Golden Minerals Reports Second Quarter 2023 Financial Results
09 August 2023 - 8:45PM
Business Wire
Golden Minerals Company (“Golden Minerals,” “Golden” or the
“Company”) (NYSE-A: AUMN and TSX: AUMN) has today released
financial results and a business summary for the quarter ending
June 30, 2023. (All figures are in approximate U.S. dollars.)
Second Quarter Business Summary
- The Company announced in June that it intends to restart mining
operations at its Velardeña Properties, pending obtaining
sufficient financing, which is still in progress. Velardeña is a
silver-gold underground mine property located in Durango State,
Mexico that Golden last operated in late 2015.
- The Rodeo mine (Durango State, Mexico) reported second quarter
2023 payable production of 1,828 ounces (“oz.”) gold and 7,742 oz.
silver in doré, with average realized sales prices of $1,976/oz.
gold and $24.34/oz. silver. Metallurgical recovery for gold
averaged 71.6% for the quarter. Mining activities at Rodeo’s pit
concluded in June, and the Company is now processing stockpiled
mineralized material.
- In April, the Company began selling three different
concentrates containing various amounts of gold, silver, lead and
zinc that were produced from material previously stockpiled during
2022 mine testing at the Velardeña Properties. During the second
quarter 2023 the Company sold 656 tonnes of gold-rich pyrite
concentrate, 118 tonnes of silver-rich lead concentrate and 63
tonnes of zinc concentrate generating a combined revenue of $1.2
million.
- The Company began selling slag, a by-product of the Rodeo
mine’s smelting process, during the second quarter 2023, and
recorded slag sales of $0.2 million.
- In June 2023, the Company effected a one-for-25 reverse share
split and separately closed a registered direct and concurrent
private placement offering of the Company’s common stock plus
warrants, resulting in gross proceeds to the Company of $2.1
million.
- The Company submitted a plan to regain compliance with the NYSE
American shareholders’ equity minimum balance of $6 million, and
the plan has been accepted by the NYSE American for review.
Second Quarter Financial Summary
- Revenue was $5.0 million in the second quarter 2023 which
included Rodeo’s sale of metals, sales of Velardeña concentrates
and sales of Rodeo slag material. Revenue was $5.9 million in the
second quarter 2022 which included Rodeo’s sale of metals.
- Net operating margin (defined as revenue from the sale of
metals less cost of metals sold) was $1.1 million in the second
quarter 2023 which included $0.0 million from Rodeo’s sale of
metals (including slag sales) and $1.1 million from Velardeña
concentrate sales. Net operating margin was $1.3M in the second
quarter 2022 which related solely to the Rodeo mine’s sale of
metals.
- Cash and equivalents balance as of June 30, 2023 was $3.4
million, compared to $4.0 million on December 31, 2022.
- Zero debt as of June 30, 2023, unchanged from December 31,
2022.
- Net loss was $1.5 million or $0.21 per share in the second
quarter 2023, compared to a net loss of $2.8 million or $0.42 per
share in the second quarter 2022.
Cash Inflows and Expenditures
Cash expenditures during the six months ended June 30, 2023
totaled $5.6 million and included:
- $2.2 million in exploration expenditures;
- $0.6 million in care and maintenance costs at the Velardeña
Properties;
- $0.3 million in exploration and evaluation activities, care and
maintenance and property holding costs at the El Quevar project,
net of reimbursements from Barrick Gold Corporation (“Barrick”)
pursuant to the Earn-In Agreement between the Company and Barrick;
and
- $2.5 million in general and administrative expenses.
The above expenditures were offset by cash inflows of $5.0
million from the following:
- $1.1 million of net operating margin from sales of Velardeña
concentrates;
- $0.2 million of net operating margin from the Rodeo
operation;
- $1.8 million, net of fees from the Company’s ATM Program;
and
- $1.9 million, net of fees from the previously reported June
2023 registered direct offering and concurrent private placement of
the Company’s common stock.
Capital Resources and 12-Month Financial Outlook
At June 30, 2023, the Company had current assets of $8.6
million, including cash and cash equivalents of approximately $3.4
million. On the same date, the Company had accounts payable and
other current liabilities of $5.4 million. (At July 31, 2023,
aggregate cash and cash equivalents totaled approximately $2.8
million.) Because the Company has ceased mining at the Rodeo mine,
its only near-term opportunity to generate cash flow from mining to
support continued operations is the Velardeña mine. Without
additional near-term capital, which the Company is currently
attempting to obtain, the Company will be forced to liquidate its
business, potentially before the fourth quarter of 2023.
