
Golden Minerals Company (NYSE American:AUMN) (TSX: AUMN) announced financial results and a business summary for the quarter ending September 30, 2020.
Third Quarter Summary Financial Results
Third Quarter Business Summary
Golden Minerals President and Chief Executive Officer, Warren Rehn, commented, “We are on track to begin production at our Rodeo gold mine during the first quarter 2021. We have the first of our required environmental permits in hand and expect to have the second in the next few weeks. Our cash balance is stronger than it has been in five years and we are debt free. I am confident that Golden Minerals is well along the path to sustainable profitability and growth.”
Financial Results
The Company reported revenue of $2.1 million in the third quarter 2020 related to the oxide plant lease and costs of approximately $0.6 million related to the services Golden provides under the terms of the lease, for a net operating margin of $1.6 million. Revenue and margin were higher in 2020 due primarily to an increase in throughput during the period. Golden also received approximately $8.0 million in net proceeds related to a public offering of the Company’s common shares, without warrants, in the third quarter 2020.
Exploration expenses were $1.2 million in the third quarter 2020 and include expenses related to work at the Sand Canyon, Rodeo and other properties, as well as property holding costs and their allocated administrative expenses. Expenses were higher in the third quarter 2020 compared to the $0.9 million of exploration expense in the third quarter 2019 due primarily to increased exploration activities at the Rodeo project. Velardeña care and maintenance expenses were $0.2 million in the third quarter 2020 compared to $0.4 million in the year ago period. The lower costs are primarily the result of cost reduction initiatives and the allocation of a portion of Velardeña’s personnel costs in support of the Rodeo project. El Quevar project expense was $0.1 million in the third quarter compared to $0.6 million in the year ago period. El Quevar costs are lower than the year ago period due to the reimbursement of certain costs per the terms of an Earn-In agreement signed between the Company and Barrick, and a drilling program conducted at El Quevar during 2019. Administrative expenses totaled $0.9 million in the third quarter 2020 compared to $0.7 million in the third quarter 2019. These expenses, including costs associated with being a public company, are incurred primarily by the Company’s corporate activities in support of the Velardeña Properties, the Rodeo project, the El Quevar project and the Company’s exploration portfolio. Expenses were higher in 2020 due primarily to increased legal fees and information technology upgrades. Golden reported a net loss of $1.3 million or $0.01 per share in the third quarter 2020 compared to a net loss of $1.8 million or $0.02 per share in the year ago period.
Twelve Month Financial Outlook
The Company ended the third quarter 2020 with a cash balance of $8.7 million. In addition to the Company’s current cash balance, projected cash inflows are expected to exceed budgeted cash outflows over the 12-month period ending September 30, 2021. Projected cash inflows for the 12-month period ending September 30, 2021 total approximately $11.6 million as follows (all figures are approximate):
The Company’s currently budgeted expenditures during the 12 months ending September 30, 2021 total $8.1 million as follows (all figures are approximate):
These projections are current as of the date of this news release but could be negatively impacted if further interruptions related to COVID-19 occur in Mexico. Additionally, the actual amount of cash receipts and expenditures the Company records during the 12-month period ending September 30, 2021 may vary significantly from the amounts shown above and will depend on a number of factors. For a more complete discussion of risk factors and for additional information regarding third quarter 2020 financial results, refer to the Form 10-Q Quarterly Report for the period ended September 30, 2020 which is available on the Company’s website at www.goldenminerals.com.
