Golden Minerals Co: Form 10-Q for the period ended Mar 31, 2025

Our Company

We were incorporated in Delaware in March 2009 under the Delaware General Corporation Law. We are an exploration company holding majority joint venture interests in the Desierto and Sarita Este concessions, adjoining gold-silver-copper exploration projects located in northwest Salta Province Argentina, a 60% joint venture interest in Sand Canyon, an exploration-stage, gold-silver project in northwestern Nevada and other mineral exploration properties located primarily in or near historical precious metals producing regions in Argentina and Mexico. We are primarily focused on advancing exploration activities at the Sarita Este/Desierto project. We incurred net operating losses for the three months ended March 31, 2025, and 2024.

We restarted mining at our Velardeña Properties in December 2023 and continued through the end of February 2024 when it was determined that the initial performance of both the mine and the plant did not achieve expected results. We processed all the mineralized material that had been mined, shut down the sulfide processing plant at the end of March 2024 and held the Velardeña Properties for short-term sale as we evaluated options to realize value from the assets. We entered into the Velardeña Sales Agreements to sell the Velardeña and Chicago mines, both sulfide and oxide processing plants, water wells, and related equipment of the Velardeña Properties to the Velardeña Buyer in exchange for an aggregate purchase price of $5.5 million in cash, plus VAT. The first three of the Velardeña Sales Agreements which include the combined sales of the Velardeña and Chicago mines, the sulfide processing plant and various related equipment were completed on June 20, 2024, and the titles to the assets were transferred to the Velardeña Buyer. The Velardeña Buyer agreed to pay $3.0 million plus VAT on July 1, 2024, to complete the fourth and final of the Velardeña Sales Agreements which covered the oxide processing plant and water wells. The Buyer has made payments of approximately $2.9 million through May 16, 2025, and is currently in default. While we retain title to the plant, the Velardeña Buyer has had operational control of the plant, and we have not had access to the property since mid-year 2024. We continue to hold our remaining interests in the oxide plant at Velardeña as assets held for sale. The Velardeña Buyer has been making periodic payments and the Company believes at this time that it will eventually collect the full amount, at which time the Company will record the sale under the fourth and final Velardeña Sales Agreement. (see “Item 1. Financial Statements—Note 3. Assets Held for Sale and Discontinued Operations”).

In October 2024, we completed the sale of Silex Argentina, which is the sole owner of El Quevar, our advanced exploration property in Argentina for $3.5 million. We also completed the sale of our Yoquivo exploration property in Mexico in November 2024 for $570,000 plus VAT and the sale of a Mexican subsidiary holding tax losses for $445,000. In April 2025 the Company completed the sale of an additional Mexican subsidiary holding tax losses and 5 minor property concessions for $600,000. The Company continues to hold an interest in several remaining exploration properties, including Sarita Este/Desierto, a gold-silver-copper exploration project located in northwest Salta Province Argentina and Sand Canyon, an exploration stage, gold-silver project in northwestern Nevada.

Because we have ceased production at the Velardeña Properties, our only near-term opportunity to generate cash flow is from the sale of assets or new sources of debt or equity capital. We are evaluating and pursuing alternatives to obtain funds to continue as a going concern, including the potential sale of the Company, finalizing the sale of its assets at the Velardeña Properties, seeking buyers or partners for certain of the Company’s other assets or obtaining equity or other external financing. In the absence of additional cash inflows, the Company anticipates that its cash resources will be exhausted in the first quarter of 2026. If we are unable to obtain additional cash resources or sell the Company, we will be forced to cease operations and liquidate. See “Item 1. Financial Statements—Note 3. Assets Held for Sale and Discontinued Operations.”

2025 Highlights

The Company has achieved a significant reduction in liabilities and a meaningful decrease in our cost structure through its restructuring efforts in 2024 which continued into the first quarter of 2025. These combined actions allowed us to strengthen our balance sheet and preserve capital, enabling us to shift focus toward our most promising exploration assets as further described below. We expect the restructuring actions to be completed once the remaining sales agreement for the Velardeña assets is completed, which we anticipate happening in the second quarter.

