GOLDEN, Colo., Aug. 11, 2016 /PRNewswire/ -- Golden Minerals
Company ("Golden Minerals" or the "Company") (NYSE MKT: AUMN and
TSX: AUM) announces results for the second quarter ended
June 30, 2016.
Second Quarter Summary
- Positive net operating margin from the oxide plant lease (oxide
plant lease revenue less lease costs) of $1.1 million in the second quarter 2016 compared
to a negative net operating margin (sale of metals less costs of
metals sold) of $0.8 million in the
second quarter 2015
- Loss from operations of $2.6
million in the second quarter 2016 compared to a loss from
operations of $4.5 million in the
second quarter 2015
- Net loss of $3.9 million in the
second quarter 2016, which included non-cash derivative losses of
$1.2 million related to the Company's
warrants and convertible loan, compared to a net loss of
$3.9 million in the second quarter
2015, which included a non-cash gain of $0.2
million from the Company's warrants
- Cash and cash equivalents balance of $3.9 million as of June
30, 2016
- Debt balance of zero as of June 30,
2016
Financial Results
The Company reported a net loss of $3.9
million in the second quarter 2016 compared to a net loss of
$3.9 million in the second quarter
2015. The 2016 net loss includes $1.2
million of non-cash derivative losses related to the
Company's warrants and convertible loan. (See Notes 11 and 18
in the Company's Form 10-Q for the period ending June 30, 2016 for complete details.) The
2015 net loss of $3.9 million
included non-cash derivative income of $0.2
million related to the Company's warrants. Revenue of
$1.6 million in the second quarter
2016, which is wholly related to the lease of the Company's oxide
plant, was lower than revenue of $2.0
million in the second quarter 2015 which was generated from
mining and processing activities at Golden Minerals' Velardena
Properties. Operating costs in the second quarter 2016 were
$4.2 million, lower than $6.5 million in the 2015 period, with the
decrease largely due to $2.8 million
costs of metals sold incurred in the 2015 period.
Also in the second quarter 2016, the Company recorded
$1.3 million of non-operating
expenses related to its outstanding warrants and to the one-year
convertible loan with The Sentient Group ("Sentient"), of which
$1.2 million are non-cash
expenses. Details are as follows:
- An increase in the Company's stock price during the second
quarter 2016 resulted in a non-cash loss of $1.1 million for the derivative value associated
with its outstanding warrants
- The Company recorded a non-cash derivative loss of $0.1 million related to an increase in the fair
value of the derivative liability associated with the Sentient
loan
- On June 10, 2016, Sentient
converted the remaining (approximate) $1.1
million principal and $34,000
accrued interest into Golden Minerals common stock, resulting in a
small ($0.01 million) non-cash gain
on debt extinguishment. Subsequent to the conversion, the Company
carries no debt on its balance sheet.
- The Company incurred $0.1 million
of interest expense related to the Sentient loan during the second
quarter 2016
The Company's cash and cash equivalents balance of $3.9 million on June 30,
2016 was $0.2 million lower
than the year-end 2015 balance of $4.1
million. The primary uses of cash during the first six
months of 2016 were as follows:
- $1.1 million in shutdown and care
and maintenance expenses at the Velardena Properties
- $1.9 million in exploration
expenditures, including costs related to drilling at the
San Luis del Cordero, Santa Maria and Rodeo properties
- $0.4 million in care and
maintenance plus property holding costs at the El Quevar
project
- $2.2 million in general and
administrative expenses
- $0.5 million from an increase in
working capital primarily related to a decrease in deferred revenue
from the lease of the Company's oxide plant
These items were offset in part by:
- $0.2 million of net proceeds from
the sale of non-strategic exploration properties
- $2.1 million of net operating
margin received pursuant to the oxide plant lease
- $3.6 million of net proceeds
received in a registered direct offering of the Company's common
stock in May 2016
Financial Outlook
The Company currently expects it will have sufficient cash to
continue its business plan into 2017 without external
funding. In addition to the $3.9
million cash balance at June 30,
2016, the Company expects to receive approximately
$2.4 million in net operating margin
from the lease of the oxide plant in the remaining two quarters of
2016 and has received $0.6 million
from the sale of non-strategic exploration properties in the third
quarter. The Company currently plans to spend approximately
$3.9 million during the remaining two
quarters of 2016, resulting in a projected cash balance at year-end
2016 of approximately $3.0
million:
- $0.7 million at the Velardena
Properties for care and maintenance;
- $1.1 million on exploration
activities and property holding costs related to exploration
properties located primarily in Mexico, including project assessment and
development costs related to the Santa
Maria, Rodeo and other properties;
- $0.3 million on El Quevar
maintenance activities, property holding costs and continuing
project evaluation costs;
- $1.4 million on general and
administrative costs; and
- $0.4 million on an increase in
working capital related primarily to a reduction in current
liabilities involving the payment of equity taxes in a foreign
jurisdiction.
Additional information regarding second quarter 2016 financial
results may be found in the Company's 10-Q Quarterly Report which
is available on the Golden Minerals website at
www.goldenminerals.com.
About Golden Minerals
Golden Minerals is a Delaware
corporation based in Golden,
Colorado. The Company is primarily focused on acquiring and
advancing mining properties near its Velardena processing plants and the
exploration of properties in Mexico and Argentina.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of
the Exchange Act and applicable Canadian securities legislation,
including statements regarding including the Company's planned
expenditures during the remainder of 2016 and anticipated cash
balance at year-end 2016; net cash flow expected to be received in
the remainder of 2016 from a third party lease of the Velardena oxide mill; and planned exploration
and anticipated drill results at certain properties in Mexico, including our Santa Maria and Rodeo properties. These
statements are subject to risks and uncertainties, including: lower
than anticipated net cash flow from the oxide plant lease due to
problems at the third party's mine or the oxide plant resulting in
less than anticipated production or due to processing delays or
cancellation of the lease due to inability to obtain required
permits or for other reasons; unfavorable results from
exploration at the Santa Maria,
Rodeo or other exploration properties and whether we will be
able to advance these or other exploration properties; potential
delays in our exploration activities or other activities to advance
properties towards mining resulting from environmental events or
permitting delays or problems, accidents, problems with
contractors, disputes under agreements related to exploration
properties, unanticipated costs and other unexpected events;
increases in costs and declines in general economic conditions;
inability to raise external financing on acceptable terms or at
all; and changes in political conditions, in tax, royalty,
environmental and other laws in Mexico, and financial 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
Securities Exchange Commission by Golden Minerals, including the
Company's Annual Report on Form 10-K for the year ended
December 31, 2015.
Golden Minerals Company
Karen Winkler
Director of Investor Relations
(303) 839-5060
Investor.relations@goldenminerals.com
GOLDEN MINERALS
COMPANY
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Expressed in
United States dollars)
|
(Unaudited)
|
|
|
|
Unaudited
|
|
June
30,
|
|
December
31,
|
|
2016
|
|
2015
|
|
(in thousands, except share data)
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
3,932
|
|
$
|
4,077
|
Short-term
investments
|
|
269
|
|
|
72
|
Trade
receivables
|
|
658
|
|
|
546
|
Inventories
|
|
290
|
|
|
330
|
Value added tax
receivable, net
|
|
4
|
|
|
400
|
Prepaid
expenses and other assets
|
|
448
|
|
|
451
|
Total current assets
|
|
5,601
|
|
|
5,876
|
Property, plant and
equipment, net
|
|
9,842
|
|
|
11,125
|
Total assets
|
$
|
15,443
|
|
$
|
17,001
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable and other accrued liabilities
|
$
|
1,538
|
|
$
|
1,144
|
Convertible
note payable - related party, net
|
|
—
|
|
|
3,702
|
Derivative
liability - related party
|
|
—
|
|
|
488
|
Deferred
revenue
|
|
—
|
|
|
500
|
Other current
liabilities
|
|
229
|
|
|
556
|
Total current liabilities
|
|
1,767
|
|
|
6,390
|
Asset retirement and
reclamation liabilities
|
|
2,342
|
|
|
2,546
|
Warrant
liability
|
|
2,486
|
|
|
210
|
