Exhibit 10.1

 

EXECUTION VERSION

 

SUBSCRIPTION AGREEMENT

 

THIS SUBSCRIPTION AGREEMENT (this “Agreement”) is made as of September 18, 2012,
by and among GOLDEN MINERALS COMPANY, a Delaware corporation (the “Company”),
and SENTIENT GLOBAL RESOURCES FUND IV, L.P. (“FUND IV”), a Cayman Islands
exempted limited partnership (the “Buyer”).

 

RECITALS

 

A.                                   SENTIENT GLOBAL RESOURCES FUND III, L.P.
(“FUND III”), a Cayman Islands exempted limited partnership, SGRF III PARALLEL
I, L.P. (“SGRF III”), a Cayman Islands exempted limited partnership, and Fund IV
(Fund III, SGRF III and Fund IV, collectively, “Sentient”) currently hold an
aggregate of 7,057,940 shares of the Company’s common stock, par value $0.01 per
share (“Common Stock”), representing approximately 19.7% of the total
outstanding shares of Common Stock.

 

B.                                     The Company has informed Sentient that it
intends to undertake a public offering of units (the “Units”) in the United
States, with each unit consisting of one share of the Company’s Common Stock and
a warrant (the “Warrant”) to purchase 0.50 of a share of the Company’s Common
Stock.  On September 14, 2012, the Company executed an underwriting agreement
(the “Underwriting Agreement”) with Wells Fargo Securities, LLC (the
“Underwriter”) with respect to the issuance and sale of 5,497,504 Units (the
“Offering”).

 

C.                                     The Buyer has advised the Company that it
desires to purchase Units concurrent with the Offering in order to permit
Sentient to have an aggregate ownership interest up to 19.90% of the issued and
outstanding Common Stock of the Company (excluding outstanding restricted common
shares held by employees).  The purchase and sale of the Units pursuant to this
Agreement will occur on a private placement basis as an offering outside of the
United States pursuant to Regulation S under the U.S. Securities Act of 1933
(the “Securities Act”), as amended.

 

NOW, THEREFORE, in consideration of the recitals and the mutual promises,
representations, warranties, and covenants set forth in this Agreement and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

 

AGREEMENT

 

1.                                      Subscription.  In consideration of and
in reliance on the representations, warranties, covenants and agreements of the
Company in this Agreement, subject to the sale of Units in the Offering, the
Buyer hereby agrees to purchase 1,365,794 Units at a purchase price of US$5.4625
per Unit (the “Offering Price”).  The form of Warrant that will be issued to the
Buyer is attached hereto as Exhibit A.

 

2.                                      Acceptance of Subscription.  The
Company, in consideration of and in reliance on the representations and
warranties, covenants and agreements of the Buyer in this Agreement,

 

--------------------------------------------------------------------------------

 

hereby accepts the subscription of the Buyer, subject to the terms and
conditions of this Agreement, and agrees to issue the Units to the Buyer.

 

3.                                      Reserved.

 

4.                                      Buyer Representations and Warranties. 
Buyer hereby represents and warrants to the Company as follows:

 

4.1                               Organization; Authorization; Validity of
Agreement.  The Buyer is a limited partnership duly organized, validly existing
and in good standing under the laws of the Cayman Islands and has full limited
partnership power and authority to execute and deliver this Agreement and the
Registration Rights Agreement and to consummate the transactions contemplated
hereby and thereby.  The execution, delivery and performance by Buyer of this
Agreement and the Registration Rights Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by Buyer,
and no other action on the part of Buyer is necessary to authorize the execution
and delivery by Buyer of this Agreement or the consummation of the transactions
contemplated hereby and thereby.  No vote of, or consent by, the limited
partners of Buyer is necessary to authorize the execution and delivery by Buyer
of this Agreement and the Registration Rights Agreement or the consummation by
it of the purchase and sale of the Units.

 

4.2                               Execution; Validity of Agreement.  This
Agreement has been duly executed and delivered by Buyer, and assuming due and
valid authorization, execution and delivery hereof by the Company, is a valid
and binding obligation of Buyer, enforceable against Buyer in accordance with
its terms, except as such enforceability may be limited by the effects of
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and
other laws relating to or affecting creditors’ rights, and the general
principles of equity.