Sarita Este / Desierto Project

The Desierto project, located in the Puna geological region of Salta Province, Argentina, has been the subject of surface exploration that identified zones of alteration, including clay and silica-rich areas typically associated with precious metal systems. During 2025, the Company plans to formalize a joint venture agreement with Cascadero Copper Corporation to advance exploration activities on the Desierto I concession. The Company anticipates initiating a Phase I drill program designed to test extensions of gold mineralization observed at the adjacent Sarita Este property. Data obtained from the initial drilling program is expected to support refinement of the Desierto geological model and further evaluation of potential synergies with the Sarita Este project.

Sand Canyon Project

In January 2025, the Company exercised its option to earn a 60% interest in the Sand Canyon project, located in Humboldt County, Nevada, pursuant to its agreement with Golden Gryphon Explorations, Inc. The parties are currently working to finalize joint venture documentation. While no drilling is planned for 2025, the Company is continuing to review and integrate historical exploration data and technical studies to inform future exploration plans.

Sale of Minera de Cordilleras

In April 2025, the Company completed the sale of its wholly owned subsidiary, Minera de Cordilleras S. de R.L. de C.V., for total consideration of $600,000. The subsidiary held five non-core mining concessions in Mexico and accumulated tax loss carryforwards as part of its restructuring program.

Financial Results of Operations

For the results of operations discussed below, we compare the results of operations for the three months ended March 31, 2025, to the results of operations for the three months ended March 31, 2024.

Exploration expense. Our exploration expense, including property holding costs and allocated administrative expenses, totaled $0.1 million and $0.1 million for the three months ended March 31, 2025 and 2024, respectively, essentially unchanged.

Administrative expense. Administrative expenses totaled $0.7 million for the three months ended March 31, 2025, compared to $1.0 million for the three months ended March 31, 2024. Administrative expenses, including costs associated with being a public company, are incurred primarily by our corporate activities in support of our exploration portfolio. The lower administrative expense we incurred during 2025 is primarily related to our cost reduction efforts.

Stock-based compensation. During the three months ended March 31, 2025 and 2024, we incurred $0.1 million of stock-based compensation expense. Stock-based compensation varies from period to period depending on the number and timing of shares granted, the type of grant, the market value of the shares on the date of grant and other variables.

Interest and other income, net. We recorded a nominal amount of interest and other income, net for the three months ended March 31, 2025 and 2024.

Loss on foreign currency transactions. We recorded a nominal amount of loss on foreign currency transactions for the three months ended March 31, 2025 and 2024. Foreign currency gains and losses are primarily related to the effect of currency fluctuations on monetary assets net of liabilities held by our foreign subsidiaries that are denominated in currencies other than U.S. dollars.

Income Taxes. We recorded zero income tax expense for the three months ended March 31, 2025 and 2024.

Loss from discontinued operations, net of taxes. In 2024, certain businesses were classified as assets held for sale and discontinued operations, including the Rodeo and Velardeña Properties in Mexico and the El Quevar property in Argentina. Loss from discontinued operations, net of taxes was $0.4 million and $3.3 million for the three months ended March 31, 2025 and 2024, respectively.

Loss from discontinued operations, net of taxes included the following major components:

• Sale of metals. Revenue from the sale of metals decreased from $1.2 million for the three months ended March 31, 2024 to zero for the three months ended March 31, 2025 primarily due to ceasing mining operations at the Rodeo and Velardeña Properties in 2023 and 2024, respectively.
• Cost of metals sold. For the three months ended March 31, 2025 and 2024, we recorded zero and $2.9 million of cost of metals sold, respectively. The decrease in costs was due to the discontinuation of mining operations.
• Exploration. Exploration decreased from $0.4 million for the three months ended March 31, 2024 to zero for the three months ended March 31, 2025 primarily due to cash constraints of the Company and the classification of assets held for sale.
• Velardeña care and maintenance costs. We recorded no expenses related to care and maintenance at our Velardeña Properties for the three months ended March 31, 2024 as the Velardeña Properties were operating during that period. We recorded $0.2 million related to care and maintenance for the three months ended March 31, 2025, for expenses related to care and maintenance at our Velardeña Properties as the result of the previous suspension of mining and processing activities in 2024.
• Other operating expense, net. We recorded $0.1 million of other operating expense for the three months ended March 31, 2025 relating primarily to the write-off of a receivable. We recorded $0.9 million for the three months ended March 31, 2024 relating mainly to a severance accrual for employees in Mexico.

