Golden Minerals Reports Second Quarter 2017 Results
August 08 2017 - 6:45AM
Golden Minerals Company (“Golden Minerals”, “Golden” or “the
Company”) (NYSE American:AUMN) (TSX:AUMN) today announced financial
results for the second quarter ended June 30, 2017 and provided a
12-month financial outlook.
Highlights
- Cash and cash equivalents balance of (US) $2.7 million as of
June 30, 2017, compared to $2.1 million as of March 31, 2017 and
$2.6 million as of December 31, 2016
- Additional $2.0 million cash to be received in August 2017 from
Hecla Mining Company (“Hecla”) as consideration for granting Hecla
a lease extension option, including $1.0 million already received
for granting the option and an additional $1.0 million to be
received before the end of August in exchange for the issuance of
approximately 1.8 million shares of Company common stock
- Cash balance forecasts of approximately $4.0 million at
December 31, 2017 and $3.0 million at June 30, 2018
- $0.2 million in net proceeds received during the second quarter
2017 from the issuance of common stock under the Company’s At the
Market (“ATM”) program
- Revenue of $1.7 million and net operating margin (oxide plant
lease revenue less lease costs) of $1.1 million related to the
lease of the Company’s oxide plant in the second quarter 2017,
compared to revenue of $1.6 million and net operating margin of
$1.1 million related to the oxide plant lease in the second quarter
2016
- Loss from operations of $0.5 million in the second quarter 2017
compared to a loss from operations of $2.6 million in the second
quarter 2016
- Insignificant net loss of $0.04 million in the second quarter
2017, including a non-cash derivative gain of $0.4 million related
to the Company’s warrants, compared to a net loss of $3.9 million
in the second quarter 2016 that included non-cash derivative losses
of $1.2 million related to the Company’s warrants and convertible
note
- Zero debt
Second Quarter Financial
Results
The Company reported revenue of approximately
$1.7 million in the second quarter 2017 related to the oxide plant
lease and costs of approximately $0.5 million related to the
services we provide under the lease, for a net operating margin of
$1.1 million. The Company also recorded other operating
income of $0.7 million during the second quarter, related primarily
to approximately $0.2 million for a refund of Argentina value added
tax paid in prior years and $0.5 million from the sale of certain
non-strategic assets and exploration properties. Golden Minerals
also issued approximately 370,000 shares of common stock through
its ATM program at an average price of $0.64 per share during the
second quarter 2017, resulting in net proceeds to the Company of
approximately $0.2 million. For the six-month period ended
June 30, 2017, the Company has sold approximately 1.0 million
shares of common stock and received approximately $0.7 million in
net proceeds from the ATM program.
Exploration expense of $0.5 million during the
second quarter 2017 was related primarily to work at the Santa
Maria, Rodeo, and other properties as well as holding costs and
allocated administrative expenses, compared to $1.2 million for the
three months ended June 30, 2016. Exploration expense for both
years was incurred primarily in Mexico, and the higher 2016 expense
was due primarily to test mining activity at Santa Maria as well as
drilling at the San Luis del Cordero property. Velardena shutdown
and care and maintenance costs were $0.4 million in the second
quarter 2017 compared to $0.5 million in the year ago period. These
costs relate to care and maintenance at the Company’s Velardena
Properties as a result of the suspension of mining activity that
occurred in November 2015. Administrative expenses were $0.9
million in the second quarter 2017 compared to $1.0 million in the
second quarter 2016. Administrative expenses include costs
associated with being a publicly-traded company, and are incurred
primarily through corporate activities in support of the Velardena
Properties, El Quevar and the Company’s exploration portfolio.
Golden reported a net loss of $0.04 million in
the second quarter 2017 compared to a net loss of $3.9 million in
the year ago period. The 2017 figure includes a $0.4 million
non-cash gain related to a decrease in the fair value of the
liability recorded for warrants to acquire the Company’s common
stock. The 2016 figure includes non-cash losses of $1.1 million
related to the Company’s warrants and $0.1 million related to an
increase in the fair value of the derivative liability associated
with a convertible note that has since been retired.
