Debt is something that Golden Minerals Co. (NYSEMKT: AUMN) doesn’t like to carry for a long time. Heading into 2Q2016, the company had debt of about $0.96 million. However, by the end of 2Q, the company didn’t have any debt on its balance sheet and here is what happened.
Golden Minerals Co. (NYSEMKT: AUMN) said Sentient Group, which was holding some credit notes issued by the company, decided to convert the notes into common shares. Sentient converted a total of $1.44 million, which included the value of the principal together with the accrued interest.
The move by Sentient produced some non-cash gain in favor of Golden Minerals and enabled the company to eliminate all its debts. Therefore, Golden Minerals is looking forward to ending 2016 with a strong balance sheet.
2016 financial outlook
Golden Minerals Co. (NYSEMKT: AUMN) finished 2Q2016 with cash and equivalents of $3.9 million. In addition to that amount, the management of Golden Minerals received $0.6 million in connection to the sale of some non-strategic properties. Another $2.4 million is expected in the balance of 2016 in the form of net operating margin in connection to the lease of the oxide plant.
If you put everything together, the management says Golden Minerals should have sufficient cash to finance its operations through 2017 without requiring external funding.
Cash expenditure in 2H2016
In the remaining two quarters of 2016, Golden Minerals Co. (NYSEMKT: AUMN) expects to spend cash of $3.9 million. With that, the company expects to end the year with cash balance of $3 million.
The key areas of spending in the back half of 2016 are general and administrative costs, which are expected to consume $1.4 million. The company expects to funnel $1.1 million in 2H2016 to property holding and exploration costs for projects mainly in Mexico.
Maintenance and care of Velardena Properties is expected to consume $0.7 million.
How Golden Minerals Co. (NYSEMKT: AUMN) fared in 2Q
Golden Minerals Co. (NYSEMKT: AUMN) generated revenue of $1.6 million in 2Q2016, which decreased from $2 million in a similar quarter last year. Net loss for the latest quarter remained an changed at $3.9 million compared to year-ago quarter.