Golden Minerals Reports Year‐end 2016 Results
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GOLDEN MINERALS COMPANY
350 Indiana Street – Suite 800 – Golden, Colorado 80401 – Telephone (303) 839-5060 – Fax (303) 839-5907
4265123.1
GOLDEN MINERALS REPORTS YEAR‐END 2016 RESULTS
GOLDEN, CO ‐ /PRNEWSWIRE/ ‐ February 28, 2017 – Golden Minerals Company (“Golden Minerals”,
“Golden” or the “Company”) (NYSE MKT and TSX: AUMN) has today announced financial results for the
full year ending December 31, 2016.
2016 Highlights
Generated a positive net operating margin (defined as lease revenue less lease costs) of $4.4
million in 2016 from the Velardena oxide plant lease compared to a negative net operating margin
of $2.0 million in 2015 from a combination of the Velardena oxide plant lease and mining activities
Granted Hecla Mining Company (“Hecla”) the right to extend the oxide plant lease through the
end of 2018
Generated an additional $1.8 million in other operating income related to sales and farm‐outs of
non‐strategic property and equipment
Spent $3.7 million in exploration expenses to advance exploration properties including Santa
Maria and Rodeo:
o At the Santa Maria property:
Completed test mining and processing and sold concentrates containing silver
and gold for approximately $0.3 million, which offset exploration costs for the
year
Began a mineral resource estimate and Preliminary Economic Assessment which
were completed in February 2017
o At the Rodeo property, completed a 2,100‐meter drilling program and began a mineral
resource estimate which was completed in January 2017
Electrum Global Holdings (“Electrum”) began exploration drilling in December 2016 on Golden’s
farmed‐out Celaya silver and gold property through their 100 percent‐owned subsidiary
Cash and cash equivalents of $2.6 million with zero debt as of December 31, 2016, as compared
to $4.1 million and $5.0 million face value convertible debt, respectively, as of December 31, 2015
Net loss of $0.13 per share in 2016 compared to net loss of $0.48 per share in 2015
Business Summary
Oxide Mill Lease
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GOLDEN MINERALS COMPANY
350 Indiana Street – Suite 800 – Golden, Colorado 80401 – Telephone (303) 839-5060 – Fax (303) 839-5907
In July 2015 the Company entered into a leasing agreement with Hecla to lease the Velardena oxide plant
for an initial term of 18 months beginning July 1, 2015. During 2016 Hecla exercised its right to extend the
initial 18‐month term for six additional months until June 30, 2017, as permitted under the original lease
agreement. The Company and Hecla also reached an agreement regarding an expansion of the tailings
impoundment, at Hecla's cost, to accommodate Hecla's increased use of tailings capacity in excess of an
agreed amount while preserving flexibility for future tailings expansions. In connection with the
agreement regarding tailings impoundment expansion, Golden also granted Hecla the right to extend the
lease for an additional 18 months following June 30, 2017, or until December 31, 2018.
Hecla is responsible for ongoing operation and maintenance of the oxide plant. During the year ended
December 31, 2016, Hecla processed approximately 136,000 tonnes of material through the oxide plant,
resulting in total revenues to Golden of approximately $6.4 million. Golden incurred costs of
approximately $2.0 million related to the services it provides under the lease for a net margin of
approximately $4.4 million during 2016. Hecla reached its intended processing throughput of
approximately 400 tonnes per day during 2016 and, at this rate, net cash payments to Golden, net of
reimbursable costs, should total approximately $0.4 million per month, including variable and fixed fees,
or nearly $5.0 million annually.
Based on recent public disclosures by Hecla, Golden believes that Hecla has sufficient reserves at their San
Sebastian mine to continue to process ore at current throughput rates at the Company’s Velardena oxide
plant through the end of 2018, should they elect to do so.