 

4.3                               Consents and Approvals; No Violations.  None
of the execution, delivery or performance of this Agreement or the Registration
Rights Agreement by Buyer and the consummation by Buyer of the purchase and sale
of the Units or compliance by Buyer with any of the provisions hereof or thereof
will (1) conflict with or result in any breach of any provision of the
certificate of limited partnership and agreement of limited partnership of
Buyer, (2) require any filing with (except for filings with the Securities and
Exchange Commission (the “SEC”), the Ontario Securities Commission, the Toronto
Stock Exchange (“TSX”), NYSE MKT, and other regulatory authorities advising them
of the issuance and sale of the Units), or permit, authorization, consent or
approval of, any governmental entity, except for approval of the listing of the
Common Stock by the TSX and the NYSE MKT, (3) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or obligation
to which Buyer is a party or to which its assets are subject, or (4) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Buyer.

 

4.4                               Report of Trade.  Buyer acknowledges that the
Company may be required to file a report of trade with the Ontario Securities
Commission containing personal information about the Buyer.  This report of
trade will include the full name, address and telephone number

 

2

--------------------------------------------------------------------------------

 

of the Buyer, the number and type of securities purchased, the total purchase
price paid for the Units, the date of the Closing and the exemption relied upon
under applicable securities laws to complete such purchase.

 

4.5                               Anti-Money Laundering.  None of the funds
being used to purchase the Units are to the Buyer’s knowledge proceeds obtained
or derived directly or indirectly as a result of illegal activities.  The funds
being used to purchase the Units which will be advanced by the Buyer to the
Company hereunder will not represent proceeds of crime for the purposes of the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the
“PCMLTFA”) and the Buyer acknowledges that the Company may in the future be
required by law to disclose the Buyer’s name and other information relating to
this Agreement and the Buyer’s subscription hereunder, on a confidential basis,
pursuant to the PCMLTFA. To the best knowledge of Buyer: (i) none of the funds
to be provided by or on behalf of the Buyer are being tendered on behalf of a
person or entity who has not been identified to the Buyer; and (ii) the Buyer
shall promptly notify the Company if Buyer discovers that any of such
representations cease to be true, and to provide the Company with appropriate
information in connection therewith.

 

4.6                               Investment Representations.

 

(a)                                  Buyer is acquiring the Units for investment
and not with a view toward, or for sale in connection with, any distribution
thereof, nor with any present intention of distributing or selling the Units.

 

(b)                                 Buyer is an “accredited investor” as defined
in Regulation D under the Securities Act and in National Instrument 45-106 -
Prospectus and Registration Exemptions of the Canadian Securities
Administrators, and is able to bear the economic risk of holding the Units for
an indefinite period, and has knowledge and experience in financial and business
matters such that it is capable of evaluating the risks of the investment in the
Units.

 

(c)                                  Buyer’s principal address is as set out in
Section 7.2 of this Agreement and is outside the United States and Buyer is not
a “U.S. person” as defined in Rule 902 under the Securities Act (a “Non-U.S.
Person”).  Buyer is acquiring the Units outside of the United States in
accordance with Regulation S under the Securities Act.  The purchase of the
Units by Buyer is for Buyer’s own account or for the account of one or more
affiliates of Buyer who are Non-U.S. Persons located outside the United States.

 

(d)                                 Buyer acknowledges that it has reviewed the
Public Reports (as defined in Section 5.8) and that it has had the right to ask
questions of and receive answers from the Company and its officers and
directors, and to obtain such information as Buyer deems necessary to verify the
accuracy (a) of the information referred to in the Public Reports and (b) of any
other information relevant to making an investment decision with respect to the
Units.

 

(e)                                  Buyer acknowledges that (i) the Units are
being offered in a transaction not involving any public offering within the
United States within the meaning of the Securities Act and that the shares of
Common Stock, including the shares of Common Stock underlying the Warrants (the
“Warrant Shares”), have not been registered under the Securities

 

3

--------------------------------------------------------------------------------

 

Act, (ii) the Units are not being qualified pursuant to a prospectus for
distribution to the public in Canada under applicable Canadian Securities Laws
(as defined in section 5.8 of this Agreement) and are not freely tradeable,
(iii) the certificates representing the shares of Common Stock will bear the
legend set forth below:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR ANY
STATE SECURITIES LAWS, AND MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY
(A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE U.S. SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
REGULATION S UNDER THE U.S. SECURITIES ACT, (D) IN COMPLIANCE WITH THE EXEMPTION
FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES
LAWS, OR (E) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S.
SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER
AND SALE OF SECURITIES, AND, IN THE CASE OF (C), (D) OR (E), THE HOLDER HAS
PRIOR TO SUCH TRANSFER FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL OF
RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION.

