Golden Minerals Announces Third Quarter Results and $2.0 Million in
Exploration Property Sales
GOLDEN, Colo., Nov. 8, 2012 /PRNewswire/ -- Golden Minerals
Company ("Golden Minerals" or the "Company") (NYSE MKT: AUMN) (TSX:
AUM) announces results for the quarter ending September 30, 2012 and $2.0 million in fourth quarter exploration
property sales.
(Logo:
http://photos.prnewswire.com/prnh/20120803/LA52082LOGO)
Financial Results
For the third quarter 2012, Golden Minerals recorded a 45
percent increase in revenue to $7.1
million from the sale of metals at its Velardena Operations
in Mexico, as compared to revenue
of $4.9 million in the second quarter
2012. Also during the third quarter, the Company recorded a
$57.2 million non-cash reduction in
goodwill related to its September
2011 transaction with ECU Silver Mining Inc. The goodwill
was initially established primarily as a result of recognizing, for
accounting purposes, a deferred tax liability for the difference
between the fair value of the Velardena property acquired in the ECU
transaction and the Mexican tax basis of the property. Since
September 2011, an approximate 20%
decrease in forecasted future gold and silver prices and certain
changes to assumptions related to the long term operating plan for
the Velardena Operations has resulted in the reduction of goodwill.
There was no reduction in the carrying value of the long-lived
Velardena property.
The Company's cash and short term investments balance increased
by $30.9 million during the quarter
to $54.0 million as of September 30, 2012. The increase is due to
$36.9 million in net proceeds
received from a registered offering and private placement of our
securities during the quarter, offset by the expenditures described
above plus capital expenditures of $2.0
million and an increase in net working capital of
$2.2 million, both related primarily
to the Velardena Operations.
Activities
The Company is continuing plans for a two-phased expansion of
the Velardena Operations. Phase One is underway and the Company
expects production to achieve a rate of 850 tonnes throughput per
day during the third quarter 2013. The Company is continuing work
on its plans for a subsequent Phase Two expansion to 1,150 tonnes
per day throughput.
During the third quarter 2012 we began to open access to new
stopes for mining. Due to the acquisition of additional
equipment and the arrival of equipment from Argentina, we are increasing mine development
activity. We accessed non-exploited ore zones in the Santa Juana mining area in the third quarter
2012 and expect to increase ore extraction in non-exploited vein
areas during the fourth quarter 2012.
We have completed the installation and commissioning of a new
flotation circuit at the end of the oxide plant leach circuit. The
new flotation circuit is intended to recover gold and silver from
material that has been leached in the oxide plant, and it is
currently producing a lead/silver concentrate that will be sold
with the lead/silver concentrate produced at the sulfide plant. The
Company is performing additional test work to determine whether the
remaining gold bearing pyrites in the tailings are best recovered
using flotation or gravity concentration methods. During the third
quarter 2012 we continued to advance the San Mateo ramp, which is expected to connect
with the lower Santa Juana
workings in the fourth quarter 2013. This connection will provide
new access to facilitate ore removal from the lower Santa Juana workings and other veins that are
accessed by the San Mateo ramp
unit. We also have continued to improve ventilation and ore
control procedures in the mine and to optimize the oxide and
sulfide plants. We expect to complete a significant expansion
of the laboratory at about year-end 2012, which will permit
improved plant response to changing metallurgical conditions.
In early November 2012 the Company
began a 2,000-meter, 10-hole drilling program at the Quevar Norte
and Sur areas at El Quevar in northwestern Argentina, focused on outlining new
mineralized zones. Also, the Company has identified two prospects
with potential to host economic precious metal mineralization on
currently held ground in Mexico,
unrelated to Velardena or our
holdings in Zacatecas. The Company
plans to drill one of these prospects in 2012.
Exploration Property Sales
In October 2012, the Company
closed on the sale of 100 percent of its interest in two of its
exploration subsidiaries, Silex Bolivia S.A. and Minera Memisa
S.A., to a subsidiary of Sumitomo Corporation for $250,000.
In early November 2012, the
Company completed the sale of four claims in Mexico to Exploraciones Mineras ParreƱa, a
subsidiary of Fresnillo PLC. The claims total over 16,000 hectares
and are located approximately 40 kilometers southwest of the city
of Fresnillo. The sales price of
the transaction was approximately $1.7
million.
