GOLDEN MINERALS COMPANY (NASDAQ:AUMN) Files An 8-K Entry into a Material Definitive Agreement
Item1.01 Entry Into a Material Definitive
Agreement.
On December20, 2016, Golden Minerals Company (the Company)
entered into an At the Market Offering Agreement (the Sales
Agreement) with H.C. Wainwright Co., LLC (Wainwright),
under which the Company may, from time to time, issue and sell
shares of the Companys common stock, $0.01 par value per share,
on the NYSE MKT LLC (the NYSE MKT) or on any other
existing United States trading market for its common stock
through Wainwright as sales manager for aggregate sales proceeds
of up to $5,000,000 (theOffering). Under the Offering, no
offers or sales of common shares will be made in Canada,
including through the Toronto Stock Exchange or other trading
markets in Canada. The common stock will be distributed at the
market prices prevailing at the time of sale. As a result, prices
of the common stock sold under the Offering may vary as between
purchasers and during the period of distribution.
Under the Sales Agreement, the Company will set the parameters
for the sale of shares of common stock, including the number of
shares to be issued, the time period during which sales are
requested to be made, any limitation on the number of shares that
may be sold in any one trading day and any minimum price below
which sales may not be made. Subject to the terms and conditions
of the Sales Agreement, Wainwright may sell the shares of common
stock by any method that is deemed to be an at the market
offering as defined in Rule415 under the Securities Act of 1933,
as amended (the Securities Act), including by means of
ordinary brokers transactions at market prices, in block
transactions or as otherwise agreed by Wainwright and the
Company. Wainwright will use commercially reasonable efforts in
conducting such sales activities consistent with its normal
trading and sales practices and applicable state and federal
laws, rulesand regulations and the rulesof the NYSE MKT. The
Sales Agreement may be terminated by the Company upon prior
notice to Wainwright or by Wainwright upon prior notice to the
Company.
The Company intends to use the net proceeds of the Offering, if
any shares of common stock are sold, together with the Companys
current cash resources, to fund new and continuing exploration
programs at its mining projects, for possible future acquisitions
and for general corporate and working capital purposes.
The Sales Agreement provides that Wainwright will be entitled to
compensation for its services at a commission rate of 2.0% of the
gross sales price per share of common stock sold. The Company has
agreed in the Sales Agreement to reimburse certain legal expenses
of Wainwright in connection with the Offering up to a maximum of
$50,000.
The Company has no obligation to sell any shares of common stock
under the Sales Agreement, and the Company or Wainwright may
suspend the offering of common stock under the Sales Agreement
upon notice to the other and subject to other conditions. The
Company has agreed in the Sales Agreement to provide
indemnification and contribution to Wainwright against certain
liabilities, including liabilities under the Securities Act.
The common stock will be issued to the Companys shelf
registration statement on FormS-3 (Registration No.333-199026),
which was declared effective by the U.S. Securities
and Exchange Commission (the SEC) on November5, 2014.
The Company filed a prospectus supplement, dated December20,
2016, with the SEC in connection with the Offering.
The foregoing description of the Sales Agreement is not
complete and is qualified in its entirety by reference to the
full text of the Sales Agreement, a copy of which is filed
herewith as Exhibit10.1 to this Current Report on Form8-K and
is incorporated herein by reference.
A copy of the Sales Agreement has been included to provide
security holders with information regarding its terms. It is
not intended to provide any other factual information about the
Company. The representations, warranties and covenants
contained in the Sales Agreement were made solely for purposes
of the Offering and as of specific dates, were solely for the
benefit of the parties to the Sales Agreement, may be subject
to limitations agreed upon by the contracting parties, and may
be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to
security holders. Security holders are not third-party
beneficiaries under the Sales Agreement and should not rely on
the representations, warranties and covenants or any
descriptions thereof as characterizations of the actual state
of facts or condition of the Company. Moreover, information
concerning the subject matter of the representations and
warranties may change after the date of the Sales Agreement,
which subsequent information may or may not be fully reflected
in the Companys public disclosures.
