Golden Minerals Reports Second Quarter 2019 Results
August 07 2019 - 6:50AM
Golden Minerals Company (“Golden Minerals”, “Golden” or the
“Company”) (NYSE American and TSX: AUMN) has released financial
results and a business summary for the quarter ending June 30,
2019.
Sale of Velardeña Properties and Other
Assets
On June 27, 2019 the Company announced it had
entered into an agreement (the “Agreement”) to sell certain of its
assets to Compañía Minera Autlán S.A.B. de C.V. (“Autlán”) for
US$22.0 million. Upon execution of the Agreement, Autlán paid the
Company a deposit of US$1.5 million, which will be applied against
the purchase price upon closing. The Agreement provides for a
period of up to 75 days for Autlán to conduct due diligence related
to the assets, which include the Velardeña properties as well as
the Santa Maria and Rodeo mining concessions. As a result of this
Agreement, the results of operations for these assets, including
the Velardeña properties and its related subsidiaries, are
presented in the Company’s second quarter financial statements as
discontinued operations, assets held for sale and liabilities
related to assets held for sale. Consequently, revenue and costs
related to the lease of the Company’s oxide mill at Velardeña are
no longer itemized on the Company’s income statement but are
instead rolled up with other items into income from discontinued
operations. Historical periods are presented in the same manner.
Please see the June 27, 2019 news release and the Form 10-Q for the
quarterly period ended June 30, 2019 (both available at
www.goldenminerals.com) for complete information about the Autlán
transaction which is expected to close near the end of the third
quarter 2019, as well as related accounting changes.
Second Quarter Summary Financial
Results
- Income from operations held for
sale of $0.4 million in the second quarter 2019, compared to $0.3
million in the second quarter 2018. These figures include revenue
of $2.0 million and $1.7 million, respectively, related to the
lease of the Company’s oxide plant. They also include net operating
margins calculated as oxide plant lease revenue less lease costs of
$1.4 million and $1.2 million for the quarters ended June 30, 2019
and June 30, 2018, respectively.
- Exploration expenses of $1.1
million in the second quarter 2019 compared to $0.9 million in the
year ago period.
- El Quevar project expenses of $0.7
million in the current quarter compared to $0.3 million in the year
ago period.
- Net loss of $2.5 million or $0.03
per share in the second quarter 2019, compared to a net loss of
$1.7 million or $0.02 per share in the second quarter 2018.
- Cash and cash equivalents balance
of $1.8 million as of June 30, 2019 compared to $2.9 million at
year-end 2018.
- Subsequent event in July 2019 which
added $2.0 million in cash through a registered direct offering of
the Company’s common stock.
- Debt balance of zero as of June 30,
2019.
Second Quarter Business
Summary
- The Company continued an
(approximately) 3,000-meter/$0.6 million drilling program at the El
Quevar silver project in Salta province, Argentina during the
second quarter 2019. This program was undertaken to help identify
target areas for future drilling, with the ultimate goal of
expanding the currently-defined resource at El Quevar. Drilling has
now concluded and program results should be published within the
current quarter once all assay data is available.
- In May 2019, Golden Minerals signed
an earn-in agreement for the gold-silver Sand Canyon project in
northwestern Nevada. Deal terms permit Golden to earn 60% interest
in the project by spending $2.5 million in exploration expenses
over four years. The project is located in a highly prospective
area 18 miles northwest of the historic Sleeper Gold Mine that was
operated by Amax Gold between 1986-1996. Golden has completed
surface exploration activities on the project including mapping and
geochemical sampling to identify drill targets.
Financial Results
The Company reported (all figures approximate)
$0.4 million in income from discontinued operations during the
second quarter 2019. This amount includes revenue of $2.0 million
related to the oxide plant lease and costs of approximately $0.6
million related to the services Golden provides under the terms of
the lease. It also includes $0.5 million in care and maintenance
costs at the Velardeña properties, $0.2 million in exploration
expenditures related to properties held for sale and $0.2 million
in depreciation and amortization on properties held for sale. Other
exploration expenses were $1.1 million in the second quarter,
reflecting work at Sand Canyon, Santa Maria, Yoquivo and additional
properties primarily in Mexico, as well as property holding costs
and allocated administrative expenses. El Quevar project expenses
were $0.7 million in the quarter and include costs associated with
the drilling program begun in March 2019 as well as project
evaluation and property holding costs. Administrative expenses of
$1.0 million in the second quarter 2019 include costs associated
with being a public company and are incurred primarily by the
Company’s corporate activities in support of the Company’s
portfolio of properties. Golden reported a net loss of $2.5 million
or $0.03 per share in the second quarter 2019 compared to a net
loss of $1.7 million or $0.02 per share in the year ago
period. Golden also received $0.2 million in proceeds from
the sale of common stock under the existing Lincoln Park Capital
Commitment Purchase Agreement (“LPC Program”) during the
quarter.
