Golden Minerals (AUMN) 11 Nov 222022 Q3 Earnings call transcript

Greetings, and welcome to the Golden Minerals Company Third Quarter 2022 Quarterly Conference Call and Webcast. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Karen Winkler, Director of Investor Relations. you. Thank

begin. may You

welcome and Minerals webcast. and XXXX third earnings call to you, Company’s Golden quarter Thank

Galassini; Financial On and our John CEO, call Warren our the today Rehn; Chief are Operating Julie Weedman. Officer, Golden President and Chief Officer,

available remarks, be answer questions. Following their will to prepared they

today applicable get we securities management laws. note forward-looking within statements made that Before be certain the please by started, will meaning of

for of from may forward-looking those Warren. materially involve XX-Q from Forward-looking Form or the I our be unknown other filed differ cause cause our in that actual turn and details uncertainties to to statements. to results known such important could statements factors over materially by and that those different expressed implied to refer statements. will and performance or risks results Please actual now recently most risks call

them. operate plan. margin silver we dropped second prices quarter. operational Lower morning, million. of and the continues and of by this Thank $X a I'll sales guidance of production the the who from the take heavily results will prices XXXX, financial you, updates. who our third by margin overview you revenue, projections. cost review in through just net analysts full close both Julie, we quarter saw company's significantly everyone. In Karen. quarter weighed under by quarter submitted quarter the highlights, performance, XX our followed third in and to their net from and gold our John will followed remarks, third have to as several on providing XXXX an then Good million from operating reported questions months Rodeo After start we'll project $X.X others year $X.X and take call million metals of quarter's operating

to the of slightly main per These X head pit. continued the lower costs are been of per we mined than the than lower higher mainly However, gold cost reach Rodeo plan higher-than-average due higher of explosives inception. to to waste-to-ore higher of bottom mine ounce have and we QX. material of as in the seen since XXXX, slightly produced higher has cash Compared costs anticipated, although the as grade Phase in ounce cost average is driver ratios

tonne which conducted we the than to For gold, XX,XXX prior XX,XXX full Average are grams gold, production for and year higher estimate between XX% per to our full to XX% and XX% gold XX% at grams Mill announced for start expected for are Velardeña remain to we plan one mining at excess XX,XXX around year ounces. higher XX,XXX are tonne recoveries quarter silver. slightly of between that be is lower plans we per this estimate XXXX tonne in would mining We is the X.X silver, veins estimate. projecting prior modified our slightly payable guidance, and projected ounces for head observed of X.X last delayed from production of grades a per the we counteract grams silver and methods work to production per order year. grams than the the earlier XX.X X.X and at mine and dilution which of while tonne mining through we and maintain test

material we the an doing using decision. production additional tests ore of and work mine which they by We waste restart information sorting, rejecting automated this system mining of after crushing. allow John notably upgrading shows and Velardeña to are in are advance with at about promise study will a continuing continuing and work, provide initial

and property. results the Yoquivo for resource in and up now publishing to completing of this San on drilling we we at tighten an maiden of finished some in Chihuahua drill advance State Francisco and round estimate exploration good on spacing are a July, On the up veins exploration front, project dollar following the Mexico, Gold-Silver Pertenencia, in additional

discovery results We the was Province, to these the additional release The the we potentially expect confirmed discovery and the drilling program, Sarita to an project grade Argentina, on Este designed results have in economic gold an volume. in completed the program. encountered follow-up XXXX At for that first in over continue showed discovery oxidized initial mineralized in reported drilling from Salta on In August, quarter. this hole expand interesting near-surface intercept. to hole which thickness we the

that commonly and to gold and of diamond high program alteration, in associated XXXX, drill to an holes. holes. to that have is are interval is targets completed total gold In potentially the We the X,XXX agreement from XX to-date which very in epithermal test economic since program pending. still property. point priority a our silver entered point completed shallow an past located five-hole program vuggy since Final assays in drilling sulfidation This the X,XXX-meter El narrow which April oxide to Results initial Partial Salta Argentina. drill province, at from Barrick Quevar seen brings Barrick to the little at project gold area the the has additional system, a over Barrick into in all with drilling. the earn-in core inception meters south. June, we drill with high-grade reported assay Gold open highest deposits results a

John on now these Barrick in more our will follow-up about the results operations. to over expect detail hand with We additional drilling in to I talk call to XXXX.

