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2016

Golden Minerals Reports Year-End 2015 Results

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GOLDEN, Colo., Feb. 25, 2016 /PRNewswire/ -- Golden Minerals Company ("Golden Minerals" or the "Company") (NYSE MKT: AUMN) (TSX: AUM) has today announced financial results for the full year ending December 31, 2015. 

2015 Summary

  • Revenue of (US)$8.1 million in 2015 compared to $0.2 million in 2014
  • Net loss of $25.4 million in 2015, related primarily to an impairment charge of $13.2 million to the Velardena Properties, compared to a net loss of $18.8 million in 2014
  • Generated approximately 465,000 payable silver equivalent ounces (AgEq oz)1 in 2015, including 327,000 oz silver and 1,976 oz gold, compared to approximately 42,300 payable AgEq oz generated in 2014, including approximately 28,700 oz silver and 194 oz gold
  • Sold approximately 494,000 AgEq oz in 2015, including 346,000 oz silver and 2,114 oz gold, compared to approximately 14,700 AgEq oz sold in 2014, including 9,500 oz silver and 75 oz gold
  • Cash and cash equivalents on hand of $4.1 million as of December 31, 2015, compared to $8.6 million as of December 31, 2014

Financial Results

The Company reported a net loss of $25.4 million for the full year 2015, related primarily to an impairment charge of $13.2 million to the net book value of the Velardena Properties mineral resource, compared to a net loss of $18.8 million in 2014.  The Company wrote down the mineral resource value pursuant to a valuation assessment related to the shutdown of mining and milling activities that occurred in November 2015.  The remaining difference in net loss between 2015 and 2014 is primarily attributable to the following:

  • Revenue from sale of metals of $7.4 million in 2015 compared to $0.2 million in 2014. Revenue in both years is related to the Company's Velardena Properties in Mexico, which processed mined material from November 2014 to November 2015. Mining at Velardena was suspended in November 2015 due to low metals prices and continued loss from operations.
  • Costs of sales at Velardena of $9.9 million in 2015 compared to $1.7 million in 2014
  • Oxide plant lease revenue, net of reimbursable costs, of $0.5 million in 2015, compared to no lease revenue in 2014
  • Exploration expenses of $3.6 million in 2015 compared to $5.5 million in 2014
  • Velardena and El Quevar project expenses of $1.2 million in 2015 compared to $4.7 million in 2014
  • Velardena shutdown and care and maintenance costs of $1.2 million in 2015 compared to $2.5 million in 2014
  • Depreciation-related expenses of $4.5 million in 2015 compared to $3.1 million in 2014
  • Interest and other income of $3.1 million in 2015 related primarily to a reduction in a loss contingency and a tax refund compared to $1.7 million in 2014 primarily related to a loss contingency
  • Derivative income related to the Company's warrants and to a one year $5.0 million convertible loan signed with The Sentient Group in October 2015 of $1.9 million in 2015 compared to $1.7 million in 2014

The Company's December 31, 2015 $4.1 million cash and cash equivalents balance is $4.5 million lower than the year-end 2014 $8.6 million amount.  The primary uses of cash during 2015 were as follows:

  • $2.5 million negative operating margin (revenues less costs of sales) at Velardena
  • $1.2 million in shutdown and care and maintenance expenses at Velardena
  • $3.6 million in exploration expenditures
  • $1.1 million in care and maintenance and property holding costs at the El Quevar project
  • $4.2 million in general and administrative expenses

These items were offset in part by:

  • $5.0 million in proceeds received from the Sentient loan
  • $0.5 million of net revenue related to the lease of the Velardena oxide plant
  • $0.5 million in proceeds from sales of non-strategic property and equipment
  • $0.8 million received as a tax refund
  • $1.3 million reduction in working capital and other items

Financial Outlook

With the $4.1 million cash balance at December 31, 2015 and assuming we receive $4.8 million of net cash flow from the oxide plant lease in 2016 and the remaining principal and interest under the Sentient loan are converted into the Company's common stock prior to the loan's October 27, 2016 maturity date, the Company plans to spend approximately $8.4 million during 2016, resulting in a balance of cash and cash equivalents of approximately $0.5 million at December 31, 2016:

  • Approximately $1.2 million at the Velardena Properties for care and maintenance
  • Approximately $1.4 million on exploration, assessment and development costs related to the San Luis del Cordero property and other properties
  • Approximately $0.8 million on other exploration activities and property holding costs related to the Company's portfolio of exploration properties located primarily in Mexico
  • Approximately $0.5 million on El Quevar project maintenance, property holding and project evaluation costs
  • Approximately $3.4 million on general and administrative costs
  • Approximately $1.1 million in increased working capital

