UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(MARK ONE)

~~[X]~~☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, ~~2017.~~2023.


~~[ ]~~
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-13627

GOLDEN MINERALS COMPANY

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

~~DELAWARE~~		~~26-4413382~~
DELAWARE		26-4413382

(STATE OR OTHER JURISDICTION OF		(I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)		IDENTIFICATION NO.)


350 INDIANA STREET, SUITE ~~800~~650
GOLDEN, COLORADO			80401

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)			(ZIP CODE)

~~(303)~~

(303) 839-5060

(REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS: YES ☒ NO ☐

INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS SUBMITTED ELECTRONICALLY AND POSTED ON ITS CORPORATE WEB SITE, IF ANY, EVERY INTERACTIVE DATA FILE REQUIRED TO BE SUBMITTED AND POSTED PURSUANT TO RULE 405 OF REGULATION S-T (§232.405 OF THIS CHAPTER) DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO SUBMIT AND POST SUCH FILES): YES ☒ NO ☐

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A LARGE ACCELERATED FILER, AN ACCELERATED FILER, A NON-ACCELERATED FILER, A SMALLER REPORTING COMPANY OR AN EMERGING GROWTH COMPANY. SEE DEFINITION OF “LARGE ACCELERATED FILER”, “ACCELERATED FILER”, “SMALLER REPORTING COMPANY”, AND “EMERGING GROWTH COMPANY” IN RULE 12B-2 OF THE EXCHANGE ACT.:


~~LARGE ACCELERATED FILER ☐~~Securities registered pursuant to Section 12(b) of the Act:		~~ACCELERATED FILER ☐~~
~~NON-ACCELERATED FILER ☐~~Tile of each class	Trading Symbol	~~SMALLER REPORTING COMPANY ☒~~Name of each exchange on which registered
~~EMERGING GROWTH COMPANY ☐~~Common Stock, $0.01 par value	AUMN	NYSE American

IF AN EMERGING GROWTH COMPANY, INDICATE BY CHECK MARK IF THE REGISTRANT HAS ELECTED NOT TO USE THE EXTENDED TRANSITION PERIOD FOR COMPLYING WITH ANY NEW OR REVISED FINANCIAL ACCOUNTING STANDARDS PROVIDED PURSUANT TO SECTION 13(A) OF THE EXCHANGE ACT.☐

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ☒ No ☐

~~INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A SHELL COMPANY (AS DEFINED IN RULE 12B-2 OF THE EXCHANGE ACT): YES ☐ NO ☒~~

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS FILED ALL DOCUMENTS AND REPORTS REQUIRED TO BE FILED BY SECTIONS 12, 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 SUBSEQUENT TO THE DISTRIBUTION OF SECURITIES UNDER A PLAN CONFIRMED BY A COURT: YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

~~AT NOVEMBER 7, 2017, 92,005,448 SHARES OF COMMON STOCK,~~

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

At November 9, 2023, 14,084,680 shares of common stock, $0.01 ~~PAR VALUE PER SHARE, WERE ISSUED AND OUTSTANDING~~par value per share, were issued and outstanding.

Table of Contents

GOLDEN MINERALS COMPANY

FORM 10-Q

QUARTER ENDED SEPTEMBER 30, ~~2017~~2023

INDEX

~~INDEX~~

Table of Contents

PART I. FINANCIAL ~~INFORMATION~~INFORMATION

Item 1.

Financial Statements

~~Item 1.Financial Statements~~

GOLDEN MINERALS COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Expressed in United States dollars)

(Unaudited)



	September 30,		December 31,
	2023		2022

	(in thousands, except share data)
Assets
Current assets
Cash and cash equivalents (Note 5)	$	1,583	$	3,972
Short-term investments (Note 5)		11		20
Inventories, net (Note 7)		305		1,371
Value added tax receivable, net (Note 8)		3,144		1,465
Prepaid expenses and other assets (Note 6)		897		1,142
Total current assets		5,940		7,970
Property, plant and equipment, net (Note 9)		5,958		6,416
Investments (Note 5)		265		225
Other long-term assets (Note 10)		141		333
Total assets	$	12,304	$	14,944

Liabilities and Equity
Current liabilities
Accounts payable and other accrued liabilities (Note 11)	$	5,036	$	3,716
Other current liabilities (Note 13)		563		633
Total current liabilities		5,599		4,349
Asset retirement and reclamation liabilities (Note 12)		4,142		3,993
Other long-term liabilities (Note 13)		40		122
Total liabilities		9,781		8,464

Commitments and contingencies (Note 20)

Equity (Note 16)
Common stock, $.01 par value, 28,000,000 shares authorized; 8,573,252 and 6,836,735 shares issued and outstanding, respectively⁽¹⁾		86		68
Additional paid-in capital		548,328		544,372
Accumulated deficit		(545,891)		(537,960)
Shareholders’ equity		2,523		6,480
Total liabilities and equity	$	12,304	$	14,944

September 30,

December 31,

2017

2016

(in thousands, except share data)

Assets

Current assets

Cash and cash equivalents (Note 4)

$
4,966

$
2,588

Short-term investments (Note 4)

242

334

Trade receivables

391

380

Inventories, net (Note 6)

267

245

Value added tax receivable, net (Note 7)

1

5

Related party receivable (Note 21)

—

643

Prepaid expenses and other assets (Note 5)

466

578

Total current assets

6,333

4,773

Property, plant and equipment, net (Note 8)

8,569

9,235

Total assets

$
14,902

$
14,008

Liabilities and Equity

Current liabilities

Accounts payable and other accrued liabilities (Note 9)

$
1,348

$
1,224

Deferred revenue (Note 15)

293

—

Other current liabilities

9

24

Total current liabilities

1,650

1,248

Asset retirement and reclamation liabilities (Note 10)

2,449

2,434

Deferred revenue (Note 15)

674

—

Warrant liability - related party (Note 12)

—

976

Warrant liability (Note 12)

—

922

Other long term liabilities

51

66

Total liabilities

4,824

5,646

Commitments and contingencies (Note 19)

Equity (Note 14)

Common stock, $.01 par value, 200,000,000 and 100,000,000 shares authorized; 92,005,448 and 89,020,041 shares issued and outstanding, respectively

919

889

Additional paid in capital

516,237

495,455

Accumulated deficit

(507,041)

(488,037)

Accumulated other comprehensive (loss) income

(37)

55

Shareholders' equity

10,078

8,362

Total liabilities and equity

$
14,902

$
14,008

(1) Reflects the one-for-25 reverse stock split that became effective June 9, 2023. Refer to Note 1, “Basis of Preparation of Financial Statements and Nature of Operations.”

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

Table of Contents

GOLDEN MINERALS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ~~AND COMPREHENSIVE LOSS~~

(Expressed in United States dollars)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022

	(in thousands except per share data)				(in thousands, except per share data)
Revenue:
Sale of metals (Note 17)	$	2,512	$	5,268	$	11,702	$	18,700
Total revenue		2,512		5,268		11,702		18,700
Costs and expenses:
Cost of metals sold (exclusive of depreciation shown below) (Note 17)		(3,320)		(4,374)		(11,225)		(13,335)
Exploration expense		(726)		(2,376)		(2,898)		(7,038)
El Quevar project expense		(118)		(154)		(435)		(448)
Velardeña care and maintenance costs		(310)		(370)		(905)		(843)
Administrative expense		(1,111)		(918)		(3,658)		(3,466)
Stock-based compensation		(92)		(194)		(324)		(543)
Reclamation expense		(74)		(71)		(222)		(211)
Other operating income, net		456		384		560		1,274
Depreciation and amortization		(148)		(89)		(380)		(241)
Total costs and expenses		(5,443)		(8,162)		(19,487)		(24,851)
Loss from operations		(2,931)		(2,894)		(7,785)		(6,151)
Other income (expense):
Interest and other income (expense), net (Note 18)		18		(3)		13		(17)
(Loss) gain on foreign currency transactions		(14)		154		91		252
Litigation settlement (Note 20)		(250)		—		(250)		—
Total other income (expense)		(246)		151		(146)		235
Loss from operations before income taxes		(3,177)		(2,743)		(7,931)		(5,916)
Income taxes (Note 15)		—		46		—		90
Net loss	$	(3,177)	$	(2,697)	$	(7,931)	$	(5,826)
Net loss per common share - basic ⁽¹⁾	$	(0.38)	$	(0.40)	$	(1.06)	$	(0.88)
Weighted-average shares outstanding - basic ⁽²⁾		8,378,001		6,714,635		7,466,444		6,632,541

(1) Reflects the one-for-25 reverse stock split that became effective June 9, 2023. Refer to Note 1, “Basis of Preparation of Financial Statements and Nature of Operations.”

Three Months Ended

Nine Months Ended

September 30,

September 30,


2017

2016

2017

2016

(in thousands except per share data)

(in thousands, except per share data)

Revenue:

Oxide plant lease (Note 15)

$
1,771

$
1,729

$
5,107

$
4,768

Total revenue

1,771

1,729

5,107

4,768

Costs and expenses:

Oxide plant lease costs (Note 15)

(619)

(549)

(1,704)

(1,478)

Exploration expense

(977)

(927)

(1,968)

(2,865)

El Quevar project (expense) income

(183)

65

(524)

(308)

Velardeña shutdown and care and maintenance costs

(379)

(456)

(1,098)

(1,589)

Administrative expense

(694)

(897)

(2,592)

(3,141)

Stock based compensation

7

(95)

(300)

(666)

Reclamation expense

(49)

(47)

(146)

(144)

Other operating income, net (Notes 7 and 8)

951

1,281

1,813

1,558

Depreciation and amortization

(138)

(346)

(456)

(1,317)

Total costs and expenses

(2,081)

(1,971)

(6,975)

(9,950)

Loss from operations

(310)

(242)

(1,868)

(5,182)

Other income and (expense):

Interest expense (Note 11)

—

—

—

(515)

Interest and other income (Note 16)

15

10

37

12

Warrant derivative loss (Notes 3 and 17)

—

(545)

—

(2,821)

Derivative loss (Note 17)

—

—

—

(778)

Loss on debt extinguishment (Note 11)

—

—

—

(1,653)

Loss on foreign currency

(23)

(21)

(20)

(63)

Total other income (expense)

(8)

(556)

17

(5,818)

Loss from operations before income taxes

(318)

(798)

(1,851)

(11,000)

Income tax benefit

—

—

—

26

Net loss

$
(318)

$
(798)

$
(1,851)

$
(10,974)

Comprehensive loss, net of tax:

Unrealized (loss) gain on securities

11

107

(92)

278

Comprehensive loss

$
(307)

$
(691)

$
(1,943)

$
(10,696)

Net loss per common share — basic

Loss

$
(0.00)

$
(0.01)

$
(0.02)

$
(0.14)

Weighted average Common Stock outstanding - basic (1)

91,097,279

88,878,371

90,028,480

78,080,858

~~(1)~~(2) Potentially dilutive shares have not been included for loss periods because to do so would be anti-dilutive. Potentially dilutive shares at September 30, 2023, consist of 408,545 equivalent shares related to stock compensation and 1,819,742 equivalent shares related to warrants outstanding. Potentially dilutive shares at September 30, 2022, consist of 440,209 equivalent shares related to stock compensation and 392,154 equivalent shares related to warrants outstanding. See Note 16 for a discussion of stock-based compensation and warrants.

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

Table of Contents

GOLDEN MINERALS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in United States dollars)

(Unaudited)


	Nine Months Ended September 30,
	2023		2022

	(in thousands)
Cash flows used in operating activities:
Net cash used in operating activities (Note 19)	$	(6,557)	$	(6,401)
Cash flows from (used in) investing activities:
Proceeds from sale of assets		514		125
Investment in Golden Gryphon Explorations Inc.		(40)		(225)
Acquisitions of property, plant and equipment		—		(46)
Net cash from (used in) investing activities	$	474	$	(146)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs		3,694		1,050
Common stock shares relinquished to pay taxes		—		(228)
Net cash from financing activities	$	3,694	$	822
Net decrease in cash and cash equivalents		(2,389)		(5,725)
Cash and cash equivalents, beginning of period		3,972		12,229
Cash and cash equivalents, end of period	$	1,583	$	6,504

Nine Months Ended

September 30,

2017

2016

(in thousands)

Cash flows from operating activities:

Net cash provided by (used in) operating activities (Note 18)

$
22

$
(5,123)

Cash flows from investing activities:

Proceeds from sale of assets

750

898

Capitalized costs and acquisitions of property, plant and equipment

(5)

(36)

Net cash from investing activities

$
745

$
862

Cash flows from financing activities:

Proceeds from issuance of common stock, net of issuance costs

1,611

3,599

Net cash from financing activities

$
1,611

$
3,599

Net increase (decrease) in cash and cash equivalents

2,378

(662)

Cash and cash equivalents, beginning of period

2,588

4,077

Cash and cash equivalents, end of period

$
4,966

$
3,415

See Note 1819 for supplemental cash flow information.

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

Table of Contents

GOLDEN MINERALS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in United States dollars)

(Unaudited)


				Additional
	Common Stock ⁽¹⁾			Paid-in		Accumulated		Total
	Shares	Amount		Capital		Deficit		Equity

	(in thousands except share data)
Balance, December 31, 2021	6,538,566	$	65	$	542,081	$	(527,961)	$	14,185
Adjustment related to correction of immaterial error (Note 4)	—		—		—		(93)		(93)
Adjusted balance at January 1, 2022 (Restated)	6,538,566		65		542,081		(528,054)		14,092
Stock compensation accrued (Note 16)	—		—		149		—		149
KELTIP shares issued net of shares relinquished to cover withholding taxes (Note 16)	44,935		1		(230)		—		(229)
Net loss	—		—		—		(316)		(316)
Balance, March 31, 2022	6,583,501	$	66	$	542,000	$	(528,370)	$	13,696
Stock compensation accrued and restricted stock awards granted (Note 16)	20,000		—		200		—		200
Warrants exercised (Note 16)	120,000		1		1,049		—		1,050
Net loss	—		—		—		(2,813)		(2,813)
Balance, June 30, 2022	6,723,501	$	67	$	543,249	$	(531,183)	$	12,133
Stock compensation accrued and restricted stock awards granted (Note 16)	2,000		—		194		—		194
Net loss	—		—		—		(2,697)		(2,697)
Balance, September 30, 2022	6,725,501	$	67	$	543,443	$	(533,880)	$	9,630

Balance, December 31, 2022	6,836,735	$	68	$	544,372	$	(537,960)	$	6,480
Stock compensation accrued (Note 16)	—		—		189		—		189
Shares issued under the at-the-market offering agreement, net (Note 16)	109,999		1		677		—		678
Net loss	—		—		—		(3,266)		(3,266)
Balance, March 31, 2023	6,946,734	$	69	$	545,238	$	(541,226)	$	4,081
Stock compensation accrued (Note 16)	—		—		43		—		43
Shares issued under the at-the-market offering agreement, net (Note 16)	198,931		2		1,115		—		1,117
Offering and private placement transaction (Note 16)	790,000		8		1,847		—		1,855
Net loss	—		—		—		(1,488)		(1,488)
Balance, June 30, 2023	7,935,665	$	79	$	548,243	$	(542,714)	$	5,608
Stock compensation accrued (Note 16)	—		—		92		—		92
Warrants exercised (Note 16)	637,587		7		(7)		—		—
Net loss	—		—		—		(3,177)		(3,177)
Balance, September 30, 2023	8,573,252	$	86	$	548,328	$	(545,891)	$	2,523

(1) Reflects the one-for-25 reverse stock split that became effective June 9, 2023. Refer to Note 1, “Basis of Preparation of Financial Statements and Nature of Operations.”

Accumulated

Additional

Other

Common Stock

Paid-in

Accumulated

Comprehensive

Total

Shares

Amount

Capital

Deficit

Income (loss)

Equity

(in thousands except share data)

Balance, December 31, 2015

53,335,333

$
534

$
484,742

$
(477,378)

$
(127)

$
7,771

Stock compensation accrued and shares issued for vested stock awards

317,968

2

250

—

—

252

Shares issued on conversion of Sentient Note (Note 11)

27,366,740

273

6,944

—

—

7,217

Registered offering common stock, net and warrants (Note 14)

8,000,000

80

3,519

—

—

3,599

Unrealized gain on marketable equity securities, net of tax

—

—

—

—

182

182

Net loss

—

—

—

(10,659)

—

(10,659)

Balance, December 31, 2016

89,020,041

$
889

$
495,455

$
(488,037)

$
55

$
8,362

Cumulative adjustment related to change in accounting principle (Note 3)

—

—

19,046

(17,148)

—

1,898

Adjusted balance at January 1, 2017

89,020,041

$
889

$
514,501

$
(505,185)

$
55

$
10,260

Stock compensation accrued and shares issued for vested stock awards

150,000

1

149

—

—

150

Shares issued under the at-the-market offering agreement, net (Note 14)

1,024,392

11

671

—

—

682

Consideration shares sold to Hecla, net (Note 15)

1,811,015

18

911

—

—

929

Deemed dividend on warrants (Note 3)

—

—

5

(5)

—

—

Unrealized loss on marketable equity securities, net of tax

—

—

—

—

(92)

(92)

Net loss

—

—

—

(1,851)

—

(1,851)

Balance, September 30, 2017

92,005,448

$
919

$
516,237

$
(507,041)

$
(37)

$
10,078

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

Table of Contents

GOLDEN MINERALS COMPANY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in United States dollars)

(Unaudited)

1.	Basis of Preparation of Financial Statements and Nature of Operations

~~1. Basis of Preparation of Financial Statements and Nature of Operations~~

Golden Minerals Company (the “Company”, “we” “our” or “us”), a Delaware corporation, has prepared these unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The interim condensed consolidated financial statements do not include all disclosures required by GAAP for annual financial statements, but in the opinion of management, include all adjustments necessary for a fair presentation. Certain prior period amounts may have been reclassified to conform to current classifications. Interim results are not necessarily indicative of results for a full year; accordingly, these interim condensed consolidated financial statements should be read in conjunction with the annual financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016,~~2022, and filed with the SEC on ~~February 28, 2017.~~March 22, 2023 (the “2022 Annual Report”).

The Company is a mining company, holding a 100% interest in the Rodeo property in Durango State, Mexico (the “Rodeo Property”), a 100% interest in the Velardeña and Chicago precious metals mining properties and associated oxide and sulfide processing plants in the state of Durango, Mexico (the “Velardeña Properties”)~~. During November 2015~~, a 100% interest in the ~~Company suspended mining~~El Quevar advanced exploration property in the province of Salta, Argentina, which is subject to the terms of the “Earn-in Agreement” (see Note 9), and ~~sulfide processing activities at its Velardeñ~~a ~~Properties~~diversified portfolio of precious metals and other mineral exploration properties located primarily in ~~order to conserve the asset until the Company is able to develop mining~~or near historical precious metals producing regions of Mexico, Argentina and processing plans that at then current prices for silver and gold indicate a sustainable positive operating margin (defined as revenues less costs of sales) or the Company is able to locate, acquire and develop alternative mineral sources that could be economically mined and transported toNevada. The Rodeo Property, the Velardeña Properties, ~~for processing. The Company has placed~~ the mine and sulfide processing plant on care and maintenance to enable a re-start of either the mine or mill when mining and processing plans and metals prices support a cash positive outlook. The Company incurred approximately $2.0 million in related shutdown costs for employee severance, net working capital obligations, and other shutdown expenditures during the year ended December 31, 2016 and $1.1 million in care and maintenance costs for the nine months ended September 30, 2017. The Company expects to incur approximately $0.4 million in quarterly care and maintenance costs while mining and processing remain suspended.

