Golden Minerals Co. announced it has signed a letter agreement to sell Silex Argentina S.A., its wholly-owned subsidiary that owns the El Quevar Project.
The letter agreement with Butte Energy Inc. stipulates that Butte will purchase 100% of the issued and outstanding shares of Silex, which is the sole owner of the El Quevar project located in Salta Province, Argentina. This agreement is binding pending the negotiation of a definitive acquisition agreement prior to Sept. 30, 2024, and closing of the sale on or before Oct. 31, 2024. The purchase price is set at $3.5 million, payable in cash: $500,000 as a non-refundable deposit by the close of business on Sept. 3, 2024; $500,000 upon execution of the acquisition agreement; and $2.5 million upon closing of the transaction.
The company noted that entering into this letter agreement aims to address its immediate cash needs. The sale of the final portions of the Velardeña Properties in Mexico has not been completed, leaving an outstanding payment of approximately $2.8 million owed to the company. Although Golden initially intended to conduct additional drilling and complete an updated Technical Report at El Quevar, it has deemed the sale of Silex the most effective strategy for alleviating short-term financial pressures. The company plans to focus its exploration efforts on other projects, including Sarita Este/Desierto and Sand Canyon, subject to future funding availability.
Closing of the transaction will depend on regulatory approvals, completion of due diligence by Butte, and necessary approvals from the boards of directors of both companies. INFOR Financial Inc. is acting as a financial advisor to Golden Minerals regarding this transaction.
On Aug. 28, Golden Minerals sold its wholly-owned Mexican subsidiary, Minera Labri S.A. de C.V., to a private Mexican company for approximately $445,500. Minera Labri previously owned Plant 1 of the Velardeña Properties, which was sold to another private group earlier in 2024. Following that transaction, Minera Labri held no assets but incurred net operating losses. The funds from the sale are expected to be used to reduce existing liabilities of the company and its subsidiaries.
In a related development, on Aug. 28, the Court of Appeals of Salta accepted the company’s appeal regarding the Desierto I mining concession. The court revoked the original cancelation ruling and ordered the restitution of the concession to Golden Minerals.
The company also provided a liquidity update, stating that it does not have sufficient resources to meet expected cash requirements over the 12 months ending June 30, 2025. As of Aug. 30, the company holds approximately $900,000 in cash and cash equivalents. Golden Minerals is exploring various options to enhance liquidity, including potential asset sales, equity financing, or the sale of the company itself. If additional resources are not secured, the company may need to cease operations and liquidate.