Golden Minerals Reports Second Quarter 2018 Results
August 09 2018 - 5:07PM
Golden Minerals Company (“Golden Minerals”, “Golden” or “the
Company”) (NYSE American and TSX: AUMN) today announced financial
results for the second quarter ended June 30, 2018 and provided a
business summary and update.
Second Quarter Business
Summary
- Reported final drill results from the Santa Maria 2017-2018
drill program and announced plans to prepare an updated Technical
Report and Preliminary Economic Assessment (“PEA”)
- Filed a new Technical Report containing a high-grade silver
resource and announced plans to prepare a PEA for the Company’s El
Quevar project in Argentina
- Sold approximately 3.15 million shares of common stock to
Lincoln Park Capital Fund, LLC (“LPC”) at $0.41 per share, under
the terms of a May 2018 registered direct purchase agreement
- Gained further flexibility in financing the advancement and/or
development of Company projects with the May 2018 signing of a
commitment purchase agreement with LPC giving Golden the right, but
not the obligation, to sell up to $10.0 million of common stock to
LPC over the next 36 months subject to certain limitations and
conditions; the parties closed on the commitment purchase agreement
in July 2018
Subsequent Event – Intended Sale of
Celaya Project
In August 2018, the Company entered into a
non-binding letter of intent with The Electrum Group LLC
(“Electrum”), outlining Electrum’s intention to purchase Golden’s
remaining interest in the Celaya project in exchange for a payment
of $3.0 million. The Company has previously expensed all its costs
associated with the Celaya project and therefore expects to realize
a gain of $3.0 million in the third quarter 2018. The proposed
transaction is intended to close no later than September 30,
2018.
Golden’s President and Chief Executive Officer,
Warren M. Rehn, notes, “The $3 million of income we expect to
receive from the sale of our remaining interest in the Celaya
project will be an important addition to our cash balance that will
allow us flexibility in continuing our exploration progress in
Mexico and Argentina without shareholder dilution, particularly at
this time when the Company’s share price is so low relative to the
value of our assets.”
Second quarter Summary
Results
- Revenue of $1.7 million and positive net operating margin
(oxide plant lease revenue less lease costs) of $1.2 million
related to the lease of the Company’s oxide plant in the second
quarter 2018, slightly better than the $1.1 million net operating
margin in the second quarter 2017
- Other operating income of $0.2 million related to the farm-out
of the Zacatecas project, compared to $0.7 million in the year ago
period related primarily to an equipment sale
- Exploration expenses of $1.0 million compared to $0.5 million
in the year ago period, with the 2018 figure reflecting increased
exploration activities at the Santa Maria and other projects in
Mexico
- Net loss of $1.7 million or $0.02 per share in the second
quarter 2018, compared to a net loss of $0.5 million or $0.01 per
share in the year ago period
- Cash and cash equivalents balance of $2.5 million as of June
30, 2018
- Debt balance of zero as of June 30, 2018
Financial Results
The Company reported revenue of approximately
$1.7 million in the second quarter 2018 related to the oxide plant
lease and costs of approximately $0.5 million related to the
services Golden provides under the terms of the lease, for a net
margin of $1.2 million. Other operating income of $0.2 million
includes pro-rated income from the farm-out of the Company’s
Zacatecas properties. Exploration expense was $1.0 million in the
second quarter and reflects increased exploration and project
evaluation activities at the Santa Maria and other projects in
Mexico. It also includes property holding costs and allocated
administrative expenses for all Company exploration projects other
than El Quevar. El Quevar project expense was $0.3 million in the
second quarter 2018 and includes costs associated with the
recently-released Technical Report, as well as project evaluation
and property holding costs. Administrative expenses (including all
costs associated with being a public company, costs incurred in
support of our exploration properties and other administrative
expenses and professional fees) were $1.1 million in the second
quarter. Golden reported a net loss of $1.7 million or $0.02 per
share in the second quarter 2018 compared to a net loss of $0.5
million or $0.01 per share in the year ago period.