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE (“TSX”); HOWEVER, SUCH SECURITIES CANNOT BE TRADED THROUGH THE
FACILITIES OF TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY
CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” IN SETTLEMENT OF
TRANSACTIONS ON THE TSX.

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE [insert date that is 4 months and a day after
issuance].

 

(iv) the certificates representing the Warrants will bear the legend set forth
below:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR ANY
STATE SECURITIES LAWS, AND MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY
(A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE U.S. SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
REGULATION S UNDER THE U.S. SECURITIES ACT, (D) IN

 

4

--------------------------------------------------------------------------------

 

COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY
APPLICABLE STATE SECURITIES LAWS, OR (E) IN A TRANSACTION THAT DOES NOT REQUIRE
REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND
REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND, IN THE CASE OF (C),
(D) OR (E), THE HOLDER HAS PRIOR TO SUCH TRANSFER FURNISHED TO THE CORPORATION
AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY
TO THE CORPORATION.

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE [insert date that is 4 months and a day after
issuance].

 

(v) the certificates representing the Warrant Shares will bear the legend set
forth below:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR ANY
STATE SECURITIES LAWS, AND MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY
(A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE U.S. SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
REGULATION S UNDER THE U.S. SECURITIES ACT, (D) IN COMPLIANCE WITH THE EXEMPTION
FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES
LAWS, OR (E) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S.
SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER
AND SALE OF SECURITIES, AND, IN THE CASE OF (C), (D) OR (E), THE HOLDER HAS
PRIOR TO SUCH TRANSFER FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL OF
RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION.

 

(vi) in the event the Warrant Shares are issued before [insert date that is 4
months and a day after issuance of the Units] the certificates representing the
Warrant Shares will bear the legend set forth below:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE (“TSX”); HOWEVER, SUCH SECURITIES CANNOT BE TRADED THROUGH THE
FACILITIES OF TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND

 

5

--------------------------------------------------------------------------------

 

CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY”
IN SETTLEMENT OF TRANSACTIONS ON THE TSX.

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE [insert date that is 4 months and a day after
issuance of the Units].

 

The Buyer shall comply with all resale restrictions applicable to the Units in
Canada and the United States under applicable securities laws.

 

(f)                                    Golden Minerals Shares.  As of the date
hereof, Buyer is the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of 3,118,150 shares of Common Stock, and Sentient (Fund III, SGRF
III and Fund IV, collectively) is the beneficial owners (as defined in
Rule 13d-3 under the Exchange Act) of 7,057,940 shares of Common Stock.

 

(g)                                 Brokers or Finders.  Buyer has not entered
into any agreement or arrangement entitling any agent, broker, investment
banker, financial advisor or other firm or person to any broker’s or finder’s
fee or any other commission or similar fee in connection with any of the
transactions contemplated by this Agreement.

 

(h)                                 Non-Reliance of Buyer.  Except for the
specific representations and warranties expressly made by the Company in
Section 5 of this Agreement, Buyer acknowledges that (a) neither the Company,
its affiliates nor any other Person has made any representation or warranty,
express or implied, as to the Company, the Company’s business, assets,
liabilities, operations, prospects, condition (financial or otherwise),
including with respect to the effectiveness or success of the Company’s
operations, exploration activities or future capital raising activities, and
(b) no officer, agent, representative or employee of the Company has any
authority, express or implied, to make any representations, warranties or
agreements not specifically set forth in this Agreement.  Buyer has not received
an “offering memorandum” (as defined in Ontario Securities Commission
Rule 14-501 — Definitions) or any other similar document describing or
purporting to describe the business and affairs of the Company.  Buyer
specifically disclaims that it is relying upon or has relied upon any
representations or warranties that may have been made by any Person except for
the specific representations and warranties expressly made by the Company in
Section 5.  Any inspection, investigation or review performed by Buyer in
connection with this Agreement will not affect or negate the representations and
warranties of the Company contained herein.