Forecasted expenditures during the 12 months ending June 30,
2024, excluding Rodeo and Velardeña cost of metals sold which is
included in the forecast of net operating margin discussed below,
total approximately $7.6 million. These forecasted expenditures
include: (i) exploration expenses of $1.4 million, (ii) El Quevar
spending (net of Barrick reimbursements) of $0.3 million and (iii)
administrative expense, including Mexico general and administrative
costs of $5.1 million and (iv) working capital needs of $0.8
million. The actual amount of cash expenditures that the Company
incurs during the 12-month period ending June 30, 2024 may vary
significantly from the amounts specified above and will depend on a
number of factors, including variations in anticipated
administrative costs, costs at El Quevar, and costs for continued
exploration, project assessment, and advancement of other
exploration properties.
In order to restart production at the Velardeña mine, the
Company requires additional financing of approximately $2.0 to $3.0
million. In addition, because the Velardeña mine is not expected to
generate cumulative positive net cash flow until 2024 at the
earliest, the Company also requires additional capital of
approximately $1.0 to $3.0 million in order to cover the Company’s
general and administrative and other expenses for the 12 months
ending June 30, 2024.
The Company is evaluating numerous alternatives for this
additional capital. Golden is engaged in several discussions for
the sale of assets. The Company has also held discussions with
various financing parties with regard to equity and/or debt
financing as well as streaming or royalty arrangements involving
future production at Velardeña. The Company is also evaluating
potential avenues to monetize some or all of its $2.9 million VAT
receivable in Mexico.
Quarterly Report on Form 10-Q
The Company’s consolidated financial statements and management’s
discussion and analysis, as well as other important disclosures,
may be found in the Company’s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2023. This Form 10-Q is available on the
Company’s website at Golden Minerals Company - SEC Filings. It has
also been filed with the U.S. Securities and Exchange Commission on
EDGAR at www.sec.gov/edgar and with the Canadian securities
regulatory authorities on SEDAR at www.sedar.com.
About Golden Minerals
Golden Minerals is a gold and silver producer based in Golden,
Colorado. The Company is primarily focused on producing gold and
silver from its Rodeo Mine, advancing its Velardeña and Yoquivo
properties in Mexico and, through partner-funded exploration, its
El Quevar silver property in Argentina, as well as acquiring and
advancing selected mining properties in Mexico, Nevada and
Argentina.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and applicable Canadian securities legislation, such as
statements regarding (i) the Company’s plan to restart mining
operations at the Velardeña properties, including the potential
timing of restart, production expectations and required capital to
restart and ramp-up operations, potential plant processing rate,
projected payable gold and silver production, operating costs, net
operating margin and projected cash flow; (ii) the Company’s plans
regarding further advancement of the El Quevar project, including
reimbursements paid by Barrick under the Earn-in Agreement to fund
the El Quevar project; (iii) collection of VAT accounts receivable
from the Mexican government; and (iv) the Company’s expected
near-term cash needs, including the need to raise additional cash
in the near-term to avoid depletion of the Company’s cash balance
in the third quarter of 2023. These statements are subject to risks
and uncertainties, including increases in costs and declines in
general economic conditions; changes in current payable terms for
gold-bearing pyrite concentrates; changes in political conditions,
in tax, royalty, environmental and other laws in the Mexico and
other market conditions; unanticipated variations in grade;
challenges associated with our proposed mining plans, including
difficulties in controlling grade dilution; decreases in commodity
prices below those used in calculating the estimates shown above;
variations in expected recoveries; increases in operating costs
above those used in calculating the estimates shown above;
interruptions in mining; or an adverse result in the pending
lawsuit with Unifin Financiera, S.A.B de C.V. Golden Minerals
assumes no obligation to update this information. Additional risks
relating to Golden Minerals may be found in the periodic and
current reports filed with the Securities & Exchange Commission
by Golden Minerals, including the Company’s Annual Report on Form
10-K for the year ended December 31, 2022.
Follow us at www.linkedin.com/company/golden-minerals-company/
and https://twitter.com/Golden_Minerals.
For additional information, please visit
http://www.goldenminerals.com/ or contact:
Golden Minerals Company Karen Winkler, Director of Investor
Relations (303) 839-5060
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version on businesswire.com: https://www.businesswire.com/news/home/20230809691721/en/
Golden Minerals Company Karen Winkler, Director of Investor
Relations (303) 839-5060
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