Twelve Month Financial
Outlook
The Company ended the second quarter 2018 with a
cash balance of $2.5 million and expects to receive $3.0 million
from the sale of its remaining interest in the Celaya property to
Electrum in the third quarter 2018. The Company expects to receive
approximately $4.6 million in net operating margin from the lease
of the oxide plant plus an additional $0.2 million from the
farm-out of its Zacatecas project during the next 12-month period
ending June 30, 2019. With the transactions referred to above and
if no additional sales of common stock under the Company’s ATM or
LPC programs occur, Golden projects it would end 2018 with a cash
balance of $4.0 million and end June 30, 2019 with a cash balance
of $2.5 million, based on the following forecasted expenditures
during the next 12 months:
- Approximately $2.0 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 $1.6 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 $3.2 million on general and administrative
costs.
Additional information regarding second 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.
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.
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 anticipated
revenue from the Velardeña oxide plant lease; future activities at
El Quevar, including the anticipated timing and expectations of the
PEA and the likelihood of future expansion of the deposit, and the
possibility of future development; expectations related to
our Santa Maria property, including planned exploration and other
evaluation work and the possibility of increasing the size of the
existing resource estimate as well as the timing and expectations
regarding the updated technical report and PEA; the Celaya
property, including the expected sale of our remaining interest in
the property in exchange for payment from Electrum as currently
provided for in the Celaya non-binding letter of intent; and
statements regarding our financial outlook for the remainder of
2018 and the first six months of 2019, including anticipated income
and expenditures. 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; the reasonability of the economic
assumptions at the basis of the results of the El Quevar PEA and
the Santa Maria PEA and technical report; the inability of the
parties to consummate the transaction set forth in the Celaya
non-binding letter of intent; 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 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 SEC by Golden Minerals,
including the Company’s Annual Report on Form 10-K for the year
ended December 31, 2017.
SOURCE: Golden Minerals Company
|
GOLDEN MINERALS COMPANY |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(Expressed in United States
dollars) |
(Unaudited) |
|
|
|
|
|
|
|
June 30, |
|
December
31, |
|
2018 |
|
2017 |
|
|
|
|
|
(in thousands, except share data) |
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and
cash equivalents |
$ |
2,510 |
|
|
$ |
3,250 |
|
Short-term investments |
|
343 |
|
|
|
238 |
|
Lease
receivables |
|
435 |
|
|
|
314 |
|
Inventories, net |
|
239 |
|
|
|
242 |
|
Value
added tax receivable, net |
|
13 |
|
|
|
148 |
|
Prepaid
expenses and other assets |
|
1,019 |
|
|
|
745 |
|
Total
current assets |
|
4,559 |
|
|
|
4,937 |
|
Property, plant and
equipment, net |
|
7,632 |
|
|
|
8,140 |
|
Total
assets |
$ |
12,191 |
|
|
$ |
13,077 |
|
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Accounts
payable and other accrued liabilities |
$ |
1,652 |
|
|
$ |
1,556 |
|
Deferred
revenue, current |
|
293 |
|
|
|
293 |
|
Other