 

5.                                      Representations and Warranties of the
Company.  The Company hereby represents and warrants to Buyer as follows:

 

5.1                               Organization.  The Company is a corporation,
duly organized, validly existing and in good standing under the laws of the
State of Delaware.  The Company has the requisite corporate power and authority
to own, lease and operate its assets and properties and to carry on its business
as it is now being conducted.  The Company is qualified to transact business and
is in good standing in each jurisdiction in which the properties owned, leased
or operated by

 

6

--------------------------------------------------------------------------------

 

it or the nature of the business conducted by it makes such qualification
necessary, except where the failure to be so qualified and in good standing
would not reasonably be expected to have a Material Adverse Effect.

 

5.2                               Authorization; Validity of Agreement.  The
Company has full corporate power and authority to execute and deliver this
Agreement and the Registration Rights Agreement and to consummate the
transactions contemplated hereby and thereby.  The execution, delivery and
performance by the Company of this Agreement and the Registration Rights
Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by the Company’s Board of Directors, and no
other corporate action on the part of the Company is necessary to authorize the
execution and delivery by the Company of this Agreement or the consummation of
the purchase and sale of the Units.

 

5.3                               Subsidiaries.  Each direct and indirect
Subsidiary of the Company is duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation and has the requisite
power and authority to own, lease and operate its assets and properties and to
carry on its business as it is now being conducted and each Subsidiary of the
Company is qualified to transact business, and is in good standing, in each
jurisdiction in which the properties owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary;
except, in all cases, where the failure to be so organized, existing, qualified
and in good standing would not reasonably be expected to have a Material Adverse
Effect.

 

5.4                               Execution; Validity of Agreement.  This
Agreement has been duly executed and delivered by the Company and, assuming due
and valid authorization, execution and delivery hereof by Buyer, is a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by the effects of
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and
other laws relating to or affecting creditors’ rights, and the general
principles of equity.

 

5.5                               Consents and Approvals; No Violations.  Except
for approval of the listing of the Common Stock and Warrant Shares by the TSX
and the NYSE MKT, none of the execution, delivery or performance of this
Agreement or the Registration Rights Agreement by the Company, the consummation
by the Company of the issuance and sale of the Units in accordance herewith or
compliance by the Company with any of the provisions hereof will (1) conflict
with or result in any breach of any provision of the certificate of
incorporation or bylaws of the Company or any of its Subsidiaries, (2) require
any filing with (except for filings with the SEC, the Ontario Securities
Commission, the TSX, the NYSE MKT, and other regulatory authorities advising
them of the issuance and sale of the Units), or permit, authorization, consent
or approval of, any governmental entity or any other Person, (3) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party, other than such violation, breach or default as would not reasonably be
expected to have a Material Adverse Effect, or (4) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to

 

7

--------------------------------------------------------------------------------

 

the Company or any of its Subsidiaries, other than such violation as would not
reasonably be expected to have a Material Adverse Effect.

 

5.6                               Good Title Conveyed.  At the time of issuance,
the Units will be duly authorized, validly issued, fully paid and nonassessable
and, not subject to any preemptive rights.  The Units, when issued, will be free
and clear of all Encumbrances, except for any restrictions on transfer arising
under the lock-up agreement to be executed by the Buyer concurrent with the
closing of the Offering, the Securities Act or any applicable state or Canadian
provincial securities laws.

 

5.7                               Capitalization.  The authorized capital of the
Company consists of (i) 100,000,000 shares of Common Stock, of which 35,715,035
are issued and outstanding as of the date of this Agreement, including 221,000
shares of restricted stock which are subject to forfeiture conditions, and
(ii) 10,000 shares of preferred stock, par value $0.01 per share, none of which
are issued and outstanding.  Except for (a) the Common Stock and Warrant Shares
included in the Units, (b) shares of Common Stock, including Warrant Shares,
issued in connection with the anticipated Offering, (c) shares of Common Stock
to be issued to directors of the Company pursuant to outstanding restricted
stock units, (d) shares of Common Stock issuable upon exercise of options issued
under the Company’s 2009 Equity Incentive Plan, (e) shares of Common Stock which
may be issued in the ordinary course pursuant to the Company’s 2009 Equity
Incentive Plan, (f) shares of Common Stock issuable upon the exercise of options
issued under the Company’s Replacement Stock Option Plan adopted in connection
with the Company’s business combination with ECU Silver Mining Inc., and
(g) shares of Common Stock issuable upon exercise of warrants issued in
connection with the Company’s business combination with ECU Silver Mining Inc.,
the Company has not issued or committed to issue any shares of Common Stock or
preferred stock or any rights, warrants, options to acquire any shares of any
class of capital stock of the Company.

