Golden Minerals Signs Binding Agreement to Sell Yoquivo Gold-Silver Project

Rhea-AI Summary

Golden Minerals Company (NYSE-A: AUMN) has signed a binding agreement to sell its Yoquivo gold-silver project in Chihuahua State, Mexico to Advance Metals (ASX: AVM) for US$570,000 plus VAT. The transaction includes three payments: an initial non-refundable US$20,000 for a seven-day due diligence period starting October 24, 2024, followed by two US$275,000 payments on November 1 and November 21, 2024. The deal is subject to regulatory approvals and due diligence completion. If AVM withdraws, they'll pay a 20% breakup fee of the purchase price.

Positive

• Immediate cash injection of US$570,000 from asset sale
• Non-refundable US$20,000 payment secured for due diligence period
• 20% breakup fee protection if buyer withdraws

Negative

• Divestment of potentially valuable gold-silver asset

Insights

Financial Analyst

The sale of the Yoquivo gold-silver project represents a strategic divestment for Golden Minerals, bringing in $570,000 in cash proceeds. For a micro-cap company with a market cap of just $5.6M, this transaction is significant, representing approximately 10.2% of the company's current market value. The structured payment plan, with an initial $20,000 due diligence fee and two subsequent $275,000 payments, provides near-term liquidity. The 20% breakup fee protection adds a layer of security to the deal. This cash injection could help strengthen the company's balance sheet and provide working capital for other operations, though the relatively modest sale price suggests value attribution to this non-core asset.

GOLDEN, Colo.--(BUSINESS WIRE)-- Golden Minerals Company (“Golden Minerals”, “Golden” or the “Company”) (NYSE-A: AUMN and TSX: AUMN) today announced it has signed a binding agreement (the “Agreement”) to sell its Yoquivo gold-silver project (located in Chihuahua State, Mexico) (the “Yoquivo Project”) to Advance Metals Limited (ASX: AVM) (“AVM”) an ASX-listed entity focused on the acquisition, discovery, and advancement of high-quality metals projects (the “Transaction”).

Under the terms of the Agreement, AVM shall purchase 100% of the Yoquivo Project from Minera de Cordilleras S. de R.L. de C.V., a wholly-owned subsidiary of Golden Minerals, for total consideration of US$570,000 (the “Purchase Price”), payable in cash, plus value added tax (“VAT”) as follows:

• A non-refundable cash payment of US$20,000, plus VAT, for AVM to have the right to carry out due diligence for a seven-day exclusive period, beginning on October 24, 2024.
• On November 1, 2024, AVM shall make a US$275,000 cash payment, plus VAT, to Golden.
• On November 21, 2024, AVM shall make a final US$275,000 cash payment, plus VAT, to Golden (collectively, the “Transaction Payments”).

Closing of the Transaction will be subject to additional conditions, including receipt of regulatory approvals and completion of due diligence review by AVM. In the event that AVM decides not to complete the Transaction, AVM will be subject to a breakup fee of 20% of the Purchase Price.

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 forward-looking information within the meaning of applicable Canadian securities legislation (collectively, “forward-looking statements”), including statements regarding the Company receiving the Transaction Payments contemplated by the Agreement and Transaction and AVM’s payment of a breakup fee in the amount of 20% of the Purchase Price if AVM decides not to complete the Transaction.

These statements are subject to risks and uncertainties including the Company’s receipt of the Transaction Payments; the ability of the Company to sell or realize value from the sale of the Yoquivo Project or its other assets, or from equity or other external financings; receipt of regulatory approvals required to complete the Transaction; the satisfaction or waiver of the Transaction’s closing conditions; 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 assumes no obligation to update this information. Additional risks relating to Golden may be found in the periodic and current reports filed with the Securities & Exchange Commission by Golden, 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/20241025226396/en/

Golden Minerals Company

(303) 839-5060

Source: Golden Minerals Company

FAQ

How much is Golden Minerals (AUMN) selling the Yoquivo Project for?

Golden Minerals is selling the Yoquivo Project for US$570,000 plus VAT.

When are the payment dates for AUMN's Yoquivo Project sale?

The payments are scheduled for: US$20,000 starting October 24, 2024, US$275,000 on November 1, 2024, and US$275,000 on November 21, 2024.

What happens if AVM cancels the Yoquivo Project purchase from AUMN?

If AVM decides not to complete the transaction, they will be required to pay a breakup fee of 20% of the US$570,000 purchase price.