The Company has retained a core group of employees, most of whom have been assigned to operate the oxide plant, which is leased to a third party and not affected by the shutdown. The oxide plant began processing material for the third party in mid-December 2015,Yoquivo property and the ~~Company expects to receive net cash flow under~~El Quevar advanced exploration property are the ~~lease of approximately $4.6 million~~Company’s only material properties.

We concluded mining operations at the Rodeo Property in 2017. During March 2017, the third party exercised its right to extend the lease through December 31, 2018. On August 2, 2017, the Company granted the third party an option to extend the lease for an additional period of up to two years ending no later than December 31, 2020June 2023, and we are engaged in ~~exchange~~planning for a $1.0 million cash payment and the purchase of $1.0 million, or approximately 1.8 million shares of the Company’s common stock, issued at par at a price of $0.55 per share, based on an undiscounted 30-day volume weighted average stock price (see Note 14). The retained employees also include an exploration group and an operations and administrative group, led by a newly appointed general manager of Mexico operations to continue to advance the Company’s plans in Mexico, oversee corporate compliance activities, and to maintain and safeguard the longer term valuerestart of the Velardeña ~~Properties~~mine. We continue to evaluate and ~~other Mexican assets.~~

~~The Company remains focused on evaluating and searching~~search for mining opportunities in North America (including Mexico) with ~~near term~~near-term prospects of mining, and particularly for properties within reasonable haulage distances of our Velardeña Properties. ~~The Company is also reviewing strategic opportunities, focusing primarily on development or operating properties in North America, including Mexico.~~ We are also focused on ~~evaluation activities at~~advancing our Yoquivo exploration property in Mexico, and through the Earn-In Agreement with Barrick, our El Quevar advanced exploration property in ~~Argentina, and~~Argentina. We are ~~continuing our exploration efforts on selected properties in our~~holding an additional portfolio of approximately ~~[10] exploration~~12 properties, located ~~primarily~~ in ~~Mexico.~~ Mexico, Nevada and Argentina for sale or advancement when possible.

The Company is considered an exploration stage ~~company~~issuer under the criteria set forth by the SEC under Subpart 1300 of Regulation S-K (“S-K 1300”) as the Company has not yet demonstrated the existence of ~~proven or probable~~ mineral reserves ~~as defined by SEC Industry Guide 7,~~ at ~~the Velardeña Properties, or~~ any of the Company’s ~~other~~ properties. As a result, and in accordance with GAAP for exploration stage companies, all expenditures for exploration and evaluation of the Company’s properties are expensed as incurred. As such, the Company’s financial statements may not be comparable to the financial statements of mining companies that do have proven and probable mineral reserves. Such companies would typically capitalize certain development costs including infrastructure development and mining activities to access the ore. The capitalized costs would be amortized on a units-of-production basis as reserves are mined. The amortized costs are typically allocated to inventory and eventually to cost of sales as the inventories are sold. As the Company does not have proven and probable mineral reserves, substantially all

~~Table of Contents~~

expenditures at the Company’s Rodeo Property and the Velardeña Properties for mine construction activity, as well as operating costs associated with the mill facilities, and for items that do not have a readily identifiable market value apart from the mineralized material, have been expensed as incurred. Such costs are charged to cost of metals sold or project expense during the period depending on the nature of the costs. Certain ~~of the~~ costs may be reflected in inventories prior to the sale of the product. The ~~term “mineralized material” as used herein, although permissible under SEC Industry Guide 7, does not indicate “reserves” by SEC standards. The~~ Company cannot be certain that any deposits at ~~the Velardeña Properties or~~ any ~~other exploration property~~of its properties will ever be confirmed or converted into ~~SEC Industry Guide 7~~S-K 1300 compliant “reserves.”

~~2. New Accounting Pronouncements~~Reverse Stock Split

~~In July 2017,~~On May 26, 2023, the ~~FASB issued ASU 2017-11,~~ “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part 1) Accounting for Certain Financial Instruments with Down Round Features, (Part II) ReplacementCompany’s Board of Directors approved a reverse stock split (the “Reverse Stock Split”) of the ~~Indefinite Deferral for Mandatorily Redeemable Financial Instruments~~Company’s common stock, par value $0.01 per share, at a ratio of ~~Certain Non public Entities~~one-for-25 shares and ~~Certain Mandatorily Redeemable Non-controlling Interests with~~ a ~~Scope Exception” (“ASU 2017-11”~~reduction in the total number of authorized shares of common stock of the Company from 350,000,000 shares to 28,000,000 shares (the “Authorized Shares Reduction”)~~. Part I relates~~, each effective as of June 9, 2023. To effect the Reverse Stock Split and the Authorized Shares Reduction, the Company filed an amendment to the ~~accounting for certain financial instruments~~Company’s Amended and Restated Certificate of Incorporation with ~~down round features~~the Secretary of State of the State of Delaware on May 30, 2023.

Table of Contents

As a result of the Reverse Stock Split, each 25 shares of common stock of the Company then-issued and outstanding automatically combined into one new share of common stock, with no change in ~~Subtopic 815-40, which is considered~~par value per share. No fractional shares of common stock were issued as a result of the Reverse Stock Split. Any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share of common stock. The common stock of the Company commenced trading on a split-adjusted basis at the open of trading on June 9, 2023.

In addition, proportionate adjustments were made to the number of shares issuable upon the exercise or vesting of all outstanding warrants and restricted stock units, resulting in ~~determining whether an equity-linked financial instrument qualifies for~~ a ~~scope exception from derivative accounting. Down round features are features of certain equity-linked instruments (or embedded features) that result~~proportional decrease in the ~~strike price being reduced based on~~number of shares of common stock reserved for issuance upon exercise or vesting of such warrants and restricted stock units and the ~~pricing~~number of ~~future equity offerings. An entity still is required to determine whether instruments would be classified as equity~~shares of common stock then reserved for issuance under the ~~guidance~~Company’s equity compensation plans, including the Company’s 2023 Equity Incentive Plan, which was reduced proportionately.

Accordingly, all share and per share data (including share and per share information related to share-based compensation and outstanding warrants), number of shares outstanding and other common stock equivalents for the periods presented in ~~Subtopic 815-40 in determining whether they qualify for that scope exception. If they~~the accompanying interim condensed consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the Reverse Stock Split.

2.	Liquidity, Capital Resources and Going Concern

We do qualify, freestanding instruments with down round features are no longer classified as liabilities. For the Company, ASU 2017-11 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted, including in an interim period. The Company early adopted ASU 2017-11not currently have sufficient resources to meet our expected cash needs during the ~~interim period~~twelve months ended September 30, ~~2017 (see Note 3).~~ 2024. At September 30, 2023, we had current assets of approximately $5.9 million, including cash and cash equivalents of approximately $1.6 million. On the same date, we had accounts payable and other current liabilities of approximately $5.6 million. Because we have ceased mining at the Rodeo mine, our only near-term opportunity to generate cash flow from mining to support continued operations is the Velardeña mine.

~~In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”), which~~We will require ~~lessees~~further sources of capital. In order to ~~recognize~~ commence and maintain production at Velardeña, ~~right-of-use~~we expect that we will need approximately $3.0 to $3.5 million in capital inflows over the first five months of production. In addition, in order to satisfy the Company’s projected general, administrative, exploration and other expenses through September 30, 2024, we will need approximately $4.0 to $5.0 million in additional capital inflows. Assuming that we are successful in restarting production and that we meet our production objectives at the Velardeña Properties, cash flow from Velardeña is expected to be positive by the end of the second quarter of 2024. These additional capital inflows may take the form of asset sales (such as the one described below), equity financing activities (including the November 2023 Offering described below see Note 20 and Note 23), debt financing, production-based financing (such as streaming or royalty financing), collection of our outstanding VAT receivable, or otherwise.

We have previously announced the execution of a ~~lease liability for all leases that are not short-term in nature. For a lessor, the accounting applied is also largely unchanged from previous guidance. The new rules will be effective~~non-binding letter of intent for the ~~Company~~sale of our Santa Maria property for a total consideration consisting of (i) initial cash proceeds of $1.5 million (plus an additional $0.24 million in VAT payment that we would retain) and (ii) a 1.5% net smelter return royalty on the Santa Maria concession up to a cap of $1.0 million (which may be purchased by the potential buyer from us for $0.5 million at any time prior to the commencement of commercial production on the Santa Maria property). If that transaction is consummated, the funds would likely be received in November 2023 or later.

We have also held discussions with various financing parties with regard to equity and/or debt financing as well as streaming or royalty arrangements involving future production at Velardeña.

As of September 30, 2023, we had value-added-tax (“VAT”) receivable in Mexico of approximately $3.1 million. Although we believe it is likely we will receive some material portion of this receivable early in the first quarter of ~~2019.~~ 2024, there is no certainty as to the timing and amount of such payment.

Table of Contents

activities that would lead to additional profitable mining and processing activities or to generate proceeds from the disposition of property, plant and equipment.

The ability of the Company to maintain a positive cash balance for a period of twelve months beyond the filing date of this Quarterly Report on Form 10-Q is dependent upon its ability to generate sufficient cash flow from operations, collect VAT accounts receivable from the Mexican government, reduce expenses, sell non-core assets, and raise sufficient funds through equity or external sources. These material uncertainties cast significant doubt on the Company’s ability to continue as a going concern. Therefore, the Company cannot conclude that substantial doubt does not exist as to the Company’s ability to continue as a going concern for the twelve months following the filing date of this Quarterly Report on Form 10-Q. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or liabilities which might be necessary should the Company not continue as a going concern.

3.	New Accounting Pronouncements

The Company does not ~~anticipate early adoption. The Company does~~believe that any recently issued, but not expect the adoption of ASU 2016-02 to materially change the amounts related to leases that are currently recorded as none of its operating leases are material and therefore the Company does not expect the adoption toyet effective accounting standards, when adopted, will have a material ~~impact~~effect on ~~its~~the accompanying interim condensed consolidated financial ~~position or results of operations.~~statements.

4.	Correction of Immaterial Error

In ~~January 2016,~~ the ~~FASB issued ASU No. 2016-01, “Recognition and Measurement~~first quarter of ~~Financial Assets and Financial Liabilities” (“ASU 2016-01”), which amended its standards~~2022, the Company became aware that at December 31, 2021, it had failed to properly record a royalty tax payable in Mexico related to ~~the accounting~~its Rodeo operations. The effect of certain financial instruments. This amendment addresses certain aspects of recognition, measurement, presentation and disclosure. Specifically, available for sale investments will not run through other comprehensive income. The new rules will become effective for annual and interim periodscorrecting this error was to reduce beginning ~~after December 15, 2017. Early adoption is not permitted. The Company is~~retained earnings by $93,000 at January 1, 2022, as reflected in the ~~process of evaluating the impact the amendment will have on its consolidated financial position and results of operations.~~

In May 2014, FASB and the International Accounting Standards Board issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized and the related cash flows. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017; early adoption is not permitted. ASU 2014-09 was originally effective December 15, 2016 but ASU 2015-14 deferred the effective date by one year. As the Company’s current accounting practices per the guidance of ASU 2014-09 are comparable to the requirements of ASU 2014-09, the Company does not expect the adoption of this update to result in a material impact on its consolidated financial position or results of operations.

~~3.Change in Accounting Principle~~

~~In July 2017, the FASB issued ASU 2017-11,~~ “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part 1) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of

~~Table of Contents~~

Certain Non public Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception” (“ASU 2017-11”). Part I relates to the accounting for certain financial instruments with down round features in Subtopic 815-40, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced based on the pricing of future equity offerings. An entity still is required to determine whether instruments would be classified in equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities. In the case where the exception from derivative accounting does not apply, warrants must be accounted for as a liability and recorded at fair value at the date of grant and re-valued at the end of each reporting period.

The September 2012 and 2014 warrants (see Note 14) include anti-dilution provisions characterized as down round features and have previously been accounted for as liabilities, with the fair value of the warrant liabilities remeasured at each reporting date and the change in liabilities recorded as other non-operating income or loss. The ~~Company had recorded a “Warrant liability” of $1.9 million and a warrant derivative gain of $17.1 million in its “Accumulated deficit” as reported in its~~accompanying Condensed Consolidated ~~Balance Sheets for the year ended December 31, 2016 relating to the September 2012 and 2014 warrants.~~The Company had recorded a warrant liability of $1.5 million as of June 30, 2017 and reported a warrant derivative gain of $0.4 million for the six months ended June 30, 2017 relating to the September 2012 and 2014 warrants.

In addition, for freestanding equity-classified financial instruments, ASU 2017-11 also requires entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Certain equity transactions following the issuance of the September 2012 and 2014 warrants have triggered anti-dilution clauses in the warrant agreements resulting in additional warrant shares and a reduction to the original strike price of the warrants. ASU 2017-11 prescribes a method to measure the value of a deemed dividend related to a triggering event by computing the difference in fair value between two instruments that have terms consistent with the actual instrument but that do not have a down round feature, where the number of warrant shares and strike price of one instrument corresponds to the actual instrument before the triggering event and the number of warrant shares and strike price of the other instrument corresponds to the actual instrument immediately after the triggering event. Following ASU 2017-11, for periods ending on or prior to December 31, 2016 the Company would have reduced its “~~Accumulated deficit~~” as reported on its Condensed Consolidated Balance Sheets by approximately $0.3 million related to prior triggering events. During the nine month period ending September 30, 2017 the Company would have reduced its accumulated deficit by approximately $5,000 related to triggering events.

~~Except for the down round features in the September 2012 and 2014 warrants, the warrants would have been~~ ~~classified in equity under the guidance in Subtopic 815-40 and therefore qualify for the scope exception in ASU 2017-11~~. ~~As permitted, the Company has elected to adopt the accounting principles prescribed by ASU 2017-11 for the interim period ended September 30, 2017~~ and has recorded a cumulative-effect adjustment stemming from a change in accounting principle in its financial statements for the three and nine months ended September 30, 2017 measured retrospectively to the beginning of 2017. The cumulative effect adjustment appears at the beginning of 2017 in the Company’s Condensed Consolidated StatementStatements of Changes in Equity.

The Company evaluated the materiality of the error described above from a qualitative and quantitative perspective. Based on such evaluation, the Company concluded that while the accumulation of the error was significant to the three months ended March 31, 2022, the correction would not be material to results of operations for the ~~Company for~~period ended December 31, 2021, nor did it have an effect on the ~~three~~trend of financial results, taking into account the requirements of SEC Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (“SAB 108”).

5.	Cash and Cash Equivalents and Investments

Cash and ~~nine months ended~~Cash Equivalents

Of the $1.6 million reported as “Cash and cash equivalents” on the Condensed Consolidated Balance Sheet at September 30, ~~2017 reflect application of the change in accounting principle from the beginning of 2017.~~

~~The following table details the impact stemming from the cumulative effect of the change in accounting principle on the Company’s Consolidated Balance Sheets as of the beginning of 2017.~~

Reported after


As Previously


Cumulative

the Effect of a Change in

Reported

Effect Adjustment

Accounting Principle
Balance Sheet Accounts Impacted by

December 31,

at the Beginning

at the Beginning
September 2012 and 2014 Warrants

2016

of 2017

of 2017

(in thousands)
Warrant Liability - Related Party

$
976

$
(976)

$
—
Warrant Liability

922

(922)

—
Additional Paid-in Capital

495,455

19,046

514,501
Accumulated Deficit

(488,037)

(17,148)

(505,185)

~~Table of Contents~~

~~As noted above,~~2023, the Company had ~~previously reported~~approximately $153,000 that was unavailable for use due to a ~~warrant derivative gain~~court order freezing the bank accounts of ~~$0.4 million during~~one of the ~~six month period ending June 30, 2017. Because~~Company’s subsidiaries in Mexico related to a lawsuit, as further described in Note 20 and Note 23. The restrictions imposed on the ~~Company has retroactively applied~~subsidiary’s bank accounts did not impact the ~~change~~Company’s ability to operate the Rodeo mine, which is held through a different Mexico subsidiary, and does not impact the Company’s ability to continue with plans for a Velardeña mine restart or move forward with any of the Company’s other exploration programs in accounting principle discussed above to the beginning of 2017, the Company is no longer reporting warrant derivative gains or losses for the September 2012 and 2014 warrants beginning in 2017. Amounts reported for periods ending on or prior to December 31, 2016 have not been adjusted.Mexico.

~~4. Cash and Cash Equivalents and Short-term Investments~~

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Short-Term Investments

Short-term investments include investments with maturities greater than three months, but not exceeding 12 months, or highly liquid investments with maturities greater than 12 months that the Company intends to liquidate during the next 12 months for working capital needs.

~~The Company determines the appropriate classification~~9

Table of its investments in equity securities at the time of acquisition and re-evaluates those classifications at each balance sheet date. Available for sale investments are marked to market at each reporting period with changes in fair value recorded as a component of other comprehensive income (loss). If declines in fair value are deemed other than temporary, a charge is made to net income (loss) for the period.Contents

The following tables summarize the Company’s short-term investments:


			Estimated		Carrying
September 30, 2023	Cost		Fair Value		Value

		(in thousands)
Short-term investments:
Trading securities	$	59	$	11	$	11
Total trading securities		59		11		11
Total short-term investments	$	59	$	11	$	11

December 31, 2022
Short-term investments:
Trading securities	$	59	$	20	$	20
Total trading securities		59		20		20
Total short-term investments	$	59	$	20	$	20

Investment in Fabled

The short-term investments at September 30, ~~2017~~2023, and December 31, ~~2016:~~

Estimated

Carrying

September 30, 2017

Cost

Fair Value

Value

(in thousands)

Investments:

Short-term:

Available for sale common stock

$
275

$
242

$
242

December 31, 2016

Investments:

Short-term:

Available for sale common stock

$
275

$
334

$
334

~~The available for sale common stock consists~~2022 consist of ~~7,500,000 common shares, approximately 10% of the outstanding~~200,000 common shares of ~~Golden Tag Resources, Ltd.~~Fabled Silver Gold Corp. (“~~Golden Tag”~~Fabled”), and 20,000 common shares of Fabled Copper Corp. Fabled is a junior mining company that ~~was a joint venture partner in~~entered into an option agreement with the Company to acquire the Company’s ~~previously owned San Diego exploration property in Mexico. The Company acquired the shares during 2015 and 2016 in transactions involving the sale of its remaining 50%~~option to earn a 100% interest in the ~~San Diego property~~Santa Maria mining claims located in Chihuahua, Mexico (see Note 9). The common shares were issued to the Company as partial consideration per the terms of the option agreement. The Fabled Copper Corp. shares were received in a spin-off of assets from Fabled that occurred on December 21, 2020, to which all existing shareholders of Fabled were entitled.

Long-Term Investments

Investments in equity securities are generally measured at fair value. Gains and losses for equity securities resulting from changes in fair value are recognized in current earnings. If an equity security does not have a readily determinable fair value, the Company may elect to measure the security at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer. At the end of each reporting period, the Company reassesses whether an equity investment security without a readily determinable fair value qualifies to be measured at cost less impairment, considers whether impairment indicators exist to evaluate if an equity investment security is impaired and, if so, records an impairment loss.

Investment in Golden ~~Tag.~~Gryphon Explorations Inc.