 

5.8                               Filings.  The Company is a reporting issuer in
the Province of Ontario and is not in default in any material respect of any of
the requirements of the Securities Act (Ontario) and the rules and regulations
adopted thereunder together with applicable policy statements of the Ontario
Securities Commission and rules of the TSX (collectively, the “Canadian
Securities Laws”).  The Company has made all filings with the SEC that it has
been required to make under the Securities Act and the U.S. Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and all filings that it has been
required to make pursuant to the Canadian Securities Laws (collectively, but not
including any report prepared pursuant to Canadian National Instrument 43-101-
Standards of Disclosure for Mineral Projects, the “Public Reports”).  The
Company prepared the Public Reports in good faith, and to the Company’s
knowledge (after reasonably prudent inquiry), none of the Public Reports, as of
their respective dates, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.  The Company is a domestic issuer, as defined in Rule 902 under the
Securities Act.

 

5.9                               Financial Statements.  The financial
statements included in the Public Reports (including the related notes and
schedules) (the “Financial Statements”) have been prepared in accordance with
United States generally accepted accounting principles applied on a consistent
basis throughout the periods covered thereby and fairly present in all material
respects

 

8

--------------------------------------------------------------------------------

 

the financial condition of the Company as of the indicated dates and the results
of operations of the Company for the indicated periods, subject, in the case of
unaudited consolidated financial statements, to normal year-end adjustments.

 

5.10                        Absence of Changes.  Since June 30, 2012, except as
disclosed in the Public Reports, (i) no event has occurred which has caused or
constitutes a Material Adverse Effect, and (ii) neither the Company nor any of
its Subsidiaries has entered into any agreement that was material to the Company
and was required to be disclosed pursuant to Form 8-K under the Exchange Act
that has not been disclosed.

 

5.11                        Litigation. There are no claims, suits, actions or
proceedings pending or, to the knowledge of the Company, threatened against,
relating to or affecting the Company or any of its Subsidiaries, before any
court, governmental department, commission, agency, instrumentality or
authority, or any arbitrator that would reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.  Neither the Company nor
any of its Subsidiaries is subject to any judgment, decree, injunction, rule or
order of any court, governmental department, commission, agency, instrumentality
or authority, or any arbitrator which prohibits the consummation of the
transactions contemplated hereby or would reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect.

 

5.12                        Brokers or Finders.  Except as set forth in the
Underwriting Agreement, the Company has not entered into any agreement or
arrangement entitling any agent, broker, investment banker, financial advisor or
other firm or Person to any broker’s or finder’s fee or any other commission or
similar fee in connection with any of the transactions contemplated by this
Agreement.

 

6.                                      Closing Conditions.  The purchase and
sale of the Units is expected to be completed on or about September 19, 2012,
concurrent with the closing of the Offering, upon satisfaction of the closing
conditions set forth in this Section 6 (the date on which such closing occurs,
the “Closing Date”).

 

6.1                               Conditions to Buyer’s Obligation to Close. 
The obligations of Buyer to consummate the purchase and sale of the Units shall
be subject to the satisfaction or waiver on or prior to the Closing Date of each
of the following conditions:

 

(a)                                  Statutes; Court Orders.  No statute,
rule or regulation shall have been enacted or promulgated by any governmental
entity which prohibits the consummation of the purchase and sale of the Units;
and there shall be no order or injunction of a court of competent jurisdiction
in effect precluding or prohibiting consummation of the purchase and sale of the
Units.

 

(b)                                 Government Action.  There shall not be
threatened or pending any suit, action or proceeding by any governmental entity
seeking to restrain or prohibit the consummation of the purchase and sale of the
Units or seeking to impose material limitations on the ability of Buyer
effectively to exercise full rights of ownership of the Units, including the
right to vote the shares of Common Stock, including the Warrant Shares.