Twelve Month Financial
Outlook
The Company ended the second quarter 2019 with a
cash balance of $1.8 million and received approximately $2.0
million, net of costs, related to the sale of approximately 8.6
million shares of Company common stock in July 2019. The Company
also expects to receive approximately $1.3 million in net operating
margin from the lease of Velardeña’s oxide plant prior to closing
the Autlán transaction near the end of the third quarter 2019.
Additionally, the Company expects to receive the remaining $20.5
million purchase price from closing the proposed Autlán transaction
near the end of the third quarter 2019. The Company’s currently
budgeted expenditures during the next 12 months ending June 30,
2020 are as follows:
- Approximately $3.0 million on
exploration activities and property holding costs related to the
Company’s portfolio of exploration properties located in Mexico,
Nevada and Argentina, including project assessment and evaluation
costs related to Yoquivo, Sand Canyon and other properties;
- Approximately $0.5 million at the
Velardeña properties for care and maintenance prior to closing of
the Autlán transaction;
- Approximately $1.0 million at the
El Quevar project to fund ongoing exploration and evaluation
activities, care and maintenance and property holding costs;
and
- Approximately $3.0 million on
general and administrative costs.
If the Autlán transaction closes as anticipated near the end of
the third quarter 2019, the Company’s cash resources will greatly
exceed its currently budgeted expenditures during the next 12
months ended June 30, 2020. Should the closing of the
transaction not occur, the Company may be required to repay the
US$1.5 million deposit and may need to take appropriate actions,
which could include sales to parties other than Autlán of certain
of the Company’s exploration assets, reductions to the Company’s
currently budgeted level of spending, and/or raising additional
equity capital through sales under its ongoing ATM or LPC
programs.
Additional information regarding second quarter
2019 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 advancing
its El Quevar silver property in Argentina and on acquiring and
advancing mining properties in Mexico and Nevada.
Financial Statements
CONDENSED CONSOLIDATED BALANCE
SHEETS(US Dollars,
unaudited)
|
June
30, |
|
December
31, |
|
2019 |
|
2018 |
|
(in thousands, except share data) |
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
1,839 |
|
|
$ |
2,934 |
|
Short-term investments |
|
172 |
|
|
|
330 |
|
Prepaid expenses and other assets |
|
300 |
|
|
|
354 |
|
Assets held for sale |
|
4,601 |
|
|
|
5,068 |
|
Total current assets |
|
6,912 |
|
|
|
8,686 |
|
Property, plant and equipment, net |
|
3,246 |
|
|
|
3,389 |
|
Other long term assets |
|
976 |
|
|
|
569 |
|
Total assets |
$ |
11,134 |
|
|
$ |
12,644 |
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable and other accrued liabilities |
$ |
779 |
|
|
$ |
943 |
|
Other current liabilities |
|
1,687 |
|
|
|
12 |
|
Liabilities related to assets held for sale |
|
3,870 |
|
|
|
4,019 |
|
Total current liabilities |
|
6,336 |
|
|
|
4,974 |
|
Other long term liabilities |
|
418 |
|
|
|
33 |
|
Total liabilities |
|
6,754 |
|
|
|
5,007 |
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Common stock, $.01 par value, 200,000,000 shares authorized;
98,080,433 and 95,620,796 shares issued and outstanding
respectively |
|
980 |
|
|
|
955 |
|
Additional paid in capital |
|
519,333 |
|
|
|
517,806 |
|
Accumulated deficit |
|
(515,933 |
) |
|
|
(511,124 |
) |
Shareholders' equity |
|
4,380 |
|
|
|
7,637 |
|
Total liabilities and equity |
$ |
11,134 |
|
|
$ |
12,644 |
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS(US dollars,
unaudited)
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
June 30, |
|
June 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
(in thousands except per share data) |
|
(in thousands, except per share data) |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Exploration expense |
|
|
(1,094 |
) |
|
|
(883 |
) |
|
|
(1,787 |
) |
|
|
(1,639 |
) |
El Quevar project expense |
|
|
(686 |
) |
|
|
(281 |
) |
|
|
(1,001 |
) |
|
|
(553 |
) |
Administrative expense |
|
|
(999 |
) |
|
|
(852 |
) |
|
|
(2,103 |
) |
|
|
(1,943 |
) |
Stock based compensation |
|
|
(51 |
) |
|
|
(206 |
) |
|
|
(600 |
) |
|
|
(209 |
) |
Other operating income, net |
