GOLDEN, Colo., May 07, 2020 (GLOBE NEWSWIRE) -- Golden Minerals Company (“Golden Minerals”, “Golden” or the “Company”) (NYSE American and TSX: AUMN) today announced financial results and a business summary for the quarter ending March 31, 2020.
First Quarter Summary Financial Results
First Quarter Business Summary
Golden Minerals’ President and Chief Executive Officer, Warren Rehn, notes, “The first quarter of 2020 has marked a significant turning point in our business focus as we gear up for a restart of gold and silver production in Mexico based on our recent preliminary economic assessment for our Rodeo project. The positive results from our updated Velardeña preliminary economic assessment provide an additional potential opportunity for future production in Mexico. Our plan is to continue operating our oxide plant at Velardeña with material from Rodeo after completion of the Hecla lease arrangement at the end of 2020. Placement of our El Quevar project with Barrick allows us to dedicate our efforts to advancing our Mexico assets while retaining tremendous upside potential from El Quevar if Barrick is successful in its exploration program. Our current cash balance gives us the means to move ahead with these plans despite current uncertainties related to the ongoing pandemic.”
The Company reported revenue of $1.2 million in the first 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 margin of $0.6 million. Revenue was lower in the current period due to a contracted amendment permitting a lower variable price per tonne of ore processed beginning in January 2020. During the first quarter 2020, Golden also received $0.4 million in proceeds from the sale of common stock under the existing Lincoln Park Capital Commitment Purchase Agreement (“LPC Program”) and the At the Market Offering Agreement (“ATM Agreement”). Additionally, the Company received $1.0 million in the form of a short-term unsecured loan from a related party, Sentient Global Resources Fund IV, L.P. (“Sentient”). Exploration expenses were $1.6 million in the first quarter, reflecting a drill program conducted at the Sand Canyon project, work at the Rodeo and other projects, and property holding costs and their allocated administrative expenses. El Quevar project expense was $0.2 million in the quarter which includes costs of exploration and evaluation activities, care and maintenance and property holding costs. Administrative expenses totaled $1.2 million in the first quarter 2020. 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 El Quevar project and the Company’s exploration portfolio. Golden reported a net loss of $3.3 million or $0.03 per share in the first quarter 2020 compared to a net loss of $2.4 million or $0.01 per share in the year ago period.
Twelve Month Financial Outlook
The Company ended the first quarter 2020 with a cash balance of $2.2 million and currently expects to receive approximately $2.1 million in net operating margin from the lease of the oxide plant through the end of 2020. Additionally, as noted above the Company received $0.9 million associated with the Barrick Earn-In Agreement and related Subscription Agreement and another $2.8 million related to the April 2020 equity offering and private placement. The Company’s currently budgeted expenditures during the 12 months ending March 31, 2021 are as follows:
These projections are current as of the date of this news release but could be negatively impacted if business interruptions related to COVID-19 persist longer than currently anticipated. Additionally, the Company’s currently budgeted expenditures are slightly greater than its resources noted above. Therefore, during the period ending March 31, 2021, the Company intends to take appropriate actions, which may include sales of certain of the Company’s nonstrategic exploration assets, reductions to the Company’s currently budgeted level of spending, and/or raising additional equity capital through sales under the ATM Program, LPC Program or otherwise.
The Company has undertaken several initiatives in response to COVID-19 related economic and financial market uncertainties. The initiatives are designed to keep the Company’s employees as safe as possible while providing the Company with liquidity during an unprecedented time of financial market disruption and volatility:
Additional information regarding first quarter 2020 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.
CONDENSED CONSOLIDATED BALANCE SHEETS(US Dollars, unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(US dollars, unaudited)
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 and Nevada.
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 regarding the Rodeo PEA results and the possibility and timing of future production from the Rodeo property; the Velardeña PEA results and anticipated future operations at the Velardeña properties; statements regarding the transaction with Barrick with respect to the El Quevar project; financial projections, including budgeted expenditures and the anticipated net operating margin from the Velardeña oxide plant lease; projected cash balances and anticipated spending during the 12 months ended March 31, 2021; assumptions regarding raising additional equity capital through sales under the Company’s ATM or LPC programs or otherwise; and the status of business restrictions and other matters related to the COVID-19 pandemic. These statements are subject to risks and uncertainties, including the reasonability of the economic assumptions at the basis of the results of the Rodeo and Velardeña PEAs and technical reports; the Company’s ability to timely obtain the necessary permits for commencement of production at Rodeo; Barrick’s fulfillment of deliverables required in connection with the Earn-In Agreement; the timing duration and overall impact of the COVID-19 pandemic, including the suspension of mining activities in Mexico; lower than anticipated revenue from the oxide plant lease; increases in costs and declines in general economic conditions; changes in political conditions, in tax, royalty, environmental and other laws in the United States, Mexico or Argentina and other market conditions; and fluctuations in silver and gold prices. 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 SEC by Golden Minerals, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
For additional information please visit http://www.goldenminerals.com/ or contact:
Golden Minerals CompanyKaren Winkler, Director of Investor Relations(303) 839-5060SOURCE: Golden Minerals Company