Additional information regarding full year 2015 financial results may be found in the Company's Annual Report on Form 10-K 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 near its Velardena processing plants and the exploration of properties in Mexico and Argentina.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and applicable Canadian securities legislation, including statements regarding including the Company's planned activities and expenditures during 2016, anticipated cash and cash equivalents balance at year-end 2016, and net cash flow expected to be received in 2016 under a third party lease of the Velardena oxide mill.  These statements are subject to risks and uncertainties, including: suspensions of existing approvals and permits or delays in obtaining or failure to obtain required approvals and permits; lower than anticipated net cash flow from the oxide plant lease due to problems at the third party's mine or at the oxide plant resulting in less than anticipated production; termination of the oxide plant lease earlier than anticipated; unexpected increases in the costs of holding exploration  properties or maintaining the Velardena and El Quevar properties on care and maintenance; increases in costs and declines in general economic conditions; unfavorable results of exploration on the San Luis del Cordero property or other properties; 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 except as required by law.  Additional risks relating to Golden Minerals may be found in the periodic and current reports filed with the Securities Exchange Commission by Golden Minerals, including the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

Golden Minerals Company
Karen Winkler
Director of Investor Relations
(303) 839-5060
Investor.relations@goldenminerals.com

GOLDEN MINERALS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in United States dollars)
 
        December 31,   December 31,
        2015   2014
         (in thousands, except share data)
Assets        
Current assets        
  Cash and cash equivalents    $           4,077   $           8,579
  Short-term investments    72   -
  Trade receivables   546   -
  Inventories    330   1,497
  Value added tax receivable    400   1,316
  Prepaid expenses and other assets    451   835
    Total current assets   5,876   12,227
Property, plant and equipment, net    11,125   29,031
    Total assets   $         17,001   $         41,258
Liabilities and Equity        
Current liabilities        
  Accounts payable and other accrued liabilities    $           1,144   $           1,639
  Convertible note payable    3,702   -
  Derivative liability    488   -
  Deferred revenue    500   -
  Other current liabilities    556   2,551
    Total current liabilities   6,390   4,190
Asset retirement and reclamation liabilities    2,546   2,685
Warrant liability    210   1,554
Other long term liabilities    84   95
    Total liabilities   9,230   8,524
             
Equity         
  Common stock, $.01 par value, 100,000,000 shares authorized; 53,335,333 and  53,162,833 shares issued and outstanding, respectively   

 

 

534

  

 

 

532
  Additional paid in capital   484,742   484,197
  Accumulated deficit    (477,378)   (451,995)
  Accumulated other comprehensive income loss   (127)   -
    Shareholders' equity    7,771   32,734
    Total liabilities and equity    $         17,001   $         41,258

 

GOLDEN MINERALS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in United States dollars)
 
        The Years Ended December 31,
        2015   2014
        (in thousands except per share data)
Revenue:        
  Sale of metals    $         7,418   $            235
  Oxide plant lease    653   -
    Total revenue   8,071   235
Costs and expenses:        
  Cost of metals sold (exclusive of depreciation shown below)    (9,866)   (1,655)
  Oxide plant lease costs    (199)   -
  Exploration expense   (3,634)   (5,528)
  El Quevar project expense   (1,042)   (1,597)
  Velardena project expense   (119)   (3,126)
  Velardena shutdown and care & maintenance costs   (1,228)   (2,457)
  Administrative expense   (4,242)   (4,642)
  Stock based compensation   (453)   (926)
  Reclamation expense   (256)   (199)
  Impairment of long lived assets    (13,181)   -
  Other operating income, net   471   691
  Depreciation, depletion and amortization   (4,480)   (3,128)
    Total costs and expenses   (38,229)   (22,567)
  Loss from operations   (30,158)   (22,332)
Other income and (expenses):        
  Interest expense    (126)   -
  Interest and other income    3,083   1,708
  Warrant derivative income    1,344   1,693
  Derivative income    553   -
  Gain (loss) on foreign currency   (79)   108
    Other total income, net   4,775   3,509
  Loss before income taxes   (25,383)   (18,823)
  Income taxes    -   -
  Net loss   $      (25,383)   $      (18,823)
Other comprehensive loss:        
  Unrealized loss on securities, net of tax   $           (127)   $                  -
  Comprehensive loss   $      (25,510)   $      (18,823)
Net loss per common share – basic (1)        
  Loss   $          (0.48)   $          (0.41)
Weighted average Common Stock outstanding - basic (1)   52,972,352   45,862,419
(1)    Potentially dilutive shares have not been included because to do so would be anti-dilutive.

1 Silver equivalent ounces include silver and gold but exclude lead and zinc and are calculated at a ratio of 70 silver ounces to 1 gold ounce.

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SOURCE Golden Minerals Company