Golden Minerals Announces First Quarter 2014 Results
GOLDEN, Colo., May 1, 2014 /CNW/ - Golden Minerals Company ("Golden Minerals" or the "Company") (NYSE MKT: AUMN) (TSX: AUM) announces results for the quarter ending March 31, 2014.
Financial Results
Loss from operations in the first quarter 2014 was $6.1 million compared to $9.5 million in the first quarter 2013, with the difference attributable primarily to the $3.1 million negative gross margin recorded in the first quarter 2013, plus lower depreciation expenses and lower Velardena-related expenses incurred in 2014; offset partially by gains from exploration property sales recorded in the first quarter 2013. The Company recorded a net loss of $5.7 million in the first quarter 2014 as compared to a net loss of $6.3 million in the first quarter 2013.
The Company's cash and short-term investments balance on March 31, 2014 was $15.0 million as compared to $19.1 million on December 31, 2013. The $4.1 million decrease is due primarily to $1.2 million in care and maintenance and $0.7 million in drilling costs associated with the review of restart plans for the Velardena Properties; $0.9 million in other exploration expenditures; $0.3 million spent on maintenance and property holding costs at the El Quevar project; and $1.7 million in general and administrative expenses, which are typically highest in the first quarter of the year because they include annual audit, stock exchange and regulatory filing fees. Offsetting these cash outlays is a reduction in working capital of $0.7 million primarily related to an increase in accounts payable for expenditures associated with drilling programs at the Velardena Properties and the Los Azules exploration project.
Business Update
During the first quarter 2014, Golden Minerals continued to evaluate plans for a restart of operations at the Velardena Properties, with the objective of implementing a plan that at then current prices for silver and gold indicates a sustainable cash margin for operations. The Company has been mapping, sampling and drilling veins underground containing higher grade shoots to verify mine modeling in support of restart planning. Golden is analyzing the potential of mining from a combination of different veins at our Velardena Properties based primarily on grades and metallurgy. Additionally, the Company is reviewing alternative high grade narrow vein mining methods to determine the most beneficial mining method for a potential restart. In these efforts, Golden is using its own technical personnel as well as independent third party consultants. During the first quarter 2014 the Company commenced a 5,000-meter underground drill program at the Velardena mine, which was subsequently increased to 8,000 meters based on positive initial results. The drill program is being carried out in order to obtain additional information to assist with creating the restart plan. Drill results are expected during the second quarter 2014.
Separately, Golden is actively searching for oxide feed from outside sources, which could enable the Company to restart the Velardena oxide plant ahead of and possibly during implementation of an economic restart operating plan.
Additionally, the Company continues to review strategic business opportunities, focusing on development or operating properties in North America, including Mexico.
Exploration Update
During the first quarter 2014, the Company completed an initial 2,000-meter drilling program at the 233-hectare Los Azules property in Chihuahua, Mexico. Based upon encouraging results from this program, as previously reported, the Company authorized an additional $1.1 million for drilling, focused on delineation of a target gold and silver resource within the first 250 vertical meters along the strike of the vein beneath historic mined areas at Los Azules. The second phase of drilling has commenced and results are expected in the third quarter 2014.
Financial Outlook
The Company expects to have sufficient funding to continue its business strategy through 2014, ending the year with a cash balance of approximately $4.0 million. Exploration expense has been increased by approximately $1.1 in conjunction with the approved phase two drilling at Los Azules, as noted above. Golden plans to spend the following amounts totaling approximately $11.0 million during the remainder of 2014, excluding costs related to a potential restart of the Velardena Properties: $2.4 million on care and maintenance activities at the Velardena Properties, primarily related to labor and contractor costs; $0.4 million on drilling costs at the Velardena Properties related to the development of restart plans; $0.8 million at the El Quevar project to fund ongoing maintenance activities and property holding costs; $3.1 million on other exploration activities and property holding costs related to the Company's portfolio of exploration properties located primarily in Mexico; and $3.9 million on general and administrative costs and $0.4 million in increased working capital, primarily related to a reduction in payables for expenditures associated with drilling programs at the Velardena Properties and the Los Azules exploration project.
Additional information regarding first quarter 2014 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 that owns the Velardena and Chicago precious metals mining properties in the State of Durango, Mexico, the advanced exploration stage El Quevar project in the province of Salta, Argentina, and a diversified portfolio of precious metals and other mineral exploration properties located in or near historical precious metals producing regions of Mexico and Argentina. The Company is primarily focused on efforts to develop new operating plans for the Velardena mining operations, to advance El Quevar, and to further its exploration properties in Argentina and Mexico.
