GOLDEN, Colo., April 29, 2016 /CNW/ -- Golden Minerals
Company ("Golden Minerals" or the "Company") (NYSE MKT: AUMN and
TSX: AUM) announces results for the first quarter ended
March 31, 2016.
First Quarter Summary
- Revenue of (US)$1.5 million in
the first quarter 2016 compared to $2.3
million in the first quarter 2015
- Loss from operations of $2.3
million compared to a loss of $5.0
million in the first quarter 2015
- Net loss of $6.3 million in the
first quarter 2016, including $3.9
million of noncash expenses related to the Company's
warrants and convertible loan, compared to a net loss of
$3.4 million in the first quarter
2015 that included $0.7 million in
noncash income related to the Company's warrants
- Cash and equivalents balance of $2.1
million as of March 31,
2016
Financial Results
The Company reported a net loss of $6.3
million in the first quarter 2016 compared to a net loss of
$3.4 million in the first quarter
2015. Revenue of $1.5 million
in the first quarter 2016 (which is wholly related to the lease of
the Company's oxide plant) was lower than revenue of $2.3 million in the first quarter 2015 which was
generated from the Company's mining and processing activities at
its Velardena Properties. Operating costs in the first
quarter 2016 were $3.8 million
compared to $7.3 million in the
year-ago period, with the decrease largely due to $3.0 million costs of metals sold incurred in the
year-ago period. In the first quarter 2016, the Company
recorded $3.9 million of other
expenses related to its outstanding warrants and one-year
convertible loan with The Sentient Group ("Sentient"). An
increase in the Company's stock price during the first quarter 2016
resulted in a noncash mark-to-market loss of $1.2 million for the warrants and $0.6 million to a derivative value associated
with the remaining Sentient loan. Also during the first
quarter 2016, approximately 80 percent of the Sentient loan's
$5.0 million original face value was
converted into Golden Minerals common stock, resulting in a noncash
loss on debt extinguishment of $1.7
million. The company also recorded $0.4 million of interest expense during the first
quarter 2016.
The Company's cash and cash equivalents balance of $2.1 million on March 31,
2016 was $2.0 million lower
than the year-end 2015 balance of $4.1
million. The primary uses of cash during the first
quarter 2016 were as follows:
- $0.6 million in shutdown and care
and maintenance expenses at the Velardena Properties
- $0.8 million in exploration
expenditures, including costs related to drilling at the
San Luis del Cordero project
- $0.2 million in care and
maintenance plus property holding costs at the El Quevar
project
- $1.2 million in general and
administrative expenses
- A $0.2 million increase in net
working capital related primarily to a reduction in deferred
revenue from the oxide plant lease, offset in part by $1.0 million of net operating margin received in
conjunction with the oxide plant lease
Financial Outlook
In addition to the $2.1 million
cash balance at March 31, 2016, the
Company expects to receive approximately $3.6 million in net operating margin from the
lease of the oxide plant during the remaining three quarters of
2016. The Company currently expects to spend approximately
$5.7 million during the remainder of
2016 as estimated below, ending the year with a projected zero cash
balance if external funding is not obtained or expenses
reduced:
- $0.9 million at the Velardena
Properties for care and maintenance expenses;
- $1.6 million on exploration
activities and property holding costs primarily in Mexico, including project assessment and
development costs related to the San
Luis del Cordero project;
- $0.4 million on El Quevar project
maintenance activities, property holding costs and continuing
project evaluation costs;
- $2.4 million on general and
administrative costs; and
- $0.4 million on an increase in
working capital related primarily to a reduction in current
liabilities
In addition, the Company is required to pay the remaining
$1.2 million principal and interest
due on the convertible loan to Sentient on October 27, 2016 if Sentient does not convert
these amounts to Golden Minerals common stock as permitted under
the loan agreement. Even if Sentient does convert the
remaining principal and interest to the Company's common stock,
Golden Minerals does not currently expect that it will have
sufficient cash to continue its business plans into 2017 without
external funding. The Company plans, and is required by the
Sentient loan, to seek external funding through the sale of equity
or securities convertible into equity. If the Company is not
successful in obtaining sufficient external funding, the Company
expects to reduce its planned 2016 expenditures.
