange near-term capital inflows from financing, asset sales or otherwise, its cash balance may be depleted during the third quarter of 2023 and the company may be forced to liquidate or wind up its business operations.

Cautionary note regarding inferred resources

The discounted cash flows shown herein are prepared in compliance with National Instrument 43-101. There is no certainty that the economic results described herein will be realized. If the company is able to obtain sufficient capital and restart production at the Velardena properties, the company would do so without completing customary feasibility studies demonstrating the economic viability of the project. A mine production decision that is made without a feasibility study carries additional potential risks, which include, but are not limited to: (i) increased uncertainty as to projected initial and sustaining capital costs and operating costs, rates of production, and average grades; and (ii) the inclusion of inferred mineral resources, as defined by NI 43-101, that are considered too geologically speculative to have the economic considerations applied to them that would enable them to be converted to a mineral reserve, as defined by NI 43-101. Mine design and mining schedules, metallurgical flow sheets, and process plant designs may require additional detailed work and economic analysis and internal studies to ensure satisfactory operational conditions and decisions regarding future targeted production.

No mineral reserves have been estimated for the Velardena properties. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The economic model for the Velardena properties is preliminary in nature and includes inferred mineral resources that are too geologically speculative to have economic considerations applied to them that would enable the inferred mineral resources to be classified as mineral reserves, and there is no certainty that the preliminary economic model for the Velardena properties will be realized.

About Golden Minerals Company

Golden Minerals is a gold and silver producer based in Golden, Colo. The company is primarily focused on initiating production at its Velardena properties (Mexico), advancing its Yoquivo gold-silver property (Mexico), advancing its El Quevar silver property (Argentina) through partner-financed exploration, and on acquiring and advancing selected mining properties in Mexico, Nevada and Argentina.

Qualified person

The following qualified persons from Tetra Tech will co-write the technical report that will be filed on SEDAR within 45 days of this news release: Dr. Guillermo Dante Ramirez Rodriguez, Randolph P. Schneider and Kira Lyn Johnson. Each of these qualified persons has reviewed and approved the information presented in this news release that was derived from the sections of the PEA study for which he or she was responsible. Each of the named qualified persons is independent of Golden Minerals.

We seek Safe Harbor.