Velardeña Project – MI Scenario PEA: $52M NPV, 1266.8% IRR
Golden Minerals Company's Velardeña Project – MI Scenario in Durango State, Mexico has a Preliminary Economic Assessment (PEA) outlining an after-tax NPV of $52M, an after-tax IRR of 1266.8%, and initial capital of $5M. The proposed mine plan runs 4.5 years.
Golden Minerals Company's Velardeña Project – MI Scenario has reported Preliminary Economic Assessment (PEA) results for the silver-gold-lead-zinc (polymetallic) project in Durango State, Mexico. The study headlines an after-tax net present value of $52M at a 8% discount rate. It reflects Golden Minerals Company's (AUMN) latest disclosed economics for the asset.
Economics. The after-tax NPV is $52M using a 8% discount rate. After-tax IRR is 1266.8%. Initial capital expenditure is estimated at $5M. Economics are based on Metal prices for NSR cutoff are: $22.71/oz-Ag, $1,826/oz-Au, $1.02/lb-Pb, and $1.31/lb-Zn.
Production and mine plan. The project envisions an underground operation. Life of mine is 4.5 years.
Resources and ownership. Mineral reserves: Mineral Reserves have not been estimated for the Velardeña Project.. The company holds a 100% interest in the project.
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.
Our Analysis
- IRR after-tax
- 1266.8%
higher than 100% of 371 projects we track
- NPV after-tax
- $52M
higher than 6% of 518 projects we track
- Initial capex
- $5M
9% of NPV
costlier than 3% of 487 projects we track
- Mine life
- 4.5yrs
- Discount rate
- 8%
- Study price assumption
- Metal prices for NSR cutoff are: $22.71/oz-Ag, $1,826/oz-Au, $1.02/lb-Pb, and $1.31/lb-Zn
- Spot silver today
- $60.84/oz
A US$4M market capitalisation against a US$5M initial build is the whole story here. The cheque is roughly 1.1x everything the company is worth, so this cannot be funded quietly from the balance sheet or a modest placement: it needs a partner, a stream, a joint venture, or equity issued at a price that hands most of the upside to whoever writes it. Existing holders should assume heavy dilution or a farm-down, and the fact that this is one of seven projects the company carries cuts both ways: there is a portfolio to lean on, but also a portfolio competing for the same limited capital. That the build is only 9% of NPV, and lighter than 97% of the 487 projects we track, tells you the asset itself is not the problem. Paying for it is.
The economics are strong on paper. A 1266.8% after-tax IRR ranks above every one of the 371 projects we track, and the US$52M after-tax NPV sits at roughly 12.6x market cap. Read that gap two ways: either the market has not connected the study to the share price, or it is discounting the PEA, the funding, the jurisdiction, and the dilution all at once. The NPV's own peer rank, higher than just 6% of the 518 projects we track, is the more sobering number, and it sits oddly beside the IRR. A 4.5-year mine life is short, and it is the constraint that matters most: a build this size against a reserve that depletes in four and a half years leaves little room to earn back the capital.
Then there is the price deck. The study uses US$22.71/oz silver against a live spot of US$60.84/oz, so the headline numbers are not the optimistic case on silver. Durango is a established mining jurisdiction, which helps permitting and partner appetite, but a scoping-level PEA carries a capital estimate with a plus or minus 50% band, and that band is wider than the entire build. The question that decides this: can a US$4M company fund a US$5M mine without surrendering the asset?
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.