 

9

--------------------------------------------------------------------------------

 

(c)                                  Representations and Warranties.  The
representations and warranties of the Company set forth in this Agreement shall
be true and correct as of the Closing Date as though made on and as of such
date, except where the failure to do so would not have a Material Adverse
Effect, provided that if any fact or condition occurs after the date of this
Agreement and such fact or condition causes any representation or warranty in
this Agreement to be untrue, misleading or inaccurate in any material respect,
the Company will deliver to Buyer a certificate describing the exceptions to the
applicable representation (a “Representation Update Certificate”), and such
Representation Update Certificate will be deemed to modify automatically the
applicable representation or warranty; provided, however, that if such
Representation Update Certificate reflects an occurrence which could reasonably
be expected to have a Material Adverse Effect, Buyer shall be entitled to reject
the Representation Update Certificate and the condition set forth in this
Section 6.1(c) shall not be met.

 

(d)                                 Covenants.  The Company shall have complied
in all material respects with all covenants, agreements and obligations of the
Company contained in this Agreement.

 

(e)                                  Consents and Approvals.  The Company shall
have received conditional approval from the TSX and approval from the NYSE MKT
with respect to the listing of the Common Stock and Warrant Shares included in
the Units.

 

(f)                                    Offering.  With respect to the Units, the
Company shall have issued (or concurrent with the Units, will issue) the Units
sold in the Offering.

 

(g)                                 Deliveries at Closing.  Buyer shall have
received from the Company each of the deliveries set forth below:

 

(i)                                     At the Closing, certificates
representing the shares of Common Stock and Warrants, comprising the Units, duly
and validly issued in favor of Buyer and otherwise sufficient to vest in Buyer
good title to the shares of Common Stock and Warrants comprising the Units;

 

(ii)                                  At the Closing, a certificate issued by
the secretary or an assistant secretary of the Company, dated the Closing Date,
in form and substance reasonably satisfactory to Buyer, certifying on behalf of
the Company (i) the resolutions of the board of directors of the Company
authorizing the execution, delivery and performance of this Agreement and the
issuance of the Units, (ii) the incumbency and signature of the authorized
signatory of the Company executing this Agreement, (iii) the amended and
restated certificate of incorporation and bylaws of the Company, as in effect on
the Closing Date, and (iv) that the condition to closing set forth in
Section 6.1(c) has been met;

 

(iii)                               At the Closing, the Registration Rights
Agreement, duly executed by the Company;

 

(iv)                              An opinion of U.S. counsel to the Company
addressed to the Buyer, providing that the issuance, sale and delivery to the
Buyer of the Units have been duly authorized by all necessary corporate action
and (i) upon issuance against

 

10

--------------------------------------------------------------------------------

 

payment therefor and delivery to the Buyer, (A) the Common Stock included in
such Units will be validly issued, fully paid and non-assessable and (B) the
Warrants will be valid and binding obligations of the Company and (ii) assuming
issuance of the Warrant Shares upon the exercise of the Warrant in accordance
with the terms of the Warrant, the Warrant Shares will be validly issued, fully
paid and non-assessable; and

 

(v)                                 An opinion of Canadian counsel to the
Company addressed to the Buyer, providing that the issuance of the Units is
exempt from the prospectus requirements under Ontario securities laws, that such
securities are subject to restrictions on transfer under Ontario securities law
and that the Common Stock included in such Units and the Warrant Shares are
conditionally approved for listing on the TSX.

 

6.2                               Conditions to the Company’s Obligation to
Close.  The obligations of the Company to consummate the purchase and sale of
the Units shall be subject to the satisfaction on or prior to the applicable
Closing Date of each of the following conditions:

 

(a)                                  Statutes; Court Orders.  No statute,
rule or regulation shall have been enacted or promulgated by any governmental
entity which prohibits the consummation of the purchase and sale of the Units;
and there shall be no order or injunction of a court of competent jurisdiction
in effect precluding or prohibiting consummation of the purchase and sale of the
Units.

 

(b)                                 Government Action.  There shall not be
threatened or pending any suit, action or proceeding by any governmental entity
seeking to restrain or prohibit the consummation of the purchase and sale of the
Units.

