Golden Minerals Company (NYSE-A:AUMN, TSX:AUMN, ETR:7GB) said it ended the second quarter of 2022 with a cash balance of $9.5 million and anticipates receiving approximately $4.5 to $6.5 million in net operating margin from its Rodeo gold-silver mine in Mexico during the 12 months ending June 30, 2023.
The projection assumes average gold and silver prices during that period of $1,800/oz and $25.00/oz, respectively.
"Our production at Rodeo continues on plan and is providing good cash flow while we continue to work on the re-start of Velardena,” Golden's president and chief executive officer, Warren Rehn, said in a statement. “At Velardena our recent test-mining showed excellent progress on productivity; however, the dilution control was not up to expectations, mostly due to geologic factors on the San Mateo vein.”
READ: Golden Minerals reports assay results from first 10 holes of second phase diamond drill program at its Sarita Este property in Argentina
"We will take the time required to resolve this through modifications in the mine plan. I expect we will be in a good position once again to propose the re-start late this year or early next year," Rehn added.
The company also anticipates receiving $1.5 million of the remaining $2.0 million due from Fabled Silver Gold Corp related to the sale of the company's Santa Maria property during the 12-month period.
Second quarter financials
During the second quarter, the company posted revenue of $5.9 million yielding a net operating margin of $1.3 million compared with $5.9 million in revenue and a net operating margin of $2.5 million in the second quarter of 2021, both from mining operations at the Rodeo mine in Mexico.
Golden Minerals had a $9.5 million cash and cash equivalents balance as of June 30, 2022, compared to $12.2 million as of December 31, 2021. Its net loss of $0.02 per share or $2.8 million in the second quarter of 2022, compared to a net loss of $0.00 per share or $0.8 million in the second quarter of 2021.
The Rodeo mine produced 3,004 payable gold ounces and 12,768 payable silver ounces with total cash costs, net of silver by-product credits, per payable ounce of gold of $1,426.1. Cash costs were higher than the $1,164 reported in Q1 2022 due to lower grade than normal mined in April, in addition to increased drilling and blasting activity which will benefit third quarter production
In July 2022, the company completed a third drill program of 5,693 meters in 24 drill holes at the Yoquivo gold-silver project located in Chihuahua State, Mexico. While complete assay results have not yet been received, the company anticipates this round of drilling will provide sufficient information with which to estimate an initial gold-silver resource later in 2022.
In June 2022, the company completed a second drill program at the Sarita Este gold-copper project in Argentina and recently released assay results from the program point to a potentially economic shallow oxidized gold system.
In June 2022, Barrick reported results of a 5-hole 1,300m initial drill program at our El Quevar property to the Company. Final assay results are pending.
Looking ahead, Golden Minerals said currently forecasted expenditures during the 12 months ending June 30, 2023, apart from Rodeo costs of metals sold which are included in the net operating margin forecast, total approximately $10.4 million as follows:
- $5.1 million on exploration activities and property holding costs associated with the Company's portfolio of exploration properties located in Mexico, Argentina and Nevada, including project assessment and evaluation costs relating to additional exploration at Rodeo and Yoquivo, as well as costs associated with the potential restart of Velardena;
- $1.0 million at the Velardena Properties for care and maintenance;
- $0.4 million at the El Quevar project to fund care and maintenance and property holding costs, net of reimbursement from Barrick; and
- $3.9 million in general and administrative costs.
Golden Minerals said its management will be hosting a conference call and webcast on Monday, August 15, 2022, at 11.00am EDT to discuss the second quarter 2022 financial results and recent project updates.
The webcast will also be available for replay on the Golden Minerals website after August 15, 2022
Contact the author at jon.hopkins@proactiveinvestors.com