AUMN.TO · 2022-11-10 12:00:00

Golden Minerals Reports Third Quarter 2022 Results

Financials

GOLDEN, Colo.--(BUSINESS WIRE)--November 10, 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 September 30,

2022.

Third Quarter Financial Results - Highlights

(All currency expressed in approximate USD)

 Revenue of $5.3 million yielding a net operating margin of $0.9 million in the third

quarter 2022, vs. $8.5 million revenue and a net operating margin of $4.2 million in the

third quarter 2021, both from mining operations at the Company’s Rodeo gold-silver

mine in Mexico.

 $6.5 million cash and cash equivalents balance as of September 30, 2022, compared to

$12.2 million as of December 31, 2021.

 Net loss of $0.02 per share or $2.7 million in the third quarter 2022, compared to a net

gain of $0.00 per share or $0.4 million in the third quarter 2021.

Third Quarter Business Summary

 The Rodeo mine (Mexico) produced 2,972 payable gold ounces and 11,907 payable

silver ounces (3,103 gold equivalent (“AuEq”) ounces) with total cash costs, net of silver

by-product credits, per payable ounce of gold of $1,391.1

 Sold 3,145 AuEq oz. in doré at average prices of $1,703/oz Au and $18.72/oz Ag (before

costs of selling and refining). Doré inventory on September 30, 2022, consisted of 277

payable gold ounces and 1,309 payable silver ounces.

 At the Velardeña Properties (Mexico), the Company continued its evaluation of modified

mine plans and mining techniques to address dilution issues encountered during 1H 2022

test-mining activities. The Company also began testing ore sorting technology in the third

quarter 2022 to evaluate its potential application at the Velardeña Properties.

 At the Yoquivo gold prospect (Mexico), the Company completed a third drill program of

5,693 meters in 24 drill holes in July 2022 and is currently conducting a fourth drill

program of approximately 3,000 meters. The Company plans to complete a maiden

resource estimate for the property for release in the first quarter 2023.

 Completed additional drilling at the Sarita Este gold prospect (Salta, Argentina) for a

project total since inception of 4,925 meters in 51 core drill holes.

1 Gold equivalents are based on actual gold and silver prices realized during the third quarter

2022. “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.

Third Quarter 2022 Financial Results

The Company reported revenue of $5.3 million from doré sales, $4.4 million costs of metals sold

and $0.9 million in net operating margin in the third quarter 2022, all related to gold-silver

production at the Rodeo mine. Exploration expenses, including property holding costs and

allocated administrative expenses, totaled $2.4 million during the quarter. Exploration expenses

were primarily related to costs to increase the capacity of the tailings dam at Velardeña to

support processing of the Rodeo mineralized material, costs in support of the potential restart of

Velardeña, exploration activities at the Yoquivo project in Mexico, and exploration activities at

the Sarita Este project in Argentina. Velardeña care and maintenance expenses were $0.4 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 third 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 $0.9 million and include costs associated with being

a public company that were 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 $2.7 million or $0.02 per share.

Twelve-Month Financial Outlook

The Company ended the third quarter of 2022 with a cash balance of $6.5 million and anticipates

receiving approximately $5.5 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 September 30, 2023, assuming average gold and silver prices during that period of

$1,800/oz and $25.00/oz, respectively. Current commodity prices have recently fallen below

these thresholds and there is no assurance that our expectations regarding future prices will be

realized. At average gold and silver prices of $1,700/oz and $20.00/oz, respectively, our

expected net operating margin for the 12 months ending September 30, 2023 would decrease by

approximately $1.5 million. The Company also anticipates receiving $1.75 million 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 September 30, 2023, apart from

Rodeo costs of metals sold which are included in the net operating margin forecast, total

approximately $9.6 million as follows:

 $4.3 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 for exploration at Rodeo and Yoquivo,

plus costs associated with the potential restart of Velardeña and costs to increase its

tailings facility which processes Rodeo’s mineralized material;

 $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 third 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 this morning, Thursday, November

10, 2022, at 11:00 a.m. Eastern Time (“ET”) to discuss third quarter 2022 financial results and

recent project updates. You are invited to join the webcast at Q3 2022 AUMN Quarterly

Conference Call and Webcast. 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 November 10, 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,

September

30, 2021

2022 (Restated)*

(in thousands, except

share data)