Long-term investments at September 30, 2023 consist of approximately 1,650,880 shares of Golden Gryphon Explorations Inc. (“GGE”). In 2019, the Company entered into an earn-in agreement with GGE for the Sand Canyon project located in northwestern Nevada. In August 2022, pursuant to the second amendment to the earn-in agreement by which the earn-in period was extended an additional year, the Company purchased approximately 1,500,000 shares of GGE’s common stock for an aggregate purchase price of $225,000. On August 29, 2023, the Company purchased an additional 150,880 shares of GGE’s common stock for an aggregate purchase price of $40,000.

For a description of the earn-in agreement with GGE, see “Exploration Properties—Sand Canyon” in our 2022 Annual Report.

The GGE investment is accounted for at cost less impairment pursuant to ASC topic 321 as there is no ready market for the shares and it is recorded as non-current investments on the Condensed Consolidated Balance Sheets. The Company concluded it was impractical to estimate fair value due to the absence of a public market for the stock. The Company identified no events or changes in circumstances that might have had a significant adverse effect on the carrying value of the investment and have therefore not recorded any impairment against the asset.

Table of Contents

Credit Risk

The Company invests substantially all of its excess cash with high credit-quality financial institutions or in U.S. government or debt securities. Credit risk is the risk that a third party might fail to fulfill its performance obligations under the terms of a financial instrument. For cash and equivalents and investments, credit risk represents the carrying amount on the balance sheet. The Company mitigates credit risk for cash and equivalents and investments by placing its funds and investments with high credit-quality financial institutions, limiting the amount of exposure to each of the financial institutions, monitoring the financial condition of the financial institutions and investing only in government and corporate securities rated “investment grade” or better. The Company invests with financial institutions that maintain a net worth of ~~not~~no less than $1 billion and are members in good standing ofwith the Securities Investor Protection Corporation.

~~Table of Contents~~

~~5. Prepaid Expenses and Other Assets~~
6.
Prepaid Expenses and Other Assets

Prepaid expenses and other current assets consist of the following:


					September 30,		December 31,
					2023		2022

	September 30,		December 31,
	2017			2016
	(in thousands)
					(in thousands)
Prepaid insurance	$	168	$	296	$	228	$	488
Deferred offering costs		137		153
Current portion of deferred offering costs						—		45
Recoupable deposits and other		161		129		669		609
	$	466	$	578
					$	897	$	1,142

The current portion of deferred offering costs ~~are~~is associated with the ATM Agreement (see Note 16).

Recoupable deposits and other at September 30, 2023 and December 31, 2022 includes a receivable from Barrick for reimbursement of costs of approximately $95,000 and $196,000, respectively, related to the ~~ATM Program discussed in detail in~~Earn-in Agreement (see Note ~~14.~~9).

7.	Inventories

~~6. Inventories, net~~

Inventories at the Velardeña Properties were as follows:


	September 30,		December 31,
	2023		2022

	(in thousands)
Doré inventory	$	39	$	230
In-process inventory		—		572
Material and supplies, net		266		569
	$	305	$	1,371

Doré and in-process inventories, recorded at book value, include approximately $2,000 and $28,000 of capitalized depreciation and amortization at September 30, ~~2017~~2023 and December 31, ~~2016 consist of the following:~~

September 30,

December 31,

2017

2016

(in thousands)

Material and supplies

$
267

$
245

$
267

$
245

~~The material and supplies~~2022, respectively. Doré inventory at September 30, ~~2017~~2023 consists of 21 payable ounces of gold and 58 payable ounces of silver. Doré inventory at December 31, 2022 consists of 157 payable ounces of gold and 652 payable ounces of silver.

The materials and supplies inventories are primarily related to the Velardeña operation and are reduced by a $0.3 million obsolescence reserve at September 30, 2023 and December 31, ~~2016 is reduced by~~2022.

8.	Value Added Tax Receivable, Net

At September 30, 2023, the Company recorded a ~~$0.2 million obsolescence charge reflected in shutdown and care and maintenance costs.~~

~~7. Value Added Tax Receivable, Net~~

~~The Company has recorded value added tax (“VAT”)~~net VAT paid in Mexico ~~and~~of $3.1 million related to the Velardeña Properties and the Rodeo operation, as a recoverable ~~asset.~~asset, which appears in “Value added tax receivable, net” on the Condensed Consolidated Balance Sheets. Mexico law allows for certain VAT payments to be recovered through ongoing applications for refunds. The Company expects that the current amounts receivable will be recovered within a one-year period. At September 30, ~~2017,~~2023, the Company ~~has also~~ recorded approximately ~~$10,000~~$1.2 million of VAT ~~receivable~~payable as a reduction to the

Table of Contents

VAT ~~payable~~receivable in ~~Mexico, which appears in “Accounts payable and other accrued liabilities”~~ ~~on the Condensed Consolidated Balance Sheets.~~

During the third quarter 2017, the Company received refunds of approximately $1.1 million from the government of Argentina for VAT paid in that country during 2012 and 2013. Because of uncertainties relating to collectability of the taxesMexico. At December 31, 2022, the Company had recorded ~~a full valuation allowance against the VAT receivable at the time the taxes were paid. The Company reported the $1.1~~approximately $1.5 million of VAT ~~refunds received during the nine months ended September 30, 2017 in~~ ~~“Other operating income”~~ on the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company has remaining Argentina VAT refund claims totaling $0.2 million. The Company cannot predict if or when it will receive these VAT refunds and accordingly has recorded a full valuation allowance for these pending VAT refund claims.receivable.

The Company has also paid VAT in ~~Mexico as well as~~ other countries, primarily related to exploration projects, which has been charged to expense as incurred because of the uncertainty of recoverability.

9.	Property, Plant and Equipment, Net

~~Table of Contents~~

~~8. Property, Plant and Equipment, Net~~

The components of property, plant and equipment are as follows:


					September 30,		December 31,
					2023		2022

	September 30,		December 31,
	2017		2016
	(in thousands)
					(in thousands)
Mineral properties	$	9,352	$	9,352	$	9,353	$	9,353
Exploration properties		2,518		2,518		2,418		2,418
Royalty properties		200		200		200		200
Buildings		4,221		4,386		3,805		3,808
Mining equipment and machinery		15,996		16,351		16,321		17,127
Other furniture and equipment		957		952		1,377		1,355
Asset retirement cost		865		992		1,158		1,157
		34,109		34,751
						34,632		35,418
Less: Accumulated depreciation and amortization		(25,540)		(25,516)		(28,674)		(29,002)
	$	8,569	$	9,235
					$	5,958	$	6,416

~~The asset retirement cost (“ARC”) is all related to~~For the ~~Company’s Velardeña Properties. The amounts for ARC have been fully depreciated as of~~nine months ended September 30, ~~2017~~2023 and ~~December 31, 2016. The decrease in the ARC during the period is related to an adjustment to the asset retirement obligation (“ARO”), as discussed below in Note 10.~~

~~In August 2016,~~2022, the Company ~~sold certain mining equipment consisting~~recognized approximately $380,000 and $241,000, respectively, of ~~two haul trucks, two scoop trams~~depreciation and ~~a compressor to Minera Indé, an indirect subsidiary of Sentient, for $687,000 (see Note 21). The equipment sold was excess equipment held at~~amortization expense.

For the ~~Company’s Velardeña Properties that~~three months ended September 30, 2023 and 2022, the Company ~~did not expect to use. The Company received $69,000 or 10%~~recognized approximately $148,000 and $89,000, respectively, of ~~the sales price at the closing of the sale, with the remaining $618,000 plus interest on the unpaid balance at an annual rate of 10% due in February 2017. The Company~~depreciation and Minera Indé amended the original equipment sale on March 31, 2017 to include the sale of an additional piece of excess equipment for $185,000 and extend the time for payment relating to the original equipment sale. Upon execution of the amendment the Company received an additional payment of $100,000. The remaining principal and interest balance, plus additional interest on the unpaid balance at an annual rate of 10%, was amended to be due in August 2017. The Company recorded a gain of $105,000 on the sale of the additional equipment, included in “~~Other operating income” in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss, equal to the gross proceeds less the remaining basis in the equipment.~~ amortization expense.

El Quevar Earn-In Agreement

On ~~May 2, 2017, the Company received approximately $750,000 from Minera Indé as payment in full for the remaining balance due related to the equipment sale, including interest through that date.~~

~~In the third quarter 2016, the Company, through its wholly owned Mexican subsidiary,~~April 9, 2020, we entered into an earn-in agreement with ~~a 100% owned Mexican subsidiary of Electrum Global Holdings, L.P., a privately owned company (together “Electrum”~~Barrick (the “Earn-In Agreement”), ~~related~~pursuant to ~~the Company’s Celaya exploration property in Mexico. The Company received~~which Barrick has acquired an upfront payment of $0.2 million and Electrum agreed to incur exploration expenditures totaling at least $0.5 million in the first year of the agreement, reduced by certain costs Electrum previously incurred on the property since December 2015 in its ongoing surface exploration program. Electrum, at its option can elect to acquire an undivided 60% interest in a joint venture company to be formed to hold the Celaya project after incurring exploration expenditures totaling $2.5 million during the first three years of the agreement. Electrum would serve as manager of the joint venture. If the Company elects not to contribute to additional exploration or development expenditures after the initial earn-in period, Electrum, at its option, would have the right to earn ~~an additional 20%~~a 70% interest in the ~~Celaya~~Company’s El Quevar project ~~for a total interest~~located in the Salta Province of ~~80%, by incurring an additional $2.5~~Argentina. As of December 31, 2021, Barrick had met the $1 million in work expenditures that would permit them to withdraw from the Earn-in Agreement. At September 30, 2023, Barrick has continued with exploration activities at El Quevar, per the terms of ~~exploration or development expenditures over a second three-year period. Following~~ the ~~second earn-in period~~Earn-in Agreement.

Sale of Santa Maria Property

On December 4, 2020, the Company ~~would have the right to maintain its 20% interest or its interest ultimately could be converted into a 10% net profits interest.~~

~~In April 2016, the Company~~and Fabled entered into an option agreement (the “Option Agreement”) under which ~~Santacruz Silver Mining Ltd. (“Santacruz”) may acquire the Company’s~~Fabled would have acquired a 100% interest in ~~certain nonstrategic mineral claims located~~the Santa Maria property by paying $4.5 million in cash over a period of several years. The Company recorded a $1.5 million payment it received from Fabled in December 2021 to “Deferred revenue” on the ~~Zacatecas Mining District, Zacatecas, Mexico (the “Zacatecas Properties”) for~~Condensed Consolidated Balance Sheets and amortized the amount to income over a ~~series~~one-year period. Upon receipt of ~~payments totaling $1.5 million. Santacruz paid~~each cash payment, the agreement imposed a performance obligation on the Company ~~$0.2~~to provide Fabled an exclusive right to the Santa Maria Properties to conduct exploration and mining activities during the period from receipt of the payment until the due date of the next required payment. Accordingly, the Company has determined that its performance obligation for each option payment received is satisfied over time. The remaining unamortized balance of deferred revenue at September 30, 2023, and December 31, 2022, is zero.

On December 19, 2022, the Option Agreement was amended to reschedule the remaining $2.0 million ~~on signing the agreement, and additional~~payment into eight quarterly payments of $0.2 million in October 2016, $0.3 million in May 2017 and one half of the October 2017 installment of $0.3 million. To maintain its option and acquire the Zacatecas Properties, Santacruz must pay the Company the remaining one half of $0.3 million already due in October 2017 and the final amount of $0.5 million due in April 2018. Santacruz was not able$250,000 from January 31, 2023 through September 30, 2024. Fabled failed to make the ~~full October 2017~~ payment ~~as scheduled~~due on January 31, 2023. In February 2023, the Company issued a notice of default under the Option Agreement to Fabled and the property has reverted to the Company ~~has granted Santacruz an extension~~as allowed under the terms of ~~time to make~~ the ~~payment. Santacruz has the right to terminate the option~~Agreement. The carrying value of Santa Maria as of September 30, 2023, and December 31, 2022, is zero.

Table of Contents

10.

Other Long-Term Assets

Other long-term assets consist of right of use assets and at September 30, 2023 include approximately $141,000 related to certain office leases. The right of use assets at December 31, 2022 include approximately $263,000 related to certain office leases and $70,000 related to a mining equipment lease at our Rodeo Property.

In December 2020, the Company’s wholly owned subsidiary, Minera de Cordilleras S. de R.L. de C.V., entered into an agreement ~~at any time, and the agreement could be terminated,~~with Triturados del Guadiana, S.A. de C.V. (“Trigusa”), whereby Trigusa has carried out mining activities at the Rodeo Property. Per the terms of the mining agreement, Trigusa provided services for the 27-month period beginning in December 2020 and ending on March 31, 2023. The Company determined that the mining agreement contained an embedded lease, relating to the mining equipment provided by Trigusa, per the guidance of ASU 2016-02 and Topic 842. The Company did not elect the practical expedient permitting the combination of lease and non-lease components of the mining agreement. The Company recorded a right of use asset and a lease liability of approximately $420,000 based on the net present value of the future lease payments discounted at 7.0%, which represented the Company’s ~~option, if Santacruz fails~~incremental borrowing rate at that time. In March 2023, the mining agreement with Trigusa was extended to ~~make subsequent payments when due.~~July 31, 2023. On May 1, 2023, the Company provided Trigusa with a notice of contract termination, subject to a 15-day notice period. Trigusa agreed to continue to provide loading services for low grade material. On August 16, 2023, Trigusa stopped hauling material to Plant 2 and demobilized their equipment.

Lease liabilities are included in “Other liabilities,” short term and long term (see Note 13), in the Company’s Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022.

~~9. Accounts Payable and Other Accrued Liabilities~~

11.

Accounts Payable and Other Accrued Liabilities

The Company’s accounts payable and other accrued liabilities consist of the following:


					September 30,		December 31,
					2023		2022

	September 30,		December 31,
	2017		2016
	(in thousands)
					(in thousands)
Accounts payable and accruals	$	273	$	344	$	3,396	$	2,213
Accrued employee compensation and benefits		1,075		880		1,615		1,478
	$	1,348	$	1,224
Income taxes payable (Note 15)						25		25
					$	5,036	$	3,716

September 30, ~~2017~~2023

Accounts payable and accruals at September 30, 2017 consist primarily of $0.1 million due to contractors and suppliers and $0.2 million related to the Company’s Velardeña Properties and corporate administrative activities, respectively. In the case of the Velardeña Properties, amounts due also include a VAT payable of less than $0.1 million that is not an offset to the VAT receivable.

Accrued employee compensation and benefits at September 30, 2017 consist of $0.3 million of accrued vacation payable and $0.8 million related to withholding taxes and benefits payable, of which $0.3 million is related to activities at the Velardeña Properties, and $0.5 million is related to the KELTIP (see Note 14).

~~December 31, 2016~~

~~Accounts payable and accruals at December 31, 2016~~2023, are primarily related to amounts due to contractors and suppliers in the amounts of ~~$0.1 million and $0.2~~$2.2 million related to the Company’s Velardeña Properties and the Rodeo Property and $1.2 million related to corporate administrative and exploration activities.

Accrued employee compensation and benefits at September 30, 2023, consist of $0.4 million of accrued vacation payable and $1.2 million related to withholding taxes and benefits payable. Included in the $1.6 million of accrued employee compensation and benefits is $1.4 million related to activities ~~respectively. In the case of~~at the Velardeña Properties ~~approximately $0.1 million is~~and the Rodeo Property.

December 31, 2022

Accounts payable and accruals at December 31, 2022, are primarily related to amounts due to contractors and suppliers in the amounts of $1.8 million related to the Company’s Velardeña ~~net VAT payable.~~Properties and the Rodeo Property and $0.4 million related to corporate administrative and exploration activities.

Accrued employee compensation and benefits at December 31, ~~2016~~2022, consist of ~~$0.3~~$0.4 million of accrued vacation payable and ~~$0.6~~$1.1 million related to withholding taxes and benefits ~~payable,~~payable. Included in the $1.5 million of ~~which $0.2~~accrued employee compensation and benefits is $1.2 million is related to activities at the Velardeña Properties and ~~$0.3 million is related to~~ the ~~KELTIP (see Note 14).~~Rodeo Property.

Table of Contents

12.

Asset Retirement and Reclamation Liabilities

~~10. Asset Retirement Obligation and Reclamation Liabilities~~

~~The~~In 2012, the Company retained the services of a mining engineering firm to prepare a detailed closure plan for reclamation activity at the Velardeña Properties. The plan was completed during the second quarter of 2012 and indicated that the Company had an ~~ARO~~asset retirement obligation (“ARO”) and offsetting ~~ARC~~asset retirement cost (“ARC”) of approximately $1.9 million.

The ~~Company will continue to accrue additional estimated~~original ARC had been fully amortized or written off by the end of December 31, 2015. The ARO amounts based on an asset retirement plan as activities requiring future reclamation and remediation occur. During the first nine months of 2017, the Company recognized approximately $146,000 of accretion expense and approximately $4,000 of amortization expense related to the ARC.

~~Table of Contents~~

~~The following table summarizes activity in the Velardeña Properties ARO:~~

Nine Months Ended

September 30,

2017

2016

(in thousands)

Beginning balance

$
2,380

$
2,480

Changes in estimates, and other

(128)

(293)

Accretion expense

146

144

Ending balance

$
2,398

$
2,331

~~The decreases in the ARO recorded during the 2017 and 2016 periods are the result of~~has been adjusted since 2012 for changes in assumptions related to inflation factors and the timing of future expenditures used in the determination of future cash ~~flows.~~flows, which previously contemplated that reclamation activities could begin as early as 2023 following the completion of mining at the Rodeo Property.

In the fourth quarter of 2021, due to the operating success at Rodeo and the potential of a restart of operations at the Velardeña mine based on recent technical studies at the time and an updated preliminary economic assessment (“PEA”) that would further delay the start of any reclamation activity, the Company retained the services of an environmental consultant to review the closure plan to determine the appropriateness of the scope and cost estimates used in the calculation of the ARO. The consultant confirmed the adequacy of the scope of the closure plan and provided certain adjustments to cost estimates. In addition, the timing for the incurrence of reclamation activity was extended approximately seven years to 2030 to take into account the likelihood of a restart of operations at the Velardeña mine that would further delay the start of any reclamation activity.

In late 2022, the Company determined that the restart of the Velardeña Properties would be deferred one year, which would in turn defer the beginning of the reclamation activity assumption by one year to 2031.

The Company will continue to accrue additional estimated ARO ~~set forth~~amounts based on the ~~accompanying Condensed Consolidated Balance Sheets at~~closure plan and as activities requiring future reclamation and remediation occur.

The following table presents the asset retirement and reclamation liabilities as of September 30, ~~2017~~2023 and December 31, ~~2016 includes approximately $0.1 million of~~2022:


	September 30,		December 31,
	2023		2022

	(in thousands)
Current asset retirement and reclamation liabilities	$	50	$	—
Non-current asset retirement and reclamation liabilities		4,142		3,993
	$	4,192	$	3,993

Current asset retirement and reclamation liabilities ~~related to activities at the El Quevar project~~is included in ~~Argentina.~~“Other Current Liabilities” (see Note 13).

~~11. Convertible Note Payable – Related Party, Net~~

In October 2015, the Company borrowed $5.0 million from The Sentient Group, LLC (“Sentient”), the Company’s largest stockholder, pursuant to the terms of a Senior Secured Convertible Note the (“Sentient Note”) and a related loan agreement (the “Sentient Loan”), with principal and accrued interest due on October 27, 2016. In January 2016, upon approval by the Company’s stockholders, the Sentient Note became convertible, solely at Sentient's option, into shares of the Company's common stock at a price equal to the lowest of: 1) $0.289, 90 percent of the 15-day volume weighted average price ("VWAP") for the period immediately preceding the loan closing date, 2) 90 percent of the 15-day VWAP for the period immediately preceding the loan conversion date, or 3) an anti-dilution adjusted price based on the lowest price for which the Company has sold its stock following the loan closing date. The loan provided for interest at a rate of 9% per annum, compounded monthly.

