GOLDEN, CO--(Marketwire - November 3, 2010) - Golden Minerals Company ("Golden Minerals" or
the "Company") (
NYSE Amex:
AUMN) (
TSX:
AUM) announces results for the third
quarter 2010.
Third Quarter 2010 Financial Results
For the third quarter 2010, Golden Minerals recorded a net loss of $10.3
million, which included $4.0 million of expense related to the El Quevar
project, $3.8 million of exploration expense and $1.9 million of
administrative expense.
At September 30, 2010, Golden Minerals' aggregate cash and short-term
investments totaled $30.6 million, which included $30.3 million of cash and
cash equivalents and $0.3 million in short term investments. Giving effect
to the net proceeds of the Company's public offering and private placement
which closed on October 22, 2010, the Company's cash and short-term
investments included an additional $103.0 million, for a total of $133.6
million of cash and cash equivalents on a pro forma basis at September 30,
2010.
Golden Minerals closed a public offering of 4,663,250 shares of the
Company's common stock, including 608,250 shares issued upon full exercise
of the underwriters' over-allotment option, at a public offering price of
US$18.50 per share. Concurrent with the closing of the public offering,
Golden Minerals closed a private placement with the Company's largest
stockholder, The Sentient Group, of an additional 1,190,031 shares of the
Company's common stock at the public offering price of US$18.50 per share.
The public offering and private placement totaled 5,853,281 shares at a
price of US$18.50 per share, resulting in estimated net proceeds to the
Company of approximately $103.0 million after deducting underwriting
discounts, placement agent fees and estimated offering expenses.
For the remainder of 2010 and through the end of 2011, pursuant to the
Company's long term business strategy, Golden Minerals expects to spend up
to approximately $16.5 million to fund the completion of the initial
feasibility work at the El Quevar project. The Company expects to spend
approximately an additional $54 million beginning in 2011 to fund the
continuation of exploration drilling, underground drifting, metallurgical
studies and related technical, engineering and project assessments to
further define the resource. The Company expects to spend approximately
$12.5 million to fund exploration on its portfolio of exploration
properties through the end of 2011. Depending on the success of the
targeted exploration program and generative exploration activities, the
Company could spend additional amounts for early and advanced stage
drilling programs on its current or new properties. An estimated $9.0
million will be spent through the end of 2011 on general and administrative
costs, working capital and other corporate purposes.
Exploration Update
During the quarter and first nine months of 2010 Golden Minerals continued
to focus on defining the extent of the Yaxtché deposit and conducting
feasibility work at the Company's 100% controlled El Quevar silver project,
located in the Salta province of Argentina. The Yaxtché deposit is one of
11 targets currently identified at the El Quevar project. As of mid October
2010, the Company has completed approximately 52,500 meters of diamond
drilling in 254 drill holes. Of these holes, 189 were drilled to test the
main Yaxtché deposit for potential mineralization. In addition, as of mid
October construction of the underground decline at the Yaxtché deposit has
advanced approximately 175 meters of the 225 meters expected to be required
to access the zone of mineralization. The Company plans to use the
production-sized decline to confirm the resource model and mining methods,
and take bulk samples for additional metallurgical testing. Other ongoing
work includes metallurgical testing and process design.
During the third quarter 2010 the Company determined that additional
drilling is warranted at the El Quevar project to further define the extent
of the resource and therefore decided to delay completion of the
feasibility study originally scheduled to be completed in the fourth
quarter of 2010. A larger resource base may support a higher production
rate than initially contemplated. Drilling will focus on extending the
Yaxtché deposit both east and west along strike, along with infill
drilling. Drilling is also underway or being planned for additional targets
outside of the Yaxtché deposit, including Carmen (300 meters north of
Yaxtché), Mani (500 meters south of Yaxtché) and Sharon (3 kilometers north
of Yaxtché). There are currently three drills operating at the El Quevar
project with a fourth drill expected to be on site in the fourth quarter.
During the quarter the Company initiated drilling on the Matehaupil
(Rabioso target) and La Pinta projects in northern Zacatecas state in
Mexico. Sample results received from the first seven core holes out of a
ten hole initial drill program at the Matehaupil project include narrow
gold intercepts in three holes. RAB-10-03 intercepted 2.2 meters averaging
2.3 grams per tonne and 3.7 meters averaging 1.4 grams per tonne. RAB-10-06
intercepted 1.3 meters averaging 2.0 grams per tonne and 1.7 meters
averaging 4.2 grams per tonne. RAB-10-07 intercepted 1.7 meters averaging
3.0 grams per tonne. The remaining assayed intervals were consistently of
low values in gold and other metals. Assay results from additional holes
at the Rabioso target are pending. Assay results have been received from
the first seven holes out of a planned ten hole rotary drill program at the
La Pinta project, directly south of Goldcorp's Peñasquito land position.
At La Pinta the Company is selectively drilling rotary holes in an effort
to identify the source of intrusive float found at the surface with
anomalous base and precious metal values. Results from the first seven
holes were uniformly low in gold and base metal values, and the source of
the intrusive float has yet to be determined.