Warren. Thanks,

gold silver we lower per than rate $X,XXX. just we've Year-to-date, net gold of marginally under XX,XXX gold the day costs at Our gold of over for tonnes under payable ounces payable and experiencing figures of processing produced cash ounces recovery XX% ounces achieving just X,XXX the quarter. payable of and the a credits in per recovery We're payable of produced at slightly of silver ounce just XX%. around XXX Rodeo and of last silver XXXX, mine quarter reported X,XXX lower third

with in averaging January silver XXth, silver silver approximately at cash XX,XXX inception gold and From gold produced September per the forecasting ounce credit. of through payable we slightly $X,XXX similar have XXXX results the XXXX are higher of XXXX, costs We XX,XXX of remainder of net recovery. ounces of a ounces for exception

third lower the keep substantial this, our to gold head $X,XXX net $X,XXX ounce we the grades for costs in to silver credits cash During and costs. Gold and lower the costs Rodeo per blasting increase saw the less byproduct check reagent result plant seen XXXX. quarter, silver costs, identical also processing at and third materials as in increase such required in explosives were costs. the significant our quarter. nearly second and have quarter as facilities in of were processing compared Despite basic payable costs a a in cost were a cash able oxide quarter-on-quarter of materials lower other quarter second lower to administrative quarter of as

prices per and Looking year to and to XXXX average for ounce, realized and ahead, around of $X XX% operating recovery to of $XX $X,XXX rates million XX% net gold estimate full respectively, silver $X silver. gold for XXXX between and million XX% a continue we margin XX% and

Rodeo we moving reached $X,XXX year at plant has storage of completion earlier plant mine Rodeo raised our at on expansion a tailing original be should Given cost XX% mine schedule. higher full due previously silver October. to properties. We're costs, to It at Velardena portion ahead net than service storage in of XXXX. announced work We from restart $X.X future. of approximately with ultimately in Last have begun the is of million, life. estimate which this $X,XXX. to will as XXX,XXX next we've remainder estimated to Velardena of late gold elect XXXX. The forward Velardena we plant throughput supply in construction ounce cash in million making X, mine oxide first months to expansion the restart expansion for its the is will the with XXXX two tailings activities support forecasted January service we we with tailings would the head anticipate XXXX provide final of The anticipate continuing quarter, that $X.X an reaching around its November Rodeo production and payable lower project in in of credits grade to year. decision project. completion per our of the material completion we materials We a remaining processes project in the also incurring additional tons the work higher-than-planned anticipated a the of the of XX% The two began months And cost at that $XXX,XXX

address alternative the although we recall, evaluating did they dilution metrics, meet mining a began techniques some announced elected that resue decision. have optimal to plans earlier optimizing anticipated and metrics is a decrease continued we on modified mine, mining met and mining continue issue and expected quarter for Velardena test mine dilution the XXXX last mining and has [ph] most the making results You'll then, we productivity that It ore not and to technology before continue of evaluation. to dilution. of Velardena, sorting Since methods method been restart techniques will we determined study

have first testing ore results. with of terms In positive of completed sorting application, the we round characterization ore

step. currently bulk to value determining of Velardeña require life. technology type These evaluate true of of our determine we're and represent will feasibility the be Velardena, that samples will of testing the probably phase utilized processing this and the second The samples location from will generation mine the ore and

have our Julie expect by present to I call testing now to will results. to our complete XXXX. financial We the March or February over hand

Thanks, John.