 

(c)                                  Representations and Warranties.  The
representations and warranties of Buyer set forth in this Agreement shall be
true and correct in all material respects as though made on and as of the
Closing Date, except when the failure to do so would not have a material adverse
effect on the ability of Buyer to perform its obligations under this Agreement
or the availability of an exemption from registration pursuant to Regulation S
under the Securities Act.

 

(d)                                 Covenants.  Buyer shall have complied in all
material respects with all covenants, agreements and obligations of Buyer
contained in this Agreement.

 

(e)                                  Consents and Approvals.  The Company shall
have received conditional approval from the TSX and approval from the NYSE MKT
with respect to the listing of the Common Stock and Warrant Shares included in
the Units.

 

(f)                                    Offering.  The Company shall have issued
(or concurrent with the Units, will issue) the Units sold in the Offering.

 

(g)                                 Deliveries at Closing.  The Company shall
have received from Buyer the following:

 

11

--------------------------------------------------------------------------------

 

(i)                                     By wire transfer of immediately
available funds, the amount of the purchase price for the securities to an
account designated by the Company prior to the applicable Closing;

 

(ii)                                  The Registration Rights Agreement, duly
executed by the Buyer.

 

7.                                      Miscellaneous.

 

7.1                               Successors and Assigns.  Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other parties.  Subject to the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective permitted successors and assigns.  Nothing in this Agreement is
intended to confer upon any party other than the parties hereto or their
respective permitted successors and assigns any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement.

 

7.2                               Notices.  Unless otherwise provided herein,
any notice, request, waiver, instruction, consent or document or other
communication required or permitted to be given by this Agreement shall be
effective only if it is in writing and (i) delivered by hand or sent by
certified mail, return receipt requested, (ii) if sent by a
nationally-recognized overnight delivery service with delivery confirmed, or
(iii) if sent by facsimile (or other similar electronic means), with receipt
confirmed as follows:

 

Company:

 

Golden Minerals Company

 

 

350 Indiana Street, Suite 800

 

 

Golden, Colorado 80401

 

 

Attn: President

 

 

Fax: (303) 839-5907

 

 

 

with a copy to:

 

Davis Graham & Stubbs LLP

 

 

1550 17th Street, Suite 500

 

 

Denver, Colorado 80202

 

 

Attn: Deborah J. Friedman

 

 

Fax: (303) 893-1379

 

12

--------------------------------------------------------------------------------

 

Buyer:

 

Sentient Global Resources Fund IV, LP

 

 

Landmark Square, 1st Floor, 64 Earth Close, West Bay Beach South

 

 

PO Box 10795

 

 

George Town, Grand Cayman KY1-1007

 

 

CAYMAN ISLANDS

 

 

Attention: Sue Bjuro — Office Manager

 

 

Fax (345) 946-0921

 

 

 

with a copy to:

 

Quinn & Brooks, LLP

 

 

c/o Gregory A. Smith

 

 

P.O. Box 590

 

 

Larkspur, Colorado 80118

 

 

Fax: (720) 294-8374

 

The parties shall promptly notify each other of any change in their respective
addresses or facsimile numbers or of the individual or entity or office to
receive notices, requests or other communications under this Section 7.2.  All
notices shall be deemed to have been given (i) if personally delivered or sent
by certified mail, as of the date when so delivered, (ii) if sent by
nationally-recognized overnight delivery service, two days after mailing, or
(iii) if sent by facsimile (or other similar electronic means) as of the date
sent, if during normal business hours of the recipient, and otherwise on the
next business day.

 

7.3                               Amendments and Waivers.  This Agreement may
not be amended or supplemented, unless set forth in a writing signed by each
party hereto. Except as otherwise permitted in this Agreement, the terms or
conditions of this Agreement may not be waived unless set forth in a writing
signed by the party entitled to the benefits thereof.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
such provision at any time in the future or a waiver of any other provision
hereof.  The rights and remedies of the parties hereto are cumulative and not
alternative. Except as otherwise provided in this Agreement, neither the failure
nor any delay by any party hereto in exercising any right, power or privilege
under this Agreement will operate as a waiver of such right, power or privilege,
and no single or partial exercise of any such right, power or privilege will
preclude any other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege.

 

7.4                               Severability.  Any term or provision of this
Agreement that is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.  If the final judgment of a
court of competent jurisdiction or other authority declares that any term or
provision hereof is invalid, void or unenforceable, the parties agree that the
court making such determination shall have the power to reduce the scope,
duration, area or applicability of the term or provision, to delete specific
words or phrases, or to replace any invalid, void or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision.

