Hello and thank you for your enquiry.
Your frustrations with the market and AUMN share performance are shared by all of us. We will continue to look for ways to reassure investors. Please understand first off that we have no material information that has not been released. However, we will challenge ourselves to find ways to better communicate. For example, this may include more frequent updates on the status of operational improvements at Valerdeña. We have just this morning released information about the updated resource update for Valerdeña, and we expect that resource estimate to be followed by an economic assessment, which of course will be communicated to investors straightaway.
Golden remains 100%-focused on executing our business plan: increasing production at Velardeña, strategically monetizing portions of our large exploration portfolio, and seeking to become self-funding as a company -- all of which will ultimately benefit our shareholders. As such, the best use for our cash is at Velardeña, where it will enable us to increase production, increase revenue and profitability, and thus ultimately become self-funding as a company. It would not, therefore, make sense to buy our stock back or pay a dividend, as these are short term measures that would compromise our longer term growth by eating cash.
As mentioned, we have announced plans to monetize our portfolio of over 80 exploration properties where deal terms are attractive. This should bring cash into the company. We have also mentioned the possibility of seeking a JV partner for El Quevar to share the cost of development there.
With regards to Velardeña production, we have exceeded production guidance in the two periods to date in which we have owned the property. We hired a customs expediter back at the end of 2011 to help us with moving the equipment from El Quevar, and we were reassured weekly by Argentine customs that 'next week', the equipment would move. During the first quarter we were able to develop a workaround for the missing equipment and as noted, we exceeded our production forecast. Only when it became evident that second through fourth quarters would be negatively impacted did we issue a revised forecast, and then we did so straightaway. Had we been told in December 2011 that it would take six months for the equipment to arrive in Mexico, we would have adjusted 2012 plans then and communicated them accordingly.
With regard to your question, the gentleman who is most closely involved with the customs expediter is in our Mexico operations at the moment. I have emailed him to ask for an update on the status of the equipment. When I hear back from him, I will let you know. If he is underground today, I may not hear back from him until the weekend.
Thank you for your support of Golden Minerals.
Golden Minerals Investor Relations
"but the AUMN cash burn rate scared the hell out of me" ----> HEY !! what's up with you, already --- don't ya know we got a lousy economy and the BOD has tuitions to pay and pensions to fund !!! -----> get with the program, already /// :O)
How did they burn through so much money in a year as a junior miner? I've not done any research of my own, but the cash burn rate scared hell out of me.
Any of you know the details on the cash expenditures?
Something is very strange with this company. Shareholders would have to prey there was nothing fishing about the fast drain of the cash.
Exactly. This company has burnt through over $100 million in the last year, so $32 million is not much. The only thing they can do now is hope that silver prices don't plunge much more and that they can find a buyer for some of the properties they own, but I suspect they will have to sell at pennies on the dollar since they don't have much leverage.
It's a very sad state of affairs for a company who had a $20 stock price a little over a year ago. All of this could have been avoided if they raised more capital.
I am not very conversant with the history of AUMN - came here consequent to my shareholding in ECU so would like some clarity; It seems nice that we have 80 + projects to sell and monetize but how did this come to be?
What in heaven’s name was a company doing assembling such a motley collection without clarity of funding needed to take these to fruition – granted that the one currently needing cash (Valerdena did not grow on their turf) but not even one of this pantheon of 80 could be taken to completion.
The ECU acquisition was primarily a paper for paper acquisition and sure some debt was retired and subsequent negative cash has been funded but these are modest.
Seems there was no great cash chest to take one let alone an assembly line of 80 to fruition unless of course most of the 80 represented such small opportunities that a public company should not really be spending its time on such peanuts.
Is this rank incompetence or worse was the 80 a pipe dream? Or hopefully a third and more palatable explanation – IR please elucidate.
There are at least 3 good ways to develop a company in the junior sector. 1/ Be a prospect generator where you acquire lots of prospective exploration property and option it out letting other junior companies spend their money to advance the projects; 2/ be the optionee and earn-in interest on one or two projects of interest; 3/ become an emerging producer by developing what you discover while maintaining a small project exploration profile.
In the case of Golden Minerals they acquired all of their projects post consolidation of the Apex Minerals collapse plus what thye acquire druing the merger with ECU Silver. Initially they plasnned on quickly going to production with their premier prospect, El Quevar, but after further review they determined that signifcant portions could be mined by open pit and this required a total re-evaluation of how to proceed and meant stopping all portal, access ramp and drifting activity which had been ongoing for sometime in anticipation of mining.
The company detrermined that if El Quaver was going to be delayed in development that they needed another quick to production asset of serious significance as it was their view that producers or emerging producers was the best way to survive in this market, ergo the ECU Silver project at Velardena was an excellent target for a merger.
The end result is that Golden Minerals reallocted its significant capital resources to Velardena and is not only becoming a significant emerging producer at a time when these will be the highest valued in the junior space but also has the inventory to be a serious prospect generator. These have always been and always will be the two most prized approaches for an emrging junior producer to get maximum valuation in the market who wants to be a mid-sized producer, I would call this genius if this was pre-planned and just plain great luck for shareholders if not.
There are few emerging junior producer companies with such an outstanding profile and I expect over the next 3-5 years you will find Golden Minerals not only significantly expands Velardena prodcution but puts El Quevar into production and adds at least one other significanr project into production while seeing JV partners spend money creating value in their very large exporation project inventory.
This should prove to be a big winner.
Thanks for sharing this.
Because of the fund repatriation talks for Argentinian projects, Golden Minerals could well be a take over target for a company like McEwen Mining. Cash proceeds from Golden Minerals's Valerdena mine could be used to develop McEwen's El Gallo project, while McEwen San Jose's cash proceeds could fund the development of Golden Minerals' El Quevar project. Repatriation problem solved...
Finding a JV partner for El Quevar, at this point, is no different from issuing a secondary of common stock.
If Velardenas is so close to being able to fund the company, why not get debt financing? I'm concerned that management is scared to lever after their last foray.
i just read some interesting quotes from rob mcwewen the ceo at mux. he clearly is frustrated with difficulties in doing business in argentina. i hope aumn is very careful with el quevar. a jv there may be a sound decision.
glad that ir suggests production at valerdana is priority one.
Interesting. The equipment issue was one I'd never found something to jump up and down over, because the concept that companies never have logistical problems or setbacks is lala land. This seems to be a normal sort of problem encountered in business: so what? The minerals in the ground aren't likely to grow feet and walk away.
One thing I'd caution you about is posting anything so informative or intelligent, as you risk ruining your reputation on this message board. You need to also post some things in a semi-literate fashion, things that make no sense, call people some insulting names and properly display a personality disorder.
Seriously, thanks for the good post.