12-Month Financial Outlook
In addition to the $2.7 million cash balance at
June 30, 2017, in July 2017 the Company received approximately $0.2
million from the refund of prior years’ value added taxes related
to activities at the El Quevar project in Argentina. In August
2017, Golden expects to receive $2.0 million from Hecla as
consideration for granting Hecla an option to extend the lease of
the Company’s oxide plant for an additional two years, through
December 31, 2020, including $1.0 million already received for
granting the option and an additional $1.0 million to be received
before the end of August in exchange for the issuance of
approximately 1.8 million shares of Company common stock. Looking
forward, during the next 12 months, Golden also expects to receive
approximately $4.8 million in net operating margin from the lease
of the oxide plant plus $0.8 million from the farm out of certain
non-strategic mineral claims in Zacatecas, Mexico to Santacruz
Silver Mining Ltd. With the transactions referred to above and if
no additional sales of common stock under the Company’s ATM program
occur, Golden projects it would end 2017 with a cash balance of
approximately $4.0 million and end June 30, 2018 with a cash
balance of approximately $3.0 million, based on the following
forecasted expenditures during the next 12 months:
- $2.0 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;
- $1.5 million at the Velardena Properties for care and
maintenance;
- $0.5 million on El Quevar maintenance activities and property
holding costs; and
- $3.5 million on general and administrative costs
Additional information regarding second quarter
2017 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 in Mexico with emphasis on areas
near its Velardena processing plants.
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 expectations
regarding the oxide plant lease including, revenues and receipt of
full payment under the recently granted lease extension option, and
statements regarding our financial outlook for the remainder of
2017 and through the end of the second quarter 2018, including
anticipated income and expenditures for those periods. These
statements are subject to risks and uncertainties, including lower
than anticipated revenue from the oxide plant lease as a result of
delays or problems at the third party’s mine or the oxide plant,
earlier than expected termination of the lease or other causes,
fluctuations in silver and gold metal prices, increases in costs
and declines in general economic conditions, 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, 2016.
GOLDEN MINERALS
COMPANYCONDENSED CONSOLIDATED BALANCE
SHEETS(Expressed in United States
dollars)(Unaudited) |
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December
31, |
|
|
|
2017 |
|
2016 |
|
|
|
(in thousands, except share data) |
|
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
2,726 |
|
|
$ |
2,588 |
|
|
Short-term investments |
|
|
231 |
|
|
|
334 |
|
|
Trade
receivables |
|
|
473 |
|
|
|
380 |
|
|
Inventories, net |
|
|
281 |
|
|
|
245 |
|
|
Value
added tax receivable, net |
|
|
185 |
|
|
|
5 |
|
|
Related
party receivable |
|
|
— |
|
|
|
643 |
|
|
Prepaid
expenses and other assets |
|
|
650 |
|
|
|
578 |
|
|
Total
current assets |
|
|
4,546 |
|
|
|
4,773 |
|
|
Property, plant and
equipment, net |
|
|
8,709 |
|
|
|
9,235 |
|
|
Total
assets |
|
$ |
13,255 |
|
|
$ |
14,008 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
Accounts
payable and other accrued liabilities |
|
$ |
1,400 |
|
|
$ |
1,224 |
|
|
Other
current liabilities |
|
|
26 |
|
|
|
24 |
|
|
Total
current liabilities |
|
|
1,426 |
|
|
|
1,248 |
|
|
Asset retirement and
reclamation liabilities |
|
|
2,402 |
|
|
|
2,434 |
|
|
Warrant liability -
related party |
|
|
813 |
|
|
|
976 |
|
|
Warrant
liability |
|
|
721 |
|
|
|
922 |
