Golden Minerals Reports Third Quarter 2023 Financial Results
Golden Minerals Reports Third Quarter 2023 Financial Results
GOLDEN, Colo.--(BUSINESS WIRE)--November 10, 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 September 30,
2023. (All figures are in approximate U.S. dollars.)
Third Quarter Business Summary and Subsequent Events
• On November 8, 2023, the Company closed a public offering of an aggregate of 6 million
shares of the Company’s common stock and related warrants, at a purchase price of $0.70
per share (the “November 2023 Offering”). Gross proceeds from the offering were
approximately $4.2 million, prior to deducting placement agent’s fees and other offering
expenses payable by the Company. Full details of the November 2023 Offering may be
found in the Prospectus filed with the Securities and Exchange Commission on
November 8, 2023, a copy of which is available on the Company’s website at
https://www.goldenminerals.com/financials-filings/sec-filings/.
• The Company is engaged in settlement negotiations regarding the dispute with Unifin
Financiera, S.A.B. de C.V. (“Unifin”). Although no definitive settlement agreement has
yet been executed, an accrued liability of $0.25 million has been recorded as of
September 30, 2023. Given that the settlement proposals have not resulted in a written
agreement, we cannot give any assurances that the settlement will be effected upon the
terms under discussion or at all.
• The Company continued with activities in preparation for restarting production at the
Velardeña Properties. Preparations include permitting, equipment readiness,
arrangements with union staff, contract miners, plant operators and support personnel.
The Velardeña mines last operated in November 2015.
• The Company completed and filed an updated Technical Report (“TR”), completed as a
Preliminary Economic Assessment (“PEA”), for its Velardeña Properties (Durango State,
Mexico). The updated PEA estimates an after-tax net present value (“NPV”) of $87.6
million, using a discount rate of 8%, with a mine life of 10.5 years. The TR is prepared as
an update of a previous PEA dated March 1, 2022 and incorporates additional
information developed by the Company since the 2022 report, including updated pricing
and concentrate sales terms, and the exclusion of a bio-oxidation plant that was formerly
contemplated.
• The Company concluded mining activities at the Rodeo mine in June 2023 as previously
disclosed. During the third quarter of 2023, the Company continued to process material
which had been stockpiled from the Rodeo mine. The processing of the stockpiled
material concluded in August when the grade of the stockpiles became uneconomic. The
last pour of doré occurred in September.
Third Quarter Financial Summary
• Revenue was $2.5 million in the third quarter 2023 and included sales of the Rodeo
mine’s metals and slag material, as well as sales of Velardeña concentrates from
previously stockpiled material. Revenue was $5.3 million in the third quarter 2022 and
was comprised solely of Rodeo’s sale of metals.
• Net operating margin (defined as revenue from the sale of metals less cost of metals sold)
was negative $0.8 million in the third quarter 2023. Net operating margin was positive
$0.9 million in the third quarter 2022 which related solely to the Rodeo mine’s sale of
metals. The lower net operating margin in the third quarter 2023 compared to the third
quarter of 2022 was due mainly to the processing of the stockpiled material in the third
quarter 2023 which had lower grades than the mined material processed in the third
quarter of 2022.
• Cash and equivalents balance as of September 30, 2023 was $1.6 million, compared to
$4.0 million on December 31, 2022.
• Zero debt as of September 30, 2023, unchanged from December 31, 2022.
• Net loss was $3.2 million or $0.38 per share in the third quarter 2023, compared to a net
loss of $2.7 million or $0.40 per share in the third quarter 2022.
Cash Inflows and Expenditures
Cash expenditures during the nine months ended September 30, 2023 totaled $8.6 million and
included:
• $2.9 million in exploration expenditures;
• $0.9 million in care and maintenance costs at the Velardeña Properties;
• $0.4 million in care and maintenance 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;
• $3.7 million in general and administrative expenses; and
• $0.7 million of negative net operating margin from Rodeo operations (which includes
Mexico G&A).
The above expenditures were offset by cash inflows of $6.2 million from the following:
• $1.2 million of net operating margin from sales of Velardeña concentrates;
• $1.8 million, net of fees from the Company’s ATM Program;
• $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; and
• $1.3 million from changes in working capital (mainly due to a decrease in inventory
associated with the end of operations at Rodeo).
Capital Resources and 12-Month Financial Outlook
At September 30, 2023, the Company had current assets of approximately $5.9 million,
including cash and cash equivalents of approximately $1.6 million. On the same date, it had
accounts payable and other current liabilities of approximately $5.6 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.
On November 8, 2023, the Company closed the November 2023 Offering which raised gross
proceeds of $4.2 million and net proceeds of approximately $3.8 million after expenses. These
funds were anticipated in the Company’s forecast. The Company’s forecast for the twelve-month
period ending September 30, 2024 also projects the receipt of additional capital inflows of $3.0
to $4.5 million. In order to commence and maintain production at Velardeña, the Company
expects to spend approximately $3.0 to $3.5 over the first five months of production primarily
for additional underground development, which is included in the capital forecast discussed
above. The actual amount of additional capital required during the twelve-month period ending
September 30, 2024 may vary significantly from the amounts specified above and will depend on
a number of factors, including variations in the anticipated administrative costs, costs to restart
Velardeña, costs at El Quevar, and costs for continued exploration, project assessment, and
advancement of its other exploration properties. Assuming that the Company is successful in
restarting production and that it meets its production objectives at the Velardeña Properties, cash
flow from Velardeña is expected to be positive by the end of the second quarter of 2024. The
additional capital required may take the form of non-core asset sales (such as the one described
below), debt financing, production-based financing (such as streaming or royalty financing),
collection of outstanding VAT receivable, or otherwise. After the November 2023 Offering, the
Company’s available shares authorized but not issued or outstanding is approximately 2.2
million shares. Should the Company desire to make future stock offerings of more than 2.2
million shares, the number of authorized shares will need to be increased which will require
shareholder approval.
With regards to the sale of non-core assets, Golden executed a non-binding letter of intent for the
sale of its Santa Maria property for a total consideration consisting of (i) initial cash proceeds of
$1.5 million (plus an additional $0.24 million in VAT payment that the Company can retain) and
(2) a 1.5% net smelter return royalty on the Santa Maria concession up to a cap of $1.0 million
(which may be purchased by the potential buyer from Golden for $0.5 million at any time prior
to the commencement of commercial production on the Santa Maria property). If that transaction
is consummated, the funds would likely be received in November 2023 or later.
Golden Minerals 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.
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 September 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 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
Velardeña Properties, including plans and preparation for restarting production at the properties,
estimated NPV and mine life, cash flow from the properties, additional capital requirements to
restart production on the properties in the form of non-core asset sales, debt financing,
production-based financing and/or collection of outstanding VAT receivable, expected
expenditures over the first five months of production on the properties for additional
underground development and discussions with various financing parties with regard to equity
and/or debt financing as well as streaming or royalty arrangements involving future production at
the properties; (ii) settlement of the Unifin dispute; (iii) projected receipt of additional capital
during the twelve-month period ending September 30, 2024; (iv) increase in the authorized
shares of the Company should the Company decide to make a future stock offering; and (v) the
potential sale of the Company’s Santa Maria property. 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 Mexico and other market conditions; unanticipated
variations in grade; challenges associated with our proposed mining plans, including difficulties
in controlling grade dilution and interruptions in mining; variations in the anticipated
administrative costs, costs to restart Velardeña, costs at El Quevar, and costs for continued
exploration, project assessment, and advancement of the Company’s other exploration
properties, 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.
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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