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AUMN Is Trading Under Net Asset Value

|Includes: Golden Minerals Company (AUMN)

Golden Minerals (NYSEMKT:AUMN) is mining company with operations in Mexico, exploration property in Argentina, and a diversified portfolio of precious metals and other mineral exploration properties located in Mexico and South America.

Due to declining precious metal prices (gold and silver), the company decided to halt operations of its Velardeña mine in Mexico.

As per the company's latest filing:

Earlier in the year management projected that the Velardeña Operations would achieve operating cash neutrality during the third quarter 2013, assuming gold and silver prices of $1,600 per ounce and $30 per ounce, respectively. Prices since then have decreased significantly below the $1,600 and $30 per ounce levels, with decreased prices being the principle reason for the suspension of operations.

AUMN placed the mine and processing plants on a care and maintenance program to enable a restart when operating plans and metals prices support a cash positive outlook for the operations. Approximately 450 positions at the Velardena Operations were eliminated. The Company currently plans to retain a core group of approximately 40 employees to facilitate a restart when needed.

Recently, the company had closed office in Peru, relinquished properties no longer of interest, and have reduced its portfolio of about 80 properties containing about 730,000 hectares to about 40 properties containing about 320,000 hectares. Since 2011, they have reduced ongoing annual expenditures for the exploration program by approximately 75%.

Here is why AUMN is a great buyat these prices ($0.50-0.55)

  As of 09/30/13 Discount Factor Adjusted Value
Cash and equivalents 23.8 100% 23.8
Account receivables 0.2 75% 0.15
Inventories 0.5 65% 0.325
Property, plant & equipment 39.4 50% 19.7
Goodwill 0.5 0% 0
Other assets 2.68 50% 1.34
Total assets 67.08   45.32
Total liabilities 10.7   10.7
NET CURRENT ASSETS 56.38   34.62
Shares outstanding 42.86   42.86
Net asset value / share $ 1.32   $ 0.81
Current price     $ 0.53
Discount     52%

Disclosure: I am long AUMN.