|
|
62 |
|
|
|
221 |
|
|
|
103 |
|
|
|
1,451 |
|
Depreciation and amortization |
|
|
(75 |
) |
|
|
(94 |
) |
|
|
(152 |
) |
|
|
(186 |
) |
Total costs and expenses |
|
|
(2,843 |
) |
|
|
(2,095 |
) |
|
|
(5,540 |
) |
|
|
(3,079 |
) |
Income (loss) from operations |
|
|
(2,843 |
) |
|
|
(2,095 |
) |
|
|
(5,540 |
) |
|
|
(3,079 |
) |
Other income and (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income (expense), net |
|
|
(40 |
) |
|
|
112 |
|
|
|
(137 |
) |
|
|
115 |
|
Loss on foreign currency |
|
|
3 |
|
|
|
(24 |
) |
|
|
(33 |
) |
|
|
(49 |
) |
Total other income (loss) |
|
|
(37 |
) |
|
|
88 |
|
|
|
(170 |
) |
|
|
66 |
|
Loss from continuing operations before income taxes |
|
|
(2,880 |
) |
|
|
(2,007 |
) |
|
|
(5,710 |
) |
|
|
(3,013 |
) |
Income taxes |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Loss from continuing operations |
|
|
(2,880 |
) |
|
|
(2,007 |
) |
|
|
(5,710 |
) |
|
|
(3,013 |
) |
Discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations |
|
|
421 |
|
|
|
318 |
|
|
|
901 |
|
|
|
589 |
|
Net loss |
|
$ |
(2,459 |
) |
|
$ |
(1,689 |
) |
|
$ |
(4,809 |
) |
|
$ |
(2,424 |
) |
Net income (loss) per common share —
basic |
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations |
|
$ |
(0.03 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.03 |
) |
Income from discontinued operations |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
0.01 |
|
|
$ |
0.01 |
|
Net income (loss) per common share —
diluted |
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations (1) |
|
$ |
(0.03 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.03 |
) |
Income from discontinued operations |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
0.01 |
|
|
$ |
0.01 |
|
Weighted average Common Stock outstanding -
basic |
|
|
97,144,467 |
|
|
|
93,681,301 |
|
|
|
96,466,982 |
|
|
|
92,709,238 |
|
Weighted average Common Stock outstanding -
diluted |
|
|
102,370,195 |
|
|
|
97,197,310 |
|
|
|
101,310,308 |
|
|
|
95,895,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Potentially dilutive shares have not been included because to
do so would be anti-dilutive.
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 relating to the closing of the
proposed Autlán transaction; plans to continue a drilling program
at El Quevar and productivity projections from the El Quevar
project; future drilling plans and exploration activities at Sand
Canyon, Yoquivo and other properties; financial projections,
including budgeted expenditures and the anticipated net operating
margin from the Velardeña oxide plant lease prior to the closing of
the Autlán transaction; potential sales of certain of the
Company’s exploration assets if the Autlán transaction does not
close; projected cash balances and anticipated spending during the
12 months ended June 30, 2020; and assumptions regarding raising
additional equity capital through sales under the Company’s ATM or
LPC programs or otherwise. These statements are subject to risks
and uncertainties, including the results of Autlán’s due diligence
investigation; the timing or outcome of third party or governmental
consents related to the Autlán transaction; changes in
interpretations of geological, geostatistical, metallurgical,
mining or processing information and interpretations of the
information resulting from future exploration, analysis or mining
and processing experience, new information from exploration or
analysis; unexpected variations in mineral grades, types and
metallurgy, fluctuations in silver and gold metal prices; failure
of mined material or veins mined to meet expectations; lower than
anticipated revenue from the oxide plant lease (prior to the
closing of the Autlán transaction) as a result of delays or
problems at the third party’s mine or the oxide plant or earlier
than expected termination of the oxide plant lease; increases in
costs and declines in general economic conditions; and changes in
political conditions, in tax, royalty, environmental and other laws
in Mexico and Argentina, 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, 2018.
SOURCE: Golden Minerals Company
For additional information please visit http://www.goldenminerals.com/ or contact:
Golden Minerals Company
Karen Winkler, Director of Investor Relations
(303) 839-5060
Investor.relations@goldenminerals.com
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