Sign in

You're signed outSign in or to get full access.

GM

Golden Minerals Co (AUMN)·Q1 2022 Earnings Summary

Executive Summary

  • Q1 2022 delivered $7.506M revenue and a net loss of $0.316M ($0.00 EPS), with Rodeo operating margin of ~$3.2M; payable production was 3,608 oz Au and 13,944 oz Ag on 527 tpd throughput and 75.4%/82.8% Au/Ag recoveries .
  • Unit costs rose as planned on lower grades (3.1 g/t Au), with cash costs at $1,164/oz vs mid-$800s in Q3 2021; management maintained 2022 guidance (12k–14k oz Au, 42k–47k oz Ag, $1,100–$1,200/oz cash costs) .
  • Velardeña restart advanced: BIOX testing completed, flotation optimization near completion, underground test mining underway; decision expected in “next few months” with BIOX build ~1 year (possible mining/stockpiling sooner if silver sustains >$25/oz) .
  • Liquidity solid at $11.7M cash; management projects $7–$9M 2022 operating margin at Rodeo under $1,800 Au/$25 Ag assumptions, and expects cash to remain ~$10–$11M through Mar-2023 absent external financing .
  • Team strengthened: new COO (John Galassini, start May 9) and CFO (Julie Weedman, effective Apr 1), supporting operational scaling and Velardeña decision execution .

What Went Well and What Went Wrong

What Went Well

  • Rodeo delivered ~$3.2M operating margin on $7.5M revenue; plant ran slightly above plan (~525 tpd), with CFO noting “operating margin at the Rodeo operation was approximately $3.2 million” .
  • Recoveries improved despite lower grades: “interesting inverse relationship” where reduced silicification improved Au recovery; Q1 recovery 75.4% Au vs Q4 decline referenced by analyst .
  • 2022 guidance maintained with higher throughput offsetting lower grades; CEO: “Our 2022 guidance for Rodeo remains unchanged… processing 175,000 to 185,000 tonnes… payable production ~12,000 to 14,000 oz Au and 42,000 to 47,000 oz Ag” .

What Went Wrong

  • Cash costs per payable Au ounce rose to $1,164/oz due to lower grades and inflation (wages, fuel, supplies); management flagged inflationary pressure but “still manageable” .
  • Net loss of $0.316M on higher exploration spend ($1.7M vs $0.8M in Q1 2021) and Velardeña care and maintenance ($0.5M vs $0.2M) .
  • Rodeo grades were lower (3.1 g/t Au), as anticipated in the mine plan, driving unit cost pressure versus Q3 2021 (4.0 g/t Au) .

Financial Results

MetricQ1 2021Q3 2021Q1 2022
Revenue ($USD Millions)$1.778 $8.479 $7.506
Net Income (Loss) ($USD Millions)$(3.178) $0.411 $(0.316)
EPS ($USD)$(0.02) $0.00 $(0.00)
Cost of Metals Sold ($USD Millions)$1.536 $4.292 $4.322
Operational MetricQ3 2021Q1 2022
Rodeo Operating Margin ($USD Millions)$4.2 $3.2
Cash Cost per Payable Au oz ($USD)$865 $1,164

Segment detail (Mexico Operations):

MetricQ3 2021Q1 2022
Mexico Operations Revenue ($USD Millions)$8.479 $7.506
Costs Applicable to Sales ($USD Millions)$4.292 $4.322

KPIs (Rodeo):

KPIQ3 2021Q1 2022
Tonnes Processed48,979 47,437
Tonnes per Day532 527
Gold Grade (g/t)4.0 3.1
Silver Grade (g/t)9.0 11.6
Recovery – Gold (%)76.5% 75.4%
Recovery – Silver (%)84.2% 82.8%
Payable Gold Produced (oz)4,777 3,608
Payable Silver Produced (oz)12,196 13,944
Gold Sold (oz)4,635 3,855
Silver Sold (oz)12,495 14,481

