Golden Minerals Co. (NYSE-A: AUMN and TSX: AUMN) announced it does not have sufficient resources to meet its expected cash needs over the next twelve months.
As of June 30, Golden Minerals had cash and cash equivalents of approximately $1.4 million. On the same date, it had accounts payable and other current liabilities totaling approximately $4.8 million. Following the cessation of mining at the Velardeña mine, the company’s only near-term opportunity for generating cash flow is from the sale of assets or from new sources of debt or equity capital.
The company is evaluating alternatives to obtain sufficient funds to continue as a going concern. These measures include finalizing the sale of its Velardeña assets, seeking buyers or partners for the company’s other assets (including El Quevar) or obtaining equity or other financing. Without additional inflows, Golden Minerals anticipates its cash resources will be exhausted by September 2024. If unable to obtain additional resources, the company may be forced to cease operations and liquidate.
The company is considering selling assets, including the El Quevar project in Argentina and the Yoquivo project in Mexico, to address its liquidity and financial stability. Proceeds from these sales would be directed toward ongoing operating expenses and satisfying liabilities, while seeking to maximize any remaining value for shareholders.
In May 2024, Golden Minerals announced a series of purchase and sale agreements to sell certain assets at its Velardeña Properties in Durango State, Mexico, to a privately held Mexican company for $5.5 million plus Value Added Tax (VAT). To date, the company has received $2.5 million plus VAT for the sale of the Velardeña Mine, the sulfide processing plant and associated facilities, and title has been transferred to the buyer.
However, there is a delay in closing the agreement related to the sale of Velardeña’s oxide processing plant and water wells. The buyer has operational access to the plant. To date, the company has received partial payments of $373,000 for these assets. The remaining $2.627 million, plus VAT, was due on July 1. The company is uncertain when or if this payment will be received and is working to sign an extension of the sale agreement with the buyer.