from of third of approximately Rodeo net the dore. approximately the $X.X million in the $X.X of X,XXX For from at margin our received mine million operating ounces sale quarter gold XXXX, was revenue

higher quarter approximately operating which G&A lower for we the in quarter's XXXX. the $X.X after-tax the cost million, of $X.X third XXXX. million second income second Exploration positive, million at negative maintenance expense This million costs margin million. going to capacity Rodeo of second at $X.X and million, on Expenditures expenses in $X.X of was of about to third than quarter similar $X.X $X.X were at drilling from was increase Este, the level drilling facility forward. the million, $X.X which Quevar second Rodeo, approximately $X.X are of the the $X.X were continue was at XXXX at and quarter $X.X and on the were other in million drilling While included quarter for $X.X reported QX $X.X expected Care million is XXXX the exploration. the on lower and than tailings that on million Sarita on at to El approximately Velardeña, drilling million Yoquivo, than million. quarter Velardeña XXXX of

XXX approximately to million with XXXX Net for for million year the compared figure with the year to million $X.X spent $X used to from full last added second operating a the of margin oxide silver plan higher XXXX capital gold, with to ended and nine quarter to months the day XXXX grams XXXX. ounce throughput and to levels per months We XXXX We about XXXX positive our throughout gold the plant. grams per ounce. The per price of margin of operating off in spent assumes of cash flow $X items $X.X dropped was continue to XX.X an due primarily mill assumes future nine lower Rodeo quarter $X,XXX tonne per operating XXXX. price tonne per construction the grades in $XX,XXX first of first on year operating and has negative significantly and tonnes full compared cash. This million $X.X cash forecast Spending activities. only ball continue compared million during a for margin approximately included of expect of a This between estimate silver. $XX of X.X for of

and next we the metal million ounce will XX, ounce remain now for $X XX on through who take not Assuming XX, The silver, expect of $X.XX million averaged other our operator $X,XXX prices per equity the exploration These will around for September balance million months projects. cash between gold XXXX, $X received back depending to or assume $XX XXXX. cash forms your projection from payable questions. to projections per on spending turn September does the to financing. the through scheduled over call of include debt any payments to I be over

you. Thank

with We Jake line question. conducting question-and-answer be [Operator the Please Sekelsky Instructions] your Partners. will first Global question from session. a now of state is Alliance Our

team. and questions. Thanks taking Warren my Hi, for

Jake. morning, Good

me Glad to have here.

at many of from looking given isn't costs, Just down actually well of there. seen which quarter-over-quarter, play at coming we've decreased quarter-over-quarter, this? the done factors environment, so to contributed peers consumable this were prices other your that something or a Was there inflationary function

question. great Jake, Yeah,

just cost the think, me had well. I do -- pass bit a you other more a material I operation and which was that. that running John it lasting structure. then smoothly little for add some and QX, basically QX But in done than the helped in that? part, moving with as QX is QX, start color. decrease color in Let of over And the extra we don't the to to any that further aid maybe, Part want bit did know John, I'll that to was

handling Sure. Warren We in significant amount a do, our increase increase prior. substantial we did oxide what as our plant. see actually of already as an explosive, commodities reagents able the to such materials, ore at material our we increase blasted of But in had were in some mentioned and blasting

being on in consumptions down bringing bare able run maintain minimum clamped really to the our being have and way able of just most recoveries. we reagent addition, the to possible. efficient terms our We're costs plant in the our In to down

So the costs, overcome we've we decrease amount able in been to able terms use. that the operating to some being the simply in prices of commodity by increase of

obviously switching all, are just with to there? curious, work prices then to, in prices I metals pushing of a re-bounding bit lately down have still and And or today. But you they're caused Velardena, volatile over just volatility test any at been you helpful. That's I'm Okay. the the at Velardena ahead slow has mean

testing, prices sometimes. more prices seeing were high -- dilution macroeconomic recover of have observed chance need to to risk Well, prices has low earlier production. we Jake, us on I some the It's factors at certainly not oil not certainly making to the -- but the have good caused We're we and really happen. mining made this that pushing and the on fairly that prices see just way to we volatility is had still good ahead a year. just for us plan expected control the quickly,

did slow the we're perhaps, it all bit, with us but down can. moving we a So forward still speed

Thanks, me. for all That’s again.. sense. Makes

Thank you, Jake.

