Golden Minerals(US:AUMN)2022-11-11 19:32Financial Data and Key Metrics Changes - In Q3 2022, the company reported revenue of $5.3 million, cost of sales of $4.4 million, and a net operating margin of just under $1 million, significantly impacted by lower metals prices [4][17] - The net operating margin from the Rodeo mine was approximately $0.9 million, with negative after-tax income of about $2.7 million [17] - Cash costs per payable gold ounce net of silver credits were lower at $1,391 compared to $1,426 in Q2 2022 [12] Business Line Data and Key Metrics Changes - The Rodeo mine produced just under 3,000 payable ounces of gold and 11,900 payable ounces of silver in Q3 2022, slightly lower than the previous quarter [11] - Year-to-date production at the Rodeo mine was just under 9,600 payable gold ounces at cash costs averaging $1,316 per payable gold ounce net of silver credits [11] - Full year 2022 production guidance for gold is maintained at 12,000 to 14,000 ounces, with silver production projected between 47,000 and 50,000 ounces [6] Market Data and Key Metrics Changes - Average realized prices for gold and silver are estimated at $1,800 and $25 per ounce, respectively, for the full year 2022 [13] - The company expects a net operating margin between $6 million and $8 million for the full year 2022 [18] Company Strategy and Development Direction - The company is focusing on optimizing mining techniques and addressing dilution issues at the Velardeña properties before making a production restart decision [15] - Exploration efforts are ongoing at the Yoquivo Gold-Silver project and Sarita Este project, with plans to publish a maiden resource estimate for Yoquivo in Q1 2023 [8][9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that lower metals prices have significantly impacted margins and highlighted the need to control mining dilution for future production decisions [4][25] - The company is optimistic about the ore sorting technology being evaluated, which could enhance head grades and reduce costs [29] Other Important Information - The tailings expansion project at the oxide plant has begun earlier than planned, with an estimated cost of around $2.2 million [14] - The company ended the quarter with approximately $6.5 million in cash, with a negative net cash flow of $3.0 million primarily due to cash used in operating activities [19] Q&A Session Summary Question: Inquiry about cost reductions in the current inflationary environment - Management noted that cost reductions were achieved through efficient operations and prior blasting activities, despite increases in commodity prices [22][23] Question: Impact of metal price volatility on Velardeña test work - Management confirmed that while volatility has slowed some progress, testing is still ongoing [25] Question: Details on the ore sorting technology being tested - The company is working with Metso Outotec on ore sorting technology, which aims to reduce dilution and improve head grades [29] Question: Timeline for production decision at Velardeña - A production decision is expected by mid-2023, contingent on the results of ore sorting tests [37] Question: Capital expenditure estimates for the BIOX plant - Initial estimates for the BIOX plant are around $10 million, with expectations of upward pressure on costs due to inflation [41] Question: Updates on exploration projects and resource estimates - The company anticipates moving to a Preliminary Economic Assessment (PEA) following the maiden resource estimate for Yoquivo [42][45]