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Golden Minerals reports 1Q revenue of $7.5M as Rodeo gold-silver mine produces 3,787 gold-equivalent ounces

Published: 08:52 10 May 2022 EDT

Golden Minerals Company -
The miner generated 3,608 ounces of payable gold and 13,944 ounces of silver, with total cash costs, net of silver by-product credits, per payable ounce of gold of $1,164

Golden Minerals Company (NYSE-A:AUMN, TSX:AUMN, ETR:7GB) has reported a big increase in first-quarter revenue as its Rodeo gold-silver mine in Mexico’s Durango State produced 3,787 gold-equivalent ounces. 

In the three months to March 31, 2022, revenue of $7.5 million yielded a net operating margin of $3.2 million versus $1.8 million revenue and a net operating margin of $200,000 in the first quarter 2021, the Colorado-based company said. 

The miner generated 3,608 ounces of payable gold and 13,944 ounces of silver, with total cash costs, net of silver by-product credits, per payable ounce of gold of $1,164.

READ: Golden Minerals says mining operations executive John Galassini has joined as its chief operating officer, effective May 9, 2022

"Rodeo continues to operate according to plan, providing cash flow for our exploration and development projects at Yoquivo, Sarita Este, and of course, Velardeña,” the company’s president and CEO Warren Rehn said in a statement. “We are on track to recommend a start-up plan for Velardeña within the next few months. I am very pleased with our progress establishing Golden Minerals as a sustainable gold and silver producer.”

Golden Arrow sold 4,040 gold equivalent ounces (oz) in dore at average prices, before selling and refining costs, of $1,888/oz gold and $24.24/oz silver. Dore inventory at the end of the quarter consisted of 375 payable ounces gold and 1,379 payable ounces silver.

The company said it also continued limited scale test mining activities at its Velardeña project for use in final optimization of a bio-oxidation plant design and for use in additional flotation separation studies. It said it is also testing mining methods to determine whether it is able to control mining dilution. Results are expected in the next few months, after which time it said it anticipates making a decision on constructing the BIOX plant and restarting the operation.

Golden Arrow said it ended the first quarter with a cash balance of $11.7 million. It expects to achieve a net operating margin of approximately $7 million to $9 million for the 12 months ending March 31, 2023, assuming average gold and silver prices during that period of $1,800 and $25 oz, respectively. 

Additionally, it noted that it is scheduled to receive the final installment of $2 million due from Fabled Silver Gold Corp. in December 2022 under the terms of an agreement for the sale of its Santa Maria project.

For the 12 months ending March 31, 2023, the company expects to spend $4.3 million on exploration activities and property holding costs associated with its portfolio of exploration properties located in Mexico, Argentina and Nevada, including project assessment and evaluation costs relating to additional exploration at Rodeo, Yoquivo and other properties.

On top of that, it has budged $1.1 million at the Velardeña properties for care and maintenance; $400,000 at the El Quevar project to fund care and maintenance and property holding costs, net of reimbursement from Barrick; $3.7 million in general and administrative costs; and $500,000 due to an increase in working capital.

Golden Minerals is focused on producing gold and silver from its Rodeo mine and advancing its Velardeña properties in Mexico and, through partner-funded exploration, its El Quevar silver property in Argentina, and acquiring and advancing selected mining properties in Mexico, Nevada and Argentina.

Contact the author at stephen.gunnion@proactiveinvestors.com

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