GOLDEN, Colo., Nov. 3, 2016 /PRNewswire/ -- Golden Minerals
Company ("Golden Minerals" or the "Company") (NYSE MKT: AUMN and
TSX: AUM) provides a business update and announces results for the
third quarter ended September 30,
2016.
Third Quarter Business Update
- Hecla exercised its right to extend its lease of the Company's
Velardena oxide plant for an
additional six months, until June 30,
2017. Hecla has the right to extend the lease for an
additional 18 months following June 30,
2017, or until December 31,
2018, under similar payment terms. The Company and Hecla
previously reached agreement regarding an expansion of the tailings
impoundment, at Hecla's cost, to accommodate processing at current
levels until approximately December 31,
2018, plus an agreed capacity to remain unused. The agreed
expansion plan preserves flexibility for future tailings
expansion.
- The Company completed a farm-out agreement on the Celaya exploration property in Mexico with Electrum Global Holdings, LP.
Electrum can earn a 60 percent interest in exchange for a
$0.2 million cash payment made at
signing and the expenditure of $2.5
million on the property over three years. If the Company
elects not to retain its 40 percent interest, Electrum can earn an
additional 20 percent interest by spending an additional
$2.5 million.
- The Company sold excess mining equipment for approximately
$0.7 million, with 90 percent of the
sales price to be paid in February
2017, and sold its 50 percent interest in the San Diego exploration property to Golden Tag
Resources, Ltd. for approximately $0.4
million in cash, 2,500,000 common shares of Golden Tag and a two percent net smelter return
royalty.
- The Company is evaluating underground drilling results at the
Santa Maria property and expects
to update its estimate of resources and complete a Preliminary
Economic Assessment during the fourth quarter 2016.
- The Company expects to complete in the fourth quarter 2016 the
2,000 meter core drilling program on the Rodeo property that it commenced in
June 2016. Initial results show a
gold and silver bearing epithermal vein and breccia system with
encouraging gold and silver values over an approximate 50 to 70
meters true width.
Third Quarter Summary Results
- Revenue of $1.7 million and
positive net operating margin (oxide plant lease revenue less lease
costs) of $1.2 million related to the
lease of the Company's oxide plant in the third quarter 2016,
compared to no revenue and a negative net operating margin (sale of
metals less costs of metals sold) of $0.8
million in the third quarter 2015
- Loss from operations of $0.2
million in the third quarter 2016 compared to a loss from
operations of $17.6 million in the
third quarter 2015
- Net loss of $0.8 million in the
third quarter 2016, including non-cash derivative losses of
$0.5 million related to the Company's
warrants, compared to a net loss of $16.8
million in the third quarter 2015, which included a non-cash
gain of $0.2 million from the
Company's warrants and $13.2 million
in expense related to the impairment of long-lived assets
- Cash and cash equivalents balance of $3.4 million as of September 30, 2016
- Debt balance of zero as of September 30,
2016
Financial Results
The Company reported a net loss of $0.8
million in the third quarter 2016 compared to a net loss of
$16.8 million in the third quarter
2015. The 2016 net loss includes $0.5
million of non-cash derivative losses related to an increase
in the fair value of the liability recorded for warrants to acquire
the Company's common stock. (See Note 18 in the Company's
Form 10-Q for the period ending September
30, 2016 for complete details.) By comparison, the
2015 net loss of $16.8 million
included non-cash derivative income of $0.2
million related to the Company's warrants and an asset
impairment expense of $13.2 million
in connection with the shutdown of the Velardena
Properties.
The Company recorded revenue of $1.7
million related to the lease of the oxide plant in the third
quarter 2016, compared to $1.8
million revenue from the sale of metals in the third quarter
2015. Operating costs in the third quarter 2016 were
$2.0 million compared to $19.4 million in the 2015 period. The
decrease in operating costs year over year is largely due to the
absence in the 2016 period of the $13.2
million asset impairment expense previously mentioned and
$2.6 million cost of metals sold
recorded in the third quarter 2015, plus the addition in 2016 of
$1.3 million in other operating
income compared to minimal other operating income recorded in the
third quarter 2015. The $1.3
million in other operating income in the 2016 period is
comprised of gains recorded related to the sale of excess mining
equipment, the sale of the Company's remaining interest in the
San Diego exploration property and
the farm-out of the Celaya
property. See page 25, "2016 Highlights", of the Form 10-Q
for the period ending September 30,
2016 for additional details.
