Golden Minerals Company

In Q3 2022, Golden Minerals reported revenue of $5.3 million, cost of sales of $4.4 million, and a net operating margin of just under $1 million at Rodeo. The company reported a negative after-tax income of about $2.7 million. Rodeo produced just under 3,000 payable ounces of gold and 11,900 payable ounces of silver in the quarter, and cash costs per payable gold ounce net of silver credits were $1,391, down from $1,426 in Q2. Year-to-date, the company produced just under 9,600 payable gold ounces at cash costs of $1,316 per payable gold ounce net of silver credits. Management maintained full-year 2022 guidance for 12,000 to 14,000 payable gold ounces and raised silver guidance to 47,000 to 50,000 ounces, with average head grades projected at about 2.8 g/t gold and 10.8 g/t silver. Full-year net operating margin was guided to $6 million to $8 million, assuming average realized prices of $1,800 per gold ounce and $25 per silver ounce. Cash ended the quarter at about $6.5 million, and management projected cash of roughly $4 million to $6 million over the next 12 months, excluding any debt or equity financing.

Warren Rehn said the quarter was hurt by sharply lower gold and silver prices, but Rodeo remained close to plan and the company kept pushing ahead operationally. He emphasized that Velardeña remains under evaluation, with ore sorting and mining-method changes intended to address dilution before a restart decision is made. He also highlighted progress at Yoquivo, Sarita Este, and Barrick’s work at El Quevar, framing the company as active across multiple projects.

Julie Weedman said Rodeo generated about $0.9 million of operating margin on $5.3 million of revenue in Q3, but the company still posted about a $2.7 million after-tax loss due largely to exploration spending and other overhead. Exploration expense was about $2.4 million, G&A was $0.9 million, and Velardeña care-and-maintenance expense was about $0.4 million; El Quevar spending was $0.2 million. She said cash ended at about $6.5 million, net cash flow for the quarter was negative $3.0 million, and capital spending year-to-date was only $46,000 versus $1.5 million in the first nine months of 2021. She guided to cash remaining around $4 million to $6 million through September 30, 2023, assuming metal prices of $1,800 gold and $25 silver and including $1.75 million of expected payments.

Analysts focused on why cash costs improved despite inflation, and management said Q3 benefited from prior blasting work, smoother operations, tighter reagent use, and lower administrative and oxide plant processing costs. Questions also centered on Velardeña, where management said volatility in metals prices slowed things somewhat but did not stop testing; they expect a decision by about the end of Q2 2023 if ore-sorting and dilution work progress well. On capital needs, management said the BIOX plant was previously estimated at about $10 million, but costs are likely higher now due to inflation; they also said production could start before BIOX is complete, with concentrates stockpiled in the interim.