The legal opinion of Davis Graham Stubbs LLP relating to the
shares of common stock being offered to the Sales Agreement is
filed as Exhibit5.1 to this Current Report on Form8-K.
Item 8.01
Other Events.
Santa Maria
At the Santa Maria mine in southern Chihuahua, Mexico, the
Company has continued with metallurgical testing of sulfide
vein material in the fourth quarter 2016. Metallurgical
recoveries at the third party sulfide flotation mill used to
process the Companys 7,500 tons of bulk samples averaged
approximately 73 percent for silver and 50 percent for gold
from partially oxidized sulfide vein material. The Company
expects recoveries to improve in the sulfide vein material it
is now testing, which exhibits less oxidation than the previous
bulk samples. If the Company were to begin mining at Santa
Maria, it would expect to mine and process sulfide material
which is less oxidized and similar to that now being tested.
The Company intends to defer until the first quarter 2017
updating its mineralized material estimate and completing a
Preliminary Economic Assessment (PEA), when the Company
expects to have received results of these additional tests and
incorporated them into the project evaluation.
Rodeo
In the fourth quarter 2016, the Company completed a 2,080-meter
core drilling program at its Rodeo gold project located
approximately 80 kilometers west of its Velardea properties in
Durango State, Mexico, at a cost of $0.4 million. The Company
has defined a gold and silver bearing epithermal vein and
breccia system with encouraging gold and silver values exposed
at
the top of a northwesterly-striking ridge and dipping to the
northeast. Previous work at Rodeo by other mining companies has
shown the mineralized system to be exposed at surface over
about one kilometer of strike length. The Company is preparing
a mineralized material estimate for Rodeo, which it expects to
release during the first quarter 2017. If the Company discovers
a deposit with sufficient tonnage and grade, with metallurgical
recoveries, costs and other characteristics to support mining,
the location of the deposit could make it amenable to open pit
mining, with material trucked to the Velardea oxide plant for
processing after the Hecla lease terminates.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits
|
ExhibitNo. |
|
Description |
|
5.1 |
Opinion of Davis Graham Stubbs LLP. |
|
|
10.1 |
At the Market Offering Agreement, dated as of December20, |
|
|
23.1 |
Consent of Davis Graham Stubbs LLP (included in |
Forward-Looking Statements
This Form8-K contains forward-looking statements within the
meaning of Section27A of the Securities Act and Section21E of
the Securities Exchange Act of 1934, as amended, and applicable
Canadian securities legislation, including statements regarding
anticipated sales of common stock under the Offering and the
intended use of proceeds from the Offering; expected Santa
Maria metallurgical test results, planned evaluation of those
results, planned timing for a mineralized material estimate
update and completion of a PEA and expected mining and
processing capabilities at Santa Maria; and expected Rodeo
drill results, whether such results and other factors will make
the deposit amendable to open pit mining, and the planned
timing for a mineralized material estimate for Rodeo. These
statements are subject to risks and uncertainties, including:
whether any sales are completed under the Offering, changes in
the use of proceeds due to unanticipated developments and other
factors that may cause actual results, performance or
achievements to be materially different than those expressed or
implied; unfavorable or less favorable than anticipated results
from exploration at the Santa Maria or Rodeo properties and
whether we will be able to advance these exploration
properties; potential delays in our exploration activities,
including evaluation of drill results, a mineralized material
update and preparation of a PEA at the Santa Maria project, or
other activities to advance properties towards mining resulting
from environmental events or permitting delays or problems,
accidents, problems with contractors, disputes under agreements
related to exploration properties, unanticipated costs and
other unexpected events; increases in costs and declines in
general economic conditions; inability to raise external
financing on acceptable terms or at all; and changes in
political conditions, in tax, royalty, environmental and other
laws in Mexico, and
financial market conditions. The Company assumes no obligation
to update this information. Additional risks relating to the
Company may be found in the periodic and current reports filed
with the Securities Exchange Commission by Golden Minerals,
including the Companys Annual Report on Form10-K for the year
ended December31, 2015.
About GOLDEN MINERALS COMPANY (NASDAQ:AUMN)
