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.
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For additional information please visit
http://www.goldenminerals.com/.
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version on businesswire.com: https://www.businesswire.com/news/home/20221110005207/en/
Golden Minerals Company Karen Winkler, Director of Investor
Relations (303) 839-5060
Golden Minerals (AMEX:AUMN)
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