AUMN.TO · 2023-08-09 12:00:00

Golden Minerals Reports Second Quarter 2023 Financial Results

Financials

GOLDEN, Colo.--(BUSINESS WIRE)--August 9, 2023--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.

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

Contacts

Golden Minerals Company

Karen Winkler, Director of Investor Relations

(303) 839-5060

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