On February 11, 2016, Sentient converted approximately $3.9 million of principal and $0.1 million of accrued interest (representing the total amount of accrued interest at the conversion date) on the Sentient Note into 23,355,000 shares of the Company's common stock at an exercise price of approximately $0.172 per share, equal to 90% of the 15-day VWAP immediately preceding the conversion date. On June 10, 2016, Sentient converted the remaining approximately $1.1 million of principal and approximately $34,000 of accrued interest (representing the total amount of accrued interest at the conversion date) into 4,011,740 shares of the Company's common stock at an exercise price of approximately $0.289 per share, equal to 90% of the 15‐~~day VWAP immediately preceding the loan’s original issue date.~~

The ~~beneficial conversion feature of~~following table presents the Sentient Note represented an embedded derivative as defined by ASC 815 "Derivatives and Hedging" ("ASC 815"). ASC 815 provides that a derivative instrument's fair value must be bifurcated from the note and separately recorded on the Company's Consolidated Balance Sheet. The Company used a third party consultant to value the embedded derivative in the Sentient Note employing a Monte Carlo type probability analysis, which falls within Level 3 of the fair value hierarchy (see Note 12). For purposes of valuing the embedded derivative as of the Sentient Loan closing date, at December 31, 2015, at February 11, 2016 (first partial conversion date), and at March 31, 2016, the valuation model took into account, among other items: 1) the probability of successfully achieving stockholder approval of the Sentient Note’s conversion feature, 2) future variationschanges in the Company’s ~~stock price,~~asset retirement and 3) the probability of entering into an equity transaction prior to the Sentient Loan maturity date that would lower the conversion price. It was determined that the embedded derivative had a fair value of approximately $1.1 million at October 27, 2015, the date the Company entered into the Sentient Loan. Subsequent mark-to-market changes in the value of the derivative were recorded as income or loss in the Consolidated Statements of Operations and Comprehensive Loss. The Sentient Note was recorded net of the bifurcated embedded derivative at October 27, 2015 with the $1.1 million difference between the face value and the recorded value of the Note representing a loan discount that was amortized to interest expense over the life of the loan using the interest rate method.

The Company incurred approximately $0.3 million in legal and other costs associated with the Sentient Loan. Per the guidance of ASU 2015-03 the loan costs were presented as a reduction to the note payable on the accompanying

~~Table of Contents~~

~~Consolidated Balance Sheets and were amortized to interest expense over the life of the Sentient note using the interest rate method.~~

~~The Company adjusted the recorded value of the Sentient Loan at the first partial conversion date and at March 31, 2016 to reflect the amortization of the loan discount and loan costs, shown as “Interest expense” in the Consolidated Statements of Operations and Comprehensive Loss. For~~reclamation liabilities for the nine months ended September 30, ~~2016,~~2023 and 2022:


	Nine Months Ended
	September 30,
	2023		2022

	(in thousands)
Balance at January 1,	$	3,993	$	3,569
Changes in estimates, and other		(23)		25
Accretion expense		222		211
Balance at September 30,	$	4,192	$	3,805

The change in estimate of the ARO recorded is due to a combination of changes in assumptions related to the timing of future expenditures, the change in inflation assumptions, and the change in the discount rate.

Table of Contents

13.

Other Liabilities

Other Current Liabilities

The following table sets forth the Company’s other current liabilities:


	September 30,		December 31,
	2023		2022

	(in thousands)
Premium financing	$	138	$	406
Office lease liability		125		164
Mining equipment lease liability		—		63
Litigation contingency accrual		250		—
Current asset retirement and reclamation liabilities		50		—
	$	563	$	633

The premium financing at September 30, 2023 and December 31, 2022, consists of the remaining balance, plus accrued interest, related to premiums payable for the Company’s directors and officers insurance and general liability insurance. In November 2022, the Company ~~recorded a total noncash loss on debt extinguishment~~financed approximately $445,000 of ~~$1.7 million reflecting~~its directors and officers insurance premium which is payable in eleven equal payments at an interest rate of 7.0% per annum. In May 2023, the ~~difference between the value~~Company financed approximately $147,000 of ~~the shares issued~~its general liability insurance premium which is payable in eleven equal payments at an interest rate of 8.3% per annum.

The office lease liability is related to ~~Sentient as a result of the February 11, 2016 conversion and the recorded value of the Sentient Loan, including related loan costs, loan discount and embedded derivative eliminated~~lease liabilities for office space at the ~~conversion date.~~ Company’s principal headquarters in Golden, Colorado and in Mexico and Argentina (see Note 10).

The ~~Company marked-to-market~~mining equipment lease liability is related to equipment used by the ~~embedded derivative~~contract miner at our Rodeo Property (see Note 10).

The litigation contingency accrual is related to the ~~February 11, 2016 conversion date~~Unifin lawsuit (see Note 20 and ~~recorded a total derivative loss~~Note 23).

The current asset retirement and reclamation liabilities is related to the ARO (see Note 12).

Other Long-Term Liabilities

Other long-term liabilities of ~~$0.8 million~~approximately $40,000 for ~~nine months~~the period ended September 30, ~~2016~~2023, are primarily related to lease liabilities for office space at the Company’s principal headquarters in Golden, Colorado and in Mexico and Argentina (see Note 10).

Other long-term liabilities of approximately $122,000 for the ~~Condensed Consolidated Statements of Operations and Comprehensive Loss.~~

~~At June 10, 2016, the Sentient Note had been fully converted and the Company had no outstanding debt at September 30, 2017 or~~period ended December 31, ~~2016.~~2022, are primarily related to lease liabilities for office space at the Company’s principal headquarters in Golden, Colorado and in Mexico and Argentina (see Note 10).

14.

Fair Value Measurements

~~12. Fair Value Measurements~~

Financial assets and liabilities and nonfinancial assets and liabilities are measured at fair value on a recurring basis under a framework of a fair value hierarchy which prioritizes the inputs into valuation techniques used to measure fair value into three broad levels. This hierarchy gives the highest priority to quoted prices (unadjusted) in active markets and the lowest priority to unobservable inputs. Further, financial assets and liabilities should be classified by level in their entirety based upon the lowest level of input that was significant to the fair value measurement. The three levels of the fair value hierarchy per ASC Topic 820 are as follows:

Level 1:1: Unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.

Level 2:2: Quoted prices in inactive markets for identical assets or liabilities, quoted prices for similar assets or liabilities in active markets, or other observable inputs either directly related to the asset or liability or derived principally from corroborated observable market data.

Table of Contents

Level 3:3: Unobservable inputs due to the fact that there is little or no market activity. This entails using assumptions in models which estimate what market participants would use in pricing the asset or liability.

~~Table of Contents~~

The following table summarizes the Company’s financial assets and liabilities ~~at fair value~~measured on a recurring basis at ~~September 30, 2017 and December 31, 2016,~~fair value by respective level of the fair value hierarchy:

Level 1

Level 2

Level 3

Total

(in thousands)

At September 30, 2017

Assets:

Cash and cash equivalents

$
4,966

$
—

$
—

$
4,966

Trade accounts receivable

387

—

—

387

Trade accounts receivable - related party

4

—

—

4

Short-term investments

242

—

—

242

$
5,599

$
—

$
—

$
5,599

At December 31, 2016

Assets:

Cash and cash equivalents

$
2,588

$
—

$
—

$
2,588

Trade accounts receivable

380

—

—

380

Trade accounts receivable - related party

643

—

—

643

Short-term investments

334

—

—

334

$
3,945

$
—

$
—

$
3,945

Liabilities:

Warrant liability - related party

$
—

$
—

$
976

$
976

Warrant liability

—

—

922

922

$
—

$
—

$
1,898

$
1,898


	Level 1		Level 2		Level 3		Total

	(in thousands)
At September 30, 2023
Assets:
Cash and cash equivalents	$	1,583	$	—	$	—	$	1,583
Short-term investments		11		—		—		11
	$	1,594	$	—	$	—	$	1,594

At December 31, 2022
Assets:
Cash and cash equivalents	$	3,972	$	—	$	—	$	3,972
Short-term investments		20		—		—		20
	$	3,992	$	—	$	—	$	3,992

The Company’s cash equivalents, comprised principally of U.S. treasury securities, are classified within Level 1 of the fair value hierarchy.

The Company’s trade accounts receivable are classified within Level 1 of the fair value hierarchy and are related to the lease of the oxide plant, valued per the terms of the lease rates per the plant lease agreement, and to the sale of mining equipment, based on the terms of the sales agreement.

The Company’s short-term investments consist of ~~the available for sale~~200,000 shares of common stock ~~in Golden Tag~~of Fabled and 20,000 shares of Fabled Copper Corp. and are classified within Level 1 of the fair value hierarchy (see Note 4)5).

At September 30, 2023 and December 31, ~~2016,~~2022, the Company did not have any financial assets or liabilities classified within Level 2 or Level 3 of the fair value hierarchy.

Non-recurring Fair Value Measurements

The Company recorded a ~~liability for warrants~~change in estimate to ~~acquire the Company’s stock~~its ARO as ~~a result~~ of ~~anti-dilution clauses in the warrant agreements that could result in a resetting~~September 30, 2023, of ~~the warrant exercise price in the event the Company were to issue additional shares of its common stock in a future transaction at a price lower than the current exercise price of the warrants~~approximately $23,000 (see Note ~~14). The Company assessed~~12), reflecting a change in the fair value of ~~its warrant liability at~~ the ~~end~~ARO primarily as the result of ~~each reporting period, with~~ changes in assumptions related to the ~~value recorded as “Warrant derivative (loss) gain” on the Company’s Condensed Consolidated Statements~~amount and timing of ~~Operations and Comprehensive Loss. The valuation policies were approved by the Chief Financial Officer who reviewed and approved the inputs~~future expenditures used in the determination of future cash flows, following the guidance of ASC Topic 410. The fair value ~~calculations and~~analysis was performed internally by the ~~changes in fair value measurements from period to period for reasonableness. Fair value measurements are discussed with the Company’s Chief Executive Officer, as deemed appropriate.~~Company. The ~~warrant liability was recorded at fair value as of December 31, 2016, based primarily on a~~ valuation ~~performed by a third party expert using a Monte Carlo simulation, which~~ falls within Level 3 of the fair value hierarchy. The valuation model took into account the probability that the Company could issue additional shares in a future transaction at a lower price than the current exercise price of the warrants. The Company did not have a warrant liability at September 30, 2017 as the result of a change in accounting principal during the period as discussed in Note 3.

~~Table of Contents~~

~~In addition to the warrant exercise prices (see Note 14)~~No other ~~significant inputs to the warrant valuation model at December 31, 2016 included the following:~~

December 31,

2016

Company's ending stock price

$
0.58

Company's stock volatility

110%

Applicable risk free interest rate

1.39%

~~At September 30, 2017, the remaining warrants are recorded as equity as the result of a change in accounting principal fully detailed in Note 3.~~

~~Non-recurring Fair Value Measurements~~

~~There were no~~ non-recurring fair value ~~measurements at December 31, 2016~~adjustments to liabilities or long-lived assets were recorded during the nine months ended September 30, ~~2017.~~2023 and 2022.

15.

Income Taxes

~~13. Income Taxes~~

The Company accounts for income taxes in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”), on a tax jurisdictional basis. In accordance with ASC 740, the interim provision for taxes was calculated by using the estimated annual effective tax rate applied to the year-to-date income or losses on a jurisdictional basis. Although the Company has generated ordinary losses on a year-to-date basis, the Company has projected taxable income by year end in certain tax jurisdictions, for which an annual effective tax rate has been calculated. For the nine months ended September 30, ~~2017~~2023, the Company ~~did not recognize any~~recognized less than $1,000 of income tax ~~benefit or~~ expense. For the nine months ended September 30, 2016 the Company recorded a nominal income tax benefit related to the partial removal of a valuation allowance on net operating losses resulting from an unrealized gain on held for sale investments reported in other comprehensive income in the Condensed Consolidated Statements of Operations and Comprehensive Loss and treated as a source of taxable income. The Company operates in jurisdictions that have generated ordinary losses on a year-to-date basis. However, the Company is unable to recognize a benefit for those losses, except as described in this paragraph, thus an estimated effective tax rate has not been used to report the year-to-date results.

In accordance with ASC 740, the Company presents deferred tax assets net of its deferred tax liabilities on a tax jurisdictional basis on its Condensed Consolidated Balance Sheets. As of September 30, ~~2017~~2023 and ~~as of~~ December 31, ~~2016,~~2022, the Company had no deferred tax assets and no deferred tax liability on the Condensed Consolidated Balance Sheets due to a valuation allowance offsetting the net deferred tax assets ~~or net deferred tax liabilities reported on its balance sheet.~~ of the Company.

The Company, a Delaware corporation, and its subsidiaries file tax returns in the United States and in various foreign jurisdictions. The tax rules and regulations in these countries are highly complex and subject to interpretation. The

Table of Contents

Company’s income tax returns are subject to examination by the relevant taxing authorities and in connection with such examinations, disputes can arise with the taxing authorities over the interpretation or application of certain tax rules within the country involved. In accordance with ASC 740, the Company identifies and evaluates uncertain tax positions, and recognizes the impact of uncertain tax positions for which there is less than a more-likely-than-not probability of the position being upheld upon review by the relevant taxing authority. Such positions are deemed to be “unrecognized tax benefits” which require additional disclosure and recognition of a liability within the financial statements. The Company had no unrecognized tax benefits at September 30, ~~2017~~2023 or December 31, ~~2016.~~2022.

~~Table of Contents~~

~~14. Equity~~
16.
Equity

~~Consideration Shares~~

On ~~August 2, 2017,~~May 26, 2023, the Company’s Board of Directors approved a reverse stock split of the common stock, par value $0.01 per share, of the Company ~~granted Hecla~~at a ratio of one-for-25 shares and a reduction in the total number of authorized shares of common stock of the Company from 350,000,000 shares to 28,000,000 shares, each effective on June 9, 2023. Accordingly, all common stock, equity award, warrant, and per share amounts have been adjusted to reflect the reverse stock split for all prior periods presented. For additional information related to the reverse stock split, see Note 1, “Basis of Preparation of Financial Statements and Nature of Operations.”

June 2023 Offering and Private Placement Transaction

On June 26, 2023, the Company entered into a Securities Purchase Agreement with certain institutional investors providing for the issuance and sale by the Company in a registered direct offering (the “June 2023 Offering”) of an ~~option to extend~~aggregate of 790,000 shares of the ~~oxide plant lease~~Company’s common stock at a purchase price of $1.45 per share and pre-funded warrants exercisable for ~~an additional period of~~ up to ~~two years (see Note 15). As partial consideration for the option Hecla purchased $1.0 million, or approximately 1.8 million~~637,587 shares of the Company’s common stock (the ~~“Consideration Shares”~~“Pre-Funded Warrants”)~~, issued at par~~ at a purchase price of ~~$0.55~~$1.4499 per ~~share, based on an undiscounted 30-day volume weighted average stock price.~~ June 2023 Pre-Funded Warrant.

The ~~Consideration Shares~~June 2023 Pre-Funded Warrants were ~~offered and~~ sold, ~~without registration under the Securities Act~~in lieu of ~~1933, as amended (the “Act”) in reliance on the exemptions provided by Section 4(a)(2)~~shares of the ~~Act and/or Regulation D promulgated thereunder. Under~~Company’s common stock, to such institutional investors whose purchase of shares of Company’s common stock in the ~~terms~~June 2023 Offering would otherwise result in such institutional investors, together with their respective affiliates and certain related parties, beneficially owning more than 9.99% of the ~~Option Agreement (defined herein)~~Company’s outstanding common stock immediately following the consummation of the June 2023 Offering. Each June 2023 Pre-Funded Warrant represents the right to purchase one share of the Company’s common stock at an exercise price of $0.0001 per share. The June 2023 Pre-Funded Warrants were exercisable immediately and could be exercised at any time until the June 2023 Pre-Funded Warrants are exercised in full.During the quarter ended September 30, 2023, all of the 637,587 June 2023 Pre-Funded Warrants were exercised for net proceeds of $63.76.

In a concurrent private placement (the “June 2023 Private Placement” and, together with the June 2023 Offering, the “June 2023 Transactions”), the Company agreed to ~~register with~~issue warrants to purchase up to 1,427,587 shares of The Company’s common stock at an exercise price of $1.90 (the “June 2023 Warrants”). Each June 2023 Warrant is exercisable six months from the ~~SEC~~date of issuance and has a term expiring five years after such initial exercise date. The aggregate gross proceeds from the ~~resale~~June 2023 Transactions were approximately $2.1 million, before deducting fees and offering expenses.

The net proceeds of the ~~Consideration Shares. A resale registration statement with the SEC became effective~~June 2023 Offering were recorded in ~~September 2017. The $1.0 million received for the Consideration Shares, net of $71,000 in legal~~equity and ~~stock exchange issuance fees, has been recorded~~appear as ~~equity~~a separate line item in the Condensed Consolidated ~~Balance Sheets~~Statements of Changes in Equity. Total costs for the ~~quarter ended September 30, 2017.~~June 2023 Offering were approximately $215,000, including listing fees, legal and other costs, and the placement agent fee of 6% of aggregate gross proceeds. All such costs were recorded as a reduction to “Additional paid in capital” on the Condensed Consolidated Balance Sheets.

~~At the Market~~At-the-Market Offering Agreement

In December 2016, the Company entered into an at-the-market offering agreement (as amended from time to time, the “ATM Agreement”) with H. C. Wainwright & Co., LLC (“Wainwright”), under which the Company may, from time to time, issue and sell shares of the Company’s common stock through Wainwright as sales manager in an at-the-market offering under a prospectus supplement for aggregate sales proceeds of up to $5.0 million (the “ATM Program”) or a maximum of 10 million shares. On September 29, 2017, the Company entered into an amendment to the ATM Agreement with Wainwright to reflect a new ~~registration statement~~Registration Statement on Form S-3 (File No. 333-220461) under which shares of the Company’s common stock may be sold under the ATM Program. ~~The~~On November 23, 2018, the Company entered into a second amendment of the ATM Agreement ~~will remain in full force and effect~~extending the agreement until the earlier of December ~~31, 2018,~~20, 2020, or the date that the ATM Agreement is terminated in accordance with the terms therein. ~~Offers~~On December 11, 2020, the

Table of Contents

Company entered into a third amendment of the ATM Agreement further extending the agreement so that it will remain in full force and effect until such time as the ATM Agreement is terminated in accordance with certain other terms therein or ~~sales of common shares~~upon mutual agreement by the parties, and to reflect a new Registration Statement on Form S-3 (No. 333-249218). On March 29, 2023, the Company filed a Prospectus Supplement increasing the total amount available to be sold under the ATM ~~Program will~~to $10.0 million in addition to the amounts previously sold. On June 28, 2023, the Company filed another Prospectus Supplement decreasing the total amount available to be ~~made only in the United States and no offers or sales of common shares~~sold under the ATM ~~Agreement will be made in Canada. The~~to $3.0 million, not including the amounts previously sold.