 

13

--------------------------------------------------------------------------------

 

7.5                               Governing Law.  This Agreement shall be
governed by and construed in accordance with the internal laws (as opposed to
the conflicts of law provisions) of the State of Colorado.

 

7.6                               Submission to Jurisdiction.  The parties
hereby submit to the non-exclusive jurisdiction of any court of the State of
Colorado or the United States District Court for the District of Colorado for
the purpose of any suit, action, or other proceeding arising out of this
Agreement, and waive any and all objections to jurisdiction that they may have
under the laws of the State of Colorado or the United States and any claim or
objection that any such court is an inconvenient forum.

 

7.7                               Entire Agreement.  This Agreement constitutes
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and thereof.

 

7.8                               Counterparts.  This Agreement may be executed
in two or more counterparts (including by facsimile or similar means of
electronic communication), each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

 

7.9                               Announcements.  Publicity and other general
releases of information to the public through the media concerning the
transaction contemplated by this Agreement shall be jointly planned and
coordinated between the Company and Buyer.  Neither party shall act unilaterally
in this regard without the prior approval of the other party provided, however,
that such approval shall not be unreasonably withheld.  Nothing in this
Section 7.9 shall prevent either party from furnishing information to any
governmental entity or from furnishing information to comply with applicable
laws or rules of any applicable stock exchange.

 

7.10                        Definitions.  The following terms shall have the
meanings set forth below:

 

(a)                                  “Encumbrances” means any and all liens,
charges, security interests, options, claims, mortgages, pledges, proxies,
voting trusts or agreements, obligations, understandings or arrangements,
defects or imperfections of title or other restrictions on title or transfer of
any nature whatsoever.

 

(b)                                 “Material Adverse Effect” means a material
adverse effect on the business, assets, liabilities, financial condition or
results of operations of the Company and its subsidiaries taken as a whole, or a
material adverse effect on the ability of the Company to perform its obligations
under this Agreement; provided however, that none of the following individually
or in the aggregate, will be deemed to have a Material Adverse Effect:
(x) fluctuations in the market price of the Common Stock; or (y) fluctuations in
the prices of precious or base metals, or (z) any change or effect arising out
of general economic conditions or conditions generally affecting the mining
industries.

 

(c)                                  “Person” means a natural person,
partnership, corporation, limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture, governmental entity
or other entity or organization.

 

14

--------------------------------------------------------------------------------

 

(d)                                 “Registration Rights Agreement” means the
Registration Rights Agreement in the form attached hereto Exhibit B.

 

(e)                                  “Subsidiary” means any corporation or other
entity with respect to which a specified Person (or a Subsidiary thereof) owns a
majority of the common stock or other appropriate equity interest, or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors, managers or members (as appropriate) of its board of directors
or other governing body.

 

7.11                        Expenses.  All reasonable, documented out-of-pocket
costs and expenses incurred by the parties in connection with the negotiation,
preparation, execution and delivery of this Agreement and the Registration
Rights Agreement, including fees, expenses and disbursements of legal counsel,
shall be paid by the Company; provided that the fees, expenses and disbursements
of legal counsel to Buyer shall not exceed $15,000.

 

*  *  *  *  *

 

15

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have executed this SUBSCRIPTION AGREEMENT as of
the date first written above.

 

GOLDEN MINERALS COMPANY

 

 

 

 

 

By:

/s/ Robert P. Vogels

 

Name:

Robert P. Vogels

 

Title:

Sr. Vice President and Chief Financial Officer

 

 

 

 

 

SENTIENT GLOBAL RESOURCES FUND IV, LP

 

 

 

By:

Sentient GP IV, L.P., General Partner

 

 

By:

Sentient Executive GP IV, Limited, General Partner

 

 

 

 

 

By:

/s/ Gregory Link

 

Name:

Gregory Link

 

Title:

Director

 

 

--------------------------------------------------------------------------------

 

Exhibit A

FORM OF WARRANT

 

--------------------------------------------------------------------------------

 

Exhibit A

FORM OF REGISTRATION RIGHTS AGREEMENT

 

--------------------------------------------------------------------------------