Golden Minerals Company (NYSE-A:AUMN, TSX:AUMN, ETR:7GB) posted strong third-quarter results that saw its revenue quadruple year-over-year on the back of successful mining operations at the Rodeo gold-silver mine in Mexico.
For the period ended September 30, 2021, the Golden, Colorado-based gold and silver producer reported revenue of $8.5 million from mining operations at the Rodeo gold-silver mine in Mexico, compared to revenue of $2.1 million in the same period a year earlier.
The $8.5 million from doré sales and $4.3 million in costs of metals sold yielded a net operating margin of $4.2 million in the 3Q, compared to a net operating margin of $1.6 million from the lease of the company’s oxide mill.
READ: Golden Minerals intersects high-grade gold at its Rodeo mine in Mexico
Exploration expenditure totaled $2.1 million during the quarter and included continued drilling at Rodeo targeting resource expansion, the start of an initial drill program at the Sarita Este gold-copper project in Salta Province, Argentina, and other costs related to the firm’s portfolio of exploration projects.
Significantly, the company reported a net income of $0.4 million in the 3Q, compared to a net loss of $1.3 million in the 3Q of 2020.
Golden Minerals had $8.8 million cash and equivalents as of September 30, 2021, compared to $6.9 million on June 30, 2021.
In a statement accompanying the numbers, Golden Minerals CEO Warren Rehn said: "We are pleased to report our first-ever profitable quarter from mining operations based on continuing strong results from gold-silver production at Rodeo. We lowered our cash operating costs to $865 per payable gold ounce in the quarter.”
He added: “Looking forward, we remain on course to achieve the higher end of our 2021 production guidance of 12,000-14,000 ounces (oz) gold and have already exceeded our guidance of 25,000-30,000 oz silver."
The company highlighted the following business milestones:
- It produced 4,777 payable gold ounces and 12,196 payable silver ounces (4,942 gold equivalent (AuEq) ounces) with total cash costs, net of silver by-product credits, per payable ounce of gold of $865.
- Sold 4,804 AuEq oz. in doré, with 1,042 AuEq oz. in doré inventory at the end of the quarter.
- Reported grades processed of 4.0 grams per tonne ("g/t") gold and 9 g/t silver during the quarter.
- Processed at an average rate of 532 tonnes per day ("tpd") during the quarter.
- Reported several potentially resource-grade intercepts from exploration drilling at Rodeo. The program, which has the potential to expand the life of the Rodeo mine beyond the currently estimated life of around 2 ¼ years, concluded in October. Full results are expected before year-end.
- Continued limited scale test mining activities at Velardeña for further study of selective mining methods and to produce crushed run of mine material and sulfide concentrates. Results of these studies are expected in Q1 2022, after which time the Company anticipates making a development decision.
Financial outlook
The company said it anticipates receiving around $11-to-$12 million in net operating margin (defined as revenue from the sale of metals less costs of metals sold) from the Rodeo operation during the 12 months ending September 30, 2022, assuming average gold and silver prices during that period of $1,800 and $25 per oz, respectively.
Golden Minerals also expects to get the second installment of $1.5 million due to Golden Minerals from Fabled Silver Gold Corp. (TSX-V:FCO, OTCQB:FBSGF) in December 2021 under the terms of an agreement for the sale of the Company’s Santa Maria project.
Investors can tune in to a conference call and webcast on November 9, 2021, at 11:00 am ET to discuss the 3Q financial results and recent project updates.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive