Golden Minerals Reports Third Quarter 2017 Results
Content was created on: November 7, 2017
GOLDEN, CO -- (Marketwired) -- 11/07/17 -- Golden Minerals Company (AUMN) ("Golden Minerals", "Golden" or "the Company") (NYSE American: AUMN) (TSX: AUMN) today provided a business summary and financial results for the third quarter ended September 30, 2017.
Third Quarter Financial Results
Cash and cash equivalents balance of $5.0 million as of September 30, 2017 compared to $2.6 million as of December 31, 2016
Revenue of $1.8 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 third quarter 2017, compared to revenue of $1.7 million and positive net operating margin of $1.2 million related to the oxide plant lease in the third quarter 2016
Net loss of $0.3 million in the third quarter 2017 compared to a net loss of $0.8 million in the third quarter 2016
Loss from operations of $0.3 million in the third quarter 2017 compared to a loss from operations of $0.2 million in the third quarter 2016
Debt balance of zero as of September 30, 2017
Financial Results
The Company reported revenue of approximately $1.8 million in the third quarter 2017 related to the oxide plant lease and costs of approximately $0.6 million related to the servicesGolden provides under the lease, for a net margin of $1.2 million. Exploration expense was $1.0 million during the third quarter, incurred primarily on drilling activity and property acquisition payments related to the Santa Maria and Mogotes properties. Golden also incurred $0.2 million of project expenses related primarily to holding costs at its El Quevar project, as well as $0.4 million related to care and maintenance at the Velardena Properties. Administrative expenses totaled $0.7 million during the third quarter compared to $0.9 million in the third quarter 2016. Golden reported a net loss of $0.3 million in the third quarter 2017 compared to a net loss of $0.8 million in the year ago period. The prior year figure included non-cash losses of $0.5 million related to certain of the Company's warrants which, subsequent to a change in accounting principle related to a recent pronouncement issued by the U.S. Financial Accounting Standards Board, have been reclassified from liabilities to equity retroactively to January 1, 2017.
Cash and Financial Outlook
The Company ended the third quarter with $5.0 million in cash and equivalents, or $2.4 million greater than the $2.6 million in similar assets held at December 31, 2016. The increase is due in part to the following expenditures and cash inflows during the first three quarters of 2017:
Expenditures totaled $6.2 million:
$2.0 million in exploration expenditures, including work at Santa Maria, Mogotes and Rodeo
$1.1 million in care and maintenance at the Velardena Properties
$0.5 million in evaluation activities and related holding costs at El Quevar
$2.6 million in general and administrative expenses
Cash inflows totaled $8.6 million:
$3.4 million of net operating margin related to the lease of the Company's oxide plant to Hecla
$1.9 million from Hecla for an option to extend its oxide plant lease, which was comprised of $1.0 million cash and $1.0 million for the purchase of Company common stock, less $0.1 million in legal and stock exchange issuance costs
$1.1 million in refunds of previous Value Added Tax payments made in Argentina in 2012 and 2013
$0.8 million from final payments related to the sale of excess mining equipment to Minera Inde
$0.7 million of net proceeds received from the issuance of Company common stock under its ATM Program
$0.2 million of net proceeds from the sale of other nonstrategic exploration properties and mining equipment
$0.2 million from a decrease in working capital
In addition to the $5.0 million balance as of September 30, 2017, during the next 12 months the Company expects to receive approximately $4.6 million in net operating margin from the lease of the oxide plant and an additional $0.8 million from Santacruz related to the exploration property farm out noted above. 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 2017 with a cash balance of approximately $3.5 million and end September 30, 2018 with a cash balance of approximately $2.5 million, based on the following forecasted expenditures during the next 12 months:
$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 the Santa Maria, Rodeo, Mogotes and other properties;
$1.5 million at the Velardena Properties for care and maintenance;
$1.0 million at the El Quevar project to fund ongoing exploration and evaluation activities, care and maintenance and property holding costs; and
$3.4 million on general and administrative costs.
Third Quarter Business Summary
In August, the Company granted Hecla Mining Company ("Hecla") an option to extend its lease of Golden's oxide mill for an additional two years, or through December 2020. In consideration for such option, Golden received (US) $1.0 million cash and Hecla purchased $1.0 million of Company common stock.
In August, the Company expanded the size of its Santa Maria gold and silver project in Chihuahua, Mexico, when it acquired three additional claims that cover the eastward extension of the Santa Maria vein.
In August, Golden began a new 1,500-meter drill program at Santa Maria, with the goal of at least doubling the size of the project and identifying it as a prospect for near-term production with low capital requirements.
In September, the Company received a permit to dewater the underground mine workings at its El Quevar silver project in Salta, Argentina, to evaluate the possibility of underground exploration drilling in conjunction with a current project to re-model the existing resource.