The Company's cash and cash equivalents balance of $3.4 million on September
30, 2016 was $0.7 million
lower than the year-end 2015 balance of $4.1
million. The reduction in cash during the first nine
months of 2016 is due primarily to:
- $1.6 million in shutdown and care
and maintenance expenses at the Velardena Properties
- $2.9 million in exploration
expenditures, including costs related to drilling at the
San Luis del Cordero, Santa Maria and Rodeo properties
- $0.3 million in care and
maintenance plus property holding costs at the El Quevar
project
- $3.1 million in general and
administrative expenses
- $0.6 million from an increase in
working capital primarily related to a decrease in deferred revenue
from the lease of the Company's oxide plant resulting from the
application of a 2015 $500,000
advance payment to 2016 lease payments
These items were offset in part by:
- $0.9 million of net proceeds from
the sale of non-strategic exploration properties
- $3.3 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
In addition to the $3.4 million
cash balance at September 30, 2016,
the Company expects to receive approximately $1.4 million in the fourth quarter 2016:
$1.2 million in net operating margin
from the lease of the oxide plant and $0.2
million from the second quarter farm out of a non-strategic
exploration property. In the third quarter, Hecla exercised
its right to extend the lease for an additional six months until
June 30, 2017, which the Company
estimates should provide approximately $2.4
million in net operating margin during the first seven
months of 2017. As noted above, Hecla has an additional 18-
month lease extension right. In addition, the Company expects
to receive $0.6 million in
February 2017 relating to the final
payment for the sale of non-strategic mining equipment that
occurred in the third quarter 2016.
The Company currently plans to spend approximately $1.8 million during the fourth quarter 2016,
resulting in a projected cash balance at year-end 2016 of
approximately $3.0 million:
- $0.4 million at the Velardena
Properties for care and maintenance;
- $0.5 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;
- $0.2 million on El Quevar
maintenance activities, property holding costs and continuing
project evaluation costs; and
- $0.7 million on general and
administrative costs.
Additional information regarding third 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 fourth quarter 2016 and anticipated cash
balance at year-end 2016; net operating margin expected to be
received in the fourth quarter 2016 and first half of 2017 from a
third party lease of the Velardena
oxide mill; amounts expected to be received in February 2017 as the final payment in respect of
an equipment sale; the planned fourth quarter 2016 drilling at the
Rodeo project and the planned
fourth quarter 2016 update of Santa
Maria resources and completion of a Preliminary Economic
Assessment. These statements are subject to risks and
uncertainties, including: lower than anticipated net operating
margin 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 termination of the lease
due to inability to obtain required permits or for other reasons;
results from exploration and project assessments at the
Santa Maria, Rodeo or other exploration properties and
whether we will 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 and 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
|
|
|
|
September
30,
|
|
December
31,
|
|
2016
|
|
2015
|
|
(in thousands, except share data)
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
3,415
|
|
$
|
4,077
|
Short-term
investments
|
|
456
|
|
|
72
|
Trade
receivables
|
|
506
|
|
|
546
|
Inventories
|
|
264
|
|
|
330
|
Value added tax
receivable, net
|
|
4
|
|
|
400
|
Related party
receivable
|
|
642
|
|
|
—
|
Prepaid expenses and
other assets
|
|
277
|
|
|
451
|
Total current
assets
|
|
5,564
|
|
|
5,876
|
Property, plant and
equipment, net
|
|
9,453
|
|
|
11,125
|
Total
assets
|
$
|
15,017
|
|
$
|
17,001