Sentient Loan Financing
The Company closed on a $5.0 million secured convertible loan borrowing from The Sentient Group
(“Sentient”) in October 2015. The proceeds from this loan enabled Golden to fund the suspension of
mining and processing activities at the Velardena Properties and continue our long term business strategy
into 2016. The loan was converted by Sentient in two separate transactions, in February 2016 and June
2016, into a total of 27,366,740 shares of Golden Minerals common stock. As a result, Golden Minerals’
debt balance was reduced to zero. As of February 24, 2017, Sentient holds approximately 46 percent of
the Company’s 89.7 million issued and outstanding shares of common stock.
Santa Maria
The Company completed an underground drilling program of 2,200 meters in 24 drill holes in 2016, and
has mined and processed a total of 7,500 tonnes of material since 2015. The average grade of the 7,500
tonnes mined and processed is 338 grams per tonne (“gpt”) silver and 0.7 gpt gold. The Company
completed an updated NI 43‐101 mineral resource estimate and PEA that estimates an after‐tax net
present value of approximately $6.4 million at an 8 percent discount rate and an internal rate of return of
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GOLDEN MINERALS COMPANY
350 Indiana Street – Suite 800 – Golden, Colorado 80401 – Telephone (303) 839-5060 – Fax (303) 839-5907
84 percent. (See the Company’s February 15, 2017 press release for additional details.) In 2017, Golden
plans to continue to optimize mining plans and obtain permits for the potential mining operation as
considered in the current PEA. The Company also plans to conduct additional exploration work with the
goal of expanding the deposit.
Rodeo
Golden Minerals completed a 2,080‐meter core drilling program at Rodeo during 2016. Results showed a
gold and silver bearing epithermal vein and breccia system with encouraging gold and silver values over
an approximate 50 to 70 meter true width. In January 2017, the Company announced completion of a NI
43‐101 mineral resource estimate for Rodeo, completed by the engineering firm of Tetra Tech. (See the
Company’s January 26, 2017 press release for additional details.) The Company believes the mineralized
material, as currently identified, could provide two to three years of mined material for the Velardena
oxide mill (located within trucking distance of the Rodeo property) following the completion of the Hecla
lease, which is currently set to expire no later than December 31, 2018. In 2017, Golden plans to continue
work related to metallurgical studies, economic evaluation and potential resource expansion.
Sales and Farm‐outs
The Company generated approximately $1.8 million in other operating income related primarily to farm‐
outs and sales of non‐strategic exploration properties and excess equipment during 2016, as detailed in
the following two sections.
Celaya Farm‐out
In August 2016, Golden entered into an earn‐in agreement with a Mexican subsidiary of Electrum related
to the 6,200‐hectare silver and gold Celaya project in Mexico. Golden received an upfront payment of $0.2
million and recorded a 2016 gain of $0.2 million related to the farm‐out. Electrum has agreed to incur
specified exploration expenditures during the initial one and three year periods, and has options to
acquire interest in a joint venture company to be formed as well as additional interest in the Celaya
project. Electrum has conducted geologic mapping and sampling on the Celaya property. New targets
have been identified and exploration drilling to test these targets began in December 2016.
Asset Sales
In August 2016, Golden sold certain excess mining equipment to Minera Indé, a related party, for
$0.7M, later amended in 2017 to include an additional $0.2 million sale. Approximately $0.2
million has been received to date, with the remainder plus interest due in August 2017. The
Company recorded a gain of $0.7 million on the sale in 2016.
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GOLDEN MINERALS COMPANY
350 Indiana Street – Suite 800 – Golden, Colorado 80401 – Telephone (303) 839-5060 – Fax (303) 839-5907
Golden sold its remaining 50 percent interest in the San Diego property in Mexico to Golden Tag
Resources, Ltd. in August 2016 for approximately $0.4 million in cash and 2.5 million common
shares of Golden Tag, recognizing a gain of approximately $0.5 million. Golden Minerals retains a
two percent net smelter return royalty on future production at the property.
The Company entered into an option agreement with Santa Cruz Silver Mining Ltd. in April 2016
related to certain non‐strategic mineral claims in the Zacatecas Mining District, for a series of
payments totaling $1.5 million over 24 months. Golden recognized a 2016 gain of $0.4 million on
the first two payments received.
