Item 1.01
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Entry into a Material Definitive Agreement.
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Amendment to Repayment of Autlán
Deposit
As previously disclosed,
on June 26, 2019, Golden Minerals Company (the “Company”) and its indirectly wholly-owned subsidiary, Minera de
Cordilleras S. de R.L. de C.V., entered into an agreement (the “Agreement”) to sell certain assets to Compañía
Minera Autlán S.A.B. de C.V. (“Autlán”) for US$22.0 million. On September 9, 2019,
the Agreement was terminated in accordance with its terms.
Upon execution of the
Agreement, Autlán paid a deposit of US$1.5 million to the Company, which the Company was obligated to repay together
with interest accruing at 3% per annum from the date of termination (the “Repayment Amount”), on or before December
8, 2019 (the “Due Date”). The Company did not pay the Repayment Amount prior to the Due Date, so the Company is obligated
to pay the Repayment Amount, together with interest accruing at 11% per annum commencing on the Due Date. The Company made its
first payment on December 9, 2019 and as of February 26, 2020, has repaid approximately $0.8 million of the deposit.
On April 7, 2020, the
Company and Autlán agreed to reduce the “Monthly Payments” (as defined in the Agreement) to US$81,000 and the
interest rate applicable to the unpaid Repayment Amount will be increased from 11% per annum to 12% per annum, effective on April
9, 2020.
Earn-In Agreement
On April 9, 2020, the
Company and several of its directly and indirectly wholly-owned subsidiaries entered into an Earn-In Agreement (the “Earn-In
Agreement”) with Barrick Gold Corporation (“Barrick”), pursuant to which Barrick has acquired an option (the
“Option”) to earn a 70% interest in the Company’s El Quevar project located in the Salta Province of Argentina.
Pursuant to the terms
of the Earn-In Agreement, in order to earn an undivided 70% interest in the El Quevar project, Barrick must: (A) incur a total
of $10 million in work expenditures over a total of eight years ($0.5 million per year in years one and two, $1 million per year
in years three, four and five, and $2 million per year in years six, seven and eight); (B) deliver to the Company a National Instrument
43-101 compliant pre-feasibility study pursuant to the parameters set forth in the Earn-In Agreement; and (C) deliver a written
notice to exercise the Option to the Company within the term of the Earn-In Agreement. Barrick may withdraw from the Earn-In Agreement
at any time after spending a minimum of $1 million in work expenditures and upon providing 30 days’ notice to the Company.
The Company will form
a new entity (“NewCo”) that will hold the El Quevar properties. Upon satisfaction of the earn-in conditions and exercise
of the Option, NewCo will be 70% owned by Barrick and 30% owned by the Company. Funding of NewCo will be based on Barrick’s
and the Company’s respective ownership and industry standard dilution mechanisms will apply in the case of funding shortfalls
by either shareholder.
The foregoing description
of the Earn-In Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the Earn-In
Agreement, which the Company plans to file as an exhibit to its Quarterly Report on Form 10-Q for the
quarter ended March 31, 2020.
Subscription Agreement
In connection
with the Earn-In Agreement, the Company and Barrick also entered into a Subscription Agreement (the “Subscription
Agreement”) dated as of April 9, 2020 pursuant to which Barrick agreed to purchase 4,719,207 shares of the
Company’s common stock (the “Shares”) at a purchase price of $0.2119 per share in a private placement
transaction. The Shares are being offered and sold without registration under the Securities Act of 1933, as amended (the
“Act”) in reliance on the exemptions provided by Section 4(a)(2) of the Act and/or Regulation D
promulgated thereunder. The Shares will be issued upon receipt of listing approval from the NYSE American and TSX.
The foregoing description
of the Subscription Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the
Subscription Agreement, which the Company plans to file as an exhibit to its Quarterly Report on Form 10-Q for
the quarter ended March 31, 2020.