Golden Minerals Reports 2014 Year-End Results
GOLDEN, CO – /PRNEWSWIRE/ – February 27, 2015 – Golden Minerals Company (NYSE MKT: AUMN; TSX: AUM) (“Golden Minerals” or “the Company”) today announced financial results for the full year ending December 31, 2014.
For the year ending December 31, 2014 Golden Minerals recorded revenue of $0.2 million and costs of metals sold of $1.7 million at the Velardeña Properties in Mexico for a negative gross margin of $1.5 million. Included in the cost of metals sold is a $1.2 million write down of finished goods inventory to estimated net realizable value. Revenue and cost of sales figures reflect approximately two months of testing the refurbished plant and processing of low grade material primarily mined for development. Mining recommenced in July 2014 and processing in November 2014 after mining activity was suspended in June 2013. The Company recorded a 2014 net loss of $18.8 million.
In addition to the negative gross margin noted above, the net loss includes the following expenditures: $5.5 million on exploration expenses; $4.6 million on administrative expenses; $3.1 million on project expenses at Velardeña incurred during start-up of mining and processing activities; $3.1 million on non-cash depreciation and amortization-related expense; $2.5 million related to Velardeña shutdown, care and maintenance activities prior to the resumption of mining activities in June 2014; and $1.6 million of expense associated with the El Quevar project. These expenses were partially offset by other operating income of $0.7 million related primarily to the sale of certain exploration properties in the third quarter 2014, $1.6 million related to the reduction of a tax liability contingency, and $1.7 million related to the reduction of a warrant derivative liability.
The Company's cash and cash equivalents balance totaled $8.6 million at December 31, 2014 compared to $19.1 million at December 31, 2013. The Company expects to end 2015 with a cash balance of approximately $2.0 million, which takes into account the December 31, 2014 cash balance and positive gross margin during 2015 from the Velardeña Properties of approximately $2.5 million, reduced by expenditures during 2015 of approximately $3.0 million for exploration activities, $1.0 million for El Quevar, $4.5 for general and administrative costs, and $0.6 million for sustaining capital and increased working capital related to the Velardeña Properties. In arriving at the forecast of positive gross margin for Velardeña, the Company assumed a price for silver and gold of $17.00 and $1,250 per ounce, respectively.
About Golden Minerals
Golden Minerals is a Delaware corporation based in Golden, Colorado. The Company is primarily focused on operations at its Velardeña Properties and the exploration of properties in Argentina and Mexico.
Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and applicable Canadian securities legislation, including statements regarding including the Company’s anticipated cash and cash equivalents balance at year-end 2015, anticipated positive gross margins from the Velardeña Properties in 2015, anticipated expenditures during 2015, assumed silver and gold prices for the forecast of positive gross margins. These statements are subject to risks and uncertainties,
These statements are subject to risks and uncertainties, including: lower than assumed silver and gold prices, higher than anticipated costs of mining and processing; delays or problems in mining or processing or the anticipated ramp-up in making saleable concentrates at the Velardeña Properties; variations in material grade and metallurgical characteristics of processed material; delays or failures in receiving government approvals or permits or suspensions of existing approvals and permits; failure to achieve anticipated metal recoveries or anticipated mining or processing results including expected quantities of anticipated saleable products; failures of new mine plan, stope development and slusher techniques to meet expectations; changes in interpretations of geological, geostatistical, metallurgical, mining or processing information and interpretations of the information resulting from future mining and processing experience; new information from drilling programs; reliability of metallurgical testing results and changes in interpretation based on processing results; technical, permitting, mining, metallurgical, recovery or processing issues; problems that delay or reduce underground mine and stope construction; operational changes or problems; failure of mined material to meet expectations; failure of veins mined to meet expectations; increases in costs and declines in general economic conditions; and changes in political conditions, in tax, royalty, environmental and other laws in Mexico, and financial market conditions. 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, 2014.
For additional information please visit http://www.goldenminerals.com/ or contact:
Golden Minerals Company Karen Winkler (303) 839-5060 Director of Investor Relations
CONSOLIDATED BALANCE SHEETS
December 31, December 31, 2014 2013 (in thousands, except share data) Assets
Current assets Cash and cash equivalents $ 8,579 $ 19,146
| Trade receivables | - | 25 |
| Inventories | 1,497 | 449 |
| Value added tax receivable | 1,316 | 1,765 |
| Prepaid expenses and other assets | 835 | 1,091 |
| Total current assets | 12,227 | 22,476 |
| Property, plant and equipment, net | 29,031 | 32,375 |
| Prepaid expenses and other assets | - | 30 |
Total assets $ 41,258 $ 54,881
Liabilities and Equity
Current liabilities Accounts payable and other accrued liabilities $ 1,639 $ 1,365
| Other current liabilities | 2,551 | 4,405 |
| Total current liabilities | 4,190 | 5,770 |
| Asset retirement and reclamation liabilities | 2,685 | 2,602 |
| Warrant liability | 1,554 | - |
| Other long term liabilities | 95 | 53 |
| Total liabilities | 8,524 | 8,425 |
Commitments and contingencies
Equity Common stock, $.01 par value, 100,000,000 shares authorized; 53,162,833 and 43,530,833 shares issued and outstanding,
| respectively | 532 | 435 |
| Additional paid in capital | 484,197 | 494,647 |
| Accumulated deficit | (451,995) | (448,626) |
| Shareholders' equity | 32,734 | 46,456 |
Total liabilities and equity $ 41,258 $ 54,881
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
The Years Ended December 31, 2014 2013 (in thousands except per share data)
Revenue:
Sale of metals $ 235 $ 10,680
Costs and expenses:
Cost of metals sold (exclusive of depreciation shown
| below) | (1,655) | (17,534) |
| Exploration expense | (5,528) | (4,575) |
| El Quevar project expense | (1,597) | (2,628) |
| Velardeña project expense | (3,126) | (3,052) |
| Velardeña shutdown and care & maintenance costs | (2,457) | (6,374) |
| Administrative expense | (4,642) | (5,610) |
| Stock based compensation | (926) | (1,555) |
| Reclamation expense | (199) | (184) |
| Impairment of long lived assets | - | (243,985) |
| Impairment of goodwill | - | (11,666) |
| Other operating income, net | 691 | 3,526 |
| Depreciation, depletion and amortization | (3,128) | (6,927) |
| Total costs and expenses | (22,567) | (300,564) |
| Loss from operations | (22,332) | (289,884) |
Other income and (expenses):
| Interest and other income | 1,708 | 444 |
| Warrant derivative income | 1,693 | - |
| Gain (loss) on foreign currency | 108 | (626) |
| Other total income and (expenses) | 3,509 | (182) |
| Loss before income taxes | (18,823) | (290,066) |
| Income taxes benefit | - | 49,686 |
Net loss $ (18,823) $ (240,380)
Other comprehensive gain:
Unrealized gain on securities, net of tax $
- $ 90
Comprehensive loss $ (18,823) $ (240,290)
Net loss per common share – basic and diluted
Loss $ (0.41) $ (5.61)
Weighted average Common Stock outstanding - basic and
diluted 45,862,419 42,838,735