Golden Minerals Reports Second Quarter 2022 Results
Golden Minerals Reports Second Quarter 2022 Results
GOLDEN, Colo.--(BUSINESS WIRE)--August 11, 2022--Golden Minerals Company (“Golden
Minerals”, “Golden” or the “Company”) (NYSE American: AUMN and TSX: AUMN) today
provided financial results and a business summary for the quarter ending June 30, 2022.
Second Quarter Financial Results - Highlights
(All currency expressed in approximate USD)
Revenue of $5.9 million yielding a net operating margin of $1.3 million in the second
quarter 2022, vs. $5.9 million revenue and a net operating margin of $2.5 million in the
second quarter 2021, both from mining operations at the Company’s Rodeo gold-silver
mine in Mexico.
$9.5 million cash and cash equivalents balance as of June 30, 2022, compared to $12.2
million as of December 31, 2021.
Net loss of $0.02 per share or $2.8 million in the second quarter 2022, compared to a net
loss of $0.00 per share or $0.8 million in the second quarter 2021.
Second Quarter Business Summary
At the Rodeo mine, produced 3,004 payable gold ounces and 12,768 payable silver
ounces (3,158 gold equivalent (“AuEq”) ounces) with total cash costs, net of silver by-
product credits, per payable ounce of gold of $1,426.1 Cash costs were higher than the
$1,164 reported in Q1 2022 due to lower grade than normal mined during the month of
April, in addition to increased drilling and blasting activity which will benefit third
quarter production.
Sold 3,219 AuEq oz. in doré at average prices (before selling and refining costs) of
$1,865/oz Au and $22.49/oz Ag. Doré inventory at June 30, 2022 consisted of 323
payable oz. Au and 1,009 payable oz. Ag.
Continued limited scale test mining activities at the Velardeña Properties, conducted to
complement final optimization of a bio-oxidation plant design and for use in additional
flotation separation studies. Test results using the bio-oxidation pre-treatment oxidation
process continue to support the use of the technology in future processing at Velardeña.
Conducted additional test mining at Velardeña beginning in May 2022 using a new
contractor to evaluate productivity and dilution of resue mining on the principal veins
accessible from the San Mateo decline. Results met expected productivity metrics but did
not meet targeted dilution metrics for some of the veins mined. The Company is therefore
continuing to evaluate modified mine plans and mining techniques to address dilution
issues during the current downturn in gold and silver prices.
In July 2022, completed a third drill program of 5,693 meters in 24 drill holes at the
Yoquivo gold-silver project located in Chihuahua State, Mexico. This drill program was
conducted to further delineate previously encountered vein-hosted mineralized intervals.
Complete assay results have not yet been received; however, the Company anticipates
this round of drilling will provide sufficient information with which to estimate an initial
gold-silver resource later in 2022.
Completed a second drill program at the Sarita Este gold-copper project (Salta Province,
Argentina) in June 2022; recently released assay results from the program point to a
potentially economic shallow oxidized gold system.
In June 2022, Barrick reported results of a 5-hole 1,300m initial drill program at our El
Quevar property to the Company. Vuggy silica alteration, which is commonly associated
with high sulfidation epithermal Au-Ag deposits, was noted in all holes. Final assay
results are pending.
1 Gold equivalents are based on actual gold and silver prices realized during the second
quarter 2022: $1,865/oz Au and $22.49/oz Ag. “Cash costs, net of by-product credits, per
payable gold ounce” is a non-GAAP financial measure. For further information, see “Non-
GAAP Financial Measures” below.
Golden’s President and Chief Executive Officer, Warren Rehn, commented on the quarter’s
results, “Our production at Rodeo continues on plan and is providing good cash flow while we
continue to work on the re-start of Velardeña. At Velardeña our recent test-mining showed
excellent progress on productivity; however, the dilution control was not up to expectations,
mostly due to geologic factors on the San Mateo vein. We will take the time required to resolve
this through modifications in the mine plan. I expect we will be in a good position once again to
propose the re-start late this year or early next year.”
Second Quarter 2022 Financial Results
The Company reported revenue of $5.9 million from doré sales, $4.6 million costs of metals sold
and $1.3 million in net operating margin in the second quarter 2022, all related to gold-silver
production at the Rodeo mine. Exploration expenses, including property holding costs and
allocated administrative expenses, totaled $2.8 million during the quarter. Expenses were
primarily related to costs in support of the potential restart of Velardeña, as well as increased
exploration activities at the Rodeo operation in Mexico and the Sarita Este property in Argentina.