current liabilities |
|
197 |
|
|
|
9 |
|
Total
current liabilities |
|
2,142 |
|
|
|
1,858 |
|
Asset retirement and
reclamation liabilities |
|
2,582 |
|
|
|
2,495 |
|
Deferred revenue,
non-current |
|
454 |
|
|
|
600 |
|
Other long term
liabilities |
|
27 |
|
|
|
43 |
|
Total
liabilities |
|
5,205 |
|
|
|
4,996 |
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Common
stock, $.01 par value, 200,000,000 shares authorized; 95,520,796
and 91,929,709 shares issued and outstanding respectively |
|
955 |
|
|
|
919 |
|
Additional paid in capital |
|
517,635 |
|
|
|
516,284 |
|
Accumulated deficit |
|
(511,604 |
) |
|
|
(509,082 |
) |
Accumulated other comprehensive loss |
|
— |
|
|
|
(40 |
) |
Shareholders' equity |
|
6,986 |
|
|
|
8,081 |
|
Total
liabilities and equity |
$ |
12,191 |
|
|
$ |
13,077 |
|
|
|
|
|
|
|
|
GOLDEN MINERALS COMPANY |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS |
(Expressed in United States dollars)
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
June 30, |
|
June 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
(in thousands except per share data) |
|
(in thousands, except per share data) |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Oxide
plant lease |
$ |
1,730 |
|
|
$ |
1,692 |
|
|
$ |
3,367 |
|
|
$ |
3,336 |
|
Total
revenue |
|
1,730 |
|
|
|
1,692 |
|
|
|
3,367 |
|
|
|
3,336 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Oxide
plant lease costs |
|
(525 |
) |
|
|
(548 |
) |
|
|
(1,028 |
) |
|
|
(1,085 |
) |
Exploration expense |
|
(1,041 |
) |
|
|
(457 |
) |
|
|
(1,940 |
) |
|
|
(991 |
) |
El Quevar
project expense |
|
(281 |
) |
|
|
(192 |
) |
|
|
(553 |
) |
|
|
(341 |
) |
Velardeña
shutdown and care and maintenance costs |
|
(492 |
) |
|
|
(369 |
) |
|
|
(981 |
) |
|
|
(719 |
) |
Administrative expense |
|
(822 |
) |
|
|
(872 |
) |
|
|
(1,883 |
) |
|
|
(1,898 |
) |
Stock
based compensation |
|
(235 |
) |
|
|
(242 |
) |
|
|
(250 |
) |
|
|
(307 |
) |
Reclamation expense |
|
(52 |
) |
|
|
(48 |
) |
|
|
(103 |
) |
|
|
(97 |
) |
Other
operating income, net |
|
224 |
|
|
|
705 |
|
|
|
1,450 |
|
|
|
862 |
|
Depreciation and amortization |
|
(264 |
) |
|
|
(130 |
) |
|
|
(560 |
) |
|
|
(318 |
) |
Total
costs and expenses |
|
(3,488 |
) |
|
|
(2,153 |
) |
|
|
(5,848 |
) |
|
|
(4,894 |
) |
Loss from
operations |
|
(1,758 |
) |
|
|
(461 |
) |
|
|
(2,481 |
) |
|
|
(1,558 |
) |
Other income
and (expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest
and other income, net |
|
110 |
|
|
|
4 |
|
|
|
113 |
|
|
|
22 |
|
(Loss)
gain on foreign currency |
|
(41 |
) |
|
|
(3 |
) |
|
|
(56 |
) |
|
|
3 |
|
Total
other income |
|
69 |
|
|
|
1 |
|
|
|
57 |
|
|
|
25 |
|
Loss from
operations before income taxes |
|
(1,689 |
) |
|
|
(460 |
) |
|
|
(2,424 |
) |
|
|
(1,533 |
) |
Income
tax |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net
loss |
$ |
(1,689 |
) |
|
$ |
(460 |
) |
|
$ |
(2,424 |
) |
|
$ |
(1,533 |
) |
Comprehensive
loss, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on securities |
|
— |
|
|
|
(51 |
) |
|
|
— |
|
|
|
(103 |
) |
Comprehensive loss |
$ |
(1,689 |
) |
|
$ |
(511 |
) |
|
$ |
(2,424 |
) |
|
$ |
(1,636 |
) |
Net loss per
common share — basic |
|
|
|
|
|
|
|
|
|
|
|
Loss |
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.02 |
) |
Weighted
average Common Stock outstanding - basic (1) |
|
93,681,301 |
|
|
|
89,618,677 |
|
|
|
92,709,238 |
|
|
|
89,485,223 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
Golden Minerals (TSX:AUMN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Golden Minerals (TSX:AUMN)
Historical Stock Chart
From Jul 2023 to Jul 2024