Exploration Update
San Luis del Cordero
The Company commenced a $0.5
million exploration drilling program in the first quarter
2016 at the Santa Rosa vein in the
San Luis del Cordero Project in
Durango State, Mexico. It expects to complete the drilling
program in May 2016 and to release
complete results of the drilling program in June 2016. At present the Company has
completed 3,500 meters of drilling in 15 holes, of which results
have been received for 12 holes. Results for three drill
holes are pending final analysis. The Company's current
drilling combined with previous drilling by others and the
Company's underground sampling have identified three ore shoots of
potential economic interest, which the Company continues to
define. The Company believes that its drill results received
to date indicate a more complex distribution of silver grades than
was shown by prior drilling of others. Drill hole results
with lower grades of silver indicate areas of the vein that are
outside of higher grade ore shoots. The Company plans to
drill an additional 1,000 to 2,000 meters in five to 10 holes,
depending on success, to further define the northwestern and
eastern ore shoots of the Santa
Rosa vein which have shown the best results to date.
When the drill program is complete it will be possible to update
the resource for the Santa Rosa
vein. Additional information regarding drill results which
have been received to date may be found in the Company's 10-Q
Quarterly Report on the Golden Minerals website.
Santa Maria
The Company continued exploration work at the Santa Maria silver and gold mine in
Chihuahua, Mexico, during the
first quarter 2016. Golden Minerals mined approximately 3,000
tonnes of material from a mineralized shoot as a bulk sample with
grades of approximately 250 grams per tonne (gpt) silver and 0.6
gpt gold. It processed the bulk sample through a toll milling
facility, generating approximately 70 tonnes of concentrates
containing approximately 15,000 ounces of silver and 26 ounces of
gold. The concentrates were sold to a third party for
approximately $200,000 in the first
quarter 2016 consisting of approximately 14,500 payable ounces of
silver and 24 payable ounces of gold, which offset exploration
costs. The Company does not have sufficient drilling data to
predict the ultimate size of this higher grade zone; however, an
underground drill program of about 1,500 meters (18 drill holes)
has commenced, with complete results expected early in the third
quarter 2016. Upon completion of the drill program the
company expects to update the resource and complete a preliminary
economic assessment.
Additional information regarding first 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; planned exploration and
anticipated drill results at certain properties in Mexico, including our San Luis del Cordero and Santa Maria properties; expectations and
assumptions related to the Sentient convertible loan; and
anticipated external financing activities. 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 San Luis del
Cordero or Santa Maria or other
exploration properties and whether we will be able to advance these
or other exploration properties; whether Sentient will convert the
remaining principal and interest of the Sentient loan into our
common stock or whether we will be required to pay the remaining
principal and interest in cash and, if the latter, whether we will
be able to raise the capital necessary to do so on terms acceptable
to us or at all; potential delays in our exploration activities or
other activities to advance properties towards mining resulting
from environmental consents 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; unfavorable results of exploration; 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
|