Thank you.

is with question. with question your from Wainwright. next Our of the Ihle Please Heiko HC proceed line

so to you Hi, Marcus of regards Heiko. with our questions. Giannini for In sort mines currently actively system the far? you plan everyone. calling the if on for taking of can there's have comparison? considering any analog using in system at And tests us how an terms the you're successful Thanks been as are is where a used of This the provide course being color in bit Velardena,

don't over on I'll John, John, just to you think detail if hand I you that question more mind, that. have don't

tremendously other the Yes, as technology the They've system things right ago. to and has Metso we're few looking and well, grown XX and with sure. as now of number there's bounds years. the and -- even infrared, more it electromagnetic, within on speed Thanks initial computers this other working Outotec a for testing. it was the grown much of with question, viable Marcus. based manufacturers sensors, five, but infrastructure than a sensors, has including -- our last years leaps the well, technology is transmission, We're run X-ray near The processing making

So since sorting just we're nothing than not with off we to samples, working performed first ore have characterization our yet. any anything for them Germany, else, with test -- more

samples rather utilized is collecting that does this on dilution. mentioned now Basically, the I for what testing. this we're will the bulk samples just to those large As call, be reduces

the goes You ore, lot you're use which, and on. water, you going a grade milling in overall less see energy, less turn, increased less on reduces your cost, it head the that to mill, you

driving magnitude technology computers some not and to the Sebastian potentially other less back this, list it. a that the power the the didn't in was of together mines couple to optimal it. A they terms newer it when So certainly putting to still San we're that technology, those of They operate places. this is of visit sensors order are One an of utilize now mines. have mind newer in in of comes of way utilizing terms Mexico, behind there the

and a feasibility it looking So lot into here. the of we're studies of doing

have after actual of We through we'll it, a go sorting we out this the hope turns but itself. for how see test lot

pretty seeing year? I'm Still And costs, holding are just for asking negotiation do what clarity, days, is with way in currently then costs happening it's number anticipate how you're I property of is a early those next looking and idea inflation how in much seeing million X.X asset drilling? drilling Awesome. by forward you results. much sounds Okay. but exploration the like on already do not that any And to guess, meters you in have regard? in differently, the to what sure QX? as you total bit now

Yes. so and but inflation. for do remained obviously, fairly Mexico, steady as the Thanks, have expect in control on exploration I at Marcus. an The we're the that its diamond mostly costs amounts maintaining drill some we'll be through the at works general Mexico system. contracted is seeing actual good Mexico, in operator for level labor this increased way costs. have pressure the year our stayed us. constant don't next them drilling to We're in of increase seeing, in costs contract, expect costs costs fuel some because see of I upward

somewhat be to more using And else. credit of the anything subdued. contract I think they'll than we're that's the that

been you're maintain affect we the but contract of it's as extreme, are Argentina, around with driller a to a a sure that that number we to he's levels negotiating, has story. bit and meters and costs aware. the of In don't able Argentina we the drill. have So looking good inflation relationship I'm different really

but us change cost don't of about in upward XX% to XX%, increased more environment we Argentina, pressure quite at still than in think had drilling on XX% basis. of annual on an in reasonable. some an the of because so In the that's to dollar. is strength where US I has costs inflation there, running that's and have And XX% the part,

looking not this US we're Argentinian terms. dollar in at peso terms, So in

inflation, able we've in to been seen drilling date, the will close to see maintain going up in what prior So effects we had to metered forward. are of very to kick we the cost some at but

for thanks in Yes, queue. hop back color Awesome. there. Okay. I'll the

Marcus Thanks,

with Research you. Thank question the Our [Operator from line Fundamental Rajeev proceed is of Instructions] next question. from Please Corp. Sid your