Velardeña care and maintenance expenses were $0.1 million in the quarter and include expenses
related to care and maintenance as a result of the suspension of mining and processing activities
in November 2015. El Quevar project expense was $0.2 million during the second quarter and
includes holding and evaluation costs for the Yaxtché deposit at El Quevar, net of
reimbursements from Barrick Gold under the terms of an Earn-In Agreement. Administrative
expenses totaled $1.3 million and include costs associated with being a public company that are
incurred primarily by the Company’s corporate activities in support of the Rodeo Property, the
Velardeña Properties, the El Quevar project and the Company’s exploration portfolio. The
Company reported a net loss of $2.8 million or $0.02 per share.
Twelve-Month Financial Outlook
The Company ended the second quarter of 2022 with a cash balance of $9.5 million and
anticipates receiving approximately $4.5 to $6.5 million in net operating margin (defined as
revenue from the sale of metals less costs of metals sold) from the Rodeo operation during the 12
months ending June 30, 2023, assuming average gold and silver prices during that period of
$1,800/oz and $25.00/oz, respectively. The Company also anticipates receiving $1.5 million of
the remaining $2.0 million due from Fabled Silver Gold Corp. related to the sale of the
Company’s Santa Maria property during the 12-month period.
Currently forecasted expenditures during the 12 months ending June 30, 2023, apart from Rodeo
costs of metals sold which are included in the net operating margin forecast, total approximately
$10.4 million as follows:
$5.1 million on exploration activities and property holding costs associated with the
Company’s portfolio of exploration properties located in Mexico, Argentina and Nevada,
including project assessment and evaluation costs relating to additional exploration at
Rodeo and Yoquivo, as well as costs associated with the potential restart of Velardeña;
$1.0 million at the Velardeña Properties for care and maintenance;
$0.4 million at the El Quevar project to fund care and maintenance and property holding
costs, net of reimbursement from Barrick; and
$3.9 million in general and administrative costs.
Additional information regarding second quarter 2022 financial results can be found in the
Company’s 10-Q Quarterly Report which is available on the Golden Minerals website at
www.goldenminerals.com.
Quarterly Conference Call and Webcast
Management will be hosting a conference call and webcast on Monday, August 15, 2022 at
11:00 a.m. Eastern Daylight Time (“EDT”) to discuss second quarter 2022 financial results and
recent project updates. You are invited to join the webcast at Golden Minerals Q2 2022 Earnings
Call. Please plan to join 10 minutes prior to the start time.
The webcast will also be available for replay on the Golden Minerals website at
http://www.goldenminerals.com after August 15, 2022.
About Golden Minerals
Golden Minerals is a growing gold and silver producer based in Golden, Colorado. The
Company is primarily focused on producing gold and silver from its Rodeo Mine and advancing
its Velardeña 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.
Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
(US Dollars, unaudited)
December
31,
June 30, 2021
2022 (Restated)*
(in thousands, except share
data)
Assets
Current assets
Cash and cash equivalents $ 9,517 $ 12,229
Short-term investments 53 67
Inventories, net 1,785 1,608
Value added tax receivable, net 1,670 1,290
Prepaid expenses and other assets 1,168 1,145
Total current assets 14,193 16,339
Property, plant and equipment, net 6,479 6,627
Other long-term assets 646 747
Total assets $ 21,318 $ 23,713
Liabilities and Equity
Current liabilities
Accounts payable and other accrued liabilities $ 4,097 $ 3,509
Deferred revenue 719 1,469
Other current liabilities 441 721
Total current liabilities 5,257 5,699
Asset retirement and reclamation liabilities 3,739 3,569
Other long-term liabilities 189 353
Total liabilities 9,185 9,621
Commitments and contingencies
Equity
Common stock, $.01 par value, 350,000,000 shares authorized; 167,427,992 and
162,804,612 shares issued and outstanding respectively
1,674
1,628
Additional paid in capital 541,642 540,518
Accumulated deficit (531,183 ) (528,054 )
Shareholders' equity 12,133 14,092
Total liabilities and equity $ 21,318 $ 23,713
* See Note 3, “Notes to the Condensed Consolidated Financial Statements” in the Form 10-Q.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(US dollars, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2022 2021 2022 2021
(in thousands except per
share data)
(in thousands, except per
share data)
Revenue:
Sale of metals $ 5,926 $ 5,861 $ 13,432 $ 7,639
Total revenue 5,926 5,861 13,432 7,639
Costs and expenses:
