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Golden Minerals Reports Third Quarter 2022 Results

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Golden Minerals Reports Third Quarter 2022 Results

 

 

 

 

 

Golden Minerals Company (NYSE American: AUMN) (TSX: AUMN) provided financial results and a business summary for the quarter ending September 30, 2022.

 

Third Quarter Financial Results – Highlights
(All currency expressed in approximate USD)

  • Revenue of $5.3 million yielding a net operating margin of $0.9 million in the third quarter 2022, vs. $8.5 million revenue and a net operating margin of $4.2 million in the third quarter 2021, both from mining operations at the Company’s Rodeo gold-silver mine in Mexico.
  • $6.5 million cash and cash equivalents balance as of September 30, 2022, compared to $12.2 million as of December 31, 2021.
  • Net loss of $0.02 per share or $2.7 million in the third quarter 2022, compared to a net gain of $0.00 per share or $0.4 million in the third quarter 2021.

 

Third Quarter Business Summary

  • The Rodeo mine (Mexico) produced 2,972 payable gold ounces and 11,907 payable silver ounces (3,103 gold equivalent (“AuEq”) ounces) with total cash costs, net of silver by-product credits, per payable ounce of gold of $1,391.1
  • Sold 3,145 AuEq oz. in doré at average prices of $1,703/oz Au and $18.72/oz Ag (before costs of selling and refining). Doré inventory on September 30, 2022, consisted of 277 payable gold ounces and 1,309 payable silver ounces.
  • At the Velardeña Properties (Mexico), the Company continued its evaluation of modified mine plans and mining techniques to address dilution issues encountered during 1H 2022 test-mining activities. The Company also began testing ore sorting technology in the third quarter 2022 to evaluate its potential application at the Velardeña Properties.
  • At the Yoquivo gold prospect (Mexico), the Company completed a third drill program of 5,693 meters in 24 drill holes in July 2022 and is currently conducting a fourth drill program of approximately 3,000 meters. The Company plans to complete a maiden resource estimate for the property for release in the first quarter 2023.
  • Completed additional drilling at the Sarita Este gold prospect (Salta, Argentina) for a project total since inception of 4,925 meters in 51 core drill holes.

1 Gold equivalents are based on actual gold and silver prices realized during the third quarter 2022. “Cash costs, net of by-product credits, per payable gold ounce” is a non-GAAP financial measure. For further information, see “Non-GAAP Financial Measures” below.

 

Third Quarter 2022 Financial Results

 

The Company reported revenue of $5.3 million from doré sales, $4.4 million costs of metals sold and $0.9 million in net operating margin in the third quarter 2022, all related to gold-silver production at the Rodeo mine. Exploration expenses, including property holding costs and allocated administrative expenses, totaled $2.4 million during the quarter. Exploration expenses were primarily related to costs to increase the capacity of the tailings dam at Velardeña to support processing of the Rodeo mineralized material, costs in support of the potential restart of Velardeña, exploration activities at the Yoquivo project in Mexico, and exploration activities at the Sarita Este project in Argentina. Velardeña care and maintenance expenses were $0.4 million in the quarter and include expenses related to care and maintenance as a result of the suspension of mining and processing activities in November 2015. El Quevar project expense was $0.2 million during the third quarter and includes holding and evaluation costs for the Yaxtché deposit at El Quevar, net of reimbursements from Barrick Gold under the terms of an Earn-In Agreement. Administrative expenses totaled $0.9 million and include costs associated with being a public company that were incurred primarily by the Company’s corporate activities in support of the Rodeo Property, the Velardeña Properties, the El Quevar project and the Company’s exploration portfolio. The Company reported a net loss of $2.7 million or $0.02 per share.

 

Twelve-Month Financial Outlook

 

The Company ended the third quarter of 2022 with a cash balance of $6.5 million and anticipates receiving approximately $5.5 to $6.5 million in net operating margin (defined as revenue from the sale of metals less costs of metals sold) from the Rodeo operation during the 12 months ending September 30, 2023, assuming average gold and silver prices during that period of $1,800/oz and $25.00/oz, respectively. Current commodity prices have recently fallen below these thresholds and there is no assurance that our expectations regarding future prices will be realized. At average gold and silver prices of $1,700/oz and $20.00/oz, respectively, our expected net operating margin for the 12 months ending September 30, 2023 would decrease by approximately $1.5 million. The Company also anticipates receiving $1.75 million from Fabled Silver Gold Corp. related to the sale of the Company’s Santa Maria property during the 12-month period.

