Golden Minerals Reports Second Quarter 2020 Results
Golden Minerals Reports Second Quarter 2020 Results
GOLDEN, Colo., Aug. 06, 2020 -- Golden Minerals Company (“Golden Minerals”, “Golden” or the “Company”) (NYSE American
and TSX: AUMN) today announced financial results and a business summary for the quarter ending June 30, 2020.
Second Quarter Summary Financial Results
• Revenue of $1.2 million and a net operating margin (oxide plant lease revenue less lease costs) of $0.8 million related
to the lease of the Company’s oxide plant in the second quarter 2020, compared to a $1.3 million net operating margin
realized in the second quarter 2019. (All currency in USD.)
• $3.7 million in funding received in conjunction with the signing of an Earn-In Agreement with Barrick Gold Corporation
(“Barrick”) ($0.9 million net), and from an equity offering and private placement of Golden common shares and warrants
completed in April 2020 ($2.8 million net).
• Cash and cash equivalents balance of $3.6 million as of June 30, 2020 compared to $4.6 million at year-end 2019.
Subsequent to June 30, 2020, additional funding of $7.9 million (net) received in July 2020 from an equity offering
without warrants.
• Exploration expenses of $0.8 million compared to $1.3 million in the year ago period.
• Net loss of $2.3 million or $0.02 per share in the second quarter 2020, compared to a net loss of $2.5 million or $0.03
per share in the second quarter 2019.
Second Quarter Business Summary
• Published Preliminary Economic Assessments (“PEA”) for the Velardeña Properties and the Rodeo gold project (May
2020).
• Submitted permits for the Rodeo gold project (June 2020), with mining operations possible for Q1 2021 pending receipt
of permits.
• Signed an Earn-in Agreement for the El Quevar silver project with Barrick (April 2020).
Golden Minerals’ President and Chief Executive Officer, Warren Rehn, commented, “With the recent capital raise completed,
we have a significant cash balance and are now in an excellent position to fund a start-up of production at the Rodeo deposit
early next year, assuming that the results of our confirmatory drilling program are satisfactory and providing we receive the
necessary government approvals. We are also moving forward with additional engineering studies for a bio-oxidation plant at
Velardeña. We can now advance our exploration plans at several properties, including drilling at the Yoquivo District in
Chihuahua, Mexico. The recent dramatic increase in gold and silver prices has greatly improved our projections of potential
cash flow from both Rodeo and Velardeña. We will continue to advance our plans to become a gold and silver producer again
as quickly as possible.”
Financial Results
The Company reported revenue of $1.2 million in the second quarter 2020 related to the oxide plant lease and costs of
approximately $0.4 million related to the services Golden provides under the terms of the lease, for a net margin of $0.8
million. Revenue and net operating margins were lower in the current period compared to the $1.3 million in the second quarter
2019 due to (1) a suspension of operations during portions of April and May related to COVID-19, and (2) a contract
amendment permitting a lower variable price per tonne of ore processed beginning in January 2020. During the second quarter
2020 as noted above, Golden also received $3.7 million in net proceeds from the sale of common stock related to an Earn-In
Agreement with Barrick and an offering of the Company’s common stock.
Exploration expenses were $0.8 million in the second quarter 2020 and include work at the Sand Canyon, Rodeo and other
properties, as well as property holding costs and their allocated administrative expenses. El Quevar project expense was $0.2
million in the quarter which includes costs of exploration and evaluation activities, care and maintenance and property holding
costs. Administrative expenses totaled $0.8 million in the second quarter 2020. These expenses, including costs associated
with being a public company, are incurred primarily by the Company’s corporate activities in support of the Velardeña
Properties, the El Quevar project and the Company’s exploration portfolio. Golden reported a net loss of $2.3 million or $0.02
per share in the second quarter 2020 compared to a net loss of $2.5 million or $0.03 per share in the year ago period.
Twelve Month Financial Outlook
The Company ended the second quarter 2020 with a cash balance of $3.6 million. Cash inflows for the 12-month period ending
June 30, 2021 are projected as follows (all figures are approximate):
• $7.9 million in net proceeds related to a July 2020 public equity offering;
• $1.3 million in net operating margin and $0.4 million from the collection of receivables following the termination of the
oxide plant lease on November 30, 2020; and
• $0.5 million in the third quarter 2020 relating to the sale of the Santa Maria project.
The Company’s currently budgeted expenditures during the 12 months ending June 30, 2021 total $9.8 million and are as
follows (all figures are approximate):
• $1.5 million on mine development costs, capital expenditures, working capital and other start-up related activities ahead
of a potential first quarter 2021 commencement of milling and processing operations at the Rodeo property,
• $2.0 million on evaluation activities, exploration and property holding costs related to the Company’s portfolio of
exploration properties located in Mexico, Nevada and Argentina, including costs at El Quevar, Yoquivo and other
properties;
• $1.6 million at the Velardeña Properties for care and maintenance;
• $1.1 million for repayment of a related party loan to Sentient;
• $0.5 million for repayment of the remaining Autlán deposit associated with a cancelled 2019 agreement; and
• $3.1 million on general and administrative costs.