Financial Results
The Company reported revenue of $6.4 million and a net operating margin of $4.0 million (defined as
lease revenue less lease costs) in 2016, both of which were wholly attributable to the lease of the
Company’s Velardena oxide plant. This marks an improvement over the negative $2.0 million net
operating margin recorded in 2015 related to the oxide mill lease and mining activity at Velardena. The
total loss from operations of $6.3 million in 2016 compared favorably to a $30.2 million loss from
operations in 2015, the latter negatively impacted by a $13.2 million non‐cash asset impairment charge
related to the Velardena Properties recorded after the Company suspended mining activities.
The Company also reported a net loss of $10.7 million or $0.13 per share in 2016, compared to a net loss
of $25.4 million or $0.48 per share in 2015. Included in the net loss for 2016 was a non‐cash derivative
loss of $1.7 million related to an increase in the fair value of the liability recorded for warrants to acquire
the Company’s common stock and a non cash derivative loss of $0.8 million related to an increase in the
fair value of the liability associated with the Sentient convertible loan. The 2015 net loss included non‐
cash warrant and convertible loan derivative gains of $1.3 million and $0.6 million, respectively.
Financial Outlook
In addition to the $2.6 million cash balance at December 31, 2016, during 2017 Golden expects to receive
approximately $4.8 million in net operating margin from the oxide plant lease, $0.8 million as final
payment of the August 2016 sale to Minera Inde of excess mining equipment, and $0.6 million from the
farm‐out of a non‐strategic exploration property that occurred in 2016. Subsequent to December 31,
2016, the Company received $0.5 million in net proceeds from the sale of its common stock under an At
the Market (“ATM”) offering which was announced in December 2016. Currently, Golden intends to spend
the following amounts during 2017, which would result in a cash balance at December 31, 2017 of
approximately $1.5 million:
Approximately $1.8 million on exploration activities and property holding costs, including project
assessment and development costs related to Santa Maria, Rodeo and other properties
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GOLDEN MINERALS COMPANY
350 Indiana Street – Suite 800 – Golden, Colorado 80401 – Telephone (303) 839-5060 – Fax (303) 839-5907
Approximately $1.5 million at the Velardena Properties for care and maintenance
• Approximately $0.5 million at the El Quevar project to fund ongoing maintenance activities and
property holding costs
• Approximately $3.5 million on general and administrative costs
Additional information regarding full year 2016 financial results may be found in the Company’s Annual
Report on Form 10‐K which is available on the Golden Minerals website at www.goldenminerals.com.
About Golden Minerals
Golden Minerals is a Delaware corporation based in Golden, Colorado. The Company is primarily focused
on acquiring and advancing mining properties in Mexico with emphasis on areas near its Velardena
processing plants.
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, including statements relating to expectations regarding the
oxide plant lease including its duration, revenues and Hecla’s future processing capabilities, expectations
related to our Santa Maria and Rodeo properties in Mexico, including planned exploration and other
evaluation work and costs, and statements regarding our financial outlook, including anticipated 2017
income and expenditures. These statements are subject to risks and uncertainties, including: lower than
anticipated revenue from the oxide plant lease as a result of delays or problems at the third party’s mine
or the oxide plant, earlier than expected termination of the lease or other causes, the reasonability of the
economic assumptions at the basis of the Santa Maria PEA and Rodeo 43‐101, changes in interpretations
of geological, geostatistical, metallurgical, mining or processing information and interpretations of the
information resulting from future exploration, analysis or mining and processing experience; new
information from drilling programs or other exploration or analysis; unexpected variations in mineral
grades, types and metallurgy; fluctuations in silver and gold metal prices; failure of mined material or
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 SEC by Golden
Minerals, including the Company’s Annual Report on Form 10‐K for the year ended December 31, 2016.