For additional details on the major components of the loss from discontinued operations, please refer to “Item 1 Financial Statements—Note 3. Assets Held for Sale and Discontinued Operations” in this Form 10-Q.

Liquidity, Capital Resources and Going Concern

2025 Liquidity Forecast and Going Concern Qualification

We do not currently have sufficient resources to meet our expected cash needs for a period of twelve months beyond the filing date of this 2025 Quarterly Report on Form 10-Q. At March 31, 2025, we had current assets of approximately $4.0 million, including cash and cash equivalents of approximately $3.5 million. On the same date, we had accounts payable and other current liabilities of approximately $4.9 million, which includes $3.0 million in deferred revenue for the sale of the Velardeña oxide plant and water wells recorded within Current liabilities held for sale on the interim Condensed Consolidated Balance Sheets. As previously disclosed, the Company ceased mining at the Velardeña mines in Mexico in the first quarter 2024 and subsequently sold the mines and certain related assets. As of March 31, 2025, the Company was owed $232,000 plus $37,000 value-added tax (“VAT”) of the $3.0 million purchase price for the Velardeña oxide plant and water wells and other minor remaining Velardeña assets (see Note 15).

The Company’s only near-term opportunity to generate cash flow to meet its expected cash requirements is from the sale of assets, equity or other external financing. The Company is evaluating and pursuing alternatives, including the potential sale of the Company, finalizing the sale of its assets at the Velardeña Properties, seeking buyers or partners for the Company’s other assets or obtaining equity or other external financing. In the absence of additional cash inflows, the Company anticipates that its cash resources will be exhausted in approximately the first quarter of 2026. If we are unable to obtain additional cash resources or sell the Company, we will be forced to cease operations and liquidate.

These interim condensed consolidated financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the normal course of business. However, as noted above, our continuing long-term operations will be dependent upon our ability to secure sufficient funding to generate future profitable operations. The underlying value and recoverability of the amounts shown as property, plant and equipment in our consolidated financial statements are dependent on our ability to generate positive cash flows from operations and to fund general administrative, and exploration activities that would lead to additional profitable mining and processing activities or to generate proceeds from the disposition of property, plant and equipment.

The ability of the Company to maintain a positive cash balance for a period of twelve months beyond the filing date of this 2025 Quarterly Report on Form 10-Q is dependent upon its ability to generate sufficient cash flow from selling assets, reducing expenses, and raising sufficient funds through equity financings or other external sources. These material uncertainties cast significant doubt on the Company’s ability to continue as a going concern. Therefore, the Company cannot conclude that substantial doubt does not exist as to the Company’s ability to continue as a going concern for the twelve months following the filing date of this Quarterly Report for the three months ended March 31, 2025 on Form 10-Q. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or liabilities which might be necessary should the Company not continue as a going concern.

2025 Liquidity Discussion

At March 31, 2025, our aggregate cash and cash equivalents totaled $3.5 million, compared to the $3.2 million in similar assets held at December 31, 2024. The March 31, 2025 increase is the result of the following expenditures and cash inflows for the three months ended March 31, 2025. Expenditures totaled $1.2 million from the following:

• $0.4 million from the net loss on discontinued operations and assets held for sale, which includes, $0.2 million in Velardeña shutdown care and maintenance costs and $0.2 million in other operating costs;
• $0.7 million in general and administrative expenses; and
• $0.1 million in exploration expenditures.

The above expenditures were partially offset by cash inflows of $1.5 million from the following:

• $1.0 million of proceeds received from the sale of Velardeña Plant 2 and water wells; and
• $0.5 million of other working capital changes.

Recent Accounting Pronouncements

There were no new accounting pronouncements issued during the first quarter of 2025 that would affect the Company or have a material impact on its consolidated financial position or results of operations.

