Golden Minerals Announces Closing of Sale of Velardeña Mine and Associated Facilities and Delay of Closing in Sale of Velardeña Oxide Plant and Water Wells

Rhea-AI Summary

Golden Minerals Company (NYSE-A: AUMN, TSX: AUMN) has closed the sale of its Velardeña Mine and associated facilities to a private Mexican company for $2,500,000 cash plus VAT. The transaction was part of asset purchase and sale agreements dated April 29, 2024. However, there's a delay in closing the sale of the oxide processing plant and water wells in Durango State, Mexico. Golden Minerals has received partial payments of $373,000 for these assets, with the remaining $2,627,000 plus VAT due on July 1. The company plans to negotiate an extension with the buyer for the outstanding amount.

Positive

• Received $2,500,000 cash plus VAT for Velardeña Mine sale
• Received partial payment of $373,000 for oxide processing plant and water wells

Negative

• Delay in closing sale of oxide processing plant and water wells
• Outstanding payment of $2,627,000 plus VAT not received on due date

Insights

Financial Analyst

Golden Minerals’ sale of the Velardeña Mine and associated facilities is a significant development. The immediate $2,500,000 cash inflow strengthens the company’s balance sheet, potentially reducing debt or funding new projects. For a small-cap mining company, liquidity is critical and this sale directly improves their financial stability.

However, the delay in the closing of the sale of the oxide processing plant and water wells is concerning. The outstanding $2,627,000 plus VAT could impact the company’s short-term liquidity if the extension negotiations with the buyer fail. Investors should be cautious and monitor updates on these negotiations closely.

Additionally, the delay might signal operational or negotiation issues which can be a red flag for stakeholders. Evaluating the company's track record on such transactions can provide further insights into potential risks or management efficiency.

Market Research Analyst

This transaction is a strategic move for Golden Minerals, likely aimed at cutting operational costs and focusing resources on more profitable ventures. Selling non-core assets like the Velardeña Mine can be a prudent decision in a fluctuating commodities market. The reinvestment of proceeds into higher-yield projects could enhance their long-term profitability.

However, partial payments for the oxide plant and water wells indicate potential buyer liquidity issues or negotiation challenges. This delay could affect Golden Minerals' operational plans and cash flow projections. Stakeholders should consider the broader industry trends, such as commodity price volatility, which can impact the company’s financial stability and project feasibility.

GOLDEN, Colo.--(BUSINESS WIRE)-- Golden Minerals Company (“Golden Minerals,” “Golden” or the “Company”) (NYSE-A: AUMN and TSX: AUMN) announces that, pursuant to certain asset purchase and sale agreements, dated April 29, 2024 (the “Agreements”), the Company has received payment in full of $2,500,000 cash, plus Value Added Tax (“VAT”), for the Velardeña Mine and associated facilities and title has been transferred to a privately held Mexican company (“the Buyer”). Further and in connection with the Agreements, there has been a delay in the closing of the Minera William agreement entered into to sell the oxide processing plant and the water wells, located in Durango State, Mexico. To date, the Company has received partial payments in the amount of $373,000 for these assets. The remaining $2,627,000, plus VAT on the full sale price, was due on July 1. The Company expects to negotiate an extension with the Buyer.

About Golden Minerals

Golden Minerals is a precious metals mining exploration company based in Golden, Colorado. The Company is primarily focused on advancing its El Quevar silver project in Argentina and its Yoquivo silver prospect in Mexico. The Company is also advancing additional mining prospects in Nevada and Argentina.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and applicable Canadian securities legislation, including statements regarding the Buyer’s scheduled payments to the Company pursuant to the Agreements. These statements are subject to risks and uncertainties including the Buyer’s ability to make the payments under the sale agreements; increases in costs and declines in general economic conditions; changes in political conditions, in tax, royalty, environmental and other laws in the United States, Mexico or Argentina and other market conditions; and fluctuations in silver and gold prices. Golden Minerals assumes no obligation to update this information. Additional risks relating to Golden Minerals may be found in the periodic and current reports filed with the Securities & Exchange Commission by Golden Minerals, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

For additional information, please visit http://www.goldenminerals.com/.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240715607001/en/

Golden Minerals Company

(303) 839-5060

Source: Golden Minerals Company

FAQ

What assets did Golden Minerals Company (AUMN) sell in the recent transaction?

Golden Minerals Company (AUMN) sold the Velardeña Mine and associated facilities to a privately held Mexican company.

How much did Golden Minerals Company (AUMN) receive for the Velardeña Mine sale?

Golden Minerals Company (AUMN) received $2,500,000 cash plus Value Added Tax (VAT) for the Velardeña Mine and associated facilities.

What is the status of the oxide processing plant and water wells sale by Golden Minerals (AUMN)?

The sale of the oxide processing plant and water wells is delayed. Golden Minerals (AUMN) has received partial payments of $373,000, with $2,627,000 plus VAT remaining due.

When was the remaining payment for the oxide plant and water wells due to Golden Minerals (AUMN)?

The remaining payment of $2,627,000 plus VAT for the oxide plant and water wells was due to Golden Minerals (AUMN) on July 1.