Cost of metals sold (exclusive of depreciation shown
below)
(4,639 )
(3,328 )
(8,961 )
(4,864 )
Exploration expense (2,799 ) (1,094 ) (4,662 ) (1,875 )
El Quevar project expense (177 ) (53 ) (294 ) (159 )
Velardeña care and maintenance costs (134 ) (141 ) (473 ) (340 )
Administrative expense (1,275 ) (992 ) (2,548 ) (2,540 )
Stock based compensation (200 ) (987 ) (349 ) (1,416 )
Reclamation expense (71 ) (63 ) (140 ) (129 )
Other operating income (expense), net 502 135 890 334
Depreciation and amortization (87 ) (168 ) (152 ) (323 )
Total costs and expenses (8,880 ) (6,691 ) (16,689 ) (11,312 )
Loss from operations (2,954 ) (830 ) (3,257 ) (3,673 )
Other income (expense):
Interest and other expense, net (36 ) (15 ) (14 ) (323 )
Gain (loss) on foreign currency transactions 48 102 98 23
Total other income (loss) 12 87 84 (300 )
Loss from operations before income taxes (2,942 ) (743 ) (3,173 ) (3,973 )
Income taxes 129 (67 ) 44 (15 )
Net Loss $ (2,813 ) $ (810 ) $ (3,129 ) $ (3,988 )
Net income (loss) per common share — basic
Loss $ (0.02 ) $ - $ (0.02 ) $ (0.02 )
Weighted average Common Stock outstanding -
basic (1)
165,109,309
162,365,584
163,817,471
161,382,645
Non-GAAP Financial Measures
“Total cash costs, net of by-product credits, per payable gold ounce,” is a non-GAAP measure,
and includes all direct and indirect operating cash costs associated with the physical activities
that would generate doré products for sale to customers, including mining to gain access to
mineralized materials, mining of mineralized materials and waste, milling, third-party related
treatment, refining and transportation costs, on-site administrative costs and royalties. Total cash
costs do not include depreciation, depletion, amortization, exploration expenditures, reclamation
and remediation costs, sustaining capital, financing costs, income taxes, or corporate general and
administrative costs not directly or indirectly related to the Rodeo project. By-product credits
include revenues from silver contained in the products sold to customers during the period.
“Total cash costs, net of by-product credits”, are divided by the number of payable gold ounces
generated by the plant for the period to arrive at “Total cash costs, net of by-product credits, per
payable gold ounce.”
“Cost of metals sold”, reported as a separate line item in the Company’s Condensed
Consolidated Statements of Operations for the three months and six months ended June 30, 2022,
is the most comparable financial measure, calculated in accordance with GAAP, to “Total cash
costs, net of by-product credits”. “Cost of metals sold” includes adjustments for changes in
inventory and excludes third-party related treatment and refining costs, which are reported as
part of revenue in accordance with GAAP. The following table presents a reconciliation for the
three months and six months ended June 30, 2022 between the non-GAAP measure of “Total
cash cost, net of by-product credits” to the most directly comparable GAAP measure, “Cost of
metals sold”.
Reconciliation of Costs of Metals Sold (GAAP) to Total Cash Costs,
net of By-product Credits (Non-GAAP)
(in thousands)
Three Months Ended June 30, 2022
Total cash costs, net of by-product credits $ 4,284
Reconciliation to GAAP measure:
Treatment and refining costs $ (83 )
Silver by-product credits 296
Write down of inventories to net realizable value —
Change in inventory (excluding depreciation, depletion and amortization) 142
Cost of metals sold $ 4,639
Six Months Ended June 30, 2022
Total cash costs, net of by-product credits $ 8,485
Reconciliation to GAAP measure:
Treatment and refining costs $ (212 )
Silver by-product credits 647
Write down of inventories to net realizable value —
Change in inventory (excluding depreciation, depletion and amortization) 41
Cost of metals sold $ 8,961
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
possibility of estimating an initial gold-silver resource in 2022 at the Yoquivo gold-silver
project; a potentially economic shallow oxidized gold system at the Sarita Este gold-copper
project; anticipated net operating margin from the Rodeo operation during the 12 months ending
June 30, 2023; the receipt of the expected final installment due to Golden Minerals from Fabled
Silver Gold Corp.; and forecasted expenditures during the 12 months ending June 30, 2023.
These statements are subject to risks and uncertainties, including the 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 or higher than anticipated costs at the
Rodeo mine, and mine testing activities at Velardeña; 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, 2021.
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For additional information please visit http://www.goldenminerals.com/.
Contacts
Golden Minerals Company
Karen Winkler, Director of Investor Relations
(303) 839-5060