All drill assays and intercepts for the holes at the El Quevar project and
the Matehaupil project, for which the Company has received and verified
results, will be available at
http://www.goldenminerals.com/.
Review by Qualified Person, Quality Control and Reports
Results of the Company's drilling program have been reviewed, verified, and
compiled under the direction of the Company's Senior Vice President of
Exploration, Robert Blakestad, M.Sc., P.Geo, L.P.G., a Qualified Person for
the purpose of NI 43-101. Mr. Blakestad has over 35 years of mineral
exploration experience, is a Professional Geoscientist registered in Nova
Scotia and a Licensed Professional Geologist in the state of Washington.
Drill intercept lengths are down-hole lengths reflecting apparent with true
widths ranging from 80% to 95% of the reported down-hole lengths widths of
mineralization.
To ensure reliable sample results, Golden Minerals uses a quality
assurance/quality control program that monitors the chain-of-custody of
samples and includes the insertion of blanks, duplicates, and certified
reference standards in each batch of samples. Core is photographed and sawn
in half with one half retained in a secured facility for verification
purposes. Sample preparation (crushing and pulverizing) is performed at an
independent ISO 9001:2001 certified laboratory. Prepared samples are
direct-shipped to ISO 9001:2001 certified laboratories. Pulp splits of
mineralized intervals are re-assayed at certified independent referee
laboratories.
About Golden Minerals
Golden Minerals is a Delaware corporation based in Golden, Colorado,
primarily engaged in the advancement of its pipeline of exploration
projects in Mexico and South America. The Company has a portfolio of 30
exploration projects, including the feasibility stage El Quevar project in
the Salta Province of northwestern Argentina, and advanced stage drilling
projects in Mexico and Peru. The Company's experienced management team has
proven in-house ability to explore, develop and operate mining projects.
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 the
anticipated expenditures during the remainder of 2010 and 2011 on the El
Quevar project and feasibility study, targeted and generative exploration,
property holding costs, and general and administrative costs. These
statements are subject to risks and uncertainties, including results of
exploration including exploration on additional targets at El Quevar;
whether continued exploration results will support engineering and other
feasibility work on El Quevar or a larger resource at El Quevar; changes in
geological interpretations, including the interpretations regarding the
westward extension, continuity and strike length of the Yaxtché deposit,
including changes resulting from additional drilling, exploration or
feasibility work; whether exploration results will be indicative of future
exploration results; delays in construction of the drift at El Quevar,
results of El Quevar feasibility study work, exploration at targeted
projects and generative exploration, uncertainties regarding whether the
results of additional exploration at the Company's projects or feasibility
work at El Quevar will be positive; unexpected increases in costs of
materials and supplies used in exploration activities; fluctuations in
silver and other metal prices; technical and permitting issues; title
problems; and the ability and success of the Company to continue raising
adequate capital and implementing its plans. Golden Minerals Company
assumes no obligation to update this information. 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,
2009.
GOLDEN MINERALS COMPANY
CONSOLIDATED BALANCE SHEETS
(Expressed in United States dollars)
(Unaudited)
Pro-Forma
September 30, September 30, December 31,
2010 (1) 2010 2009
------------- ------------- ------------
(in thousands, except share data)
Assets
Current assets
Cash and cash equivalents $ 133,270 $ 30,268 $ 8,570
Investments 335 335 444
Trade receivables - - 1,460
Prepaid expenses and other
assets 1,518 1,568 2,087
------------- ------------- ------------
Total current assets 135,123 32,171 12,561
Property, plant and equipment,
net 9,084 9,084 7,774
Assets held for sale 1,316 1,316 813
Prepaid expenses and other
assets 447 447 552
------------- ------------- ------------
Total assets $ 145,970 $ 43,018 $ 21,700
============= ============= ============
Liabilities and Equity
Current liabilities
Accounts payable and other
accrued liabilities $ 2,624 $ 2,674 $ 2,428
Other current liabilities 67 67 63
------------- ------------- ------------
Total current liabilities 2,691 2,741 2,491
Other long term liabilities 584 584 651
------------- ------------- ------------
Total liabilities 3,275 3,325 3,142
------------- ------------- ------------
Commitments and contingencies
Equity
Common stock, $.01 par value,
50,000,000 shares authorized;
(15,124,567 pro-forma),
9,271,286 and 3,238,615 shares
issued and outstanding 151 93 32
Additional paid in capital 183,728 80,784 37,854
Accumulated deficit (41,197) (41,197) (20,276)
Accumulated other
comprehensive income (loss) 13 13 154
------------- ------------- ------------
Parent company's
Shareholders' equity 142,695 39,693 17,764
Noncontrolling interest in
subsidiaries - - 794
------------- ------------- ------------
Total equity 142,695 39,693 18,558
------------- ------------- ------------
Total liabilities and
equity $ 145,970 $ 43,018 $ 21,700
============= ============= ============
(1) The pro-forma presentation reflects the results of a public offering
and private placement of common stock which the Company closed on
October 22, 2010.
