Velardeña Project PEA: $88M NPV, 860.7% IRR
Golden Minerals Company's Velardeña Project in Durango State, Mexico has a Preliminary Economic Assessment (PEA) outlining an after-tax NPV of $88M, an after-tax IRR of 860.7%, and initial capital of $7M. The proposed mine plan runs 10.5 years.
Golden Minerals Company's Velardeña Project has reported Preliminary Economic Assessment (PEA) results for the silver project in Durango State, Mexico. The study headlines an after-tax net present value of $88M at a 8% discount rate. It reflects Golden Minerals Company's (AUMN) latest disclosed economics for the asset.
Economics. The after-tax NPV is $88M using a 8% discount rate. After-tax IRR is 860.7%. Initial capital expenditure is estimated at $7M. Economics are based on $22.71/oz-Ag, $1,826/oz-Au, $1.02/lb-Pb, $1.31/lb-Zn.
Production and mine plan. Life of mine is 10.5 years.
These figures are extracted from Golden Minerals Company's technical disclosures and reflect the most recent PEA on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Reserves & Resources
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Measured | 298,400 | 375 g/t Ag, 6.21 g/t Au, 1.71% Pb, 2.08% Zn | 3,598,900 Ag oz, 59,600 Au oz, 7,680,000 Pb lb, 9,306,300 Zn lb |
| Indicated | 656,700 | 379 g/t Ag, 5.53 g/t Au, 1.68% Pb, 2.08% Zn | 7,999,800 Ag oz, 116,700 Au oz, 17,090,700 Pb lb, 21,173,100 Zn lb |
| Measured & Indicated | 955,100 | 378 g/t Ag, 5.74 g/t Au, 1.69% Pb, 2.08% Zn | 11,598,700 Ag oz, 176,300 Au oz, 24,770,700 Pb lb, 30,479,400 Zn lb |
| Inferred | 1,329,300 | 430 g/t Ag, 5.19 g/t Au, 1.81% Pb, 2.26% Zn | 18,393,700 Ag oz, 221,900 Au oz, 42,294,600 Pb lb, 52,697,800 Zn lb |
Our Analysis
- IRR after-tax
- 860.7%
higher than 100% of 23 projects we track
- NPV after-tax
- $88M
higher than 8% of 25 projects we track
- Initial capex
- $7M
8% of NPV
costlier than 23% of 30 projects we track
- Mine life
- 10.5yrs
- Discount rate
- 8%
- Study price assumption
- $22.71/oz-Ag, $1,826/oz-Au, $1.02/lb-Pb, $1.31/lb-Zn
- Spot silver today
- $58.86/oz
The build cost here is the story, and it is a stark one. At roughly 1.7x the company's entire US$4M market cap, the initial US$7M capex cannot be quietly funded from cash flow or a modest equity raise. Someone has to write a cheque that is nearly double what the whole business is worth today. For a nano-cap with only three tracked projects, that means meaningful dilution for existing holders or a strategic partner taking a substantial position. The project's capital-light nature, at 8% of NPV, is real but secondary: the funding gap is the gating item, and the market's skepticism on that gap is likely why the NPV sits at about 20.4x the market cap. That spread cuts both ways, either the market has not priced the asset, or it is pricing the financing risk and the PEA-stage uncertainty.
The economics themselves are the supporting act, and they are strong on paper. The 860.7% after-tax IRR ranks above 100% of the 23 silver projects we track, a top-decile result that clears the practical financing hurdle for a higher-risk junior by a wide margin. The after-tax NPV of US$88M is less remarkable, ranking above only 8% of 25 peers, which tempers the headline return. The study's silver price assumption of $22.71/oz sits far below today's spot of $58.86/oz, so the returns are not dependent on an optimistic price deck; if anything, they carry upside on the metal price. But this is a PEA, scoping-level, with a capital estimate that typically carries a plus or minus 50% band, and a 10.5-year mine life in Durango State, Mexico, a jurisdiction that is workable but not without its own permitting and community considerations.
The single question that decides whether this works is not whether the mine is economic, it almost certainly is. The question is who funds the build and at what cost to current shareholders. A US$7M cheque against a US$4M market cap is either a transformative catalyst or a dilution event that transfers most of the upside to new investors. Until that financing is defined, the 860.7% IRR is a theoretical number, not a return.
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.