AUMN - Earnings call transcript Q2 2022

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Operator

Greetings. Welcome to the Golden Minerals Company Second Quarter 2022 Quarterly Conference Call and Webcast. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Karen Winkler, Director of Investor Relations.

You may begin.

Karen Winkler

operator. Thanks, Minerals XXXX Golden call. second Company’s to earnings quarter Welcome John CEO, our our and On Officer, are and our Warren Operating Weedman; today’s call Julie President Rehn; Officer, Chief Chief Galassini. Financial

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

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

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

Warren Rehn

analysts call who our highlights, Thank today’s questions of you, who will company’s performance we I and Karen. over brief all then project overview hand a operating by call to guidance the Good will quarter’s joining results. quarter will by up the the quarter thanks us. Julie you has who open sent the through in John will discuss our Afterwards, for else updates. I take morning from XXXX call second second to and and will followed anyone providing financial to several by begin questions. followed

including decades’ some these cost rates As you production. inflation headwinds headwinds, to our all know, Mexico high affected up degree operations macroeconomic the U.S. continued the facing challenges. have supply and of and driving chain And are

second are this inflationary in the costs head Rodeo operating are Rodeo part ounces in XX,XXX we bottom quarter due to of pit. pit ounces Expenditures Grades from primarily but the Este in as to approximately remaining net also the margin. just and the encountered higher encountered Phase grade Higher $X.X payable mine what at lower cost mining the exploration our that for the new past the this quarter. well of near million as of we we Phase pressures on pit X than quarter material due loss and X X materials, increased basic in at X,XXX and at net at Phase approximately produced current Yoquivo $X.XX test generating mine for silver the in XXXX, have Rodeo payable Velardena discovery quarter per at share. also to cash our Our of under Sarita as gold last

for is XXXX per grams and X.X Our ton XX,XXX gold to XXXX full for XX,XXX average estimated ounces guidance silver. and X.X year ton ounces per XX,XXX estimated silver, remains of at production ounces of production Payable gold grades unchanged. Rodeo to with of grams XX,XXX

a mining range the we some of veins through Our One plans mining. to that at start modified particular, anticipated. recent been delayed, methods San test Velardena once results again of excess have yielded the counteract we in Mateo vein mine dilution work plan to and dilution in while mining exceeding vein we the observed from our

other mined plan dilution. the would the San replacing modify plan the We Mateo to are looking by vein caused extra veins the at have in with that characteristics options the same not that

material. looking ore to possibility take at sorting upgrade alternatives deleted also are the We will months. of the these several Investigating

in to the information mine of have Velardena work will better our reworked prices about the until we off time, expected at provide have are we producing long-term dipped our and silver mining not also returned since Rodeo this During production and details and our additional values, methods. recent higher not plan call. yet later John have

that intervals program grade showed unknown located silver as completed month, our holes program haven’t project to in The in at yet strong of holes meters our been further gold of reported XXXX month, Complete XX mineralized vein last business, drill structures. a grades XXXX side Yoquivo drill hosted gold received. we program, exploration silver X delineate designed X,XXX gold during third silver of results was drilling last Chihuahua, the previously to Mexico. Moving first new continued high and the assay The and were identified identified multiple about

June program. initial this designed drilling Sarita we oxide However, gold gold XXXX offset third drilling Este this interval we Province, and to Argentina, expect in an program delineate in information will we resource round At a completed sufficient second give us drill estimate prospect our later silver Salta maiden that of in was an that encountered to a year.

to received recently with pleased system. point economic very shallow assay that potentially results are a We oxide gold

program planning you June, vuggy Final I on will further reported Salta alteration associated from to In over call at El XXXX, with Sarita to the an about the the silver into with to in of talk hand Barrick will project gold results sulphidation of all begin Barrick now assay are are drilling silica quarter. recall located more past Barrick commonly drill detail operation. targets priority Este the Gold is program April property. our at diamond in holes. highest agreement current in This high the the initial John and drill epithermal to in which deposits pending. Province, We entered X,XXX Quevar test a earning meter also X-hole Argentina. we the completed

