Golden Minerals Reports First Quarter 2018 Results
May 02 2018 - 5:08PM
Golden Minerals Company (“Golden Minerals”, “Golden” or “the
Company”) (NYSE American:AUMN) (TSX:AUMN) today provided a business
summary and financial results for the first quarter ended March 31,
2018.
First Quarter Business
Summary
- Announced and filed on SEDAR a new Technical Report with an
updated resource estimate for the El Quevar silver project
(Argentina), highlighting 2.6 million tonnes of indicated sulfide
material at an average silver grade of 487 grams per tonne
(“gpt”)1 (41.1 million Ag oz.) and 0.3 million tonnes of
inferred sulfide material at an average silver grade of 417 gpt Ag
(4.1 million Ag oz.)
- Received $1.0 million from Electrum Global Holdings, L.P.
(“Electrum”) in exchange for an amendment to the Electrum farm-out
agreement providing Electrum an additional 20 percent interest in
the Celaya project (Mexico)
- Completed a 22 hole, 4800 meter drill program at the Santa
Maria silver/gold mine (Mexico)
First Quarter Summary
Results
- Revenue of $1.6 million and positive 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 first
quarter 2018, in line with first quarter 2017
- Other operating income of $1.2 million compared to $0.2 million
in the year ago period
- Net loss of $0.7 million or $0.01 per share in the first
quarter 2018, compared to a net loss of $1.1 million or $0.01 per
share in the year ago period
- Cash and cash equivalents balance of $2.7 million as of March
31, 2018
- Debt balance of zero as of March 31, 2018
Financial Results
The Company reported revenue of approximately
$1.6 million in the first quarter 2018 related to the oxide plant
lease and costs of approximately $0.5 million related to the
services we provide under the terms of the lease, for a net margin
of $1.1 million. Other operating income of $1.2 million included
$1.0 million received from Electrum as consideration for permitting
Electrum to earn an additional 20% interest in the Celaya project,
$0.1 million related to a Value Added Tax credit utilized in
Mexico, and $0.1 million related to the farm-out agreement with
Santacruz Silver Mining regarding the Company’s Zacatecas
Properties in Mexico. Exploration expense was $0.9 million in the
first quarter 2018 and included property holding costs and
allocated administrative expenses for exploration projects other
than El Quevar. It also included expenses related to Santa Maria’s
first quarter 2018 exploration activities. El Quevar project
expense was $0.3 million in the first quarter and included project
holding and evaluation costs, including the recently-released
Technical Report. Administrative expenses, including all costs
associated with being a public company, costs incurred in support
of our exploration properties and other administrative expenses,
were $1.1 million in the first quarter. Golden reported a net loss
of $0.7 million or $0.01 per share in the first quarter 2018
compared to a net loss of $1.1 million or $0.01 per share in the
year ago period.
Twelve Month Financial
Outlook
In addition to the $2.7 million cash balance at
March 31, 2018, the Company expects to receive approximately $4.5
million in net operating margin from the lease of the oxide plant
and an additional $0.5 million from the farm-out agreement with
Santacruz Silver Mining during the next 12-month period ending
March 31, 2019. 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 2018 with a cash balance of
approximately $1.5 million and end March 31, 2019 with a cash
balance of approximately $1.0 million, based on the following
forecasted expenditures during the next 12 months:
- Approximately $1.5 million on exploration activities and
property holding costs related to exploration properties located
primarily in Mexico, including project assessment and evaluation
costs related to Santa Maria and other properties;
- Approximately $1.5 million at the Velardeña Properties for care
and maintenance;
- 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 $2.7 million on general and administrative
costs.
Additional information regarding first quarter
2018 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.
1 Technical Report prepared by Amec Foster
Wheeler E&C Services, Inc. dated February 26, 2018. Report is
available on www.sedar.com and the Golden Minerals Company
website.
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 Velardeña processing plants, and on advancing its El
Quevar project located in Salta, Argentina.
Cautionary Note to U.S. Investors
Regarding Estimates of Indicated and Inferred
Resources
We use certain terms in this news release, such
as “indicated” and “inferred” resources, that are required by
Canadian National Instrument 43-101; however, these terms are not
recognized under the U.S. SEC Industry Guide 7. U.S.
investors are cautioned not to assume that any or all of the
indicated or inferred resources are economically or legally
mineable or that these resources will ever be converted into
reserves. “Inferred mineral resources” have a high degree of
uncertainty as to their existence and it cannot be assumed that all
or any part of an inferred mineral resource will ever be upgraded
to a higher category. Under Canadian rules, estimates of
inferred mineral resources may not form the basis of a feasibility
study or pre-feasibility study, except in rare cases. The SEC
normally only permits issuers to report mineralization that does
not constitute SEC Industry Guide 7 compliant “reserves” as
in-place tonnage and grade without reference to unit amounts.
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 anticipated receipts
from the oxide plant lease and the farm-out agreement with
Santacruz Silver Mining, projected cash balances, and anticipated
spending during the twelve months ended March 31, 2019. 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,
potential non-payment of the required farm-out payments by
Santacruz, 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 drilling programs or other 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; 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 SEC by Golden Minerals, including the Company’s
Annual Report on Form 10-K for the year ended December 31,
2017.
