AUMN - Golden Minerals to restart Velardeña mining operations but needs to raise cash

2023-06-05 08:28:54 ET

Golden Minerals ( NYSE: AUMN ) +21.6% pre-market Monday after saying it plans to restart mining operations at its Velardeña properties in Mexico, subject to the receipt of sufficient capital.

The company said the decision to restart operations was based primarily on "vastly improved sales terms" now available for gold-rich pyrite concentrate that is produced from flotation processing of Velardeña mineralized material, which permits a restart without the significant expense of the previously planned bio-oxidation facility.

However, Golden Minerals ( AUMN ) said it currently does not have sufficient resources to initiate the restart or to meet expected cash needs during the 12 months ending May 31, 2024.

Golden Minerals ( AUMN ) said it needs to raise additional cash "in the very near term," whether through the sale of non-core assets or equity financing; if it is unsuccessful, the company expects its cash balance would be depleted early in Q3 2023, and it could be forced to liquidate its business.

The company said mining operations at Rodeo have ceased, and although it continues to process ore from the Rodeo stockpile, it does not expect to generate a significant amount of positive operating margin from Rodeo going forward.

More on Golden Minerals:

• Financial and valuation comparison to sector peers
• Analysis: Golden Minerals: A Softer Year Ahead At Rodeo
• Stock price return: Down 61.5% YTD, down 72% in the past 12 months

For further details see: