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Golden Minerals Company (2)
Symbol AUMN
Shares Issued 14,084,680
Close 2024-03-18 C$ 0.41
Market Cap C$ 5,774,719
Recent Sedar Documents

Golden Minerals loses $9.2-million (U.S.) in 2023

2024-03-19 09:52 ET - News Release

Ms. Karen Winkler reports

GOLDEN MINERALS REPORTS FULL YEAR 2023 RESULTS

Golden Minerals Company has released financial results and a business summary for the full fiscal year ending Dec. 31, 2023. All figures are in approximate U.S. dollars.

Business summary:

  • The company's Rodeo mine (Durango state, Mexico) concluded operations in June, 2023, and finished processing stockpiled material in September, 2023. From its inception in January, 2021, through Dec. 31, 2023, Rodeo produced 31,126 ounces gold and 126,151 oz silver. Cash costs per payable gold oz, net of silver byproducts, averaged $1,275 during that period.
  • Between March and September, 2023, the company processed and sold 3,000 tonnes of mineralized material from the Velardena properties that had been stockpiled during test mining conducted during 2022.
  • In November, 2023, the flotation plant was restarted to finish processing material that had been partially processed previously. This material had been held for future use in the tailings impoundment of the flotation plant. Test work showed that the company could successfully recover a gold- and silver-bearing pyrite concentrate that was marketable from this material. The company processed 23,069 dry metric tonnes (DMT) of material in 2023 and 2024 and sold a total of 1,279 DMT of gold-bearing pyrite concentrate.
  • The company began mining activities at Velardena in December, 2023, given newer favourable concentrate terms (first announced in early 2023), positive results of testing activities, and of recent metallurgical and economic analyses. Operations were subsequently shut down in late February, 2024, after the initial performance of the mine and processing plant did not achieve expected results. The company is now engaged in contract processing for a third party on a trial basis at the oxide plant and is otherwise holding the Velardena properties for short-term sale while it evaluates alternatives to realize value from the assets.
  • The company completed an initial mineral resource estimate for its Yoquivo property (Chihuahua state, Mexico) in February, 2023, highlighting an estimated 937,000 tonnes of inferred material comprising 12.3 million oz silver at a grade of 410 grams per tonne, plus 64,000 oz gold at a grade of 2.1 g/t.
  • The company sold its Santa Maria property to a private party in December, 2023, for $1.5-million in cash, $240,000 in value-added tax, plus a 1.5-per-cent net smelter royalty on gold and silver production capped at $1-million.

Financial summary:

  • Total 2023 revenue was $12-million, including the sale of metals from the Rodeo mine as well as revenue from slag and concentrate sales at Velardena. Total revenue was $23.3-million in 2022, which was attributable solely to the sale of metals from the Rodeo mine.
  • Cost of metals sold in 2023 was $12.4-million (including costs from both Rodeo and Velardena) versus $17.5-million in 2022, which included only Rodeo costs.
  • Exploration expenses were $3.4-million in 2023 versus $9.6-million in 2022.
  • Velardena care and maintenance expenses were $1.2-million in 2023 versus $1.4-million in 2022.
  • Administrative expenses were $4.7-million in 2023 versus $4.5-million in 2022.
  • Other operating income was $2.3-million in 2023 versus $1.6-million in 2022.
  • Net loss was $9.2-million, or $1.08 per share, in 2023 compared with a net loss of $9.9-million, or $1.49 per share, in 2022.
  • Cash and equivalents balance was $3.8-million as of Dec. 31, 2023, versus $4-million as of Dec. 31, 2022.
  • Debt was zero as of Dec. 31, 2023, which is unchanged from Dec. 31, 2022.

2023 cash inflows and expenditures

Cash inflows during 2023 totalled $9.7-million and included:

  • $7.5-million from equity offerings, net of fees;
  • $2.2-million from the sale of non-core assets.

Expenditures in 2023 totalled $9.9-million and included the following:

  • $3.4-million in exploration expenditures, including $600,000 to expand the tailing facility at Plant 2, $300,000 to support Colque, and $2.5-million to support exploration and mining activities at the Rodeo property, Velardena properties, Yoquivo and other properties;
  • $1.2-million in care and maintenance costs at the Velardena properties;
  • $600,000 in exploration and evaluation activities, care and maintenance, and property holding costs at the El Quevar project, net of reimbursements from Barrick;
  • $4.7-million in general and administrative expenses.

Capital resources and 2024 financial outlook

Forecasted expenditures during the 12 months ending Dec. 31, 2024, excluding Velardena's cost of metals sold that is included in the forecast of net operating margin discussed below, total approximately $9-million. These forecasted expenditures include: (i) exploration expenses of $1.3-million; (ii) El Quevar spending (net of Barrick reimbursements) of $400,000; (iii) administrative expense of $3.3-million; and (iv) $4-million for administrative and shutdown costs in Mexico. The actual amount of cash expenditures incurred during the 12-month period ending Dec. 31, 2024, may vary significantly from the amounts specified above and will depend on a number of factors including variations in the anticipated administrative expenses and costs at El Quevar, and costs for continued exploration, project assessment and advancement of the company's other exploration properties.

The company does not currently have sufficient resources to meet its expected cash needs during the year ended Dec. 31, 2024. At Dec. 31, 2023, the company had current assets of approximately $8.7-million including cash and cash equivalents of approximately $3.8-million. On the same date, it had current liabilities of approximately $5.7-million. On Feb. 29, 2024, the company announced that it was stopping production at the Velardena properties after the initial performance of the mine and processing plant did not achieve expected results. The forecasted net operating margin from the Velardena properties during 2024 is expected to be between a loss of $2-million and a loss of $2.5-million. Net operating margin is defined as revenue from the sale of metals less the cost of metals sold. This estimate assumes average gold and silver prices per ounce during the period of $1,948 and $24.34, respectively. The actual amount that the company receives in net operating margin from the Velardena properties during the year may vary significantly from the amounts specified above. The company does not anticipate receiving additional funds from the sale of concentrates produced at the Velardena properties after March 31, 2024.

To meet its liquidity needs during the year, the company plans to sell assets, collect VAT receivables, seek equity financing and reduce costs. The amount of cash that it needs to raise from these sources combined in order to cover forecasted expenditures during the 12 months ended Dec. 31, 2024, is between $7.6-million and $8.6-million.

There is no assurance that the company will be successful in raising sufficient capital. At March 11, 2024, it had approximately 1.9 million shares authorized but not yet outstanding out of 28 million shares authorized, which could be offered to raise equity. In the absence of sufficient asset sales, equity financing or other external financing, the company's cash balance is expected to be depleted in the second quarter of 2024.

Annual report on Form 10-K

The company's consolidated audited financial statements and management's discussion and analysis, as well as other important disclosures, may be found in the company's annual report on Form 10-K for the year ended Dec. 31, 2023. This Form 10-K 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 and with the Canadian securities regulatory authorities on SEDAR+.

About Golden Minerals Company

Golden Minerals is a precious metals mining exploration company based in Golden, Colo. The company is primarily focused on advancing its Yoquivo property in Mexico, and, through partner-financed exploration, advancing its El Quevar silver property in Argentina. The company is also focused on acquiring and advancing selected mining properties in North America and Argentina.

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