These asset sales will be included in the Company's fourth
quarter 2012 results.
Additional information regarding third quarter 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, primarily engaged in the ramp-up and expansion of
existing production at the Velardena operations in Mexico and advancement of the evaluation stage
El Quevar project in 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 laws,
including statements regarding of the timing of anticipated
production ramp-up at the Velardena Operations to 850 tonnes per
day and 1,150 tonnes per day throughput rates; the timing of
anticipated opening of new stopes for mining, plant optimization
efforts, the sufficiency of mobile mining and other equipment on
site for mine development activities, the potential expansion of
Velardena Operations throughput rates to 1,150 tonnes per day using
autoclave processing and the possible timing and processing
components of such an expansion; and planned exploration drilling.
These statements are subject to risks and uncertainties, including
timing and availability of external funding to complete the planned
expansion to 1,150 tonnes per day throughput; unexpected events at
the Velardena Operations, including further delays or problems in
mine development and plant optimization; operational changes or
problems; variations in ore grade and relative amounts, grades and
metallurgical characteristics of oxide and sulfide ores; delays or
failure in receiving required board or government approvals or
permits; technical, permitting, mining, metallurgical or processing
issues; failure to achieve anticipated production and improvements
in head grades, recoveries and concentrate production and quality
at the Velardena Operations; delays in or failure to realize
anticipated benefits of plant optimization efforts; failure to
realize anticipated metal production increases from the addition of
the bulk flotation process at the oxide plant; failure to realize
anticipated production or increases in production from the
anticipated increase in mine development and the commencement of
mining in new stopes; loss of and inability to adequately replace
skilled mining and management personnel; possible disputes with
customers or joint venture partners; failure of undeveloped ore or
veins to meet expectations; interpretations and changes in
interpretations of geologic information; volatility or other
changes in the U.S. and Canadian securities markets; availability
and cost of materials, supplies and electrical power required for
mining operations and exploration; fluctuations in silver, gold,
zinc and lead prices, costs and general economic conditions;
changes in political conditions, tax, environmental and other laws;
and diminution of physical safety of employees in Mexico, and other conditions in the countries
in which the Company operates. Additional risks relating to
Golden Minerals Company may be found in the periodic and current
reports filed with the Securities Exchange Commission by Golden
Minerals Company, including the Annual Report on Form 10-K for the
year ended December 31, 2011.
Golden Minerals Company
Jerry W. Danni
(303) 839-5060
Executive Vice President
Investor.relations@goldenminerals.com
GOLDEN
MINERALS COMPANY
|
CONSOLIDATED BALANCE SHEETS
|
(Expressed in United States
dollars)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
(in
thousands, except share data)
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
53,561
|
|
$
48,649
|
|
Investments
|
|
417
|
|
-
|
|
Trade
receivables
|
|
1,199
|
|
-
|
|
Inventories
|
|
5,170
|
|
5,312
|
|
Value
added tax receivable
|
|
3,033
|
|
1,317
|
|
Prepaid
expenses and other assets
|
|
1,177
|
|
3,119
|
|
|
Total
current assets
|
|
64,557
|
|
58,397
|
Property,
plant and equipment, net
|
|
282,031
|
|
284,199
|
Goodwill
|
|
12,942
|
|
70,155
|
Prepaid
expenses and other assets
|
|
197
|
|
264
|
|
|
Total
assets
|
|
$
359,727
|
|
$
413,015
|
Liabilities and Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable and other accrued liabilities
|
$
6,034
|
|
$
8,070
|
|
Other
current liabilities
|
|
7,512
|
|
7,505
|
|
|
Total
current liabilities
|
|
13,546
|
|
15,575
|
|
Asset
retirement obligation
|
|
2,226
|
|
3,781
|
|
Deferred
tax liability
|
|
49,226
|
|
55,603
|
Other long
term liabilities
|
|
217
|
|
288
|
|
|
Total
liabilities
|
|
65,215
|
|
75,247
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
Equity
|
|
|
|
|
|
Common
stock, $.01 par value,
|
|
|
|
|
|
|
100,000,000 shares authorized; 42,578,333 and
35,690,035 shares issued and outstanding,
respectively
|
|
424
|
|
355
|
|
Additional
paid in capital
|
|
491,411
|
|
453,756
|
|
Accumulated deficit
|
|
(197,308)
|
|
(116,221)
|
|
Accumulated other comprehensive loss
|
|
(15)
|
|
(122)
|
|
|
Parent
company's shareholder's equity
|
|
294,512
|
|
337,768
|
|
|
Total
liabilities and equity
|
|
$
359,727
|
|
$
413,015
|
GOLDEN
MINERALS COMPANY
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
|
(Expressed in United States dollars)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
(in
thousands, except share data)
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Sale of
metals
|
|
$
7,063
|
|
$
-
|
|
$
18,384
|
|
$
-
|
Costs
and expenses:
|
|
|
|
|
|
|
|
|
|
Costs applicable to sale of metals
(exclusive
of
depreciation shown below)
|
|
(8,573)
|
|
(965)
|
|
(23,103)
|
|
(965)
|
|
Exploration expense
|
|
(1,207)
|
|
(4,639)
|
|
(5,419)
|
|
(12,645)
|
|
El Quevar
project expense
|
|
(985)
|
|
(5,520)
|
|
(3,574)
|
|
(23,276)
|
|
Velardena
project expense
|
|
(767)
|
|
-
|
|
(6,291)
|
|
-
|
|
Administrative expense
|
|
(1,934)
|
|
(1,836)
|
|
(5,787)
|
|
(6,242)
|
|
Severence
and acquisition related cost
|
-
|
|
(5,353)
|
|
-
|
|
(7,050)
|
|
Stock
based compensation
|
|
(308)
|
|
(3,260)
|
|
(831)
|
|
(5,328)
|
|
Reclamation and accretion expense
|
|
(40)
|
|
(31)
|
|
(185)
|
|
(126)
|
|
Goodwill
Impairment
|
|
(57,213)
|
|
-
|
|
(57,213)
|
|
-
|
|
Other
operating income & (expenses), net
|
264
|
|
(76)
|
|
479
|
|
340
|
|
Depreciation, depletion and amortization
|
(2,774)
|
|
(717)
|
|
(6,617)
|
|
(1,580)
|
|
|
Total
costs and expenses
|
|
(73,537)
|
|
(22,397)
|
|
(108,541)
|
|
(56,872)
|
|
Loss from
operations
|
|
(66,474)
|
|
(22,397)
|
|
(90,157)
|
|
(56,872)
|
Other
income and expenses:
|
|
|
|
|
|
|
|
|
|
Interest
and other income
|
|
162
|
|
11,099
|
|
2,323
|
|
11,240
|
|
Royalty
income
|
|
14
|
|
155
|
|
371
|
|
285
|
|
Interest
expense
|
|
-
|
|
(337)
|
|
-
|
|
(337)
|
|
Gain
(loss) on foreign currency
|
|
368
|
|
(1,432)
|
|
802
|
|
(1,646)
|
|
|
Total
other income and expenses
|
544
|
|
9,485
|
|
3,496
|
|
9,542
|
|
Loss from
operations before income taxes
|
(65,930)
|
|
(12,912)
|
|
(86,661)
|
|
(47,330)
|
|
Income
taxes benefit
|
|
2,614
|
|
1,168
|
|
5,574
|
|
1,070
|
|
Net
loss
|
|
$
(63,316)
|
|
$
(11,744)
|
|
$
(81,087)
|
|
$
(46,260)
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
Unrealized
gain (loss) on securities
|
|
166
|
|
251
|
|
107
|
|
(309)
|
|
Comprehensive loss
|
|
$
(63,150)
|
|
$
(11,493)
|
|
$
(80,980)
|
|
$
(46,569)
|
Net
loss per common share ā basic and diluted
|
|
|
|
|
|
|
|
|
|
Loss
|
|
$
(1.74)
|
|
$
(0.59)
|
|
$
(2.27)
|
|
$
(2.79)
|
Weighted average common stock outstanding - basic
and diluted (1)
|
|
36,318,747
|
|
19,989,334
|
|
35,762,251
|
|
16,605,896
|
(1)
|
Potentially dilutive shares have not been included
because to do so would be anti-dilutive.
|
SOURCE Golden Minerals Company