Under the ATM, the common stock ~~will be~~is distributed at the market prices prevailing at the time of sale. As a result, prices of the common stock sold under the ATM Program may vary as between purchasers and during the period of distribution. ~~The~~Further, on March 29, 2023, the Company entered into a fourth amendment of the ATM Agreement which provides that Wainwright will be entitled to compensation for its services at a commission rate of ~~2.0%~~up to 3.0% of the gross sales price per share of common stock sold. The Company reimbursed certain legal expenses of Wainwright totaling $50,000 and incurred additional accounting, legal, and regulatory costs of approximately $109,000 in connection with establishing the ATM Program. Such costs have been deferred and will be amortized to equity as sales are completedsold under the ATM ~~Program. At September 30, 2017, the unamortized costs appear on the accompanying Consolidated Balance Sheets as “Prepaid expense and other assets.”~~Agreement.

During the nine months ended September 30, ~~2017~~2023, the Company sold an aggregate of ~~approximately 1,024,000~~308,930 shares of common ~~shares~~stock under the ATM Program at an average price of ~~$0.70~~$6.19 per share of common ~~share~~stock for ~~gross~~net proceeds, after commissions and fees, of approximately ~~$720,000.~~$1,839,000. Approximately $45,000 of deferred ATM Program costs were amortized during the nine months ended September 30, 2023. The ~~Company paid cash commissions~~remaining balance of the deferred ATM Program costs, recorded in “Prepaid expenses and other nominal transaction fees to Wainwright totaling approximately $16,000 or 2.2% of the gross proceeds and amortized approximately $23,000 of deferred accounting, legal and regulatory costs resulting in a net amount of approximately $682,000 that has been recorded as equity inassets” on the Condensed Consolidated Balance ~~Sheets.~~ Sheet (see Note 6), is zero at September 30, 2023.

During the nine months ended September 30, ~~2017~~2022, the Company ~~also incurred~~did not sell shares of common stock under the ATM Program. At September 30, 2022, there was a remaining balance of $70,000 of deferred ATM Program costs, recorded in “Prepaid expenses and other assets” on the Condensed Consolidated Balance Sheets.

As of September 30, 2023, there was approximately ~~$15,000 in additional accounting, legal, and regulatory costs associated with~~$3.0 million remaining available for issuance under the ATM Program ~~that were included in “General and administrative costs” in~~based on a prospectus supplement filed with SEC on June 28, 2023. On October 1, 2023, the ~~Condensed Consolidated~~2020 Registration Statement ~~of Operations and Comprehensive Loss.~~on Form S-3 expired.

Equity Incentive Plans

Under the Company’s Amended and Restated 2009 Equity Incentive Plan (the ~~“Equity~~“2009 Plan”) awards of the Company’s common stock may be made to officers, directors, employees, consultants and agents of the Company and its subsidiaries.

On May 26, 2023, the stockholders of the Company voted to approve the Company’s 2023 Equity Incentive Plan (the “2023 Plan”) to replace the 2009 Plan. Under the 2023 Plan, awards of the Company’s common stock may be made to officers, directors, employees, consultants and agents of the Company and its subsidiaries. The 2023 Plan provides for, among other things, (i) a reserve of 360,000 shares (on a reverse stock split-adjusted basis) of common stock of the Company that may be issued pursuant to awards under the 2023 Plan and (ii) a term that expires on February 23, 2033. Permitted awards under the 2023 Plan include options, stock appreciation rights, restricted stock, restricted stock units, performance stock units, and other cash and stock-based awards. The principal terms of the 2023 Plan are described in the Company’s definitive proxy statement for the Annual Meeting of the Company’s stockholders, filed with the SEC on April 6, 2023. The Company recognizes stock-based compensation costs using a graded vesting attribution method whereby costs are recognized over the requisite service period for each separately vesting portion of the award.

Following the adoption of the 2023 Plan, no further awards may be made under the 2009 Plan.

Table of Contents

Restricted Stock Grants

The following table summarizes the status and activity of the Company’s restricted stock grants ~~issued under the Equity Plan~~ at September 30, ~~2017~~2023, and the changes during the nine months then ended:


		Weighted
		Average Grant
		Date Fair
	Number of	Value Per

					Weighted
					Average
					Grant Date
				Number of	Fair Value
Restricted Stock Grants	Shares	Share		Shares	Per Share
Outstanding at December 31, 2016	100,000	$	0.63
Outstanding at beginning of period				19,800	$	10.95
Granted during the period	150,000		0.57	—		—
Restrictions lifted during the period	(50,000)		0.57	(12,933)		11.97
Forfeited during the period	—		—	—		—
Outstanding at September 30, 2017	200,000	$	0.60
Outstanding at end of period				6,867	$	9.02

~~During the period a 150,000 share~~As of September 30, 2023, no restricted stock ~~grant was~~grants had been made ~~to a new employee with 50,000 shares vesting immediately and~~under the ~~remaining shares vesting at 50,000 shares on each of the first and second anniversaries of the grant.~~ 2023 Plan.

For the nine months ended September 30, ~~2017~~2023 and 2022, the Company recognized approximately ~~$56,000~~$76,000 and $163,000, respectively, of stock compensation expense related to the restricted stock grants. ~~The~~

For the three months ended September 30, 2023 and 2022, the Company ~~expects to recognize additional~~recognized approximately $20,000 and $37,000, respectively, of stock compensation expense related to ~~these awards of approximately $92,000 over~~ the ~~next thirty-five months.~~restricted stock grants.

Restricted Stock Units

The ~~following table summarizes~~2009 Plan permitted the ~~status~~Company to issue Restricted Stock Units (“RSUs”), which entitle each recipient to receive one unrestricted share of common stock upon termination of the ~~Company’s stock option grants issued under the Equity Plan at September 30, 2017 and the changes during the nine months then ended:~~

Weighted

Average

Exercise

Number of

Price Per

Equity Plan Options

Shares

Share

Outstanding at December 31, 2016

95,810

$
8.02

Granted during the period

—

—

Forfeited or expired during period

(55,500)

8.00

Exercised during period

—

—

Outstanding at September 30, 2017

40,310

$
8.05

Exercisable at end of period

40,310

$
8.05

Granted and vested

40,310

$
8.05

recipient’s employment or board service. Also, pursuant to the ~~Equity~~2009 Plan, the Company’s Board of Directors adopted the Non-Employee Director’s Deferred Compensation and Equity Award Plan (the “Deferred Compensation Plan”). Pursuant to the Deferred Compensation Plan, ~~the~~ non-employee directors, and employees as allowed by the 2009 Plan, receive a portion of their compensation in the form of ~~Restricted Stock Units (“RSUs”)~~RSUs issued under the ~~Equity~~2009 Plan. The RSUs generally vest on the first anniversary of the ~~grant and~~grant.

The 2023 Plan permits the Company to issue RSUs, which entitle each ~~vested RSU entitles the director~~recipient to receive one unrestricted share of common stock upon ~~the~~ termination of the ~~director’s~~recipient’s employment or board service.

The following table summarizes the status and activity of the ~~RSU grants issued under the Deferred Compensation Plan~~Company’s RSUs at September 30, ~~2017~~2023, and the changes during the nine months then ended:


		Weighted
		Average Grant
		Date Fair
	Number of	Value Per
Restricted��Stock Units	Shares	Share
Outstanding at December 31, 2016	1,607,317	$	1.28

					Weighted
					Average
					Grant Date
				Number of	Fair Value
Restricted Stock Units				Shares	Per Share
Outstanding at beginning of period				232,409	$	15.06
Granted during the period	280,000		0.48	40,000		1.62
Restrictions lifted during the period	—		—	—		—
Forfeited during the period	—		—	—		—
Outstanding at September 30, 2017	1,887,317	$	1.16
Outstanding at end of period				272,409	$	13.09

During the nine months ended September 30, 2023, the Company granted 40,000 RSUs to an officer of the Company under the 2023 Plan.

For the nine months ended September 30, ~~2017~~2023 and 2022, the Company recognized approximately ~~$93,000~~$270,000 and $244,000, respectively, of stock compensation expense related to the ~~RSU grants. The~~RSUs.

For the three months ended September 30, 2023 and 2022, the Company ~~expects to recognize additional~~recognized approximately $58,000 and $73,000, respectively, of stock compensation expense related to the ~~RSU grants of approximately $88,000 over the next 8 months.~~RSUs.

Table of Contents

Key Employee Long-Term Incentive Plan

The Company’s 2013 Key Employee Long-Term Incentive Plan (the “KELTIP”) ~~provides~~provided for the grant of units (“KELTIP Units”) to certain officers and key employees of the Company, which units will, once vested, entitle such officers and employees to receive an amount, in cash or in Company common stock (such method of settlement at the sole discretion of the Board of Directors) issued pursuant to the ~~Company’s Equity~~2009 Plan, measured generally by the price of the Company’s common stock on the settlement date. KELTIP Units are not an actual equity interest in the Company and are solely unfunded and unsecured obligations of the Company that are not transferable and do not provide the holder with any stockholder rights. Payment of the settlement amount of vested KELTIP Units is deferred generally until the earlier of a change of control of the Company or the date the grantee ceases to serve as an officer or employee of the Company.

The Company intends to settle all the KELTIP Units in common stock of the Company, an option that the Board of Directors holds in its sole discretion so long as sufficient shares remain available under the 2009 Plan. As a result, all outstanding KELTIP Units are recorded ~~as a liability, included~~ in “~~Accounts payable~~equity at September 30, 2023 and ~~other accrued liabilities” in~~December 31, 2022.

For the ~~Condensed Consolidated Balance Sheets. On May 23, 2017 and May 19, 2016,~~three months ended September 30, 2023, the Company ~~awarded 435,000 and 585,000 KELTIP Units respectively, to two officers~~recognized approximately $14,000 of ~~the Company and recorded approximately $0.2 million and $0.3 million respectively, of~~stock compensation expense ~~included in “Stock based compensation” in~~related to the ~~Condensed Consolidated Statement of Operations and Comprehensive Loss. The~~ KELTIP ~~Units are marked to market at the end of each reporting period and for~~grants. For the nine months ended September 30, ~~2017~~2023, the Company recognized approximately $21,000 of stock compensation income related to the grants due to KELTIP Units being forfeited upon departure of an ~~approximately $59,000 reduction to compensation expense.~~officer of the Company. There were ~~1,020,000~~168,000 and ~~585,000~~188,000 KELTIP Units outstanding at September 30, ~~2017~~2023 and at December 31, ~~2016,~~2022, respectively. However, under the 2023 Plan the Company discontinued the KELTIP and will no longer issue KELTIP Units.

For the three and nine months ended September 30, 2022, the Company recognized approximately $39,000 and $136,000, respectively, of stock compensation expense related to the KELTIP units.

Common ~~stock warrants~~Stock Warrants

The following table summarizes the status of the Company’s common stock warrants at December 31, 2022, and September 30, ~~2017~~2023, and the changes during the nine months then ended:


		Weighted
	Number of	Average Exercise
	Underlying	Price Per

					Weighted
				Number of	Average
				Underlying	Exercise Price
Common Stock Warrants	Shares	Share		Shares	Per Share
Outstanding at December 31, 2016	17,578,950	$	2.17
Outstanding at December 31, 2022				392,155	$	8.58
Granted during period	—		—
Dilution adjustment	157,302
June 2023 pre-funded warrants				637,587		0.0001
June 2023 warrants				1,427,587		1.90
Exercised during period				—		—
June 2023 pre-funded warrants				(637,587)		0.0001
Expired during period	(6,258,080)		4.62	—		—
Exercised during period	—
Outstanding at September 30, 2017	11,478,172	$	0.81
Outstanding at September 30, 2023				1,819,742	$	3.19

The warrants relate to prior registered offerings and private placements of the Company’s stock. In September 2012, the Company closed on a registered offering and concurrent private placement with Sentient in which it sold units, consisting of one share of common stock and a five-year warrant to acquire one half of a share of common stock at an exercise price of $8.42 per share. A total of 3,431,649 warrant shares were issued and became exercisable on March 20, 2013 and expired on September 19, 2017, five years from the date of issuance.

In September 2014, the Company closed on a registered public offering and concurrent private placement with Sentient in which it sold units, consisting of one share of common stock and a five-year warrant to acquire one half of a share of common stock at an exercise price of $1.21 per share. A total of 4,746,000 warrant shares were issued that became exercisable on March 11, 2015 and will expire on September 10, 2019, five years from the date of issuance.

In May 2016, the Company issued 8.0 million registered shares of common stock at a purchase price of $0.50 per share in a registered direct offering (the “Offering”) resulting in gross proceeds of $4.0 million. In connection with the Offering, each investor received an unregistered warrant to purchase three‐quarters of a share of common stock for each share of common stock purchased. The resulting 6,000,000 warrant shares have an exercise price of $0.75 per share, became exercisable on November 7, 2016 and will expire on November 6, 2021, five years from the initial exercise date.

The warrants issued in September 2012 and September 2014 were recorded as a liability on the balance sheet at December 31, 2016, as a result of anti-dilution clauses in the warrant agreements that could result in a resetting of the warrant exercise price and the number of warrant sharesAll outstanding in the event the Company were to issue additional shares of its common stock in a future transaction at an offering price lower than the current exercise price of the warrants. The May 2016 warrants are not subject to anti-dilution and the warrants are recorded ~~as equity.~~in equity at September 30, 2023 and December 31, 2022, following the guidance established by ASC Topic 815-40. The Company’s warrants allow for potential settlement in cash if certain extraordinary events are effected by the Company, including a 50% or greater change of control in the Company’s common stock. Since those events have been deemed to be within the Company’s control, the Company continues to apply equity treatment for these warrants.

Table of Contents

17.

Sale of Metals and Related Costs

Revenue from Gold and Silver in Doré

Pursuant to the anti-dilution clauses in the September 2012 and 2014 warrant agreements, the exercise price of the warrants had been adjusted downward as a result of the subsequent issuance of the Company’s common stock in separate transactions, including the September 2014 registered public offering and private placement, the conversion of the Sentient Note, the May 2016 Offering and private placement, the ATM Program and the Hecla Share Issuance (defined herein). As a result of these transactions, the number of shares of common stock issuable upon exercise of the September 2012 warrants, prior to their expiration on September 19, 2017, had increased from the original 3,431,649 shares to 6,258,080 shares (2,826,431 share increase) and the exercise price has been reduced from the original $8.42 per share to $4.62 per share. The number of shares of common stock issuable upon exercise of the September 2014 warrants has increased from the original 4,746,000 shares to 5,478,172 shares (732,172 share increase) and the exercise price has been reduced from the original $1.21 per share to $0.87 per share.

At December 31, 2016, the total liability recorded for the 2012 and 2014 warrants was approximately $1.9 million, consisting of approximately $1.8 million for the 2014 warrants and $0.1 million for the 2012 warrants. The Company did not have a warrant liability at September 30, 2017 as the result of a change in accounting principal during the period as discussed in Note 3.

~~15. Revenue, Deferred Revenue and Related Costs~~

~~Oxide Plant Lease and Oxide Plant Lease Costs~~

For the nine months ended September 30, 2017 the Company recorded revenue of approximately $5.1 million and related costs of approximately $1.7 million associated with the lease of the Velardeña Properties oxide plant. The Company recognizes oxide plant lease fees and reimbursements for labor, utility and other costs as “~~Revenue: Oxide plant lease~~” in the Condensed Consolidated Statements of Operations and Comprehensive Loss following the guidance of ASC 605 regarding "income statement characterization of reimbursements received for "out-of-pocket" expenses incurred" and "reporting revenue gross as a principal versus net as an agent". ASC 605 supports recording as gross revenue fees received for the reimbursement of expenses in situations where the recipient is the primary obligor and has certain discretion in the incurrence of the reimbursable expense. The actual costs incurred for reimbursed direct labor and utility costs are reported as “~~Oxide plant lease costs” in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company recognizes lease fees during the period the fees are earned per the terms of the lease.~~

On August 2, 2017, the Company granted Hecla an option to extend the oxide plant lease for an additional period of up to two years ending no later than December 31, 2020 (the “Extension Period”) in exchange for a $1.0 million upfront cash payment and the purchase of $1.0 million, or approximately 1.8 million shares, of the Company’s common stock, issued at par at a price of $0.55 per share, based on an undiscounted 30-day volume weighted average stock price (see Note 14). The option and lease extension were memorialized in (i) an Option Agreement dated August 2, 2017 among the Company and Hecla Mining Company (the “Option Agreement”), and (ii) a Second Amendment to Master Agreement and Lease Agreement dated August 2, 2017 among Minera William S.A. de C.V., an indirect subsidiary of the Company, and Minera Hecla S.A. de C.V., an indirect subsidiary of Hecla Mining Company (the “Second Amendment”). Under the Second Amendment, Hecla must exercise the option to extend the lease no later than October 3, 2018. All of the fixed fees and throughput related charges remain the same as under the original lease. Similar volume limitations apply to any required future tailings expansions, which Hecla will fund, leaving unused at the end of the lease term an agreed amount of capacity in the expanded tailings facility. Pursuant to the Second Amendment, Hecla will have the right to terminate the lease during the Extension Period for any reason with 120 days’ notice. Hecla will also have a one-time right of first refusal to continue to lease the plant following a termination notice through December 31, 2020 if the Company decides to use the oxide plant for its own purposes before December 31, 2020.

The Company expects to recognize the $1.0 million of income from granting the option over the expected life of the lease from August 2, 2017 through December 31, 2020 on a straight-line basis, including such income in “~~Other operating income~~” in the Condensed Consolidated Statements of Operations and Comprehensive Loss. As of September 30, 2017 the unamortized portion of the lease option totaled approximately $1.0 million recorded as short and long term “~~Deferred revenue~~” on the Condensed Consolidated Balance Sheets. The $1.0 million received for the Consideration Shares, net of $71,000 in legal and stock exchange issuance fees, has been recorded as equity in the Condensed Consolidated Balance Sheets for the quarter ended September 30, 2017.

~~Table of Contents~~

For the nine months ended September 30, 2016 the Company recorded revenue of approximately $4.8 million and related costs of approximately $1.5 million associated with the lease of the Velardeña Properties oxide plant.

~~16. Interest and Other Income~~

For the nine months ended September 30, 2017 and 2016 the Company had only a nominal amount of interest and other income. The 2017 amount is primarily related to interest on amounts receivable from the sale of mining equipment as discussed in Note 8.

~~17. Derivative Loss~~

During the nine months ended September 30, ~~2016~~2023, the Company recorded revenue of approximately ~~$2.8~~$9.7 million and related costs of ~~warrant derivative loss~~approximately $11.0 million related to ~~an increase~~gold and silver contained in doré bars related to the Rodeo operation. The gold and silver contained in the ~~fair value of~~doré bars were sold to one customer, a metals refinery located in the ~~liability recorded for warrants to acquire~~United States. Under the Company’s common stock. The warrant liability at December 31, 2016 was recorded at fair value based primarily on a valuation performed by a third-party expert using a Monte Carlo simulation which falls within Level 3 of the fair value hierarchy (see Note 12). The third party valuation model takes into account the probability that the Company could issue additional shares in a future transaction at a lower price than the current exercise price of the warrants. Significant inputs to the third party valuation model included prices for the warrants disclosed above, the probability of an additional issuanceterms of the Company’s ~~common stock~~agreement with its customer, title passes and revenue is recognized by the Company when the contractual performance obligations of the parties are completed, generally at the time a ~~lower~~provisional or final payment is made. A provisional payment for approximately 95% of the contained gold and silver is made generally within 10-12 days after the product is shipped and customary sales documents are completed. A final payment is made within approximately 30 days following the date of shipment when final assays and refinery charges are agreed upon by the parties. A price ~~than the current warrant exercise price and the inputs in the table below~~ for the ~~respective periods. The~~gold and silver sold is set, based on current market prices, at the time a provisional or final payment is made. Refining and transport costs, deducted from the final payments made, are treated as third-party agent costs incurred by the Company ~~did not have a warrant liability at September 30, 2017 as~~in performing its obligations under the ~~result~~agreement with its customer after the transfer of ~~a change in accounting principal during the period as discussed in Note 3.~~control on provisional sales and are therefore netted against revenue on an accrual basis.