Other long term
liabilities
|
|
76
|
|
|
84
|
Total liabilities
|
|
6,671
|
|
|
9,230
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Common stock,
$.01 par value, 200,000,000 and 100,000,000 shares authorized;
88,920,041 and 53,335,333 shares issued and outstanding,
respectively
|
|
889
|
|
|
534
|
Additional paid
in capital
|
|
495,393
|
|
|
484,742
|
Accumulated
deficit
|
|
(487,554)
|
|
|
(477,378)
|
Accumulated
other comprehensive income (loss)
|
|
44
|
|
|
(127)
|
Shareholders' equity
|
|
8,772
|
|
|
7,771
|
Total liabilities and equity
|
$
|
15,443
|
|
$
|
17,001
|
GOLDEN MINERALS
COMPANY
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
|
(Expressed in
United States dollars) (Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(in thousands except per share data)
|
|
(in thousands, except per share data)
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Oxide plant
lease
|
$
|
1,576
|
|
$
|
—
|
|
$
|
3,039
|
|
$
|
—
|
Sale of
metals
|
|
—
|
|
|
1,961
|
|
|
—
|
|
|
4,298
|
Total revenue
|
|
1,576
|
|
|
1,961
|
|
|
3,039
|
|
|
4,298
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Oxide plant
lease costs
|
|
(455)
|
|
|
—
|
|
|
(929)
|
|
|
—
|
Cost of metals
sold (exclusive of depreciation shown below)
|
|
—
|
|
|
(2,775)
|
|
|
—
|
|
|
(5,787)
|
Exploration
expense
|
|
(1,162)
|
|
|
(1,267)
|
|
|
(1,938)
|
|
|
(2,236)
|
El Quevar
project expense
|
|
(210)
|
|
|
(405)
|
|
|
(373)
|
|
|
(811)
|
Velardeña
project expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(119)
|
Velardeña
shutdown and care and maintenance costs
|
|
(546)
|
|
|
—
|
|
|
(1,133)
|
|
|
—
|
Administrative
expense
|
|
(1,026)
|
|
|
(1,000)
|
|
|
(2,244)
|
|
|
(2,328)
|
Stock based
compensation
|
|
(539)
|
|
|
(94)
|
|
|
(571)
|
|
|
(273)
|
Reclamation
expense
|
|
(46)
|
|
|
(48)
|
|
|
(97)
|
|
|
(158)
|
Other operating
income, net
|
|
205
|
|
|
294
|
|
|
244
|
|
|
470
|
Depreciation,
depletion and amortization
|
|
(421)
|
|
|
(1,175)
|
|
|
(971)
|
|
|
(2,534)
|
Total costs and expenses
|
|
(4,200)
|
|
|
(6,470)
|
|
|
(8,012)
|
|
|
(13,776)
|
Loss from
operations
|
|
(2,624)
|
|
|
(4,509)
|
|
|
(4,973)
|
|
|
(9,478)
|
Other income and
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(72)
|
|
|
—
|
|
|
(515)
|
|
|
—
|
Interest and
other income
|
|
32
|
|
|
467
|
|
|
35
|
|
|
1,383
|
Warrant
derivative (loss) gain
|
|
(1,096)
|
|
|
218
|
|
|
(2,276)
|
|
|
868
|
Derivative
loss
|
|
(130)
|
|
|
—
|
|
|
(778)
|
|
|
—
|
Gain (loss) on
debt extinguishment
|
|
13
|
|
|
|
|
|
(1,653)
|
|
|
—
|
Loss on foreign
currency
|
|
(38)
|
|
|
(26)
|
|
|
(42)
|
|
|
(54)
|
Total other (expense) income
|
|
(1,291)
|
|
|
659
|
|
|
(5,229)
|
|
|
2,197
|
Loss from
operations before income taxes
|
|
(3,915)
|
|
|
(3,850)
|
|
|
(10,202)
|
|
|
(7,281)
|
Income tax
benefit
|
|
26
|
|
|
—
|
|
|
26
|
|
|
—
|
Net
loss
|
$
|
(3,889)
|
|
$
|
(3,850)
|
|
$
|
(10,176)
|
|
$
|
(7,281)
|
Comprehensive
loss, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain
(loss) on securities
|
|
89
|
|
|
43
|
|
|
171
|
|
|
(37)
|
Comprehensive
loss
|
$
|
(3,800)
|
|
$
|
(3,807)
|
|
$
|
(10,005)
|
|
$
|
(7,318)
|
Net loss per
common share — basic
|
|
|
|
|
|
|
|
|
|
|
|
Loss
|
$
|
(0.05)
|
|
$
|
(0.07)
|
|
$
|
(0.14)
|
|
$
|
(0.14)
|
Weighted average
Common Stock outstanding - basic (1)
|
|
82,817,778
|
|
|
52,688,552
|
|
|
74,343,257
|
|
|
52,688,552
|
|
|
(1)
|
Potentially dilutive
shares have not been included because to do so would be
anti-dilutive.
|
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SOURCE Golden Minerals Company