Forward-Looking Statements

Some information contained in or incorporated by reference into this Quarterly Report on Form 10-Q (this “Form 10-Q”) may contain forward-looking statements and forward-looking information (collectively, “forward-looking statements”) within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable securities laws. We use the words “anticipate,” “continue,” “likely,” “estimate,” “expect,” “may,” “could,” “will,” “project,” “should,” “believe” and similar expressions (including negative and grammatical variations) to identify forward- looking statements. These statements include comments relating to (i) our anticipated near-term capital needs and potential sources of capital; (ii) our plans regarding exploration activities at the Sarita Este/Desierto project and the completion of the related joint venture documents and formation of the joint venture with Cascadero Copper Corporation (“Cascadero”); (iii) plans regarding our Sand Canyon exploration property in Nevada; (iv) expectations pertaining to the collection of receivables from the sale of the Velardeña Properties; (iv) projected spending for the twelve months ending March 31, 2026; and (v) statements concerning our financial condition, business strategies, business and legal risks, and our financial outlook for 2025, including anticipated expenditures and cash inflows during the year. Although we believe the expectations and assumptions reflected in those forward-looking statements are reasonable, we cannot assure you that these expectations and assumptions will prove to be correct. Our actual results could differ materially from those expressed or implied in these forward-looking statements as a result of various factors described in this Form 10-Q, including:

• The Company’s expected near-term cash needs, including the need to raise additional cash in the near-term and whether we are able to raise the necessary capital required to continue our business on terms acceptable to us or at all;
• Higher than anticipated exploration, maintenance, general and administrative costs;
• Whether we will receive the full amount of receivables from the sale of the Velardeña Properties and whether the timing of such collections will be delayed;
• Plans regarding further advancement of the Sarita Este/Desierto project, including completion of the joint venture documents with Cascadero;
• Plans regarding further advancement of the Sand Canyon project, including completion of the joint venture with Golden Gryphon Explorations, Inc.;
• Decreases in silver and gold prices;
• Risks related to our exploration properties, including unfavorable results from exploration and whether we will be able to advance our exploration properties;
• Variations in the nature, quality and quantity of any mineral deposits that are or may be located at our exploration properties, changes in interpretations of geological information, and unfavorable results of drilling, metallurgical and other tests;
• Potential delays in our exploration activities or other activities to advance properties towards mining resulting from environmental consents or permitting delays or problems, accidents, problems with contractors, disputes under agreements related to exploration properties, unanticipated costs and other unexpected events;
• Our ability to retain key management and exploration personnel necessary to successfully operate and grow our business;
• Economic and political events negatively affecting the market prices for gold, silver, zinc, lead and other minerals that may be found on our exploration properties;
• Political and economic instability in Argentina and other countries in which we conduct our business, and future actions of any of these governments with respect to nationalization of natural resources or other changes in mining or taxation policies;
• Adverse technological changes and cybersecurity threats;
• Volatility in the market price of our common stock; and
• The factors discussed under “Risk Factors” in our 2024 Annual Report.

These factors are not intended to represent a complete list of the general or specific factors that could affect us. Many of these factors are beyond our ability to control or predict. Although we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, such expectations may prove to be materially incorrect due to known and unknown risks and uncertainties. You should not unduly rely on any of our forward-looking statements. These statements speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Interest Rate Risk

We invest substantially all of our excess cash in U.S. government and debt securities rated “investment grade” or better. The rates received on such investments may fluctuate with changes in economic conditions. Based on the average cash and investment balances outstanding during the first three months of 2025, a 1% decrease in interest rates would have resulted in only a nominal reduction in interest income for the period.

Foreign Currency Exchange Risk

Although most of our expenditures are in U.S. dollars, certain purchases of labor, services, supplies and capital assets are denominated in other currencies, primarily in Mexico and Argentina. As a result, currency exchange fluctuations may impact the costs of our exploration and mining activities. To reduce this risk, we maintain minimum cash balances in foreign currencies and complete most of our purchases in U.S. dollars.

Commodity Price Risk

We are primarily engaged in the exploration of properties containing gold, silver, zinc, lead and other minerals. As a result, decreases in the price of any of these metals have the potential to negatively impact our ability to establish reserves and mine on our properties. We currently hold no commodity derivative positions.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of March 31, 2025, (the “Evaluation Date”). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The risk factors for the three months ended March 31, 2025, are substantially the same as those set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024.