During the nine months ended September 30, ~~2016~~2022, the Company sold gold and silver contained in doré bars related to the Rodeo operation and recorded revenue of approximately $18.7 million and related costs of approximately $13.3 million. Costs related to the sale of metal products include direct and indirect costs incurred to mine, process and market the products.

Revenue from Concentrate Sales

In April 2023, the Company began to sell three different concentrates containing various amounts of gold, silver, lead and zinc produced from material processed from the Velardeña mine which had been stockpiled from test mining performed in 2022 as part of the studies undertaken in connection with the potential restart of the Velardeña Properties. During the nine months ended September 30, 2023, the Company recorded ~~approximately $0.8~~revenue of $1.5 million from the combined sales of ~~derivative loss~~these concentrates and related costs of $0.2 million. The concentrate was sold to ~~an increase~~one customer, a metal trader in Mexico. Under the ~~fair value~~terms of the ~~derivative liability~~Company’s agreement with its customer, title passes and revenue is recognized by the Company when the contractual performance obligations of the parties are completed, generally at the time a provisional or final payment is made. A provisional payment for approximately 90% of the contained gold, silver, lead and zinc is made generally within 10-12 days after the product is shipped and customary sales documents are completed. A final payment is made within approximately 60 days following the date of shipment when final assays and refinery charges are agreed upon by the parties. A price for the gold and silver sold is set, based on average market prices, one month following the delivery of concentrate to the buyer. Refining and transport costs, deducted from the final payments made, are treated as third-party agent costs incurred by the Company in performing its obligations under the agreement with its customer after the transfer of control on provisional sales and are therefore netted against revenue on an accrual basis.

There were no concentrate sales during the nine months ended September 30, 2022.

Revenue from Slag Sales

During the nine months ended September 30, 2023, the Company recorded revenue of $0.5 million and related costs of zero related to the ~~Sentient Loan (see Note 11).~~gold and silver contained in the slag from the Rodeo Property. The ~~derivative liability~~slag was ~~recorded~~sold to one customer, a metals refinery located in the United States. Under the terms of the Company’s agreement with its customer, title passes and revenue is recognized by the Company when the contractual performance obligations of the parties are completed which occurs at ~~fair value at~~the time a final payment is made. Final payment is made 30 working days after the settlement of assays for 95% of the contained gold and 90% of the contained silver. The price for the gold and silver sold is set on the first trading day following the day of the settlement assay. Refining costs are deducted from the final payments made, are treated as third-party agent costs incurred by the Company in performing its obligations under the agreement with its customer and are therefore netted against revenue.

There were no slag sales during the nine months ended September 30, ~~2016 based primarily on a valuation performed by a third party expert using a Monte Carlo simulation, which falls within Level 3~~2022.

Table of Contents

18.

Interest and Other Income (Expense), Net

For the ~~fair value hierarchy (see Note 12). Significant inputs to the valuation model included: 1) future variations in the Company’s stock price,~~three and ~~2) the probability of entering into an equity transaction prior to the loan maturity date that would lower the conversion price. At~~nine months ended September 30, ~~2017~~2023 and ~~December 31, 2016,~~2022, the ~~Sentient Loan had been fully converted.~~Company recognized a nominal amount of Interest and other income (expense), net.

19.

Cash Flow Information

~~Table of Contents~~

~~18. Supplemental Cash Flow Information~~

The following table reconciles net loss for the period to cash used in operations:

Nine Months Ended September 30,

2017

2016

(in thousands)

Cash flows from operating activities:

Net loss

$
(1,851)

$
(10,974)

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization and depreciation

456

1,317

Accretion of asset retirement obligation

146

143

Write off of loss contingency, net

—

(212)

Asset write off

—

24

Gain on reduction of asset retirement obligation

(56)

—

Gain on sale of assets

(605)

(1,522)

Amortization of deferred loan costs

—

57

Warrant liability fair market adjustment

—

2,821

Derivative liability fair market adjustment

—

778

Accretion of loan discount

—

372

Loss on debt extinguishment

—

1,653

Deferred income taxes

—

(26)

Stock compensation

299

666

Changes in operating assets and liabilities:

Decrease in trade accounts receivable

607

41

Decrease in prepaid expenses and other assets

137

150

(Increase) decrease in inventories

(22)

66

(Increase) decrease in value added tax recoverable, net

(3)

347

Increase in accrued interest payable net of amounts capitalized

—

86

Increase (decrease) in deferred revenue

967

(500)

Decrease in reclamation liability

(4)

(8)

Decrease in accounts payable and accrued liabilities

(34)

(389)

Decrease in deferred leasehold payments

(15)

(13)

Net cash provided by (used in) operating activities

$
22

$
(5,123)


	Nine Months Ended September 30,
	2023		2022

	(in thousands)
Cash flows (used in) from operating activities:
Net loss	$	(7,931)	$	(5,826)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		380		241
Accretion of asset retirement obligation		222		211
Loss on trading securities		9		32
Gain on sale of assets		(436)		(125)
Stock-based compensation		324		543
Litigation settlement		250		—
Changes in operating assets and liabilities from continuing operations:
Decrease (increase) in inventories, net		1,066		(150)
Increase in value added tax receivable, net		(1,679)		(480)
Decrease (increase) in prepaid expenses and other assets		201		(37)
Decrease in other long-term assets		192		104
Increase in accounts payable and other accrued liabilities		1,320		835
Decrease in deferred revenue		—		(1,125)
Decrease in other current liabilities		(320)		(445)
(Decrease) increase in reclamation liability		(73)		25
Decrease in other long-term liabilities		(82)		(204)
Net cash used in operating activities	$	(6,557)	$	(6,401)

The following table sets forth supplemental cash flow information and non-cash transactions:


	Nine Months Ended September 30,
	2023		2022

	(in thousands)
Supplemental disclosure:
Interest paid	$	17	$	6
Income taxes paid	$	—	$	413

Supplemental disclosure of non-cash transactions:
Deferred equity offering costs amortized	$	45	$	—

Table of Contents

20.

Commitments and Contingencies

~~19. Commitments~~During April 2021, the Company became aware of a lawsuit in Mexico against one of the Company’s Mexican subsidiaries, Minera William, S.A. de C.V. (“Minera William”). The plaintiff in the matter is Unifin Financiera, S.A.B de C.V. (“Unifin”). The lawsuit was assigned to the Fifth Specialized Commercial District Court. In November 2022, the Company was formally served with the complaint in connection with the lawsuit and ~~Contingencies~~

in December 2022 the Company filed its answer to the complaint. Unifin is alleging that a representative of Minera William signed certain documents in July 2011 purporting to bind Minera William as a guarantor of payment obligations owed by a third party to Unifin in connection with that third party’s acquisition of certain drilling equipment. At the time the documentation was allegedly signed, Minera William was a subsidiary of ECU Silver Mining prior to the Company’s acquisition of ECU in September 2011. As a preemptive measure, Unifin has obtained a preliminary court order freezing Minera William’s bank accounts in Mexico, which has limited the Company’s and Minera William’s ability to access approximately US$153,000 according to current currency exchange rates. Notwithstanding this action, the restrictions imposed on Minera William’s bank accounts do not impact the Company’s ability to operate the Rodeo mine, which is held through a different Mexico subsidiary. Likewise, the action does not impact the Company’s ability to continue with the Company’s evaluation plans for a potential Velardeña mine restart or move forward with any of the Company’s other exploration programs in Mexico. However, because the Velardeña mine and one processing plant are held by Minera William, any adverse outcome to the action may have a material impact on our ability to restart production at Velardeña. Unifin is seeking recovery for as much as US$12.5 million. The Company believes there is no basis for this claim. A preliminary hearing was initially scheduled to take place in April 2023 but was rescheduled to June 2023. In June 2023 Minera William and Unifin agreed to pursue discussions to settle the matter and the Court agreed to suspend trial to allow Minera William and Unifin to negotiate a settlement agreement. Subsequent to September 30, ~~2017 and December 31, 2016,~~2023, tentative terms were reached to settle the dispute in exchange for a payment by the Company ~~had~~of 0.25 million, although no ~~gain or loss contingencies.~~ definitive settlement agreement has yet been executed. An accrued liability has been recorded for $0.25 million as of September 30, 2023 (see Note 13 and Note 23).

The Company also has certain purchase and lease commitments as set forth in the Company’s ~~Form 10-K for the year ended December 31, 2016.~~2022 Annual Report.

21.

Segment Information

~~20. Segment Information~~

The Company’s sole activity is the mining, construction and exploration of mineral properties containing precious metals. The Company’s reportable segments are based ~~upon~~on the Company’s ~~revenue producing~~revenue-producing activities and ~~cash consuming~~cash-consuming activities. The Company reports two segments, one for its revenue-producing activities in Mexico, which includes both the Velardeña Properties ~~in Mexico~~and the Rodeo Property, and the other comprised of ~~non-revenue producing~~non-revenue-producing activities, including exploration, construction and general and administrative activities. Intercompany revenue and expense amounts have been eliminated within each segment in order to report on the basis that management uses internally for evaluating segment performance.

Table of Contents

The financial information relating to the Company’s segments is as follows:

Exploration, El

Costs

Depreciation,

Quevar, Velardeña

Three Months Ended

Applicable

Depletion and

and Administrative

Pre-Tax (gain)

Capital

September 30, 2017

Revenue

to Sales

Amortization

Expense

loss

Total Assets

Expenditures

Velardeña Properties

$
1,771

$
619

$
53

$
623

$
(2,016)

$
3

Corporate, Exploration & Other

—

—

85

1,609

2,334

2

$
1,771

$
619

$
138

$
2,232

$
318

$
5

Nine Months Ended

September 30, 2017

Velardeña Properties

$
5,107

$
1,704

$
179

$
1,361

$
(3,667)

$
6,573

$
3

Corporate, Exploration & Other

—

—

277

4,820

5,518

8,329

2

$
5,107

$
1,704

$
456

$
6,181

$
1,851

$
14,902

$
5

Three Months Ended

September 30, 2016

Velardeña Properties

$
1,729

$
549

$
249

$
509

$
(1,563)

$
15

Corporate, Exploration & Other

—

—

97

1,706

2,361

—

$
1,729

$
549

$
346

$
2,215

$
798

$
15

Nine Months Ended

September 30, 2016

Velardeña Properties

$
4,768

$
1,478

$
982

$
2,100

$
(1,319)

$
8,370

$
35

Corporate, Exploration & Other

—

—

335

5,803

12,319

6,647

1

$
4,768

$
1,478

$
1,317

$
7,903

$
11,000

$
15,017

$
36




							Exploration, El
			Costs		Depreciation,		Quevar, Velardeña
Three Months Ended			Applicable		Depletion and		and Administrative						Capital
September 30, 2023	Revenue		to Sales		Amortization		Expense		Pre-Tax Loss		Total Assets		Expenditures
Mexico Operations	$	2,512	$	3,347	$	145	$	753	$	1,896			$	—
Corporate, Exploration and Other		—		—		3		1,485		1,281				—
Consolidated	$	2,512	$	3,347	$	148	$	2,238	$	3,177			$	—

Nine Months Ended
September 30, 2023
Mexico Operations	$	11,702	$	11,225	$	368	$	2,907	$	3,041	$	7,727	$
Corporate, Exploration and Other		—		—		12		4,989		4,890		4,577
Consolidated	$	11,702	$	11,225	$	380	$	7,896	$	7,931	$	12,304	$	—

Three Months Ended
September 30, 2022
Mexico Operations	$	5,268	$	4,374	$	77	$	1,878	$	1,097			$	17
Corporate, Exploration and Other		—		—		12		1,940		1,646				2
Consolidated	$	5,268	$	4,374	$	89	$	3,818	$	2,743			$	19

Nine Months Ended
September 30, 2022
Mexico Operations	$	18,700	$	13,335	$	204	$	5,815	$	14	$	9,084	$	43
Corporate, Exploration and Other		—		—		37		5,980		5,902		9,465		3
Consolidated	$	18,700	$	13,335	$	241	$	11,795	$	5,916	$	18,549	$	46

22.

Related Party Transactions

~~21. Related Party Transactions~~

The following sets forth information regarding transactions between the Company (and its subsidiaries) and its officers, directors and significant stockholders.

~~Sale~~Administrative Services, Lease of Equipment:

In August 2016, the Company sold certain mining equipment to Minera Indé, an indirect subsidiary of Sentient, for $687,000 (see Note 8), in a transaction approved by the Company’s Audit Committee and Board of Directors. At September 30, 2017 Sentient holds approximately 45% of the Company’s 92.0 million shares of issued and outstanding common stock. The equipment sold was excess equipment held at the Company’s Velardeña Properties that the Company did not expect to use. The Company used a third party consultant with experience in the used mining equipment market in Mexico to determine a fair value. The Company believes the price paid was at least equal to the fair market value of the equipment had it been sold through auction or in the open market. The Company received 10% of the sales price at the closing of the sale in August 2016, with the remainder, plus interest on the unpaid balance at an annual rate of 10%, due in February 2017.

With the approval of a Special Committee of the Company’s Board of Directors, the Company and Minera Indé amended the original equipment sale on March 31, 2017 to include the sale of an additional piece of excess equipment for $185,000 and extend the time for payment relating to the original equipment sale. Upon execution of the amendment the Company received an additional payment of $100,000. The remaining principal and interest balance, plus additional interest on the unpaid balance at an annual rate of 10%, was amended to be due in August 2017. The Company recorded a gain of $105,000 on the sale of the additional equipment, included in “~~Other operating income~~” in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss, equal to the gross proceeds less the remaining basis in the equipment. On May 2, 2017, the Company received approximately $750,000 from Minera Indé as payment in full for the remaining balance due related to the equipment sale, including interest through that date.

~~Administrative Services:~~

Beginning in August 2016, the Company began providing limited accounting and other administrative services to Minera Indé, an indirect subsidiary of ~~Sentient.~~ The Sentient Group (“Sentient”). Sentient, through the Sentient executive funds, holds approximately 18% of the Company’s 8.6 million shares of issued and outstanding common stock. The administrative services are provided locally in Mexico by the administrative staff atin the Company’s ~~Velardeña Properties.~~Mexico office. The Company charges Minera Indé $15,000 per month for the services, which provides reimbursement to the Company for its costs incurred plus a small profit margin. The Company also leases, from time to time, certain nonessential mining equipment to Minera Indé. Amounts received under the arrangement reduce costs incurred for ~~the care and maintenance of the Velardeña Properties and allows the Company to~~

~~Table of Contents~~

~~maintain a larger more experienced staff at the Velardeña Properties to support the oxide plant lease and potential future mining or processing activities.~~exploration. The Company’s Board of Directors and Audit Committee approved the agreement. For the nine months ended September 30, ~~2017~~2023 and 2022, the Company charged Minera Indé approximately $233,000 and $135,000, respectively, for services and the use of equipment, offsetting costs that are recorded in “~~Velardeña shutdown and care and maintenance~~Exploration expense” in the Condensed Consolidated Statements of ~~Operations~~Operations.

23.Subsequent Events

Unifin Litigation

On October 27, 2023 the Company was informed that Unifin has expressed its willingness to settle the dispute with the Company in exchange for a payment by the Company of $0.25 million although no definitive settlement agreement has yet been executed. The Company expects to use $153,000 in cash that has been frozen in the Minera William bank account as partial payment of the settlement amount (see Note 5). An accrued liability has been recorded for $0.25 million as of September 30, 2023 (see Note 13 and ~~Comprehensive Loss.~~ Note 20).

November 2023 Offering

On November 6, 2023, the Company entered into a Securities Purchase Agreement with certain purchasers providing for the issuance and sale by the Company pursuant to a Registration Statement on Form S-1 (No. 333-274403)

Table of Contents

(the “November 2023 Offering”) of an aggregate of 4,712,488 shares of the Company’s common stock, $0.01 par value per share, at a purchase price of $0.70 per share; (ii) pre-funded warrants to purchase 1,287,512 shares of the Company’s common stock (the “November 2023 Pre-Funded Warrants”) at a purchase price of $0.0001 per November 2023 Pre-Funded Warrant; (iii) Series A warrants to purchase 6,000,000 shares of the Company’s common stock (the “November 2023 Series A Warrants”) at a purchase price of $0.70 per November 2023 Series A Warrants; (iv) Series B warrants to purchase 3,000,000 shares of the Company’s common stock (the “November 2023 Series B Warrants” at a purchase price of $0.70 per November 2023 Series B Warrants.

The November 2023 Pre-Funded Warrants are exercisable immediately and could be exercised at any time until the November 2023 Pre-Funded Warrants are exercised in full. The November 2023 Series A Warrants are exercisable immediately and will expire five years from the date of issuance. The November 2023 Series B Warrants are exercisable immediately and will expire 18 months from the date of issuance. The aggregate gross proceeds from the November 2023 Offering was $4.2 million, before deducting fees and offering expenses.

Table of Contents

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations~~

Our Company

We were incorporated in Delaware in March 2009 under the Delaware General Corporation Law. During the nine months ended September 30, ~~2017,~~2023, our principal source of revenue was from the ~~lease~~sale of gold and silver from our ~~oxide plant.~~Rodeo Property in Durango, Mexico. We also had a secondary source of revenue from concentrate produced from material previously mined in 2022 at our Velardeña Property during a test mining study. We incurred net operating losses for the nine months ended September 30, ~~2017~~2023 and ~~2016.~~2022.

~~The Company remains focused on evaluating~~Mining operations at the Rodeo Property concluded in the second quarter of 2023, and ~~searching~~we are engaged in activities to restart Velardeña. We also continue to evaluate and search for mining opportunities in North America (including Mexico) with ~~near term~~near-term prospects of mining, and particularly for properties within reasonable haulage distances of our Velardeña Properties. ~~The Company is also reviewing strategic opportunities, focusing primarily on development or operating properties in North America, including Mexico.~~ We are also focused on ~~evaluation activities at~~advancing our Yoquivo exploration property in Mexico as funds become available, and through the Earn-In Agreement with Barrick, our El Quevar exploration property in ~~Argentina, and~~Argentina. We are ~~continuing our exploration efforts on selected properties in our~~holding an additional portfolio of approximately ~~[10] exploration~~12 properties, located ~~primarily~~ in ~~Mexico.~~Mexico, Nevada and Argentina for sale or advancement when possible.

Because we have ceased production at the Rodeo mine, our only near-term opportunity to generate cash flow from mining to support continued operations is the Velardeña mine. In order to restart production at the Velardeña mine, we will require additional capital. See “—Liquidity, Capital Resources and Going Concern—2023 Liquidity Forecast and Going Concern Qualification” below.

This discussion should be read in conjunction with ~~Management’s~~the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operation” included in our 2022 Annual ~~Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on February 28, 2017.~~Report.