In September, Golden began a 1,500-meter drill program at the Mogotes project, located adjacent to the Company's Velardena Properties in Durango State, Mexico.
Additional information regarding third quarter 2017 financial results may be found in the Company's 10-Q Quarterly Report which is available on the Golden Minerals website atwww.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 Velardena processing plants.
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 expectations regarding the oxide plant lease; projected future cash balances; future drilling plans at, anticipated future resource estimates, and potential capital costs for development of Santa Maria; future drilling activities at the Mogotes project; and future results from the re-modeling project at El Quevar. These statements are subject to risks and uncertainties, including 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, increases in costs and declines in general economic conditions, and changes in political conditions, in tax, royalty, environmental and other laws in Mexico or 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 Securities and Exchange Commission by Golden Minerals, including the Company's Annual Report on Form 10-K for the year ended December 31, 2016.
SOURCE: Golden Minerals Company
GOLDEN MINERALS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in United States dollars)
(Unaudited)
September 30, December 31,
2017 2016
------------- -------------
(in thousands, except share
data)
Assets
Current assets
Cash and cash equivalents $ 4,966 $ 2,588
Short-term investments 242 334
Trade receivables 391 380
Inventories, net 267 245
Value added tax receivable, net 1 5
Related party receivable - 643
Prepaid expenses and other assets 466 578
------------- -------------
Total current assets 6,333 4,773
Property, plant and equipment, net 8,569 9,235
------------- -------------
Total assets $ 14,902 $ 14,008
============= =============
Liabilities and Equity
Current liabilities
Accounts payable and other accrued
liabilities $ 1,348 $ 1,224
Deferred revenue 293 -
Other current liabilities 9 24
------------- -------------
Total current liabilities 1,650 1,248
Asset retirement and reclamation liabilities 2,449 2,434
Deferred revenue 674 -
Warrant liability - related party - 976
Warrant liability - 922
Other long term liabilities 51 66
------------- -------------
Total liabilities 4,824 5,646
------------- -------------
Commitments and contingencies
Equity
Common stock, $.01 par value, 200,000,000 and
100,000,000 shares authorized; 92,005,448
and 89,020,041 shares issued and
outstanding, respectively 919 889
Additional paid in capital 516,237 495,455
Accumulated deficit (507,041) (488,037)
Accumulated other comprehensive (loss) income (37) 55
------------- -------------
Shareholders' equity 10,078 8,362
------------- -------------
Total liabilities and equity $ 14,902 $ 14,008
============= =============
GOLDEN MINERALS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in United States dollars) (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2017 2016 2017 2016
----------- ----------- ----------- -----------
(in thousands except per (in thousands, except
share data) per share data)
Revenue:
Oxide plant lease $ 1,771 $ 1,729 $ 5,107 $ 4,768
---------- ---------- ---------- ----------
Total revenue 1,771 1,729 5,107 4,768
----------- ----------- ----------- -----------
Costs and expenses:
Oxide plant lease costs (619) (549) (1,704) (1,478)
Exploration expense (977) (927) (1,968) (2,865)
El Quevar project
(expense) income (183) 65 (524) (308)
Velardeña shutdown and
care and maintenance
costs (379) (456) (1,098) (1,589)
Administrative expense (694) (897) (2,592) (3,141)
Stock based
compensation 7 (95) (300) (666)
Reclamation expense (49) (47) (146) (144)
Other operating income,
net 951 1,281 1,813 1,558
Depreciation and
amortization (138) (346) (456) (1,317)
----------- ----------- ----------- -----------
Total costs and
expenses (2,081) (1,971) (6,975) (9,950)
----------- ----------- ----------- -----------
Loss from operations (310) (242) (1,868) (5,182)
Other income and
(expense):
Interest expense - - - (515)
Interest and other
income 15 10 37 12
Warrant derivative loss - (545) - (2,821)
Derivative loss - - - (778)
Loss on debt
extinguishment - - - (1,653)
Loss on foreign
currency (23) (21) (20) (63)
----------- ----------- ----------- -----------
Total other income
(expense) (8) (556) 17 (5,818)
----------- ----------- ----------- -----------
Loss from operations
before income taxes (318) (798) (1,851) (11,000)
Income tax benefit - - - 26
----------- ----------- ----------- -----------
Net loss $ (318) $ (798) $ (1,851) $ (10,974)
Comprehensive loss, net
of tax:
Unrealized (loss) gain
on securities 11 107 (92) 278
----------- ----------- ----------- -----------
Comprehensive loss $ (307) $ (691) $ (1,943) $ (10,696)
=========== =========== =========== ===========
Net loss per common share
- basic
Loss $ 0.00 $ (0.01) $ (0.02) $ (0.14)
=========== =========== =========== ===========
Weighted average Common
Stock outstanding -
basic (1) 91,097,279 88,878,371 90,028,480 78,080,858
=========== =========== =========== ===========
(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