John Galassini

at excess X,XXX you, payable over payable XXXX. we gold produced produced our gold credits. XX, Year-to-date, have per we in and January XX,XXX ounce averaging June cash during ounces quarter ounces Rodeo net we silver ounces produced second of silver of payable Warren. ending $X,XXX approximately X,XXX payable per cost credits Thank operations, of cash ounce net gold have Rodeo’s $X,XXX XX,XXX ounces since payable silver costs gold At silver and at the gold of and in of of XX,XXX inception XXXX, announces

through gold higher of at see byproduct during Cash just over per recovery net which result metric sustainable quarter XXXX. credits XX% We as items. per and levels day the around were as XX% payable and $X,XXX for producing tons silver, silver achieving several are XXX second gold a costs for we of ounce

modeled during about as First, lower as medium of year grade expected we Phase in material higher material Phase and seen we as as initial the remainder transitioned to the X grade and pit. We high same grade was – and anticipate our second the quarter of of grade for from X quarter. the the mix a mined have we material the

the chain related drilling issues. in onset in conflict third to and of costs we a during of the the the quarter explosives benefit In production. blasting second And related quarter for we addition, the spike saw saw of increased cost supply Ukraine and incurred

average $X to year $X,XXX per $X between estimate ounce and Rodeo’s from continue $X realized million we prices margin million full and lowered respectively, operating of and million. gold $X between million of we XXXX estimates silver While have

in optimization activities This BIOX a which and XXXX. the can to Test final work Velardena. silver spent June flotation indicate This minerals was plants During gold We of circuit. Rodeo expansion principal Mateo the XXXX, pyrite intend forward mining how mines XXXX. begin using underground fully in take is that currently XXXX, and accessible planned the veins $X.X material. to bio-oxidation anticipated scale of processing of initially around for that expected effectively XXXX pretreatment BIOX BIOX process Rodeo is throughput third proposed the May, limited additional a higher the cost quarter the moved concentrate future to began place began or mining additional we the The of at plant than into dockside using use results in due million, that resue to separate the tailing being but of are for gold in support samples and use our continue of studies bearing our in from mining Velardena designed at the test use contractor processes is to a would estimated to obtain plant evaluate past productivity future at we bulk new that capacity we on processing for be San decline. oxidation technology activities to originally expanding dilution is to most

of of the did test meet mining results metrics dilution productivity met veins metrics, on they the Although not some expected anticipated mined.

techniques mine issues. mining continue modified therefore address We and evaluating electing dilution are to plans and

downturn current at prices, Velardena metal temporarily plans our restart precious production delayed. to the are in During

proceed X evaluate coming methods further critical ultimate the project. with the work, consistent development minimal we PEA. achieve of would are our to initial the mining maximize the given intend see success Velardena. that results Before produce explore want to other to test months, In dilution of is with we value activity demonstrate to the targets that mining we of financial will like and test the to the We fully results mining dilution ability the

dilution. to ore manufacturer been will also begun results. have step In mining samples financial over sorting present and quarter. Rock addition an have testing ore hand this Julie to processing later sorter the preliminary of test now to we detailed minimize additional the to the in I and techniques, with scheduled to for evaluation testing, ore call further for sent

Julie Weedman

Thank you, John.

in at XXX Rodeo X,XXX material was operation of was the For average the of ton. grams processed received grade rate dore. of and second the revenue per $X.X per at from just million approximately our sale gold gold XXXX, a under million plant of quarter operating ounces the margin from day approximately tons The operated $X.X of X.X

million drilling approximately $X.X Rodeo, going Expenditures $X.X million and at of El quarter expense we positive, approximately Exploration for is to at Este, the negative the same in the first mining included forward. maintenance $X.X Quevar margin that expected potential restart quarter’s than from million were of the Velardena, income Sarita of QX reported Yoquivo, $X.X million. $X.X operating test Care G&A million the at quarter $X.X exploration. at similar of on first drilling to million lower were of first in higher second of quarter was $X.X on after-tax $X.X than XXXX million. was the at on on the $X.X $X.X expenses quarter and the the million While which level XXXX. approximately as first drilling XXXX. about million, for and remain costs continue Velardena was which XXXX general million, on Rodeo XXXX This million quarter are second for $X.X

million a for margin be dropped exercise continued $X to half to significantly ton construction mill tailing per spent of per These We occurring negative $X.X spent compared million XXXX the lower million second processing Rodeo million activities due operating now of future per costs than to plant. gold with ended ton cash previously compared to tons XXXX of the from of at $XX and the which the $X,XXX partially higher has the the silver. full anticipated full The silver to X.X of and margin is XXXX was compared $X included the about half only XXXX anticipated to used a by due operating figure Net from to $X throughout $X.X the than operating cash. million year warrants. added XXXX estimating grades estimated of per estimate $X an for sooner per incurred our year, This XX,XXX with last around million the received first in a oxide margin items to anticipated we plant and $X are ounce increase mainly below to price of between assumes the throughput positive expect of XXXX during in assumes for of costs ball year the rate operating Spending grams XXXX. approximately and with capital quarter XXX first on grams for million $X.X ounce. cash higher flow levels gold quarter due are price This to We million plant. in day, primarily offset capacity. of off X.X

