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Golden Minerals is a junior silver producer with a strong growth profile, listed on both the NYSE Amex and TSX.
Message: AUMN Closes 8.65 MM Share Offering
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Well, the quasi-good news is that they pulled off the deal at .26 despite the fact that the stock traded .22-.23 after the announcement.
In the PR below, you will see why the institutional shareholders paid up for the deal. Of course, they received a warrant for each share. But, these "selected and favored" beneficiaries also get their 2016 warrants repriced down to .35 from a much higher price (AUMN has not answered my question about what that former price was, but I'm sure it was significantly higher). Plus, the warrant expiration was extended another 6 months.
In summary, long term shareholders were shafted by a 10 cent (30%) share decline from .33 to .23 once the offering was announced. But, the "selected and favored" HCW Institutional shareholders received a free warrant and an better-priced former warrant. As has been consistent for the past 8 years, AUMN management really took care of those shareholders who have been with this company throughout the ECU merger (sic)
$2.25MM offering allows AUMN mgmt. to maintain their excessive salaries without missing a beat after poorly budgeting their cash levels and overspending prior to the $22MM Valardena sale only about 51 days from today. We can only pray that they spend that money wisely in this enormous rally in gold and silver, during which the only declining stock in the sector may be AUMN!
It's funny, 75 days seems like a very long time for a Mexican mining company to complete due diligence on a turn-key operation in Torreon, MX. I'm not a miner, but it would seem as though 1 week would be sufficient.
Against the backdrop of a very strong precious metal rally, during which long term shareholders are enjoying the first small fundamental rally in years, I wonder if AUMN mgmt. considered approaching the Valardena buyer and offering a lower price in order to accelerate the due diligence, avoiding the damaging offering? Nah.....that would be putting shareholders before management and I've yet to see that happen over the past 8 years.
Despite this entire travesty, in the spirit of full disclosure, I added additional stock to my already very large position last Thursday and Friday. My conviction is obviously not driven by AUMN mgmt., but rather the expectation that gold and silver will maintain this bull run and that the investors will eventually chase the laggers.
Let us pray!
Silverbull50
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Golden Minerals Closes $2.25 Million Registered Direct Offering
GLOBENEWSWIRE 4:35 PM ET 7/19/2019
GOLDEN, Colo., July 19, 2019 (GLOBE NEWSWIRE) -- Golden Minerals Company (“Golden Minerals" or the "Company”) today announced that it has closed its previously announced registered direct offering of shares of common stock with certain institutional investors. The gross proceeds to the Company from this offering were $2.25 million, before deducting the placement agent fees and other estimated offering expenses. The Company intends to use the proceeds from the offering for working capital requirements and general corporate purposes.
H.C. Wainwright & Co. acted as the exclusive placement agent in connection with this offering. The Company issued to the investors approximately 8.65 million registered shares of common stock at a purchase price of $0.26 per share in the registered direct offering. Additionally, for each share of common stock purchased by an investor, such investor received an unregistered warrant to purchase one share of common stock. The warrants have an exercise price of $0.35 per share, are exercisable commencing six months from the date of issuance and will expire five years from the initial exercise date.
Each of the investors in this offering held warrants that were issued by the Company in May 2016 and were exercisable until November 2021. In connection with this transaction, the Company exchanged the May 2016 warrants for an equal number of new warrants with an exercise price of $0.35 per share, exercisable until May 2022.
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