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Plant Throughput (tonnes)FY 2022175k–185k t175k–185k t Maintained
Payable Gold (oz)FY 202212k–14k12k–14k Maintained
Payable Silver (oz)FY 202242k–47k42k–47k Maintained
Average Grades (g/t)FY 20222.9 Au / 9.4 Ag2.9 Au / 9.4 Ag Maintained
Recoveries (%)FY 2022~80% Au/Ag~80% Au/Ag Maintained
Cash Costs per Payable Au oz ($)FY 2022$1,100–$1,200$1,100–$1,200 Maintained
Net Operating Margin ($)FY 2022$7M–$9M (at $1,800 Au/$25 Ag)$7M–$9M (same assumptions) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2021)Previous Mentions (Q4 2021)Current Period (Q1 2022)Trend
Velardeña restart & BIOXRestart contingent on BIOX; feasibility-level BIOX work targeted; potential restart in 2022/early 2023 Not available in document setBIOX testing completed; flotation optimization nearing completion; test mining ongoing; decision in next few months; BIOX build ~1 year to mid-2023; may mine/stockpile earlier; needs silver >$25/oz Advancing toward decision; price-dependent
Rodeo performance & costMid-$800 cash costs, strong Q3 margin; throughput ~500 tpd; 2021 margin guidance $10M–$11.5M Not available in document setCash costs $1,164/oz on lower grades; margin ~$3.2M; 2022 guidance maintained Higher unit costs; margin resilient
Inflation & supply chainNot highlightedNot availableWage and fuel inflation; rising service/supplies; longer lead times (liners/steel); proactive ordering Costs rising, mitigations in place
Exploration (Yoquivo/Sarita Este)Yoquivo second drill program; Sarita Este program finishing Not availableYoquivo third drill program started; Sarita Este permits submitted; shallow oxide Au indications Continued advancement
Leadership——New COO and CFO appointments announced/confirmed Strengthened operating leadership

Management Commentary

  • CEO: “Our Rodeo mine continues to operate as anticipated and continues to generate significant cash flow for the company… In the first quarter of 2022, we produced about 3,600 ounces of gold and 14,000 ounces of silver” .
  • CFO: “For the first quarter 2022, our operating margin at the Rodeo operation was approximately $3.2 million from revenue of $7.5 million… Cash operating costs… were about $1,164 per ounce” .
  • CEO on Velardeña: “BIOX testing… has now been completed… underground test mining… intended to make the formal decision on the resumption of mining activities within the next few months… BIOX plant would take roughly 1 year running into midyear 2023” .
  • CEO on inflation: “We are seeing wage inflationary pressure in Mexico… substantial [fuel] increases… and increased cost in direct supplies… I think we can anticipate that cost… will reflect the overall inflationary pressure” .

Q&A Highlights

  • Velardeña test mining timing and pricing: Results expected around end of June/earliest Q3; sustained silver >$25/oz needed to consider mining ahead of BIOX completion; board approval required .
  • Rodeo mine life: Additional drilling could extend mine life “another quarter or 2” depending on results; southern deposit remains open .
  • Exploration plans: Yoquivo drilling targeting initial resource; Sarita Este trenching/drilling permits submitted for 2022 campaign .
  • Inflation impacts: Wage, fuel, supplies rising; care & maintenance mainly security contracts with annual repricing lag (~one year) .
  • Supply chain: Longer lead times for mill liners/steel; early ordering to avoid BIOX build delays .
  • Financing for Velardeña: Preferred mix of small debt and forward sales; decision not yet made .

Estimates Context

  • Wall Street consensus (S&P Global) for Q1 2022 EPS and Revenue was unavailable at time of retrieval due to request limits; as a result, beats/misses versus consensus cannot be assessed and should be treated as unavailable for this recap. Values would have been retrieved from S&P Global if accessible.

Key Takeaways for Investors

  • Rodeo remains the cash engine with ~$3.2M quarterly margin and strong throughput; expect higher unit costs in 2022 as grades trend lower but throughput offsets production, consistent with guidance .
  • Near-term stock catalysts: Velardeña restart decision and BIOX plan clarity (mid-2023 build), plus potential early mining/stockpiling contingent on sustained silver >$25/oz .
  • Cost inflation is present but manageable; watch wage/fuel trends and service costs, as they can pressure cash costs and margins in coming quarters .
  • Exploration provides optionality: Yoquivo third program targeting first resource and Rodeo pit-adjacent drilling could modestly extend mine life; Sarita Este advancing permitting .
  • Liquidity: $11.7M cash and expected 2022 operating margin of $7–$9M at assumed commodity prices underpin funding for exploration and Velardeña decision; management guides cash ~$10–$11M through Mar-2023 absent financing .
  • Leadership upgrades (COO/CFO) align with operational scaling needs and execution of Velardeña restart plan; monitor organizational impact on throughput/cost control .
  • Without consensus estimates, focus on operational KPIs (grades, recoveries, cash costs) and progress toward Velardeña milestones to gauge trajectory until coverage normalizes.