GOLDEN MINERALS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Expressed in United States dollars)
(Unaudited)
For The For The
Period Period
Nine March 25, January 1,
Three Months Ended Months 2009 2009
September 30, Ended Through Through
-------------------- September September March 24,
2010 2009 30, 2010 30, 2009 2009
--------- --------- --------- --------- -----------
(Successor) (Predecessor)
(in thousands, except share data)
Revenue:
Management
service fees $ 98 $ 2,652 $ 11,216 $ 6,010 $ 1,350
Costs and expenses:
Costs of services (31) (1,179) (2,566) (2,263) -
Exploration
expense (3,755) (3,598) (9,893) (7,067) (3,482)
El Quevar
feasibility (4,031) - (10,004) - -
Administrative
expense (1,868) (2,521) (6,295) (5,857) (4,779)
Stock based
compensation (559) (609) (1,859) (1,218) (2,717)
Other operating
income &
(expenses), net 76 293 186 305 -
Depreciation,
depletion and
amortization (307) (232) (751) (384) (102)
--------- --------- --------- --------- -----------
Total costs
and expenses (10,475) (7,846) (31,182) (16,484) (11,080)
--------- --------- --------- --------- -----------
Loss from
operations (10,377) (5,194) (19,966) (10,474) (9,730)
Other income and
expenses:
Interest and
other income 90 106 376 204 1,010
Royalty income 80 272 239 399 88
Interest and
other expense - - - - (345)
Gain (loss) on
foreign currency (65) 76 (53) 170 (13)
Gain on
extingushment
of debt - - - - 248,165
Loss on auction
rate securities - (867) - (2,199) (828)
Reorganization
costs, net - (249) - (917) (3,683)
Fresh start
accounting
adjustments - - - - 9,122
--------- --------- --------- --------- -----------
Total other
income and
expenses 105 (662) 562 (2,343) 253,516
--------- --------- --------- --------- -----------
Income (loss)
from continuing
operations
before income
(taxes) benefit (10,272) (5,856) (19,404) (12,817) 243,786
Income taxes 20 (284) (1,517) (497) (165)
--------- --------- --------- --------- -----------
Net income (loss)
from continuing
operations (10,252) (6,140) (20,921) (13,314) 243,621
Income (loss) from
discontinued
operations - - - - (4,153)
--------- --------- --------- --------- -----------
Net income
(loss) $ (10,252) $ (6,140) $ (20,921) $ (13,314) $ 239,468
Net (income)
loss
attributable to
noncontrolling
interest $ - $ - $ - $ - $ (7,869)
--------- --------- --------- --------- -----------
Net income (loss)
attributable to
the Successor/
Predecessor
shareholders $ (10,252) $ (6,140) $ (20,921) $ (13,314) $ 231,599
--------- --------- --------- --------- -----------
Other comprehensive
loss:
Unrealized gain
(loss) on
securities $ (74) $ (666) $ (141) $ 160 $ 940
--------- --------- --------- --------- -----------
Comprehensive
income (loss)
attributable to
Successor/
Predecessor
shareholders $ (10,326) $ (6,806) $ (21,062) $ (13,154) $ 232,539
========= ========= ========= ========= ===========
Net income (loss)
per Common/
Ordinary Share -
basic
Income (loss)
from continuing
operations
attributable to
the Successor/
Predecessor
shareholders $ (1.15) $ (2.06) $ (2.81) $ (4.46) $ 4.13
Discontinued
operations
attributable to
the Successor/
Predecessor
shareholders - - - - (0.20)
--------- --------- --------- --------- -----------
Income (loss)
attributable to
the Successor/
Predecessor
shareholders $ (1.15) $ (2.06) $ (2.81) $ (4.46) $ 3.93
========= ========= ========= ========= ===========
Net income (loss)
per Common/
Ordinary Share -
diluted
Income (loss)
from continuing
operations
attributable to
the Successor/
Predecessor
shareholders $ (1.15) $ (2.06) $ (2.81) $ (4.46) $ (0.06)
Discontinued
operations
attributable to
the Successor/
Predecessor
shareholders - - - - (0.17)
--------- --------- --------- --------- -----------
Income (loss)
attributable to
the Successor/
Predecessor
shareholders $ (1.15) $ (2.06) $ (2.81) $ (4.46) $ (0.23)
========= ========= ========= ========= ===========
Weighted average
Common Stock/
Ordinary Shares
outstanding -
basic 8,919,536 2,987,735 7,455,303 2,987,735 59,000,832
========= ========= ========= ========= ===========
Weighted average
Common Stock/
Ordinary Shares
outstanding -
diluted 8,919,536 2,987,735 7,455,303 2,987,735 69,171,400
========= ========= ========= ========= ===========
Contact Information: For additional information please visit http://www.goldenminerals.com/ or
contact:
Golden Minerals Company
Jerry W. Danni
(303) 764-9160
Executive Vice President