2023 Highlights ~~for the Nine Months Ended September 30, 2017~~

~~Velardeña Oxide Plant Lease Agreement~~Rodeo Property

~~In July 2015, we leased our Velardeña oxide plant to a wholly-owned subsidiary of Hecla Mining Company for an initial term of 18 months beginning July 1, 2015.~~ ~~The lease agreement containedseveral lease extension options, and~~From inception in ~~the third quarter 2016, the lease was extended~~January 2021, through ~~June2017. The 2016 extension included an agreement under which Hecla would construct, at its cost,certain tailings expansion facilities to accommodate Hecla's increased use of tailings capacity~~ ~~in excess of an agreed amount, while preserving flexibility for future tailings expansions.~~ ~~The tailings expansionwork began in early 2017 and is now completed.~~ ~~The parties agreed that Hecla would either leave unused at~~ the end of the ~~lease term an agreed amount~~third quarter of ~~capacity~~2023, we have produced 31,126 ounces of gold and 126,151 ounces of silver from Rodeo. Cash costs per payable gold ounce, net of silver by-product credits averaged $1,275 during that period.

Mill throughput averaged 603 tonnes per day in the ~~expanded tailings facility,~~first quarter 2023 and 558 tonnes per day in the second quarter 2022. We ceased mining activities at Rodeo during the second quarter of 2023. During the third quarter of 2023, we processed stockpiled material from Rodeo. We stopped processing the stockpiled material during September 2023 as the grades dropped to an uneconomic level.

Table of Contents

The table below sets forth the key processing and sales statistics for the Rodeo operation for the three and nine months ended September 30, 2023:


Rodeo Operations Statistics
(in thousands except per unit amounts)

	Three Months Ended	Nine Months Ended
	September 30, 2023	September 30, 2023
Tonnes mined (1)	-	226,896
Tonnes in stockpiles awaiting processing (2)	-	-
Tonnes in low grade stockpiles (3)	-	-
Tonnes processed	30,841	135,900
Average tonnes per day processed	335	498

Average gold grade processed (grams per tonne)	1.2	1.5
Average silver grade processed (grams per tonne)	5.8	7.1

Plant recovery - gold (%)	71.6	72.1
Plant recovery - silver (%)	85.6	81.7

Payable gold produced in doré (ounces)	837	4,746
Payable silver produced in doré (ounces)	3,767	23,044
Payable gold equivalent produced in doré (ounces) (4)	883	5,025

Gold sold in doré (ounces)	1,044	4,882
Silver sold in doré (ounces)	4,525	23,639
Gold equivalent sold in doré (ounces) (4)	1,099	5,168

Average realized price, before refining and selling costs
Gold (dollar per ounce)	$ 1,931.42	$ 1,929.96
Silver (dollar per ounce)	$ 23.67	$ 23.37

(1) Includes all mined material transported to the plant, stockpiled or designated as waste
(2) Includes mined material stockpiled at the mine or transported to the plant awaiting processing in the plant
(3) Material grading between 1.6 g/t (current cutoff grade) and 1 g/t Au held for possible future processing
(4) Gold equivalents based on realized $ Au and $ Ag price

Table of Contents

The following table highlights additional non-GAAP cost and revenue statistics related to the Rodeo operations:


		Three Months Ended September 30, 2023	Nine Months Ended September 30, 2023
Total cash operating costs	$	2,533	$	10,154
Treatment and refining costs		64		263
Silver by-product credits		(107)		(552)
Total cash costs, net of by-product credits	$	2,490	$	9,865

Cash cost per unit
Payable gold ounces produced in doré		837		4,746
Total cash operating costs	$	3,026	$	2,139
Treatment and refining charges		77		56
Silver by-product credits		(128)		(116)
Total cash costs, net of by-product credits, per payable gold ounce (1)	$	2,975	$	2,079

Tonnes processed in plant		30,841		135,900
Total cash operating costs per tonne processed	$	82	$	75

(1) Cash costs, net of by-product credits, per payable ounce of gold is a non-GAAP financial measure. See “Non-GAAP Financial Measures” below for a reconciliation to the GAAP financial measure.

Total cash operating costs for the three and nine months ended September 30, 2023, as depicted in the table above, include all production costs during the period, including mining, milling and general and administrative costs related to mined and material including full administrative costs in Mexico that are not categorized as costs to produce concentrate or ~~construct an additional expansion at its cost. In connection with their agreement regarding tailings impoundment expansions,~~exploration or Velardeña care and maintenance costs.

Total operating margin related to the ~~parties agreed that Hecla had~~Rodeo operations for the ~~right to extend the lease for an additional 18~~three and nine months ~~following June~~ended September 30, ~~2017, or until December 31, 2018. On March 24, 2017, Hecla exercised its right to extend the lease until December 31, 2018.~~

~~On August 2, 2017, we granted Hecla an option to extend the lease for an additional period of up to two years ending no later than December 31, 2020 (the “Extension Period”) in exchange for a~~2023 were negative $1.0 million and negative $0.7 million, respectively, on sales of metal in doré and slag of $2.3 million and $10.2 million, respectively, offset by cost of metal sold of $3.3 million and $11.0 million, respectively.

All operating activity at Rodeo and Plant II concluded by September 30, 2023.

Non-GAAP Financial Measures

Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by generally accepted accounting principles. These measures should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP.

“Total cash ~~payment~~costs, net of by-product credits, per payable gold ounce”, is a non-GAAP financial measure calculated by the Company as set forth below and may not be comparable to similar measures reported by other companies.

“Total cash costs, net of by-product credits, per payable gold ounce”, includes all direct and indirect operating cash costs associated with the ~~purchase~~physical activities that would generate doré products for sale to customers, including mining to gain access to mineralized materials, mining of ~~$1.0 million,~~mineralized materials and waste, milling, third-party related treatment, refining and transportation costs, on-site administrative costs and royalties. Total cash costs do not include depreciation, depletion, amortization, exploration expenditures, reclamation and remediation costs, sustaining capital, financing costs, income taxes, or ~~approximately 1.8 million shares, of~~corporate general and administrative costs not directly or indirectly related to the Company’s common stock issued at par at a price of $0.55 per share (the “Hecla Share Issuance”), based on an undiscounted 30-day volume weighted average stock price. Hecla must exercise the option to extend the lease no later than October 3, 2018. All of the fixed fees and throughput related charges remain the same as under the original lease. Similar volume limitations apply to any required future tailings expansions, which Hecla will fund, leaving unused at the end of the lease term an agreed amount of capacityRodeo project. By-product credits include revenues from silver contained in the ~~expanded tailings facility. Hecla will have the right~~products sold to ~~terminate the lease~~customers during the ~~Extension Period for any reason with 120 days’ notice. Hecla will also have a one-time right~~period. “Total cash costs, net of ~~first refusal to continue to lease~~by-product credits”, are divided by the number of payable gold ounces generated by the plant ~~following~~for the period to arrive at “Total cash costs, net of by-product credits, per payable gold ounce.”

“Cost of metals sold,” reported as a ~~termination notice through December 31, 2020 if we decide to use~~separate line item in our Condensed Consolidated Statements of Operations for the ~~oxide plant for our own purposes before~~ ~~December 31, 2020.~~

~~Hecla is responsible for ongoing operation~~three months and ~~maintenance of the oxide plant. During~~ the nine months ended September 30, ~~2017, Hecla processed approximately 101,000~~2023, is the most comparable financial measure, calculated in accordance with GAAP, to “Total cash costs, net of by-product credits.” “Cost of metals sold” includes adjustments for

Table of Contents

changes in inventory and excludes third-party related treatment and refining costs, which are reported as part of revenue in accordance with GAAP. The following table presents a reconciliation for the three months and nine months ended September 30, 2023, between the non-GAAP measure of “Total cash cost, net of by-product credits” to the most directly comparable GAAP measure, “Cost of metals sold.”

Reconciliation of Cash Costs to Cost of Metals Sold


		Reconciliation of Costs of Metals Sold (GAAP) to Total Cash Costs, net of By-product Credits (Non-GAAP)
		Three Months Ended	Nine Months Ended
		September 30, 2023	September 30, 2023
Total cash costs, net of by-product credits	$	2,490	$	9,865

Reconciliation to GAAP measure:
Treatment and refining costs	$	(64)	$	(263)
Silver by-product credits		107		553
Write down of inventories to net realizable value		(75)		63
Change in inventory (excluding depreciation, depletion and amortization)		842		776
Costs of metal unrelated to Rodeo Operations		20		231
Cost of metals sold	$	3,320	$	11,225

Velardeña Properties

The Velardeña Properties contain two underground mines that were last operated in late 2015, at which point mining activities were suspended when a combination of low metals prices, mining dilution and metallurgical challenges rendered operations unprofitable. We elected to preserve the asset for future use, and since that time we have evaluated and tested various mining methods and processing alternatives that could enable sustainable profitable operations.

In June 2021, we began limited-scale mining activities at our Velardeña underground mine to obtain further bulk samples for use in final optimization of the bio-oxidation (BIOX™) plant design and for use in additional flotation separation studies (BIOX is a trademark of Metso-Outotec Oyj for its proprietary bio-oxidation process.). Test results using the BIOX™ pre-treatment oxidation process supported the use of the technology in future processing at Velardeña. In March 2022 we filed an updated PEA Technical Report Summary and NI 43-101 Technical Report supporting a possible economic operation at Velardeña using the optimized flotation parameters, BIOX™ treatment of pyrite concentrates and employing resue mining techniques to control dilution. In May 2022 we began additional test-mining activities with a new mining contractor to evaluate productivity and dilution of resue mining on the principal veins accessible from the San Mateo decline in part to validate the PEA assumptions. The results of the test mining met expected productivity metrics but did not meet anticipated dilution metrics on some of the veins mined. We initiated ore-sorting studies to limit the negative effects of the excess dilution. Initial results of these tests were positive, and we continue to work on incorporating these results in our mine planning.

In late 2022, a tailing storage facility expansion project was initiated to provide storage volume for the remainder of the Rodeo mine life. The project was completed in May 2023. A total of $2.6 million was expended for this project of which $0.6 million was expended in 2023.

In early 2023, the terms for the sale of our gold-rich pyrite concentrates improved significantly over previously-available terms. The recently improved terms allow us to re-open the Velardeña Properties’ mines without the BIOX™ plant. Internal cash flow models using the new concentrate sales terms yield results only slightly less attractive than models using BIOX™ treatment; however, the new models require low capital investment and so are much less risky to implement. We are now planning to restart production at Velardeña during the fourth quarter 2023 without the need for the BIOX™ facility, subject to our ability to obtain sufficient capital to do so.

In March 2023, we restarted our flotation plant (Plant I) to process 3,000 tonnes of mineralized material that had been stockpiled during the test mining in 2022. Under the new concentrate sales terms, 656 tonnes of gold-rich pyrite concentrate, 118 tonnes of silver-rich lead concentrate and 63 tonnes of zinc concentrate have been sold under an offtake

Table of Contents

agreement through September 30, 2023. The three shipments that have been completed in the ~~oxide plant, resulting in total revenues to us~~nine months ended September 30, 2023 generated cash receipts of approximately ~~$5.1 million, comprised~~$1.5 million. These successful sales of ~~approximately $2.2 million for direct plant charges plus fixed fees~~concentrates on the improved terms have caused us to shift our efforts towards a restart of Velardeña without the requirement of constructing and ~~other net reimbursable costs totaling approximately $2.9 million. We incurred costs~~using the BIOX™ technology. An internally prepared updated forecast assuming gold and silver prices of ~~approximately $1.7 million related to the services we provide under the lease~~$1,900 and ~~reported~~ $22.50 per ounce, respectively, indicates that Velardeña can generate a positive net operating margin ~~of approximately $3.4 million during the first nine~~within around six months of ~~2017. Hecla has been processing material~~restarting operations. We have included cash flow from Velardeña production in our updated liquidity forecast for the next twelve months ending September 30, 2024, which forecasts future cash flow from operating margins assuming Velardeña operations restart in November 2023. See “—Liquidity, Capital Resources and Going Concern—2023 Liquidity Forecast and Going Concern Qualification” below.

In August 2023 we released and filed the results of an updated independent technical report prepared under S-K 1300 guidelines. The report validates our internal economic models for the Velardeña resource and potential economic results. For purposes of our internal cash flow projections, we have utilized more conservative assumptions than those reflected in the technical report summary.

Preparations to restart the operation have progressed on schedule including arrangements with union staff, contract miners, plant operators, and support personnel. Our ability to restart production is dependent on our ability to raise sufficient capital in the near term.

Yoquivo

During 2022, we completed payments required under Yoquivo’s two option agreements and now hold 100% ownership of the ~~intended approximately 400~~Yoquivo concessions subject to royalty interests between 2% and 3% net smelter return payable on production to third parties and capped at $2.8 million in the aggregate.

With an effective date of February 24, 2023, an initial mineral resource estimate was completed for Yoquivo that estimates an inferred mineral resource of 937,000 tonnes ~~per day rate during 2017. At~~at 570 g/t Ag eq (equivalent ounces are calculated using prices of $1,840/oz Au and $24.00/oz Ag) on five veins that had enough drill density to support mineral resources. Further information regarding this ~~rate, we expect net cash payments~~initial mineral resource estimate is included in our 2022 Annual Report. Numerous other veins on the property have yet to ~~us, net~~be drilled sufficiently to allow estimation of ~~reimbursable costs, should total approximately $0.4 million per month, including variable and fixed fees, or nearly $4.5 million annually.~~additional resources.

~~Santa Maria~~

Since ~~2015, we have completed test mining~~2020, exploration and ~~processing~~delineation drilling of ~~7,500 tons from~~16,565 meters in 70 holes has advanced the ~~Santa Maria mine west of Hildalgo de Parral, Chihuahua, with average grades 338 gpt silver and 0.7 gpt gold. In March 2017, a preliminary economic~~

~~Table of Contents~~

~~assessment (“PEA”) was completed on our behalf by the engineering firm Tetra Tech, prepared pursuant~~project to ~~Canadian National Instrument 43-101, based on an updated estimate of mineralized material.~~this stage. The PEA presented a base case assessment of developing Santa Maria’s mineral deposit. The PEA contemplates a 38-month underground mining operation at a mining rate of 200 tonnes per day using a combination of cut and fill and other mining techniques, and custom milling at a local third-party flotation mill. Based on the assumptions in the PEA, we believe there may be potentialCompany plans to ~~develop a small mining operation at Santa Maria.~~

~~In August 2017, we~~ ~~acquired three additional claims~~ that cover the eastward extension of the Santa Maria vein. The new claims provide a 600 meter potential extension to the strike length of the vein system and add substantial downdip expansion potential. ~~In August 2017, we also commenced a new drill program targeting extensions of the vein deposit described in the PEA and recent estimate of mineralized material~~continue drilling with the goal of expanding the ~~existing estimate~~resource as funding allows.

El Quevar

In April 2020, we entered into the Earn-in Agreement with Barrick. For a description of ~~mineralized material~~the Earn-In Agreement, see “Our Material Mining Properties—El Quevar” in our 2022 Annual Report. During the earn-in period, in addition to ~~improve~~required exploration spending, Barrick will fund the ~~overall economics reported in the PEA.~~ ~~Nine~~ ~~holes and approximately 1,900 meters have been drilled to date with mineralized intercepts revealed in completed assay results from the first six holes. A total~~holding costs of ~~twelve holes are planned for the drill program and assay results from the remaining six holes already drilled or planned are expected to be available in the fourth quarter 2017.~~

~~We have the right to acquire the Santa Maria property under two separate option agreements representing the total concessions that comprise~~ the property, which will qualify as work expenditures. Barrick will reimburse us for additional payments of $1.4 million, payable through April 2022. The first option agreement, covering concessions acquired in August 2014, requires an additional approximately $0.7 million be paid to acquire a 100% interest in the concessionsexpenses related to ~~that option~~maintaining the exploration camp, which will initially be run by ~~continuing~~us under a service agreement, and which will also qualify as work expenditures. Barrick met the minimum $1.0 million in work expenditures required by the Earn-in Agreement in September 2021. If Barrick elects to ~~make minimum payments of $0.1 in 2018~~terminate the Earn-In Agreement, we will become responsible for future holding costs and $0.2 in each of the years 2019 through 2021. In addition, until the total due under the first option agreement has been paid, the property owners have the right to 50% of any net profits from mining activities from the concessionsexploration spending related to the option, after reimbursement of all costs incurred by us since April 2015, to the extent that such net profit payments exceed the minimum payments. The second option agreement, covering concessions recently acquired in August 2017, requires an additional approximately $0.7 million be paid to acquire a 100% interest in the concessions related to that option by making additional payments of $0.1 million in 2018 and $0.2 million in each of the years 2019 through 2021.

~~El Quevar~~

~~In September 2017, wereceived~~ a permit to dewater the underground mine workings at our El Quevar silver project located in Salta, Argentina, to evaluate the possibility of exploration drilling from underground in conjunction with a current project to re-model the existing silver materialized material at the Yaxtché deposit. Based on the previous mineralized material results and using a higher cutoff grade for silver, we are evaluating the potential to define a smaller but higher grade silver material in the core of the previously defined Yaxtché deposit that could be amenable to potentially profitable underground mining and flotation processing.

~~To date,~~property. At this time, the Company has received US$1.1 million in refunds of previous valued added tax (“VAT”) payments made in Argentina during 2012 and 2013. The refunds, available through certain provisions in the Argentina Mining Investment Law, have been pending for several years, but were only recently approved for payment by the Argentine tax authority. The added cash allows the Company more flexibility in advancingexpects Barrick will continue its exploration ~~projects, particularly at El Quevar.~~program with additional geophysical studies followed by additional drilling.

We continue to hold our El Quevar property on care and maintenance while we conduct the evaluation activities discussed above and remain open to finding a partner to contribute to the funding of further exploration.

Sarita Este / Desierto

~~Rodeo~~

~~During 2016, we completed a 2,080-meter core drilling program at the Rodeo property, approximately 80kilometers west of the Velardeña Properties in Durango Mexico. The results from the program revealed a gold andsilver bearing epithermal vein and breccia system with encouraging gold and silver values over an approximate 50 to70 meter true width. The system is exposed at the top of a northwesterly striking ridge and dips steeply to thenortheast over about one kilometer of strike length. During January 2017, the engineering firm of Tetra Techcompleted an estimate of mineralized material at the Rodeo deposit, prepared pursuant to Canadian NationalInstrument 43-101. We believe this material, as currently identified, could provide additional mined material for ourVelardeña oxide mill following the completion of the Hecla lease, currently set to expire December 31, 2020.~~

~~Table of Contents~~

We have received confirmation of good gold and silver metallurgical recoveries for milled material in initial test work. Bottle roll cyanide leach testing of the high-grade samples resulted in gold extractions of 80 to 86 percent. The gold extraction is size dependent with the lowest extraction at a grind of 100 mesh and the highest extraction at a grind of 200 mesh. Silver extractions ranged from 72 to 76 percent for all tests. The gold and silver readily leached from the samples within 24 hours. Reagent consumption averaged 1.7 kilograms per metric tonne (“kg/mt”) for sodium cyanide and 9.8 kg/mt for lime. Test work also indicates that the material is not suitable for gold and silver recovery by heap leaching.

In 2017, we plan to continue to evaluate the economics of mining the deposit using open pit techniques and processing the material at our Velardeña oxide plant following the termination of the lease of the plant to Minera Hecla.

~~Celaya Farm-out~~

In August 2016, our wholly owned Mexican subsidiary entered into an earn-in agreement with a 100% owned Mexican subsidiary of Electrum Global Holdings, L.P., a privately owned company (together “Electrum”), related to our Celaya exploration property in Mexico. We received an upfront payment of $0.2 million and Electrum agreed to incur exploration expenditures totaling at least $0.5 million within the first year of the agreement, reduced by certain costs Electrum previously incurred on the property since December 2015 in its ongoing surface exploration program. Electrum, at its option, can elect to acquire an undivided 60% interest in a joint venture company to be formed to hold the Celaya project after incurring exploration expenditures totaling $2.5 million during the first three years of the agreement. Electrum would serve as manager of the joint venture. If we elect not to contribute to additional exploration or development expenditures after the initial earn-in period, Electrum, at its option, would have the right to earn an additional 20% interest in the Celaya project, for a total interest of 80%, by incurring an additional $2.5 million of exploration or development expenditures over a second three-year period. Following the second earn-in period we would have the right to maintain our 20% interest or our interest ultimately could be converted into a 10% net profits interest.