These projections are current as of the date of this news release but could be negatively impacted if further interruptions
related to COVID-19 occur in Mexico. The Company currently includes anticipated expenditures for the potential start-up of
mining at the Rodeo gold project in the first quarter 2021, but an estimate of revenues has not been included pending the
results of a confirmatory drilling program in the third quarter 2020 and receipt of operating permits estimated to occur in late
2020.
Additional information regarding second quarter 2020 financial results may be found in the Company’s 10-Q Quarterly Report
which is available on the Golden Minerals website at www.goldenminerals.com.
Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
(US Dollars, unaudited)
June 30, December 31,
2020 2019
(in thousands, except share data)
Assets
Current assets
Cash and cash equivalents $ 3,557 $ 4,593
Lease receivables 353 448
Inventories, net 186 231
Derivative at fair value 128 254
Prepaid expenses and other assets 705 669
Total current assets 4,929 6,195
Property, plant and equipment, net 5,471 6,031
Other long term assets 1,013 1,131
Total assets $ 11,413 $ 13,357
Liabilities and Equity
Current liabilities
Accounts payable and other accrued liabilities $ 1,152 $ 2,127
Deferred revenue, current 227 472
Debt - related party 1,025 —
Other current liabilities 870 1,824
Total current liabilities 3,274 4,423
Asset retirement and reclamation liabilities 3,040 2,839
Other long term liabilities 412 494
Total liabilities 6,726 7,756
Commitments and contingencies
Equity
Common stock, $.01 par value, 200,000,000 shares authorized; 128,176,731 and
106,734,938 shares issued and outstanding respectively 1,282 1,067
Additional paid in capital 525,844 521,314
Accumulated deficit (522,439) (516,780)
Shareholders' equity 4,687 5,601
Total liabilities and equity $ 11,413 $ 13,357
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(US dollars, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2020 2019 2020 2019
(in thousands except per share data) (in thousands, except per share data)
Revenue:
Oxide plant lease $ 1,224 $ 1,976 $ 2,420 $ 3,908
Total revenue 1,224 1,976 2,420 3,908
Costs and expenses:
Oxide plant lease costs (420) (613) (984) (1,210)
Exploration expense (824) (1,328) (2,455) (2,183)
El Quevar project expense (245) (686) (493) (1,001)
Velardeña care and maintenance costs (192) (452) (655) (969)
Administrative expense (767) (969) (1,930) (2,043)
Stock based compensation (614) (89) (666) (653)
Reclamation expense (62) (55) (121) (114)
Other operating (expense) income, net (106) 71 (102) 179
Depreciation and amortization (265) (270) (544) (544)
Total costs and expenses (3,495) (4,391) (7,950) (8,538)
Loss from operations (2,271) (2,415) (5,530) (4,630)
Other expense:
Interest and other expense, net (46) (43) (73) (141)
Loss on foreign currency (6) — (56) (38)
Total other loss (52) (43) (129) (179)
Loss from operations before income taxes (2,323) (2,458) (5,659) (4,809)
Income taxes — — — —
Net loss $ (2,323) $ (2,458) $ (5,659) $ (4,809)
Net loss per common share — basic
Loss $ (0.02) $ (0.03) $ (0.05) $ (0.05)
Weighted average Common Stock
outstanding - basic (1) 124,134,135 97,144,467 115,690,717 96,466,982
(1) Potentially dilutive shares have not been included because to do so would be anti-dilutive.
About Golden Minerals
Golden Minerals is a Delaware corporation based in Golden, Colorado. The Company is primarily focused on advancing its
Rodeo and Velardeña properties in Mexico and, through partner-funded exploration, its El Quevar silver property in Argentina,
as well as acquiring and advancing mining properties in Mexico, Argentina and Nevada.
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 regarding the Rodeo PEA results and the possibility and timing of future production from the
Rodeo property; the Velardeña PEA results and anticipated future operations at the Velardeña properties; statements
regarding the transaction with Barrick with respect to the El Quevar project; financial projections, including budgeted
expenditures and the anticipated net operating margin from the Velardeña oxide plant lease; projected cash balances and
anticipated spending during the 12 months ended June 30, 2021; and potential business restrictions and other matters related
to the COVID-19 pandemic. These statements are subject to risks and uncertainties, including the reasonability of the
economic assumptions at the basis of the results of the Rodeo and Velardeña PEAs and technical reports; the Company’s
ability to timely obtain the necessary permits for commencement of production at Rodeo; the projected timing and the
Company’s ability to repay its debts, including the related party loan to Sentient and the remaining Autlán deposit; the timing
duration and overall impact of the COVID-19 pandemic, including the potential future re-suspension of non-essential activities
in Mexico, including mining; lower than anticipated revenue from the oxide plant lease; increases in costs and declines in
general economic conditions; changes in political conditions, in tax, royalty, environmental and other laws in the United
States, Mexico or Argentina and other market conditions; and fluctuations in silver and gold prices. 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, 2019.
For additional information please visit http://www.goldenminerals.com/ or contact:
Golden Minerals Company
Karen Winkler, Director of Investor Relations
(303) 839-5060
SOURCE: Golden Minerals Company