Golden Minerals closes US$103m offering

Vancouver – Golden Minerals (AUM-T, AUMN-X) has cashed in on an exploding stock price with a US$103 million financing.

The company’s stock price has climbed from around $8 in early September to over $25 in late October as the outlook on its El Quevar project in Argentina improved significantly and the price of silver climbed.

On October 7, with Golden’s stock price at almost $22, it announced it had arranged a 4 million share offering at a price of $18.50 per share, for gross proceeds of $75 million. Since then, underwriters fully exercised an overallotment option for an additional 608,000 shares.

Also, Golden Minerals’ largest shareholder, the Sentient Group, agreed to purchase 1.2 million shares that, after closing the offering, will give it 19.9% of Golden’s total outstanding stock. The Sentient deal brought the total number of shares issued to 5.9 million for the US$103 million in proceeds.

On Oct. 22, the day the financing closed, the company’s share price rose $3.90 or 17.8% to close at $25.80.

In late September as the company’s stock climbed Golden Minerals issued a terse press release stating that it has no comment on the unusual market activity, as is its policy.

But the climb can be partially attributed to the company’s high grade silver intercepts along strike of the Yaxtch deposit at El Quevar. In mid-September the company released hole 211 that hit 146 metres grading 317 grams silver per tonne west of the deposit, and hole 217 that cut 2 metres grading 970 grams silver and then 2 metres grading 489 grams silver to the east.

The results came not long after the company increased the resource at Yaxtch by 42% to 902,000 indicated tonnes grading 310 grams silver and 4.8 million inferred tonnes averaging 336 grams silver. The August increase came only 8 months after the previous resource had been established.

The positive results have made the company re-evaluate how it approaches a feasibility study on the project. Golden Minerals has actually postponed a feasibility study and instead launched an additional $5 million drill program to better understand the project’s expansion possibilities.

Meanwhile, the price of silver has climbed from around US$18 per oz in late August to US$24.50 per oz. in mid-October. On Oct. 22 it closed at US$23.29 per oz.

Besides El Quevar, the company has roughly 30 exploration projects in Mexico and South America at various stages of development.

Prior to the offering the company had 9.3 million shares outstanding and after it will have 14.4 million.