GOLDEN, Colo., Aug. 09, 2018 (GLOBE NEWSWIRE) -- Golden Minerals Company (“Golden Minerals”, “Golden” or “the Company”) (NYSE American and TSX: AUMN) today announced financial results for the second quarter ended June 30, 2018 and provided a business summary and update.
Second Quarter Business Summary
Subsequent Event – Intended Sale of Celaya Project
In August 2018, the Company entered into a non-binding letter of intent with The Electrum Group LLC (“Electrum”), outlining Electrum’s intention to purchase Golden’s remaining interest in the Celaya project in exchange for a payment of $3.0 million. The Company has previously expensed all its costs associated with the Celaya project and therefore expects to realize a gain of $3.0 million in the third quarter 2018. The proposed transaction is intended to close no later than September 30, 2018.
Golden’s President and Chief Executive Officer, Warren M. Rehn, notes, “The $3 million of income we expect to receive from the sale of our remaining interest in the Celaya project will be an important addition to our cash balance that will allow us flexibility in continuing our exploration progress in Mexico and Argentina without shareholder dilution, particularly at this time when the Company’s share price is so low relative to the value of our assets.”
Second quarter Summary Results
The Company reported revenue of approximately $1.7 million in the second quarter 2018 related to the oxide plant lease and costs of approximately $0.5 million related to the services Golden provides under the terms of the lease, for a net margin of $1.2 million. Other operating income of $0.2 million includes pro-rated income from the farm-out of the Company’s Zacatecas properties. Exploration expense was $1.0 million in the second quarter and reflects increased exploration and project evaluation activities at the Santa Maria and other projects in Mexico. It also includes property holding costs and allocated administrative expenses for all Company exploration projects other than El Quevar. El Quevar project expense was $0.3 million in the second quarter 2018 and includes costs associated with the recently-released Technical Report, as well as project evaluation and property holding costs. Administrative expenses (including all costs associated with being a public company, costs incurred in support of our exploration properties and other administrative expenses and professional fees) were $1.1 million in the second quarter. Golden reported a net loss of $1.7 million or $0.02 per share in the second quarter 2018 compared to a net loss of $0.5 million or $0.01 per share in the year ago period.
Twelve Month Financial Outlook
The Company ended the second quarter 2018 with a cash balance of $2.5 million and expects to receive $3.0 million from the sale of its remaining interest in the Celaya property to Electrum in the third quarter 2018. The Company expects to receive approximately $4.6 million in net operating margin from the lease of the oxide plant plus an additional $0.2 million from the farm-out of its Zacatecas project during the next 12-month period ending June 30, 2019. With the transactions referred to above and if no additional sales of common stock under the Company’s ATM or LPC programs occur, Golden projects it would end 2018 with a cash balance of $4.0 million and end June 30, 2019 with a cash balance of $2.5 million, based on the following forecasted expenditures during the next 12 months:
Additional information regarding second quarter 2018 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 in Mexico with emphasis on areas near its Velardeña processing plants, and on advancing its El Quevar project located in Salta, Argentina.
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 the anticipated revenue from the Velardeña oxide plant lease; future activities at El Quevar, including the anticipated timing and expectations of the PEA and the likelihood of future expansion of the deposit, and the possibility of future development; expectations related to our Santa Maria property, including planned exploration and other evaluation work and the possibility of increasing the size of the existing resource estimate as well as the timing and expectations regarding the updated technical report and PEA; the Celaya property, including the expected sale of our remaining interest in the property in exchange for payment from Electrum as currently provided for in the Celaya non-binding letter of intent; and statements regarding our financial outlook for the remainder of 2018 and the first six months of 2019, including anticipated income and expenditures. These statements are subject to risks and uncertainties, including: lower than anticipated revenue from the oxide plant lease as a result of delays or problems at the third party’s mine or the oxide plant; earlier than expected termination of the lease or other causes; the reasonability of the economic assumptions at the basis of the results of the El Quevar PEA and the Santa Maria PEA and technical report; the inability of the parties to consummate the transaction set forth in the Celaya non-binding letter of intent; 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; failure of mined material or veins mined to meet expectations; increases in costs and declines in general economic conditions; and changes in political conditions, in tax, royalty, environmental and other laws in Mexico and 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 SEC by Golden Minerals, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.
SOURCE: Golden Minerals Company
For additional information please visit http://www.goldenminerals.com/ or contact:
Golden Minerals Company
Karen Winkler, Director of Investor Relations