 

Currently forecasted expenditures during the 12 months ending September 30, 2023, apart from Rodeo costs of metals sold which are included in the net operating margin forecast, total approximately $9.6 million as follows:

  • $4.3 million on exploration activities and property holding costs associated with the Company’s portfolio of exploration properties located in Mexico, Argentina and Nevada, including project assessment and evaluation costs for exploration at Rodeo and Yoquivo, plus costs associated with the potential restart of Velardeña and costs to increase its tailings facility which processes Rodeo’s mineralized material;
  • $1.0 million at the Velardeña Properties for care and maintenance;
  • $0.4 million at the El Quevar project to fund care and maintenance and property holding costs, net of reimbursement from Barrick; and
  • $3.9 million in general and administrative costs.

 

Additional information regarding third quarter 2022 financial results can 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 growing gold and silver producer based in Golden, Colorado. The Company is primarily focused on producing gold and silver from its Rodeo Mine and advancing its Velardeña Properties in Mexico and, through partner funded exploration, its El Quevar silver property in Argentina, as well as acquiring and advancing selected mining properties in Mexico, Nevada and Argentina.

 

Financial Statements

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(US Dollars, unaudited)

 
    December 31,
September 30,   2021
2022   (Restated)*
(in thousands, except share data)
Assets
Current assets
Cash and cash equivalents $ 6,504   $ 12,229  
Short-term investments 35   67  
Inventories, net 1,786   1,608  
Value added tax receivable, net 1,770   1,290  
Prepaid expenses and other assets 1,182   1,145  
Total current assets 11,277   16,339  
Property, plant and equipment, net 6,404   6,627  
Investments 225    
Other long-term assets 643   747  
Total assets $ 18,549   $ 23,713  
 
Liabilities and Equity
Current liabilities
Accounts payable and other accrued liabilities $ 4,345   $ 3,509  
Deferred revenue 344   1,469  
Other current liabilities 276   721  
Total current liabilities 4,965   5,699  
Asset retirement and reclamation liabilities 3,805   3,569  
Other long-term liabilities 149   353  
Total liabilities 8,919   9,621  
 
Commitments and contingencies
 
Equity
Common stock, $.01 par value, 350,000,000 shares authorized; 167,477,992 and 162,804,612 shares issued and outstanding respectively 1,675   1,628  
Additional paid-in capital 541,835   540,518  
Accumulated deficit (533,880 ) (528,054 )
Shareholders’ equity 9,630   14,092  
Total liabilities and equity $ 18,549   $ 23,713  

See Note 3, “Notes to the Condensed Consolidated Financial Statements” in the Form 10-Q.

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(US dollars, unaudited)

 
Three Months Ended   Nine Months Ended
September 30,   September 30,
2022   2021   2022   2021
(in thousands except per share data)   (in thousands, except per share data)
Revenue:
Sale of metals $ 5,268   $ 8,479   $ 18,700   $ 16,118  
Total revenue 5,268   8,479   18,700   16,118  
Costs and expenses:
Cost of metals sold (exclusive of depreciation shown below) (4,374 ) (4,292 ) (13,335 ) (9,156 )
Exploration expense (2,376 ) (2,146 ) (7,038 ) (4,021 )
El Quevar project expense (154 ) (90 ) (448 ) (249 )
Velardeña care and maintenance costs (370 ) (414 ) (843 ) (754 )
Administrative expense (918 ) (911 ) (3,466 ) (3,451 )
Stock-based compensation (194 ) (75 ) (543 ) (1,491 )
Reclamation expense (71 ) (67 ) (211 ) (196 )
Other operating income, net 384   138   1,274   472  
Depreciation and amortization (89 ) (143 ) (241 ) (466 )
Total costs and expenses (8,162 ) (8,000 ) (24,851 ) (19,312 )
(Loss) income from operations (2,894 ) 479   (6,151 ) (3,194 )
Other income (expense):
Interest and other expense, net (3 ) (13 ) (17 ) (336 )
Gain on foreign currency transactions 154   133   252   156  
Total other income (expense) 151   120   235   (180 )
(Loss) gain from operations before income taxes (2,743 ) 599   (5,916 ) (3,374 )
Income taxes 46   (188 ) 90   (203 )
Net (loss) income $ (2,697 ) $ 411   $ (5,826 ) $ (3,577 )
Net (loss) income per common share – basic $ (0.02 ) $ 0.00   $ (0.04 ) $ (0.02 )
Weighted-average shares outstanding – basic 166,948,751   162,477,039   164,872,701   161,751,452  

 

 

Posted November 10, 2022

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