|
|
|
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
(in thousands, except
share data)
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
2,109
|
|
$
|
4,077
|
|
Short-term
investments
|
|
154
|
|
|
72
|
|
Trade
receivables
|
|
530
|
|
|
546
|
|
Inventories
|
|
331
|
|
|
330
|
|
Value added tax
receivable, net
|
|
203
|
|
|
400
|
|
Prepaid expenses and
other assets
|
|
450
|
|
|
451
|
|
Total
current assets
|
|
3,777
|
|
|
5,876
|
Property, plant and
equipment, net
|
|
10,254
|
|
|
11,125
|
|
Total
assets
|
$
|
14,031
|
|
$
|
17,001
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts payable and
other accrued liabilities
|
$
|
1,212
|
|
$
|
1,144
|
|
Convertible note
payable, net
|
|
963
|
|
|
3,702
|
|
Derivative
liability
|
|
687
|
|
|
488
|
|
Deferred
revenue
|
|
138
|
|
|
500
|
|
Other current
liabilities
|
|
295
|
|
|
556
|
|
Total current
liabilities
|
|
3,295
|
|
|
6,390
|
Asset retirement and
reclamation liabilities
|
|
2,297
|
|
|
2,546
|
Warrant
liability
|
|
1,390
|
|
|
210
|
Other long term
liabilities
|
|
80
|
|
|
84
|
|
Total
liabilities
|
|
7,062
|
|
|
9,230
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $.01
par value, 100,000,000 shares authorized; 76,690,333 and
53,335,333 shares issued and outstanding, respectively
|
|
767
|
|
|
534
|
|
Additional paid in
capital
|
|
489,912
|
|
|
484,742
|
|
Accumulated
deficit
|
|
(483,665)
|
|
|
(477,378)
|
|
Accumulated other
comprehensive income loss
|
|
(45)
|
|
|
(127)
|
|
Shareholders' equity
|
|
6,969
|
|
|
7,771
|
|
Total
liabilities and equity
|
$
|
14,031
|
|
$
|
17,001
|
GOLDEN MINERALS
COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
(Expressed in United States dollars) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
(in thousands, except
per share data)
|
Revenue:
|
|
|
|
|
|
|
|
Oxide plant
lease
|
|
$
|
1,463
|
|
$
|
-
|
|
Sale of
metals
|
|
|
-
|
|
|
2,337
|
|
Total
revenue
|
|
|
1,463
|
|
|
2,337
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Oxide plant lease
costs
|
|
|
(474)
|
|
|
-
|
|
Cost of metals sold
(exclusive of depreciation shown below)
|
|
|
-
|
|
|
(3,012)
|
|
Exploration
expense
|
|
|
(776)
|
|
|
(969)
|
|
El Quevar project
expense
|
|
|
(163)
|
|
|
(406)
|
|
Velardena project
expense
|
|
|
-
|
|
|
(119)
|
|
Velardena shutdown
and care & maintenance costs
|
|
|
(587)
|
|
|
-
|
|
Administrative
expense
|
|
|
(1,218)
|
|
|
(1,328)
|
|
Stock based
compensation
|
|
|
(32)
|
|
|
(179)
|
|
Reclamation
expense
|
|
|
(51)
|
|
|
(110)
|
|
Other operating
income, net
|
|
|
39
|
|
|
176
|
|
Depreciation,
depletion and amortization
|
|
|
(550)
|
|
|
(1,359)
|
|
Total costs and
expenses
|
|
|
(3,812)
|
|
|
(7,306)
|
|
Loss from
operations
|
|
|
(2,349)
|
|
|
(4,969)
|
Other income and
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(443)
|
|
|
-
|
|
Interest and other
income
|
|
|
3
|
|
|
916
|
|
Warrant derivative
(loss) gain
|
|
|
(1,180)
|
|
|
650
|
|
Derivative
loss
|
|
|
(648)
|
|
|
-
|
|
Loss on debt
extinguishment
|
|
|
(1,666)
|
|
|
-
|
|
Loss on foreign
currency
|
|
|
(4)
|
|
|
(28)
|
|
Total other (expense)
income
|
|
|
(3,938)
|
|
|
1,538
|
|
Loss from operations
before income taxes
|
|
|
(6,287)
|
|
|
(3,431)
|
|
Income tax
benefit
|
|
|
-
|
|
|
-
|
|
Net loss
|
|
$
|
(6,287)
|
|
$
|
(3,431)
|
Comprehensive loss,
net of tax:
|
|
|
|
|
|
|
|
Unrealized gain
(loss) on securities
|
|
|
82
|
|
|
(80)
|
|
Comprehensive
loss
|
|
$
|
(6,205)
|
|
$
|
(3,511)
|
Net loss per common
share - basic
|
|
|
|
|
|
|
|
Loss
|
|
$
|
(0.09)
|
|
$
|
(0.07)
|
Weighted average
Common Stock outstanding - basic (1)
|
|
|
65,868,598
|
|
|
52,686,250
|
(1) Potentially
dilutive shares have not been included because to do so would be
anti-dilutive.
|
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SOURCE Golden Minerals Company