For additional information please visit
http://www.goldenminerals.com/ or contact:
Golden Minerals CompanyKaren WinklerDirector of
Investor Relations(303)
839-5060Investor.relations@goldenminerals.com
SOURCE: Golden Minerals Company
GOLDEN MINERALS
COMPANYCONDENSED CONSOLIDATED BALANCE
SHEETS(Expressed in United States
dollars)(Unaudited)
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
|
2018 |
|
2017 |
|
|
|
(in thousands, except share data) |
|
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
2,711 |
|
|
$ |
3,250 |
|
|
Short-term investments |
|
|
233 |
|
|
|
238 |
|
|
Lease
receivables |
|
|
402 |
|
|
|
314 |
|
|
Inventories, net |
|
|
259 |
|
|
|
242 |
|
|
Value
added tax receivable, net |
|
|
13 |
|
|
|
148 |
|
|
Prepaid
expenses and other assets |
|
|
850 |
|
|
|
745 |
|
|
Total
current assets |
|
|
4,468 |
|
|
|
4,937 |
|
|
Property, plant and
equipment, net |
|
|
7,866 |
|
|
|
8,140 |
|
|
Total
assets |
|
$ |
12,334 |
|
|
$ |
13,077 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
Accounts
payable and other accrued liabilities |
|
$ |
1,400 |
|
|
$ |
1,556 |
|
|
Deferred
revenue, current |
|
|
293 |
|
|
|
293 |
|
|
Other
current liabilities |
|
|
193 |
|
|
|
9 |
|
|
Total
current liabilities |
|
|
1,886 |
|
|
|
1,858 |
|
|
Asset retirement and
reclamation liabilities |
|
|
2,544 |
|
|
|
2,495 |
|
|
Deferred revenue,
non-current |
|
|
528 |
|
|
|
600 |
|
|
Other long term
liabilities |
|
|
35 |
|
|
|
43 |
|
|
Total
liabilities |
|
|
4,993 |
|
|
|
4,996 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
Common
stock, $.01 par value, 200,000,000 sharesauthorized; 91,929,709 and
89,020,041 shares issued andoutstanding, respectively |
|
|
919 |
|
|
|
919 |
|
|
Additional paid in capital |
|
|
516,329 |
|
|
|
516,284 |
|
|
Accumulated deficit |
|
|
(509,907 |
) |
|
|
(509,082 |
) |
|
Accumulated other comprehensive loss |
|
|
— |
|
|
|
(40 |
) |
|
Shareholders' equity |
|
|
7,341 |
|
|
|
8,081 |
|
|
Total
liabilities and equity |
|
$ |
12,334 |
|
|
$ |
13,077 |
|
|
|
|
|
|
|
|
|
|
GOLDEN MINERALS
COMPANYCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS(Expressed in
United States dollars) (Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
March 31, |
|
|
|
2018 |
|
2017 |
|
|
|
(in thousands, except per share data) |
|
Revenue: |
|
|
|
|
|
|
|
Oxide
plant lease |
|
$ |
1,637 |
|
|
$ |
1,644 |
|
|
Total
revenue |
|
|
1,637 |
|
|
|
1,644 |
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
Oxide
plant lease costs |
|
|
(503 |
) |
|
|
(537 |
) |
|
Exploration expense |
|
|
(899 |
) |
|
|
(534 |
) |
|
El Quevar
project expense |
|
|
(272 |
) |
|
|
(149 |
) |
|
Velardeña
shutdown and care and maintenance costs |
|
|
(489 |
) |
|
|
(350 |
) |
|
Administrative expense |
|
|
(1,061 |
) |
|
|
(1,026 |
) |
|
Stock
based compensation |
|
|
(15 |
) |
|
|
(65 |
) |
|
Reclamation expense |
|
|
(51 |
) |
|
|
(49 |
) |
|
Other
operating income, net |
|
|
1,226 |
|
|
|
157 |
|
|
Depreciation and amortization |
|
|
(296 |
) |
|
|
(188 |
) |
|
Total
costs and expenses |
|
|
(2,360 |
) |
|
|
(2,741 |
) |
|
Loss from
operations |
|
|
(723 |
) |
|
|
(1,097 |
) |
|
Other income
and (expense): |
|
|
|
|
|
|
|
Interest
and other income, net |
|
|
3 |
|
|
|
18 |
|
|
(Loss)
gain on foreign currency |
|
|
(15 |
) |
|
|
6 |
|
|
Loss from
operations before income taxes |
|
|
(735 |
) |
|
|
(1,073 |
) |
|
Income
tax |
|
|
— |
|
|
|
— |
|
|
Net
loss |
|
$ |
(735 |
) |
|
$ |
(1,073 |
) |
|
Comprehensive
loss, net of tax: |
|
|
|
|
|
|
|
Unrealized loss on securities |
|
|
— |
|
|
|
(52 |
) |
|
Comprehensive loss |
|
$ |
(735 |
) |
|
$ |
(1,125 |
) |
|
Net loss per
common share — basic |
|
|
|
|
|
|
|
Loss |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
Weighted
average Common Stock outstanding - basic (1) |
|
|
91,726,375 |
|
|
|
89,350,286 |
|
|
|
|
|
|
|
|
|
|
(1) Potentially dilutive shares have not
been included because to do so would be anti-dilutive.
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