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

Operator

Thank the you. with question. first of Our question line Please proceed Instructions] Global Jacob Alliance Sekelsky [Operator comes with Partners. from your

Jacob Sekelsky

you life just Hey, there guys. taking extended I low remaining by Can Thanks have you I on few think is mine a know fruit there the mean, questions. hanging more you quarters? extended any it for at do my maybe Rodeo? touch already,

Warren Rehn

is Yes, Jake. this morning, Warren. Good Yes.

one. the October of higher just take We into lasting me XXXX. that grade Let see material

than the just we the X.X last average margin. grade It’s material So which bit that grade higher gold would but quite after years our X price XXXX could that as in not where that’s it continue another grams, have lower that the of do think were profitably. the current is probably think money, more We last same or could material. grade make material about and less updates, average of And I does profit of March. depending a I lower the the distinctly fairly operation on

elsewhere the opportunity mineralization, the in expanding higher property is at. we grade more we there to are the material, have exploration in current continue the do in we looking So not an center but which extended much are life, seeing

Jacob Sekelsky

looking And to specific important re-sequence vein the mine remind areas? or is the just vein. in that, were to Okay, to that the other the if issues sort dilution Velardena, of San to just Can that’s in plan us the helpful. mine plan Mateo at plane early you is then bring how

Warren Rehn

or The less Yes, that. the it’s to Mateo carry resource fairly – important me with San was is on initially overall important. let it

the was particular the jointing through up levels, parts have about San mining, mining. resource. Now the off of structure gotten of And still that this fall vein the so that tend to third at overall or some higher doing wider the the of but the a test in of where parallel direct there as is much we vein are in to it makes just the we we fine are Mateo area

that But Mateo on San based – stopes further everywhere. on that the in particular want the same characteristic in I So vein San feature. John, in maybe, in that it It’s isn’t it any That not comment to believe wasn’t same over-diluted present geologic present manner that? Mateo was you East, those it on manner.

John Galassini

as we a of it I type that did had you – mentioned, we difference characterized you didn’t think really other as and it break it’s and higher parts rock the so tested And well. in mine the just dilution.

Jacob Sekelsky

Got it.

board. continues? with or and circuit just next lastly, think the as for you Are are then figures something across still CapEx you and the go for take at obviously, as And at that Okay. on back seeing we you quarter mentioned, restart comfortable you Warren, Velardena, cost those inflation test capital a is BIOX that work look the the restart over

Warren Rehn

of our Well, we the Jake are in process, detailed bids. completing

from So, specific bids haven’t specific completed that. quite providers, we

in plant the So far anticipated. we million with overall the line of BIOX had $XX that it’s cost

I still so okay. think that’s And to going be

a that chance us. is there some will materials Now, surprise

going it, up, of As I going we costs have all substantial. But are aware been think not don’t it’s the down. be to

costs, I had far. am on way answer we the the like planned. out that’s it’s of what finish but really an we I estimates don’t until detailed where looking that of it’s range to so So, have not

Jacob Sekelsky

good. me. again. very It’s Thanks all for Okay. That’s

Warren Rehn

Thanks Jake.

Operator

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

Sid Rajeev

and Alright. Good morning thanks for time. your everyone

range So, so might trend second hear in it on with cash any going are seems guidance second half, pleased be? costs grades what to the like any half, the the might cash that to but costs, improve lower definitely guidance

Warren Rehn

Hi Sid.

going them we level to QX, really what is production some and saw We some I QX work are drilling. QX. predicting come benefit not additional from in in additional of we do in to that detail. did down expect back that blasting And

was they bit. April, the And production was grade cost that think – in lower, the as But grades grams per lowest QX benefit ounce QX, drive still ton. seeing a so our a average but will which I month, And down per the low that to within grams that’s X accrued no, we costs ton. April around the are at X.X bit almost of month as per quite

won’t think I the quarter in this – next quarter. we lower that see grade So, quite

So, move that on bit. ounce also, the down are we seeing per a should based we – cost

