GOLDEN, Colo., Nov. 3, 2016 /PRNewswire/ -- Golden Minerals Company ("Golden Minerals" or the "Company") (NYSE MKT: AUMN and TSX: AUM) provides a business update and announces results for the third quarter ended September 30, 2016.
Third Quarter Business Update
Third Quarter Summary Results
The Company reported a net loss of $0.8 million in the third quarter 2016 compared to a net loss of $16.8 million in the third quarter 2015. The 2016 net loss includes $0.5 million of non-cash derivative losses related to an increase in the fair value of the liability recorded for warrants to acquire the Company's common stock. (See Note 18 in the Company's Form 10-Q for the period ending September 30, 2016 for complete details.) By comparison, the 2015 net loss of $16.8 million included non-cash derivative income of $0.2 million related to the Company's warrants and an asset impairment expense of $13.2 million in connection with the shutdown of the Velardena Properties.
The Company recorded revenue of $1.7 million related to the lease of the oxide plant in the third quarter 2016, compared to $1.8 million revenue from the sale of metals in the third quarter 2015. Operating costs in the third quarter 2016 were $2.0 million compared to $19.4 million in the 2015 period. The decrease in operating costs year over year is largely due to the absence in the 2016 period of the $13.2 million asset impairment expense previously mentioned and $2.6 million cost of metals sold recorded in the third quarter 2015, plus the addition in 2016 of $1.3 million in other operating income compared to minimal other operating income recorded in the third quarter 2015. The $1.3 million in other operating income in the 2016 period is comprised of gains recorded related to the sale of excess mining equipment, the sale of the Company's remaining interest in the San Diego exploration property and the farm-out of the Celaya property. See page 25, "2016 Highlights", of the Form 10-Q for the period ending September 30, 2016 for additional details.
The Company's cash and cash equivalents balance of $3.4 million on September 30, 2016 was $0.7 million lower than the year-end 2015 balance of $4.1 million. The reduction in cash during the first nine months of 2016 is due primarily to:
These items were offset in part by:
In addition to the $3.4 million cash balance at September 30, 2016, the Company expects to receive approximately $1.4 million in the fourth quarter 2016: $1.2 million in net operating margin from the lease of the oxide plant and $0.2 million from the second quarter farm out of a non-strategic exploration property. In the third quarter, Hecla exercised its right to extend the lease for an additional six months until June 30, 2017, which the Company estimates should provide approximately $2.4 million in net operating margin during the first seven months of 2017. As noted above, Hecla has an additional 18- month lease extension right. In addition, the Company expects to receive $0.6 million in February 2017 relating to the final payment for the sale of non-strategic mining equipment that occurred in the third quarter 2016.
The Company currently plans to spend approximately $1.8 million during the fourth quarter 2016, resulting in a projected cash balance at year-end 2016 of approximately $3.0 million:
Additional information regarding third quarter 2016 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 near its Velardena processing plants and the exploration of properties in Mexico and Argentina.
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 expenditures during the fourth quarter 2016 and anticipated cash balance at year-end 2016; net operating margin expected to be received in the fourth quarter 2016 and first half of 2017 from a third party lease of the Velardena oxide mill; amounts expected to be received in February 2017 as the final payment in respect of an equipment sale; the planned fourth quarter 2016 drilling at the Rodeo project and the planned fourth quarter 2016 update of Santa Maria resources and completion of a Preliminary Economic Assessment. These statements are subject to risks and uncertainties, including: lower than anticipated net operating margin from the oxide plant lease due to problems at the third party's mine or the oxide plant resulting in less than anticipated production or due to processing delays or termination of the lease due to inability to obtain required permits or for other reasons; results from exploration and project assessments at the Santa Maria, Rodeo or other exploration properties and whether we will advance these or other exploration properties; potential delays in our exploration activities or other activities to advance properties towards mining resulting from environmental events or permitting delays or problems, accidents, problems with contractors, disputes under agreements related to exploration properties, unanticipated costs and other unexpected events; increases in costs and declines in general economic conditions; inability to raise external financing on acceptable terms or at all; 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. 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, 2015.
Golden Minerals Company
Director of Investor Relations
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SOURCE Golden Minerals Company