Hi, good everyone. morning,

As your and everyone especially see cash reporting John is similar else pleased costs. since grades to mentioned, costs were also declining, we're higher

So to based see think might And ounce it was might was yes, estimate, year very it to I nice looking that per mid of are the that. be second for But decision year, that. in even be good your on next $X,XXX to Velardena, it QX a seems you at that fair like see full lower. or half? production terms But costs assume is by

Sid, question. tests really sorting thanks depends for for ore us. Yes. come the it these quickly on together No, how

the that the setbacks to I don't for obvious we think And control midyear is any probably in problem. have assuming the most timing decision. dilution trying

sorting the very I ore that looks think promising.

I out, year. halfway what think make should the pointed to we John As be placed through be decision well a able to

it end QX. call So of by the

positive, months? production able And are decision within if to move the to is you six

The economic production. we benefits yes, the full can of be production We right will can the BIOX of plants, question the to which construction have – required is start the away.

stockpile concentrates according made, but place decision would, the to until plan completed. would that start we production pyrite the we However, the once plant be we have can started, in have and and anyway, BIOX have we

and But be and that, will to income they with operation plant cost about obstacle have at BIOX for decent early, production we point. take and the lead some affected after into process I course, would main to inflation after we estimates. a any full production had at capital financing total So, was of to cost still until sell decision but able start-up, the But from start looking up. the is year BIOX We the the the silver go rate, the will be able at which completed, concentrates the optimal market have expect wouldn't we're been by that there entail. just

Okay.

the $X that how much new million kind for Now, know are money to moving, cash Is CapEx CapEx I new at? how We fair a modeling million much from operations. $X OpEx it's you're assumption? plant, plus your of looking

capital But you're the $XX the was and cash, about less our I million, we I the that, us. The what think capital and plant that solid Sid. going upward estimate pressure ballpark take to itself, for exactly so for haven't with had to on in do that's point just expect spend determined plant BIOX

we quote inflation capital decision So have increases would encompass that due much the place before we the more in the to point. a to make that obviously, up would detailed all

Okay.

can on about you questions out anything next Yoquivo that? more a will two What to expecting? after And are resource Just the maiden move talk projects, you PEA other that? coming you quarter,

total move on We're Yeah, an expecting four vein on I focusing out robust systems five should the easy PEA. think drilled be grades. it to and a are to property. pretty systems project only one We've of with interesting vein of the

for know in can of get the to the the initial to be able the – we in I we of And starting think, main resource want resource. getting initial we attractive. will on actually that – just on be possible resource grades out and just future show entire will numbers. So estimates point, the about expand might quickly, PEA It's go we maiden I sorts It project resource. and to there, a a look we'll that to be put the fairly independent there. based level hard matter review able before the from of move talk a expand

Okay.

that the after right are can going we to to before PEA? would that or So, assume you move PEA you away, update

right to PEA year. next is to move hope away My

study. think So, get much the PEA time costs take level for the to it will us don't I estimated

are are resource? to Sarita programs existing these that update recent close you the with drill Este For now ready

drill drilling. up based ways that probably So latest still results And finished we October we haven't announced from just yet. in that. round resource round a away We're we're for this from waiting Este at Sarita

internally see for of then we once it toured worthwhile resource hand, Este. whether a or be limits on see Sarita least one in that and a of where before drilling can go should at ahead round that we'll volume, look we waiting more the estimate we obvious have mineralized if with take get at would some we of So it

a I is from away next we're a that report. me. ways main But to think report actually bringing little So -- into looking likely year resource resource

Appreciate All right. Thank so you much. it.

No. Sid. Thank you,

you. to Karen Thank [Operator are at I this Director the like Winkler, time. turn questions further would There comments. Instructions] of no for floor to closing back over Relations Investor

everyone joining. talking call you for concludes next We good with quarter. forward this Have today. to Thanks day. look And to our again a

Thank today's teleconference. concludes you. This

lines participation. disconnect Thank your at time. this may You you for your