Golden Minerals Company (AUMN)

[NYBob]

Picassa thank you, well said and I agree with you -

Hi Bill!
You know I have been holding ECU as a core position for many years. I bought more of the stock immediately after the merger announcement with Golden Minerals, and I have bought more Golden Minerals and warrants thereafter. Meanwhile the stock has continued to slide following the closing of the transaction. Perhaps some investors may assume there is some fundamental weakness lurking behind the scenes to account for this anemic market performance. I suppose this is always a risk that we face with any mining stock, but I doubt that the current market price is any reflection whatsoever on the true potential of this company. The sad part is that we could have stated the same thing several quarters ago, but the stock has continued itsdecline.

I have been in Northern Mexico all week on a mine tour so I was out of the loop until today, but I have reviewed the AUM quarterly report and all I can say is that I not in the least dismayed as a shareholder. This company is on the right track and I do think they will achieve success that will eventually be discounted into the share price. Take for example the guidance for Velardena in 2012, projecting 800,000 ounces of silver and 16,000 ounces of gold production. Combined with operational improvements on the front end, that production if achieved should generate some meaningful cash flow. Add in the current update, with 600m of new underground development, increased efficiency in the silver recovery from the processing plant, and sharply higher head grade in the mill throughput. These are significant developments that are happening very quickly since the merger was completed. I defy anyone to show me evidence of that in the share price however.

Consider that AUM has a cash position in the treasury of roughly $80 million.

Consider that the company plans to pay off a large debt overhang of
$15 million ahead of schedule.

Just on those two factors, the strong cash and the material improvement in the balance sheet, should warrant some excitement from shareholders. This is a company in the midst of a turnaround. The merger has so far progressed exactly as I had expected it would. The
company is much stronger on almost every front. They have two flagship projects on the go that would be the envy of any other junior. A big war chest has already been budgeted for further development to build value and perhaps shore up the bottom line next year. And market sentiment stinks! To me this is the ultimate value play.

It is never easy to hunker down in a foxhole and watch the value of a stock decline month after month, amidst an overall market environment that is skittish and uncertain. Risks are part of the story and there may indeed be something currently unknown that is dragging on this story. But I suspect the opposite is true in this case, and that the risk level for Golden Minerals is sharply lower now than when the stock traded at a double from the current price range. I think we have another month of chop to survive, and tax loss selling will rule the day until then. Perhaps the metals have a few nasty surprises to throw us as well. But I remain staunchly committed to this stock and still firmly believe we are going to see higher highs in the years ahead. I am encouraged by the progress that the company has
demonstrated in such a short time, and convinced that this will eventually make the story too attractive for it to remain on its assmuch longer.
Cheers!
MexicoMike
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