Financial Statements
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(US dollars, unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(in thousands except per share data) | (in thousands, except per share data) | |||||||||||||||
Revenue: | ||||||||||||||||
Oxide plant lease | $ | 2,146 | $ | 1,944 | $ | 4,566 | $ | 5,852 | ||||||||
Total revenue | 2,146 | 1,944 | 4,566 | 5,852 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Oxide plant lease costs | (582 | ) | (594 | ) | (1,566 | ) | (1,804 | ) | ||||||||
Exploration expense | (1,226 | ) | (935 | ) | (3,681 | ) | (3,119 | ) | ||||||||
El Quevar project expense | (130 | ) | (582 | ) | (623 | ) | (1,584 | ) | ||||||||
Velardeña care and maintenance costs | (206 | ) | (422 | ) | (861 | ) | (1,391 | ) | ||||||||
Administrative expense | (852 | ) | (742 | ) | (2,782 | ) | (2,784 | ) | ||||||||
Stock based compensation | (105 | ) | (72 | ) | (771 | ) | (725 | ) | ||||||||
Reclamation expense | (63 | ) | (57 | ) | (184 | ) | (171 | ) | ||||||||
Other operating (expense) income, net | 24 | 45 | (78 | ) | 225 | |||||||||||
Depreciation and amortization | (226 | ) | (270 | ) | (770 | ) | (814 | ) | ||||||||
Total costs and expenses | (3,366 | ) | (3,629 | ) | (11,316 | ) | (12,167 | ) | ||||||||
Loss from operations | (1,220 | ) | (1,685 | ) | (6,750 | ) | (6,315 | ) | ||||||||
Other expense: | ||||||||||||||||
Interest and other expense, net | (12 | ) | (42 | ) | (85 | ) | (182 | ) | ||||||||
Loss on foreign currency | (36 | ) | (24 | ) | (92 | ) | (63 | ) | ||||||||
Total other loss | (48 | ) | (66 | ) | (177 | ) | (245 | ) | ||||||||
Loss from operations before income taxes | (1,268 | ) | (1,751 | ) | (6,927 | ) | (6,560 | ) | ||||||||
Income taxes | (18 | ) | (9 | ) | (18 | ) | (9 | ) | ||||||||
Net loss | $ | (1,286 | ) | $ | (1,760 | ) | $ | (6,945 | ) | $ | (6,569 | ) | ||||
Net loss per common share — basic | ||||||||||||||||
Loss | $ | -0.01 | $ | -0.02 | $ | -0.06 | $ | -0.07 | ||||||||
Weighted average Common Stock outstanding – basic (1) | 143,285,564 | 104,764,260 | 124,956,140 | 99,263,135 | ||||||||||||
(1) Potentially dilutive shares have not been included because to do so would be anti-dilutive.
CONDENSED CONSOLIDATED BALANCE SHEETS
(US Dollars, unaudited)
September 30, | December 31, | ||||||
2020 | 2019 | ||||||
(in thousands, except share data) | |||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 8,658 | $ | 4,593 | |||
Lease receivables | 502 | 448 | |||||
Inventories, net | 199 | 231 | |||||
Derivative at fair value | 251 | 254 | |||||
Value added tax receivable, net | 69 | — | |||||
Prepaid expenses and other assets | 570 | 669 | |||||
Total current assets | 10,249 | 6,195 | |||||
Property, plant and equipment, net | 5,343 | 6,031 | |||||
Other long term assets | 988 | 1,131 | |||||
Total assets | $ | 16,580 | $ | 13,357 | |||
Liabilities and Equity | |||||||
Current liabilities | |||||||
Accounts payable and other accrued liabilities | $ | 1,304 | $ | 2,127 | |||
Deferred revenue, current | 100 | 472 | |||||
Debt – related party | — | — | |||||
Other current liabilities | 230 | 1,824 | |||||
Total current liabilities | 1,634 | 4,423 | |||||
Asset retirement and reclamation liabilities | 3,102 | 2,839 | |||||
Other long term liabilities | 385 | 494 | |||||
Total liabilities | 5,121 | 7,756 | |||||
Commitments and contingencies | |||||||
Equity | |||||||
Common stock, $.01 par value, 200,000,000 shares authorized; 149,012,652 and 106,734,279 shares issued and outstanding respectively | 1,490 | 1,067 | |||||
Additional paid in capital | 533,694 | 521,314 | |||||
Accumulated deficit | -523,725 | -516,780 | |||||
Shareholders’ equity | 11,459 | 5,601 | |||||
Total liabilities and equity | $ | 16,580 | $ | 13,357 | |||
About Golden Minerals
Golden Minerals is a Delaware corporation based in Golden, Colorado. The Company is primarily focused on advancing its Rodeo and Velardeña properties in Mexico and, through partner-funded exploration, its El Quevar silver property in Argentina, as well as acquiring and advancing mining properties in Mexico, Argentina and Nevada.
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