|
|
Other long term
liabilities |
|
|
55 |
|
|
|
66 |
|
|
Total
liabilities |
|
|
5,417 |
|
|
|
5,646 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
Common
stock, $.01 par value, 200,000,000 and 100,000,000 shares
authorized; 90,031,347 and 89,020,041 shares issued and
outstanding, respectively |
|
|
899 |
|
|
|
889 |
|
|
Additional paid in capital |
|
|
496,194 |
|
|
|
495,455 |
|
|
Accumulated deficit |
|
|
(489,207 |
) |
|
|
(488,037 |
) |
|
Accumulated other comprehensive (loss) income |
|
|
(48 |
) |
|
|
55 |
|
|
Shareholders' equity |
|
|
7,838 |
|
|
|
8,362 |
|
|
Total
liabilities and equity |
|
$ |
13,255 |
|
|
$ |
14,008 |
|
|
|
|
|
|
|
|
|
|
|
GOLDEN MINERALS
COMPANYCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS(Expressed in
United States dollars) (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
|
June 30, |
|
June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
(in thousands except per share data) |
|
(in thousands, except per share data) |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Oxide
plant lease |
|
$ |
1,692 |
|
|
$ |
1,576 |
|
|
$ |
3,336 |
|
|
$ |
3,039 |
|
Total
revenue |
|
|
1,692 |
|
|
|
1,576 |
|
|
|
3,336 |
|
|
|
3,039 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Oxide
plant lease costs |
|
|
(548 |
) |
|
|
(455 |
) |
|
|
(1,085 |
) |
|
|
(929 |
) |
Exploration expense |
|
|
(457 |
) |
|
|
(1,162 |
) |
|
|
(991 |
) |
|
|
(1,938 |
) |
El Quevar
project expense |
|
|
(192 |
) |
|
|
(210 |
) |
|
|
(341 |
) |
|
|
(373 |
) |
Velardeña
shutdown and care and maintenance costs |
|
|
(369 |
) |
|
|
(546 |
) |
|
|
(719 |
) |
|
|
(1,133 |
) |
Administrative expense |
|
|
(872 |
) |
|
|
(1,026 |
) |
|
|
(1,898 |
) |
|
|
(2,244 |
) |
Stock
based compensation |
|
|
(242 |
) |
|
|
(539 |
) |
|
|
(307 |
) |
|
|
(571 |
) |
Reclamation expense |
|
|
(48 |
) |
|
|
(46 |
) |
|
|
(97 |
) |
|
|
(97 |
) |
Other
operating income, net |
|
|
705 |
|
|
|
205 |
|
|
|
862 |
|
|
|
244 |
|
Depreciation and amortization |
|
|
(130 |
) |
|
|
(421 |
) |
|
|
(318 |
) |
|
|
(971 |
) |
Total
costs and expenses |
|
|
(2,153 |
) |
|
|
(4,200 |
) |
|
|
(4,894 |
) |
|
|
(8,012 |
) |
Loss from
operations |
|
|
(461 |
) |
|
|
(2,624 |
) |
|
|
(1,558 |
) |
|
|
(4,973 |
) |
Other income
and (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
— |
|
|
|
(72 |
) |
|
|
— |
|
|
|
(515 |
) |
Interest
and other income |
|
|
4 |
|
|
|
32 |
|
|
|
22 |
|
|
|
35 |
|
Warrant
derivative gain (loss) |
|
|
425 |
|
|
|
(1,096 |
) |
|
|
363 |
|
|
|
(2,276 |
) |
Derivative loss |
|
|
— |
|
|
|
(130 |
) |
|
|
— |
|
|
|
(778 |
) |
Gain
(loss) on debt extinguishment |
|
|
— |
|
|
|
13 |
|
|
|
— |
|
|
|
(1,653 |
) |
(Loss)
gain on foreign currency |
|
|
(3 |
) |
|
|
(38 |
) |
|
|
3 |
|
|
|
(42 |
) |
Total
other income (expense) |
|
|
426 |
|
|
|
(1,291 |
) |
|
|
388 |
|
|
|
(5,229 |
) |
Loss from
operations before income taxes |
|
|
(35 |
) |
|
|
(3,915 |
) |
|
|
(1,170 |
) |
|
|
(10,202 |
) |
Income
tax benefit |
|
|
— |
|
|
|
26 |
|
|
|
— |
|
|
|
26 |
|
Net
loss |
|
$ |
(35 |
) |
|
$ |
(3,889 |
) |
|
$ |
(1,170 |
) |
|
$ |
(10,176 |
) |
Comprehensive
loss, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized (loss) gain on securities |
|
|
(51 |
) |
|
|
89 |
|
|
|
(103 |
) |
|
|
171 |
|
Comprehensive loss |
|
$ |
(86 |
) |
|
$ |
(3,800 |
) |
|
$ |
(1,273 |
) |
|
$ |
(10,005 |
) |
Net loss per
common share — basic |
|
|
|
|
|
|
|
|
|
|
|
|
Loss |
|
$ |
- |
|
|
$ |
(0.05 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.14 |
) |
Weighted
average Common Stock outstanding - basic (1) |
|
|
89,618,677 |
|
|
|
82,817,778 |
|
|
|
89,485,223 |
|
|
|
74,343,257 |
|
(1) |
Potentially
dilutive shares have not been included because to do so would be
anti-dilutive. |
|
|
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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