Mar 3 2014
Golden Minerals Company ("Golden Minerals" or "the Company") announces financial results for the full year ending December 31, 2013.
For the year ending December 31, 2013 Golden Minerals recorded revenue of $10.7 million and costs of metals sold of $17.5 million for a negative gross margin of $6.9 million related to the sale of metals at the Velardena Properties in Mexico. The Company suspended mining operations at Velardena on June 19, 2013 due to depressed precious metals prices in order to conserve the asset until the Company is able to create new mining and processing plans that at then-current silver and gold prices indicate a sustainable cash margin. The Company recorded a 2013 net loss of $240.4 million, of which $210.7 million is attributable to non-cash impairment charges, net of tax. Approximately $204.2 million of the net impairment charges were recorded in the second quarter 2013 related to lower metals prices and to the suspension of mining and processing activities at Velardena in June 2013. The remaining $6.5 million in non-cash impairment charges, net of tax, were recorded during the fourth quarter 2013.
In addition to the negative gross margin and impairment charges noted above, the net loss includes $6.9 million for non-cash depreciation and amortization-related expense; $6.4 million related to Velardena shutdown, care and maintenance activities; $5.6 million for general and administrative expense; $4.6 million for exploration expense; $3.1 million for project expenses at Velardena; and $2.6 million of expense associated with the El Quevar project. These expenses were partially offset by other operating income of $3.5 million related primarily to the sale of certain Peruvian exploration properties in the first quarter 2013 and $4.7 million related to current and deferred tax benefits.
The Company's cash and cash equivalents balance totaled $19.1 million at December 31, 2013 compared to $44.6 million at December 31, 2012. The $25.5 million decrease during 2013 resulted primarily from the cash expenses noted above plus $4.8 million in Velardena Properties capital and development expenditures and a decrease in working capital of $1.4 million primarily related to a reduction in inventories and receivables at the Velardena Properties.
Current Activities
We continue to evaluate plans for a restart of mining 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 mining. We have been mapping and sampling underground veins containing higher grade shoots to verify mine modeling in support of restart planning. We are analyzing the potential of mining from a combination of different veins at our Velardena Properties based primarily on grades and metallurgy. Additionally, we are reviewing alternative high-grade, narrow-vein mining methods to determine the most beneficial mining method for a potential restart. In these efforts, we are using our own technical personnel as well as independent third party consultants. During the first quarter 2014 we commenced a 5,000-meter underground drill program at the Velardena mine in order to obtain additional information to assist us in creating our restart plan. The drill program is being conducted in known but previously undrilled areas located outside the current 43-101 resource. We expect to receive the drill results in the second quarter 2014. Separately, Golden continues to pursue outside feed sources for the processing facilities at the Velardena Properties. Such a third-party agreement could permit an earlier restart of the Velardena facilities than would otherwise be the case.
During the fourth quarter 2013, the Company began a planned 2,000-meter drilling program at the Los Azules exploration property located in Chihuahua, Mexico. The Company announced high-grade gold drill intersections associated with this drilling program in a February 27, 2014 press release. Based on program results to date, the Company has approved an additional $1.1 million for drilling focused on definition of a target gold and silver resource within the first 250 vertical meters along the strike of the vein beneath areas of historic mining activity. Separately, the Company continues to seek a partner for its El Quevar silver project located in the Salta Province of Argentina.
About Golden Minerals
Golden Minerals is a Delaware corporation based in Golden, Colorado. The Company is primarily focused on efforts to create a new mining and processing plan for its Velardena Properties, the advancement of its El Quevar advanced exploration property in Argentina, and the exploration of properties in Argentina and Mexico.
Source: http://www.goldenminerals.com