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 a potential Velardena properties restart plan; anticipated costs related to the continued care and maintenance of the Velardena Properties assets, anticipated expenditures on exploration and El Quevar, and general and administrative costs; the continuation of planned activities during the production suspension period including activities related to development and evaluation of potential new operating strategies; planned drilling on the Los Azules property; and anticipated year-end 2014 cash and cash equivalents. These statements are subject to risks and uncertainties, including unexpected events at the Velardena Operations, including higher than anticipated care and maintenance costs, accidents or damage to equipment or environmental or permitting problems; difficulties in or inability to develop a new operating plan for production at a sustainable cash positive margin, which could be caused by, among other things, variations in ore grade and relative amounts, grades and metallurgical characteristics of oxide and sulfide ores; labor or union problems; delays or failure in receiving or maintaining required government approvals or permits; technical, permitting, mining, metallurgical or processing issues; unfavorable drill results at the Velardena Properties further decreases in silver and gold prices; loss of and inability to adequately replace skilled mining and management personnel; 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 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, 2013.
Golden Minerals Company
Karen Winkler
Director of Investor Relations
(303) 839-5060
Investor.relations@goldenminerals.com
| GOLDEN MINERALS COMPANY | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| (Expressed in United States dollars) | ||||||
| March 31, | December 31, | |||||
| 2014 | 2013 | |||||
| (unaudited) | ||||||
| (in thousands, except share data) | ||||||
| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ 15,020 | $ 19,146 | ||||
| Trade receivables | - | 25 | ||||
| Inventories | 385 | 449 | ||||
| Value added tax receivable, net | 1,843 | 1,765 | ||||
| Prepaid expenses and other assets | 957 | 1,091 | ||||
| Total current assets | 18,205 | 22,476 | ||||
| Property, plant and equipment, net | 31,445 | 32,375 | ||||
| Prepaid expenses and other assets | - | 30 | ||||
| Total assets | $ 49,650 | $ 54,881 | ||||
| Liabilities and Equity | ||||||
| Current liabilities | ||||||
| Accounts payable and other accrued liabilities | $ 1,993 | $ 1,365 | ||||
| Other current liabilities | 3,978 | 4,405 | ||||
| Total current liabilities | 5,971 | 5,770 | ||||
| Asset retirement obligation | 2,541 | 2,602 | ||||
| Other long term liabilities | 74 | 53 | ||||
| Total liabilities | 8,586 | 8,425 | ||||
| Commitments and contingencies | ||||||
| Equity | ||||||
| Common stock, $.01 par value, | ||||||
| 100,000,000 shares authorized; 43,530,833 shares issued and outstanding for both periods | 435 | 435 | ||||
| Additional paid in capital | 494,913 | 494,647 | ||||
| Accumulated deficit | (454,284) | (448,626) | ||||
| Shareholder's equity | 41,064 | 46,456 | ||||
| Total liabilities and equity | $ 49,650 | $ 54,881 | ||||
| GOLDEN MINERALS COMPANY | ||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | ||||||
| (Expressed in United States dollars) (Unaudited) | ||||||
| Three Months Ended | ||||||
| March 31, | ||||||
| 2014 | 2013 | |||||
| (in thousands, except share data) | ||||||
| Revenue: | ||||||
| Sale of metals | $ - | $ 5,830 | ||||
| Costs and expenses: | ||||||
| Costs applicable to sale of metals (exclusive | ||||||
| of depreciation shown below) | - | (8,872) | ||||
| Exploration expense | (1,600) | (1,524) | ||||
| El Quevar project expense | (334) | (1,087) | ||||
| Velardena project expense | - | (2,162) | ||||
| Velardena shutdown and care & maintenance costs | (1,249) | - | ||||
| Administrative expense | (1,655) | (1,897) | ||||
| Stock based compensation | (330) | (421) | ||||
| Reclamation and accretion expense | (49) | (42) | ||||
| Other operating income, net | 2 | 3,198 | ||||
| Depreciation, depletion and amortization | (846) | (2,568) | ||||
| Total costs and expenses | (6,061) | (15,375) | ||||
| Loss from operations | (6,061) | (9,545) | ||||
| Other income and (expense): | ||||||
| Interest and other income | 394 | 205 | ||||
| Interest and other expense | - | (133) | ||||
| Gain on foreign currency | 9 | 735 | ||||
| Total other income | 403 | 807 | ||||
| Loss from operations before income taxes | (5,658) | (8,738) | ||||
| Income tax benefit | - | 2,478 | ||||
| Net loss | $ (5,658) | $ (6,260) | ||||
| Comprehensive loss: | ||||||
| Unrealized gain on securities | - | 90 | ||||
| Comprehensive loss | $ (5,658) | $ (6,170) | ||||
| Net loss per common share – basic | ||||||
| Loss | $ (0.13) | $ (0.15) | ||||
| Weighted average common stock outstanding - basic (1) | 42,893,617 | 42,803,822 | ||||
| (1) | Potentially dilutive shares have not been included because to do so would be anti-dilutive. |
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SOURCE Golden Minerals Company
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