Assets

Current assets

Cash and cash equivalents $ 6,504 $ 12,229

Short-term investments 35 67

Inventories, net 1,786 1,608

Value added tax receivable, net 1,770 1,290

Prepaid expenses and other assets 1,182 1,145

Total current assets 11,277 16,339

Property, plant and equipment, net 6,404 6,627

Investments 225 —

Other long-term assets 643 747

Total assets $ 18,549 $ 23,713

Liabilities and Equity

Current liabilities

Accounts payable and other accrued liabilities $ 4,345 $ 3,509

Deferred revenue 344 1,469

Other current liabilities 276 721

Total current liabilities 4,965 5,699

Asset retirement and reclamation liabilities 3,805 3,569

Other long-term liabilities 149 353

Total liabilities 8,919 9,621

Commitments and contingencies

Equity

Common stock, $.01 par value, 350,000,000 shares authorized; 167,477,992 and

162,804,612 shares issued and outstanding respectively

1,675

1,628

Additional paid-in capital 541,835 540,518

Accumulated deficit (533,880 ) (528,054 )

Shareholders' equity 9,630 14,092

Total liabilities and equity $ 18,549 $ 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 Nine Months Ended

September 30, September 30,

2022 2021 2022 2021

(in thousands except per

share data) (in thousands, except per

share data)

Revenue:

Sale of metals $ 5,268 $ 8,479 $ 18,700 $ 16,118

Total revenue 5,268 8,479 18,700 16,118

Costs and expenses:

Cost of metals sold (exclusive of depreciation

shown below)

(4,374 )

(4,292 )

(13,335 )

(9,156 )

Exploration expense (2,376 ) (2,146 ) (7,038 ) (4,021 )

El Quevar project expense (154 ) (90 ) (448 ) (249 )

Velardeña care and maintenance costs (370 ) (414 ) (843 ) (754 )

Administrative expense (918 ) (911 ) (3,466 ) (3,451 )

Stock-based compensation (194 ) (75 ) (543 ) (1,491 )

Reclamation expense (71 ) (67 ) (211 ) (196 )

Other operating income, net 384 138 1,274 472

Depreciation and amortization (89 ) (143 ) (241 ) (466 )

Total costs and expenses (8,162 ) (8,000 ) (24,851 ) (19,312 )

(Loss) income from operations (2,894 ) 479 (6,151 ) (3,194 )

Other income (expense):

Interest and other expense, net (3 ) (13 ) (17 ) (336 )

Gain on foreign currency transactions 154 133 252 156

Total other income (expense) 151 120 235 (180 )

(Loss) gain from operations before income taxes (2,743 ) 599 (5,916 ) (3,374 )

Income taxes 46 (188 ) 90 (203 )

Net (loss) income $ (2,697 ) $ 411 $ (5,826 ) $ (3,577 )

Net (loss) income per common share - basic $ (0.02 ) $ 0.00 $ (0.04 ) $ (0.02 )

Weighted-average shares outstanding - basic 166,948,751 162,477,039 164,872,701 161,751,452

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 and nine months ended September 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 and nine months ended September 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 September 30, 2022

Total cash costs, net of by-product credits $ 4,133

Reconciliation to GAAP measure:

Treatment and refining costs $ (95)

Silver by-product credits 217

Write down of inventories to net realizable value (75)

Change in inventory (excluding depreciation, depletion and

amortization)

194

Cost of metals sold $ 4,374

Nine Months Ended September 30, 2022

Total cash costs, net of by-product credits $ 12,617

Reconciliation to GAAP measure:

Treatment and refining costs $ (307)

Silver by-product credits 865

Write down of inventories to net realizable value (75)

Change in inventory (excluding depreciation, depletion and

amortization)

235

Cost of metals sold $ 13,335

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

Company’s plans to complete a maiden resource estimate for the Yoquivo gold-silver project;

anticipated net operating margin from the Rodeo operation during the 12 months ending

September 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 September

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; continued volatility in prices for gold and silver; results of mine testing

activities at Velardeña; the Company’s ability to recover VAT receivable in Mexico and the

timing of such recovery; declines in general economic conditions; and changes in political

conditions, in tax, royalty, environmental and other laws in the United States, Mexico or

Argentina and other 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, 2021.

https://twitter.com/Golden_Minerals

For additional information please visit http://www.goldenminerals.com/.

Contacts

Golden Minerals Company

Karen Winkler, Director of Investor Relations

(303) 839-5060

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