For additional information please visit http://www.goldenminerals.com/ or contact:
Golden Minerals Company
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GOLDEN MINERALS COMPANY
350 Indiana Street – Suite 800 – Golden, Colorado 80401 – Telephone (303) 839-5060 – Fax (303) 839-5907
Karen Winkler
Director of Investor Relations
(303) 839‐5060
SOURCE: Golden Minerals Company
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GOLDEN MINERALS COMPANY
350 Indiana Street – Suite 800 – Golden, Colorado 80401 – Telephone (303) 839-5060 – Fax (303) 839-5907
GOLDEN MINERALS COMPANY
CONSOLIDATED BALANCE SHEETS
(Expressed in United States dollars)
Assets
Current assets
Cash and cash equivalents $ 2,588 $ 4,077
Short-term investm ents 334 72
Trade receivables 380 546
Inventories 245 330
Value added tax receivable, net 5 400
Related party receivable 643 —
Prepaid ex penses and other assets 578 451
Total current assets 4,773 5,876
Property, plant and equipm ent, net 9,235 11,125
Total as sets $ 14,008 $ 17,001
Liabilities and Equity
Current liabilities
Accounts payable and other accrued liabilities $ 1,224 $ 1,144
Convertible note payable - related party, net — 3,702
Derivative liability - related party — 488
Deferred revenue — 500
Other current liabilities 24 556
Total current liabilities 1,248 6,390
Asset retirem ent and reclam ation liabilities 2,434 2,546
Warrant liability - related party 976 117
Warrant liability 922 93
Other long term liabilities 66 84
Total liabilities 5,646 9,230
Com m itm ents and contingencies
Equity
Common stock, $.01 par value, 200,000,000 and 100,000,000
shares authorized; 89,020,041 and 53,335,333 shares issued
and outstanding, respectively
889 534
Additional paid in capital 495,455 484,742
Accumulated deficit -488,037 -477,378
Accumulated other comprehensive income (loss) 55 -127
Shareholders' equity 8,362 7,771
Total liabilities and equity $ 14,008 $ 17,001
December 31, December 31,
2016 2015
(in thousands, except share data)
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GOLDEN MINERALS COMPANY
350 Indiana Street – Suite 800 – Golden, Colorado 80401 – Telephone (303) 839-5060 – Fax (303) 839-5907
GOLDEN MINERALS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in United States dollars)
Potentially dilutive shares have not been included because to do so would be anti‐dilutive.
Revenue:
Ox ide plant lease $ 6,400 $ 653
Sale of metals — 7,418
Total revenue 6,400 — 8,071
Cos ts and e xpe ns e s :
Ox ide plant lease costs -2,046 -199
Cost of m etals sold (ex clusive of depreciation shown below) — -9,866
Ex ploration ex pense -3,718 -3,634
El Quevar project ex pense -508 -1,042
V elardeña project ex pense — -119
V elardeña shutdown and care and maintenance costs -2,016 -1,228
Adm inistrative ex pense -3,890 -4,242
Stock based com pensation -593 -453
Reclam ation ex pense -192 -256
Im pairm ent of long lived assets — -13,181
Other operating incom e, net 1,790 471
Depreciation, depletion and am ortization -1,548 -4,480
Total costs and expenses -12,721 -38,229
Loss from operations -6,321 -30,158
Other income and (expense):
Interest expense -515 -126
Interest and other incom e 390 3,083
Warrant derivative (loss) gain -1,688 1,344
Derivative (loss) gain -778 553
Loss on debt ex tinguishm ent -1,653 —
Loss on foreign currency -94 -79
Total other (expense) income -4,338 4,775
Loss from operations before incom e tax es -10,659 -25,383
Incom e tax benefit — —
Net loss $ -10,659 $ -25,383
Comprehensive loss, net of tax:
Unrealized gain (loss) on securities 182 -127
Comprehensive loss $ -10,477 $ -25,510
Net loss p er com m on share — b asic
Loss $ -0.13 $ -0.48
Weighted average Common Stock outstanding - basic (1) 81,651,896 52,972,352
T he Year E nded December 31,
2016 2015
(in thousands except per share data)