04:46:19 EDT Thu 20 Jun 2024
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Golden Minerals Company (2)
Symbol AUMN
Shares Issued 14,572,185
Close 2024-05-13 C$ 0.74
Market Cap C$ 10,783,417
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Golden Minerals loses $4.6-million (U.S.) in Q1 2024

2024-05-14 09:37 ET - News Release

Ms. Karen Winkler reports


Golden Minerals Company has released financial results and a business summary for the quarter ending March 31, 2024. All figures are in approximate U.S. dollars.

First quarter business summary and subsequent events:

  • The company restarted silver-gold production at the company's Velardena properties (Durango state, Mexico) in December, 2023, but stopped mining at the end of February, 2024, and stopped processing mineralized material at the end of March, 2024, after determining the initial performance of the mine and processing plant did not achieve the expected mine production ramp-up schedule or initial expected plant concentrate production results. Operational issues at the mine were caused by a combination of insufficient experienced miners, and issues with mine ventilation and mining equipment availability.
  • On March 27, 2024, Golden announced that Barrick Gold Corp. had notified the company that it was withdrawing from the 2020 earn-in agreement between the two parties related to the company's El Quevar silver project (Salta province, Argentina). The agreement's termination was effective on April 20, 2024, and the El Quevar project has now reverted back into the full control of Golden Minerals. Golden now intends to focus on exploration activities at El Quevar as financing allows.
  • On April 29, 2024, two of Golden's Mexico subsidiaries, Minera William SA de CV and Minera Labri SA de CV entered into certain asset purchase and sale agreements with a privately held Mexican company whereby Minera William and Minera Labri agreed to sell certain mining concessions, equipment, land parcels and other assets to the buyer in exchange for an aggregate purchase price of $5.5-million in cash, plus value-added tax (VAT). The assets being sold include the Velardena and Chicago mines, both of the company's oxide and sulphide processing plants, and related equipment. Under the terms of the purchase and sales agreements:
    • On April 29, 2024, the buyer paid a non-refundable advance payment of $1-million in cash to the company;
    • On May 20, 2024, the buyer shall pay $2-million in cash, plus VAT (including VAT on the advance payment), to the company;
    • On July 1, 2024, the buyer shall pay $2.5-million in cash, plus VAT, to the company.
  • Although the company believes the transaction will be completed, there can be no assurance that the transaction will be completed on the terms described or at all.

First quarter financial summary:

  • Revenue from discontinued operations was $1.2-million in the first quarter 2024 and included sales of concentrate, slag material and dore from the Velardena discontinued operations. Revenue was $4.2-million in the first quarter 2023, which was related to the sale of metals in dore from the Rodeo mine (Durango state, Mexico).
  • Net operating margin from discontinued operations (defined as revenue from the sale of metals less cost of metals sold) was negative $1.7-million in the first quarter 2024, which was related to the Velardena discontinued operations. Net operating margin was positive $200,000 in the first quarter 2023, which was related to the sale of metals in dore from the Rodeo mine.
  • Cash and equivalents balance as of March 31, 2024, was $2.4-million, compared with $3.8-million on Dec. 31, 2023.
  • Zero debt as of March 31, 2024, unchanged from Dec. 31, 2023.
  • Net loss was $4.6-million or 32 cents per share in the first quarter 2024, compared with a net loss of $3.3-million or 47 cents per share in the first quarter 2023.

Cash inflows and expenditures

Cash expenditures during the three months ended March 31, 2024, totalled $3.5-million and included:

  • $1-million in general and administrative expenses;
  • $500,000 in exploration expenditures;
  • $100,000 in care and maintenance costs at the El Quevar project, net of zero reimbursements from Barrick;
  • $1.7-million of net operating margin from the Velardena discontinued operations (defined as revenue from the sale of metals less the cost of metals sold);
  • $200,000 in changes in working capital (mainly due to an increase in accounts receivable associated with the sales made near the end of the first quarter).

The above expenditures were offset by cash inflows of $2.1-million from the following:

  • $2-million from the collection of VAT receivables from the Mexican government;
  • $100,000 of proceeds received from the sale of non-core assets in working capital.

Capital resources and 12-month financial outlook

The company does not currently have sufficient resources to meet its expected cash needs during the 12 months ended March 31, 2025. At March 31, 2024, the company had current assets of approximately $5.3-million, including cash and cash equivalents of approximately $2.4-million. On the same date, it had accounts payable and other current liabilities of approximately $6.5-million. Because the company has ceased mining at the Velardena mine, its only near-term opportunity to generate cash flow is from the sale of assets and equity financings.

Golden Minerals will require further sources of capital. In order to satisfy the company's projected general, administrative, exploration and other expenses through March 31, 2025, the company will need approximately $6-million to $8-million in total capital inflows. These capital inflows may take the form of asset sales such as from the anticipated closing of the sale of Velardena assets for $5.5-million, collection of the company's outstanding receivable, equity financing activities or otherwise.

As of March 31, 2024, Golden Minerals had VAT receivable in Mexico of approximately $1.1-million. Although the company believes it is likely it will receive some material portion of this receivable in the second and third quarters of 2024, there is no certainty as to the timing and amount of such payment.

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 March 31, 2024. This Form 10-Q is available on the company's website at Golden Minerals -- 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 its El Quevar silver property in Argentina. The company is also focused on acquiring and advancing selected mining properties in Mexico, Nevada and Argentina.

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