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts payable and
other accrued liabilities
|
$
|
1,406
|
|
$
|
1,144
|
Convertible note
payable - related party, net
|
|
—
|
|
|
3,702
|
Derivative liability
- related party
|
|
—
|
|
|
488
|
Deferred
revenue
|
|
—
|
|
|
500
|
Other current
liabilities
|
|
9
|
|
|
556
|
Total current
liabilities
|
|
1,415
|
|
|
6,390
|
Asset retirement and
reclamation liabilities
|
|
2,388
|
|
|
2,546
|
Warrant
liability
|
|
3,031
|
|
|
210
|
Other long term
liabilities
|
|
71
|
|
|
84
|
Total
liabilities
|
|
6,905
|
|
|
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
|
|
495,424
|
|
|
484,742
|
Accumulated
deficit
|
|
(488,352)
|
|
|
(477,378)
|
Accumulated other
comprehensive income (loss)
|
|
151
|
|
|
(127)
|
Shareholders'
equity
|
|
8,112
|
|
|
7,771
|
Total
liabilities and equity
|
$
|
15,017
|
|
$
|
17,001
|
GOLDEN MINERALS
COMPANY
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
|
(Expressed in
United States dollars) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(in thousands except per share data)
|
|
(in thousands, except per share data)
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Oxide plant
lease
|
$
|
1,729
|
|
$
|
—
|
|
$
|
4,768
|
|
$
|
—
|
Sale of
metals
|
|
—
|
|
|
1,788
|
|
|
—
|
|
|
6,086
|
Total
revenue
|
|
1,729
|
|
|
1,788
|
|
|
4,768
|
|
|
6,086
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Oxide plant lease
costs
|
|
(549)
|
|
|
—
|
|
|
(1,478)
|
|
|
—
|
Cost of metals sold
(exclusive of depreciation shown below)
|
|
—
|
|
|
(2,598)
|
|
|
—
|
|
|
(8,385)
|
Exploration
expense
|
|
(927)
|
|
|
(615)
|
|
|
(2,865)
|
|
|
(2,851)
|
El Quevar project
(expense) income
|
|
65
|
|
|
(177)
|
|
|
(308)
|
|
|
(988)
|
Velardeña project
expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(119)
|
Velardeña shutdown
and care and maintenance costs
|
|
(456)
|
|
|
(393)
|
|
|
(1,589)
|
|
|
(393)
|
Administrative
expense
|
|
(897)
|
|
|
(1,047)
|
|
|
(3,141)
|
|
|
(3,375)
|
Stock based
compensation
|
|
(95)
|
|
|
(99)
|
|
|
(666)
|
|
|
(372)
|
Reclamation
expense
|
|
(47)
|
|
|
(48)
|
|
|
(144)
|
|
|
(206)
|
Impairment of long
lived assets
|
|
—
|
|
|
(13,181)
|
|
|
—
|
|
|
(13,181)
|
Other operating
income, net
|
|
1,281
|
|
|
7
|
|
|
1,558
|
|
|
477
|
Depreciation,
depletion and amortization
|
|
(346)
|
|
|
(1,209)
|
|
|
(1,317)
|
|
|
(3,743)
|
Total costs
and expenses
|
|
(1,971)
|
|
|
(19,360)
|
|
|
(9,950)
|
|
|
(33,136)
|
Loss from
operations
|
|
(242)
|
|
|
(17,572)
|
|
|
(5,182)
|
|
|
(27,050)
|
Other income and
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
—
|
|
|
—
|
|
|
(515)
|
|
|
—
|
Interest and other
income
|
|
10
|
|
|
623
|
|
|
12
|
|
|
2,006
|
Warrant derivative
(loss) gain
|
|
(545)
|
|
|
200
|
|
|
(2,821)
|
|
|
1,068
|
Derivative
loss
|
|
—
|
|
|
—
|
|
|
(778)
|
|
|
—
|
Loss on debt
extinguishment
|
|
—
|
|
|
|
|
|
(1,653)
|
|
|
—
|
Loss on foreign
currency
|
|
(21)
|
|
|
(71)
|
|
|
(63)
|
|
|
(125)
|
Total other
(expense) income
|
|
(556)
|
|
|
752
|
|
|
(5,818)
|
|
|
2,949
|
Loss from operations
before income taxes
|
|
(798)
|
|
|
(16,820)
|
|
|
(11,000)
|
|
|
(24,101)
|
Income tax
benefit
|
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
Net loss
|
$
|
(798)
|
|
$
|
(16,820)
|
|
$
|
(10,974)
|
|
$
|
(24,101)
|
Comprehensive
loss, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain
(loss) on securities
|
|
107
|
|
|
(88)
|
|
|
278
|
|
|
(125)
|
Comprehensive
loss
|
$
|
(691)
|
|
$
|
(16,908)
|
|
$
|
(10,696)
|
|
$
|
(24,226)
|
Net loss per
common share — basic
|
|
|
|
|
|
|
|
|
|
|
|
Loss
|
$
|
(0.01)
|
|
$
|
(0.32)
|
|
$
|
(0.14)
|
|
$
|
(0.46)
|
Weighted average
Common Stock outstanding - basic (1)
|
|
88,878,371
|
|
|
52,960,212
|
|
|
78,080,858
|
|
|
52,921,542
|
|
|
(1)
|
Potentially dilutive
shares have not been included because to do so would be
anti-dilutive.
|
Logo -
http://photos.prnewswire.com/prnh/20120803/LA52082LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/golden-minerals-reports-third-quarter-2016-results-300356398.html
SOURCE Golden Minerals Company