Sid Rajeev

color inflation, able macro, so cash those In you percentage of increase? able are a from QX give you of increase came Warren. Thank are specific a what kind give stuff, project Okay. to percent in to you, versus costs the chain some on segmented supply

Julie Weedman

did and contractors. difference we the So, cost, of cash it Especially, the in through split look at portion pretty difficult come related to our is to the costs lot exact inflation. out a

it the the on portion cash don’t cost bigger contributor related percentage I grade. specific of lower to no, And the was So, inflation. what in to have as a mentioned quarter increase of we was the

Sid Rajeev

Yes. grades. Lower

And you. range out Any year. on could Thank later Yoquivo, what enough for estimates preliminary be? coming done this could guidance been work estimates Any size Okay. has with? resource drilling the we

Operator

Warren. we like may sounds have lost It

John Galassini

have line. lost Yes, we unfortunately, Warren

Sid Rajeev

Yoquivo Maybe out any that guidance production of aggressive? that some say be it expecting months-ish, then in pushed mentioned Velardena, just kind everything and XXXX? question, already we out or got final not pushed fair things got six Is timelines. to a too later will by were Previously, or bit

John Galassini

did, test work the spots were lot we the there So, test a of work that bright actually. in

so standards critical the was which up But we technique a dilution are taking the we resume Sid, only we is have veins for the to doing have the the dilution. mining higher But a get up dilution. a throughputs we to long resume methodologies And mentioned Velardena fill, at mining and be is more at addition, cut can make you now, productivity with ore is your of and many still to other With it factor us that like met right with higher, previously have combination look it low wanted. you another that tested, What evaluate. to an take mine not the that the of to couple we going where – looking And but volume. to hole. have resume That’s method, even in in also tons with month or modified take for sorter. will will

So, Velardena in is an probably a delay with those six-month estimate. are line, three-month tests looking at to to in the restart we

Sid Rajeev

That’s good. your Thank time. so you much. Appreciate

John Galassini

You bet. Thank you.

Operator

And comes Please Finnick with of from question. our [ph]. proceed Finnick your the question line with Consulting John next

Unidentified Analyst

my taking still Thanks for back on Warren is line, dropped? the he call. or Is

Warren Rehn

on back I dropped am off. I John. got

Unidentified Analyst

two-part Hey had question, a I Hey. please. Warren.

from us wanted just Quevar be First is, from congratulations if activity may you assays when on Barrick, we update team are expected? out some could on having and and find to the El you

Warren Rehn

Yes. essays will this not that Barrick us a the after I required expect They have until are sometime to of their next in to quarter. month. this month report end

may at going have get that is that feeling clear sooner are another a those of would we and latest of least had this assay enough plans idea to their But when success, carry would at with when information October than potentially what on in we looks we like. they But success be geologic get phase that. my that However, forward. assays and see what drilling to success, more

Unidentified Analyst

when a most is And projects, look Velardena there terms Rodeo, Great. chart pie presentation and #X, net secondly, of value which in Thanks. is Slide Quevar of metrics your different Okay. the online, recent NPV, you is and value. what deck at present discussing different the specifically,

Yet considerably looking projects. it lower that a much, article at those recent $XXX million most looking out at there So, NPV written when by is the showing Alpha three Dart Taylor shows Seeking NPV.

value Is inform accurate your information value is? little an deck? what you he think old you that pulling etcetera? bit could in Is investors So, the from a source, about

Warren Rehn

to John, me try address let that. Yes.

getting metals net our value any the in the he lower example, understand NPV present updated resource, and of value. And any current Dart’s our I for is were hasn’t much projects at Quevar what He from current NPV all, models, to of for most So, prices. Ek of values prices. analyses at than the done values is metal not of which

real. areas value to main two is losing his compared the analysis are those So, in what’s he where

leads that based that projects considering, with than what the greater and in we I error to the is analysis. his far and is reports have company our you, agree that on the value published we So, Dart far, have,

Unidentified Analyst

you. Thank Okay.

Warren Rehn

John. you, Thank

Operator

reached the closing over have remarks. Karen the question-and-answer session. I now will of back we end the call And Winkler for to turn

Karen Winkler

Thanks to joining today. call operator and again look forward you quarter. thanks seeing to We next the everyone for

all You day. have good a

Operator

this And And Thank time. this your may at you disconnect participation. concludes conference. today’s you your for lines

Golden Minerals (AUMN) 15 Aug 222022 Q2 Earnings call transcript