The case for & against
Bull & Bear analysis
Bearish
Golden Minerals Company (NYSE: AUMN) is a junior mining company specializing in the exploration and production of precious metals, particularly gold and silver. The company operates primarily in Mexico and Argentina, focusing on its Rodeo and Velardeña mining projects. With a recent strategic shift from exploring to producing, Golden Minerals aims to leverage its existing assets while overcoming operational challenges posed by the volatile commodity market. The business is currently navigating inflationary pressures and supply chain disruptions, which are key themes affecting the mining sector.
Bull says
- ↑Q2 net operating margin of $1.3 M on first profitable quarter
- ↑Maintained full-year guidance of 12k–14k oz gold and 47k–50k oz silver
- ↑Promising drilling at Yoquivo/Cerrito Este may yield maiden resource later this year
- ↑Cash operating costs trimmed slightly; $9 M cash balance sustains operations
- ↑High Book-to-Price ratio and QS Score 4.18 indicate potential undervaluation
- ↑Ore-sorting trials underway could reduce dilution and boost recoveries
Bear says
- ↓Cash costs per payable gold ounce rose to $1,426 in Q2
- ↓Negative net cash flow of ~$3 M amid $2.4 M exploration spend
- ↓Velardeña faces regulatory delays and higher restart construction costs
- ↓Requires sustained silver price above $25/oz to justify Velardeña restart
- ↓Weak profitability and earnings yield factors raise return concerns
- ↓Low momentum and high volatility scores suggest ongoing stock instability
Earnings Call · Q3 2021 · Mgmt. Guidance
Updated 09-05-2026bullish
Transcript signals
Bull points
- I'm pleased to report that Golden Minerals just completed its first ever profitable quarter from mine operating income. This is a great milestone, and it is validation of successfully executing our plan to become a profitable producer.
- Production and revenue for Rodeo were both strong in Q3 with a quarter over quarter gain of 38% in gold production and a 44% gain in revenue.
- Our cost per ounce of gold produced has improved significantly since Q2 and is now in the mid $800 net of silver credits.
Bear points
- We have determined that it is not in the company's best interest to start the mine until we have approved the construction of the BIOX plants and they're closer to the possible completion date.
- The economics of operating without receiving good payables for the gold are simply not attractive enough to justify the risks. We will not get good payables for the gold until we have the biox plant operating and can extract the gold using our oxide plant. This pushes a possible restart date out into 2022.
- I think we spent probably more exploration drill dollars this past year than we would plan on for next year, but we haven't made that final decision. But as we start gearing up on Velardeña once that decision is made, I think we will, by necessity, cut back on exploration spending next year.
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