Golden Minerals Signs Definitive Agreement to Sell Its El Quevar Silver Project

Rhea-AI Summary

Golden Minerals Company (NYSE-A: AUMN and TSX: AUMN) has entered into a definitive agreement to sell its wholly-owned subsidiary, Silex Argentina S.A., to Butte Energy Inc. This sale includes the El Quevar silver project in Salta Province, Argentina. The purchase price is set at US$3,500,000, payable in cash through three installments:

• US$500,000 non-refundable deposit (paid on September 3, 2024)
• US$500,000 due by September 27, 2024
• US$2,500,000 upon closing

The transaction is expected to close by October 31, 2024, subject to regulatory approvals and other conditions. INFOR Financial Inc. is acting as financial advisor, while Fasken Martineau DuMoulin LLP serves as Canadian counsel for Golden Minerals in this transaction.

Positive

• Sale of El Quevar silver project for US$3,500,000 in cash
• Non-refundable deposit of US$500,000 already received
• Potential to improve company's cash position upon transaction closing

Negative

• Divestment of a potentially valuable silver asset
• Transaction subject to regulatory approvals and closing conditions

Insights

Financial Analyst

The sale of Golden Minerals' El Quevar silver project through its subsidiary Silex Argentina S.A. is a significant development for the company. With a total purchase price of $3.5 million, this transaction represents a substantial influx of cash for Golden Minerals, which had a market cap of only about $4 million prior to this announcement.

The deal structure, with $1 million in non-refundable deposits before closing, mitigates some risk for Golden. However, the bulk of the payment ($2.5 million) is due at closing, which is subject to regulatory approvals. This introduces some uncertainty, but if completed, it would nearly double the company's current market valuation.

For a small-cap mining company, divesting a non-core asset can be a strategic move to focus on more promising projects or to shore up the balance sheet. Investors should watch closely for how Golden Minerals plans to utilize this cash infusion, as it could significantly impact the company's future prospects and financial health.

GOLDEN, Colo.--(BUSINESS WIRE)-- Golden Minerals Company (“Golden” or the “Company”) (NYSE-A: AUMN and TSX: AUMN) announces that further to its press release dated September 3, 2024, it has entered into a definitive agreement (the “Definitive Agreement”) to sell Silex Argentina S.A. (“Silex”), its wholly-owned subsidiary, to Butte Energy Inc. (“Butte”). Butte has agreed to purchase 100% of the issued and outstanding shares of Silex, which is the sole owner of the Company’s El Quevar silver project located in Salta Province, Argentina.

The Definitive Agreement is binding on the parties, pending closing of the sales transaction (the “Transaction”) on or prior to October 31, 2024. The purchase price for the acquisition of 100% of Silex is US$3,500,000, payable in cash, as follows:

1. US$500,000, as a non-refundable deposit, which was paid on September 3, 2024;
2. US$500,000, payable to Golden prior to the close of business on September 27, 2024; and
3. US$2,500,000 payable to Golden upon closing of the Transaction (the “Final Payment”).

Closing of the Transaction will be subject to additional conditions, including receipt of regulatory approvals. INFOR Financial Inc. is acting as financial advisor to the Company in relation to this Transaction. Fasken Martineau DuMoulin LLP is acting as Canadian counsel to the Company.

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 closing the Transaction and the Company receiving the payment due on September 27, 2024 and the Final Payment as contemplated by the Definitive Agreement.

These statements are subject to risks and uncertainties including the Company’s receipt of the payment due on September 27, 2024 and the Final Payment, receipt of regulatory approvals required, the satisfaction or waiver of closing conditions, or the ability of the Company to close the Transaction. 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/20240927800259/en/

Golden Minerals Company

(303) 839-5060

Source: Golden Minerals Company

FAQ

What is the purchase price for Golden Minerals' El Quevar silver project (AUMN)?

The purchase price for Golden Minerals' El Quevar silver project is US$3,500,000, payable in cash through three installments.

When is the expected closing date for Golden Minerals' (AUMN) sale of El Quevar?

The expected closing date for Golden Minerals' sale of El Quevar is on or prior to October 31, 2024, subject to regulatory approvals and other conditions.

Who is purchasing Golden Minerals' (AUMN) El Quevar silver project?

Butte Energy Inc. is purchasing Golden Minerals' El Quevar silver project through the acquisition of Silex Argentina S.A., Golden's wholly-owned subsidiary.

What are the payment terms for Golden Minerals' (AUMN) El Quevar project sale?

The payment terms include a US$500,000 non-refundable deposit paid on September 3, 2024, US$500,000 due by September 27, 2024, and US$2,500,000 payable upon closing of the transaction.