Electrum Global Holdings’ Mexican subsidiary, Minera Adularia, has completed 5,600 meters of drilling on the property in seven drill holes in their ongoing drill program. Results to date show intercepts of epithermal quartz vein mineralization with grades for gold, silver, lead and zinc that warrant further drill testing. In three of the seven holes, intercepts of quartz vein material carry gold and silver grades that are within the range of economic interest, if sufficient volumes can be found in a configuration amenable to exploitation.

~~Mogotes~~

In September 2017, we began a 1,500 meter drill program on our Mogotes property on the El Mogote claim located 7 kilometers southeast of the town of Velardeña, Durango, Mexico. The drill program is planned to test an area of silicification and breccias hosted in andesitic volcanic rocks. The altered area is exposed over a strike length of 1.5 kilometers and a width of about 500 meters. The breccias are interpreted to be a combination of fault breccias and hydrothermal breccias associated with strong silicification controlled in part by a northwest striking southwest dipping normal fault that juxtaposes Tertiary volcanics west of the fault against Cretaceous limestone east of the fault. The altered area has a strong geochemical signature of widespread anomalously high arsenic and antimony with erratic values of gold up to 1.8 ppm from surface rock samples.

We plan to drill at least seven holes totaling 1,700 meters in this initial test of the Mogotes East target. Five holes totaling 1,500 meters have already been drilled with assay results pending. The Company is targeting veins and breccias that may be associated with the exposed hydrothermal alteration and anomalous geochemistry, and expects to encounter sulfide mineralization at depths of less than 200 meters below surface.

The Mogotes property was purchased from Silver Standard Resources in 2015 and is wholly owned by one of Golden Minerals’ Mexican subsidiaries, subject to a 2 percent Net Smelter Return royalty to Silver Standard and a pre-existing finder’s fee agreement (2 percent of direct exploration and development expenditures, capped at $365,000).

~~Other Exploration~~

In October 2017 we acquired the right to purchase claims covering the Yoquivo District, Ocampo Municipality, Chihuahua through an option agreement. The Yoquivo District is a past producing, bonanza grade epithermal vein gold and silver district located 35 kilometers southeast of the Ocampo Mining District. We have the right to purchase six claims totaling 1,906 hectares for payment of $0.5 million over four years plus outstanding claim taxes totaling approximately

~~Table of Contents~~

~~$0.1 million. No cash payments to the owner are due until the second anniversary of the agreement. The owner retains a two percent net smelter return royalty capped at $2.0 million.~~

~~In April 2016,~~2019, we entered into an option agreement ~~under~~with Cascadero Minerals Corporation (“Cascadero”) to acquire a 51% interest in the gold/copper Sarita Este concession, located in the northwest portion of the Province of Salta, Argentina, adjacent to the Taca Taca project owned by First Quantum Minerals. The option agreement calls for us to spend a total of $2.5 million over four years including a minimum of 2,000 meters of drilling. We have exceeded the drilling requirement and have spent approximately $3.0 million since entering into the agreement in December 2019. We have

Table of Contents

notified Cascadero of our intention to proceed with the joint venture as 51% owners of the concession. Completion of the joint venture documents and formation of the joint venture company are in progress.

In the fourth quarter of 2021, we completed the first drill program ever conducted at Sarita Este, which ~~Santacruz Silver Mining Ltd. may acquire~~involved drilling 10 diamond drill holes totaling 2,518 meters to explore untested epithermal gold-silver and copper porphyry targets. In January 2022, we announced assay results from the drill program, including the potential of an oxidized gold system. We completed a second drill program in June 2022 designed to offset and further delineate mineralization associated with the gold interval encountered in the first drill program. In August 2022, we released partial results from the second drill program which point to a potentially economic shallow oxidized gold system. Our third drill program, completed in October 2022, returned results confirming that the mineralization at the Sico epithermal targets is concentrated on the eastern flank of the prospect.

The Desierto concessions (Desierto 1 and 2) which are adjacent to and south of the Sarita Este concession are subject to an option agreement with a third-party partial owner and a proposed joint venture agreement also between the Company and Cascadero. The Desierto 1 concession is the object of a legal dispute between the Company and the Salta Ministry of Mines in which the Company is disputing the cancellation of the concession by the province. The dispute is expected to be resolved before the end of 2023.

Santa Maria

In December 2020, we entered into the Option Agreement to sell our interest in ~~certain nonstrategic mineral claims located in~~ the ~~Zacatecas Mining District, Zacatecas, Mexico for a series of payments totaling $1.5 million. Santacruz paid~~Santa Maria properties to Fabled. Pursuant to the ~~Company $0.2 million on signing~~Option Agreement, during the ~~agreement and additional payments of $0.2 million in October 2016, $0.3 million in May 2017 and one half~~Exercise Period, Fabled was obligated to pay to each of the ~~October 2017 installment~~owners of ~~$0.3 million. To maintain its option and acquire~~ the ~~Zacatecas Properties, Santacruz is~~Concessions (the “Owners”) any remaining required ~~to pay the remaining one half of $0.3 million already~~payments due in October 2017 and the final amount of $0.5 million due in April 2018. Santacruz was not able to make the full October 2017 payment as scheduled ad we have granted Santacruz an extension of time to make the payment. Santacruz has the right to terminate the option agreement at any time, and the agreement could be terminated, at our option, if Santacruz fails to make subsequent payments when due.

~~Sale of Mining Equipment~~

In August 2016, we sold certain mining equipment consisting of two haul trucks, two scoop trams and a compressor to Minera Indé, an indirect subsidiary of Sentient, a related party, for $687,000. The equipment sold was excess equipment held at our Velardeña Properties that we did not expect to use. We used a third party consultant with experience in the used mining equipment market in Mexico to determine a fair value. We believe the price paid was at least equal to the ~~fair market value of~~Owners pursuant to the ~~equipment had it been sold through auction or in~~various underlying option agreements between the ~~open market. We received 10% of the sales price at the closing of the sale in August, with the additional 90%, plus interest on the unpaid balance at an annual rate of 10%, due in February 2017.~~

~~With the approval of a Special Committee of the Company’s Board of Directors,~~Owners and the Company, and ~~Minera Indé amended~~to make all payments and perform all other requirements needed to maintain the ~~original equipment sale~~Concessions in good standing. Fabled did not make the payment due on ~~March~~January 31, ~~2017~~2023, and we issued a notice of default under the Option agreement. Fabled did not cure the default as required within 5 days; therefore, we have taken back the property as allowed under the Option Agreement.

The Company has entered into a non-binding agreement to ~~include~~sell the ~~sale~~Santa Maria concessions to a private third party and, if the transaction proceeds, we anticipate that we will close in the fourth quarter of an additional piece of excess equipment for $185,000 and extend the time for payment relating to the original equipment sale. Upon execution of the amendment, the Company received an additional payment of $100,000. The remaining principal and interest balance, plus additional interest on the unpaid balance at an annual rate of 10%, was amended to be due in August 2017. On May 2, 2017, we received approximately $750,000 from Minera Indé as payment in full for the remaining balance due related to the equipment sale, including interest through that date. 2023.

Financial Results of Operations

For the results of continuing operations discussed below, we compare the results from operations for the three ~~and nine~~ months ended September 30, ~~2017~~2023, to ~~the results from operations for the three and nine months ended September 30, 2016.~~

~~Three Months Ended September 30, 2017~~

~~Revenue from oxide plant lease.~~ ~~We recorded revenue of $1.8 million and $1.7 million during~~ the three months ended September 30, ~~2017 and 2016, respectively, related~~2022.

Three Months Ended September 30, 2023

Revenue from the sale of metals. In addition to the ~~lease~~sales of ~~our~~doré from Rodeo, beginning in April of 2023 we also sold three types of concentrates which were produced from Velardeña ~~oxide plant~~material that had been mined in 2022 as part of the test mining to analyze the potential restart of the Velardeña ~~third party.~~Properties. We also sold slag remaining from previous doré sales and doré production at Plant 2.

●

Doré Sales - We recorded $2.1 million in revenue related to gold and silver in doré for the three months ended September 30, 2023, and $5.3 million for the three months ended September 30, 2022. Lower revenue in 2023 resulted from 2,046 fewer gold equivalent ounces sold partially offset by a slightly higher realized price of $1,931 per ounce for the three months ended September 30, 2023, compared to $1,703 per ounce for the three months ended September 30, 2022. Fewer gold ounces were sold in the three months ended September 30, 2023, compared to the three months ended September 30, 2022, due to the lower amount and grade of the material processed mainly attributed to the cessation of mining at Rodeo in the second quarter 2023.

●

Concentrate Sales – We recorded $0.2 million in the three months ended September 30, 2023 from the final settlement of previous sales of gold-rich pyrite concentrate, silver-rich lead concentrate and zinc concentrate. There were no concentrate sales in the three months ended September 30, 2022.

~~Oxide plant lease costs.~~ ~~We recorded $0.6 million and $0.5 million~~

Table of ~~costs~~Contents

●

Slag Sales – We recorded $0.2 million in revenue related to the gold and silver in slag that was sold to a refiner in the United States in the three months ended September 30, 2023. There were no slag sales in the three months ended September 30, 2022.

Cost of metals sold. For the ~~oxide plant lease during the three-month periods~~three months ended September 30, ~~2017~~2023 and ~~2016,~~2022, we recorded $3.3 million and $4.4 million of cost of metals sold, respectively. ~~The~~Lower costs ~~consist~~in 2023 compared to 2022 were due primarily to lower mining costs as mining operations at Rodeo concluded at the end of ~~reimbursable labor and utility costs which for accounting purposes are also included in revenue from the oxide plant lease.~~June 2023.

Exploration expense. Our exploration expense, including ~~work at the Santa Maria, Rodeo and Mogotes properties,~~ property holding costs and allocated administrative expenses, totaled ~~$1.0~~$0.7 million and $2.4 million for the three months ended September 30, ~~2017, as compared~~2023 and 2022, respectively. The lower exploration expense for 2023 is primarily related to ~~$0.9 million for~~the absence of costs related to increase the capacity of the tailings facility at Velardeña incurred in the three months ended September 30, ~~2016. Exploration expense for both years was~~2022 which were not incurred primarily in Mexico. The higher exploration expenses in 2017 are primarily related to drilling activity and property acquisition payments occurring at the Santa Maria property, Mogotes and other properties.

~~Velardeña shutdown and care and maintenance costs. We recorded $0.4 million and $0.5 million for~~during the three months ended September 30, ~~2017~~2023.

Velardeña care and ~~2016,~~maintenance costs. We recorded $0.3 million and $0.4 million for the three-month periods ended September 30, 2023 and 2022, respectively, for expenses related to ~~shut down and~~ care and maintenance at our Velardeña Properties as the result of the suspension of mining and processing activities in November 2015.

~~Table of Contents~~

El Quevar project expense. ~~During~~We incurred $0.1 million and $0.2 million for the ~~three months~~three-month periods ended September 30, ~~2017 we incurred $0.2 million primarily~~2023 and 2022, respectively, related to holding and evaluation costs for the Yaxtché deposit at our El Quevar project in Argentina. During the three months ended September 30, ~~2016 we recorded net negative expense of~~2023 and 2022, approximately $0.0 million and $0.1 million, ~~primarily related to a reversal~~respectively, of ~~an accrual for Argentina equity tax recorded during the 2015 period resulting~~costs actually incurred were offset by reimbursements from ~~an audit of certain prior years.~~Barrick as discussed above.

Administrative expense. Administrative expenses totaled ~~$0.7~~$1.1 million ~~for the three months ended September 30, 2017 compared to~~and $0.9 million for the three months ended September 30, ~~2016.~~2023 and 2022, respectively. Administrative expenses, including costs associated with being a public company, are incurred primarily by our corporate activities in support of the Rodeo Property, Velardeña Properties, El Quevar project and our exploration portfolio.

Stock-based compensation. During the three months ended September 30, 2023 and 2022, we incurred approximately $0.1 million and $0.2 million, respectively, of expense related to stock-based compensation. Stock-based compensation varies from period to period depending on the number and timing of shares granted, the type of grant, the market value of the shares on the date of grant and other variables.

Reclamation and accretion expense. During each of the three months ended September 30, 2023 and 2022, we incurred approximately $0.1 million of reclamation expense related to the accretion of an asset retirement obligation at the Velardeña Properties and environmental liabilities associated with the Rodeo operation.

Other operating income, net. We recorded $0.5 million of other operating income for the three months ended September 30, 2023 primarily related to the sale of non-core assets. For the three months ended September 30, 2022, we recorded $0.4 million of other operating income primarily related to the amortization of deferred income related to the option agreement for the sale of the Santa Maria property described in our 10-K report for the year ended December 31, 2022.

Depreciation, depletion and amortization. During each of the three months ended September 30, 2023 and 2022, we incurred depreciation, depletion and amortization expense of approximately $0.1 million.

Interest and other expense, net. We recorded a nominal amount of interest and other expense, net for each of the three months ended September 30, 2023 and 2022.

Litigation settlement expense. During the three months ended September 30, 2023, we recorded approximately $0.3 million to settle the Unifin matter discussed below in item 1 of Part II. During the three months ended September 30, 2022, we recorded approximately $0.0 million.

Gain (loss) on foreign currency losses. During the three months ended September 30, 2023, we recorded a nominal amount of foreign exchange gains. During the three months ended September 30, 2022, we recorded $0.2 million of foreign exchange gains. Foreign currency gains and losses are primarily related to the effect of currency fluctuations on monetary transactions incurred by our foreign subsidiaries that are denominated in currencies other than U.S. dollars.

Table of Contents

Income taxes. We recorded a zero tax benefit for the three months ended September 30, 2023. We recorded a nominal amount for an income tax benefit for the three months ended September 30, 2022.

Nine Months Ended September 30, 2023

Revenue from the sale of metals. As discussed above, in addition to the sales of doré from Rodeo, beginning in April of 2023 we also sold three types of concentrates which were produced from Velardeña material that had been mined in 2022 as part of the test mining to analyze the potential restart of the Velardeña Properties. We also sold slag remaining from previous doré sales and doré production at Plant 2.

●

Doré Sales - We recorded $9.7 million in revenue related to gold and silver in doré for the nine months ended September 30, 2023, and $18.7 million for the nine months ended September 30, 2022. Lower revenue in 2023 resulted from 5,239 fewer gold equivalent ounces sold partially offset by a slightly higher realized price of $1,930 per ounce for the nine months ended September 30, 2023, compared to $1,825 per ounce for the nine months ended September 30, 2022. Fewer gold ounces were sold in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, due to the lower amount and grade of material processed mainly attributed to the cessation of mining at Rodeo in the second quarter 2023.

●

Concentrate Sales – We recorded $1.5 million in the nine months ended September 30, 2023 from the sale of 656 tonnes of gold-rich pyrite concentrate, 118 tonnes of silver-rich lead concentrate and 63 tonnes of zinc concentrate. There were no concentrate sales in the nine months ended September 30, 2022.

●

Slag Sales – We recorded $0.5 million in revenue related to the gold and silver in slag that was sold to a refiner with operations in Mexico and United States in the nine months ended September 30, 2023. There were no slag sales in the nine months ended September 30, 2022.

Cost of metals sold. For the nine months ended September 30, 2023 we recorded $11.2 million of cost of metals sold, and we recorded $13.3 million during the nine months ended September 30, 2022 for cost of metals sold. Lower costs in 2023 compared to 2022 were due primarily to lower mining costs related to cessation of mining at Rodeo at the end of June along with lower processing costs related to lower cyanide consumption and lower grinding costs due to a change in the metallurgy of the lower grade material processed in 2023.

Exploration expense. For the nine months ended September 30, 2023 we incurred exploration expense of $2.9 million. This included $0.6 million for work on the tailings dam at Plant 2, $0.3 million for general expenses in Argentina and $2.0 million for property holding costs and other allocated administrative expenses. For the nine months ended September 30, 2022, we incurred exploration expense of $7.0 million. The higher costs in 2022 were comprised of $1.2 million of test mining and optimization of the bio-oxidation plant design conducted at Velardeña, $1.1 million of exploration at Yoquivo, $1.0 million at our Sarita Este property in Argentina, $0.8 million at our Rodeo operation, $0.6 million on tailing capacity expansion to support Rodeo production and $2.3 million in other general exploration expenses.

El Quevar project expense. For each of the nine months ended September 30, 2023, and 2022, we incurred $0.4 million related to holding and evaluation costs for the Yaxtché deposit at our El Quevar project in Argentina. During the nine months ended September 30, 2023, and 2022, approximately $0.1 million and $0.7 million of costs were reimbursed by Barrick, respectively as discussed above.

Velardeña care and maintenance costs. We recorded $0.9 million and $0.8 million for the nine months ended September 30, 2023 and 2022, respectively, for expenses related to shut down and care and maintenance at our Velardeña Properties as a result of the suspension of mining and processing activities in November 2015.

Administrative expense. Administrative expenses totaled $3.7 million and $3.5 million for the nine months ended September 30, 2023 and 2022, respectively. Administrative expenses, including costs associated with being a public company, are incurred primarily by our corporate activities in support of the Rodeo and Velardeña Properties, El Quevar project and our exploration portfolio. The ~~$0.7~~$3.7 million of administrative expenses we incurred during the ~~third quarter 2017~~nine months of 2023 is comprised of ~~$0.4~~$1.6 million of employee compensation and directors’ fees, ~~$0.1~~$1.1 million of professional fees and ~~$0.2~~$1.0 million of insurance, rents, travel expenses, utilities, and other office costs. The ~~$0.9~~$3.5 million of administrative

Table of Contents

expenses we incurred during the ~~third quarter 2016~~nine months of 2022 is comprised of ~~$0.4~~$1.5 million of employee compensation and directors’ fees, ~~$0.3~~$0.9 million of professional fees and ~~$0.2~~$1.1 million of insurance, rents, travel expenses, utilities, and other office costs.

~~Stock based~~Stock-based compensation. During the ~~three~~nine months ended September 30, ~~2017 and 2016~~2023 we incurred ~~a nominal reduction~~approximately $0.3 million of expense related to ~~expense and~~stock-based compensation. During the nine months ended September 30, 2022, we incurred approximately $0.5 million of expense ~~respectively,~~ related to ~~stock based~~stock-based compensation. Stock based compensation varies from period to period depending on the number and timing of shares granted, the type of grant, the market value of the shares on the date of grant and other variables. The 2017 and 2016 third quarter stock based compensation amounts include $0.1 million reduction to expense and $0.4 million of expense, respectively, related to KELTIP grants made to two officers (see Note 14 to the consolidated financial statements filed as part of this Form 10-Q for a discussion of KELTIP grants). The 2017 reduction to expense resulted from marking-to-market the outstanding KELTIP grants.

Reclamation and accretion expense. During each of the ~~three months~~nine-month periods ended September 30, ~~2017~~2023 and ~~2016~~2022 we incurred approximately ~~$49,000 and $47,000~~$0.2 million of reclamation expense ~~respectively,~~ related to the accretion of an asset retirement obligation at the Velardeña Properties.

Other operating income (expense), net. We recorded ~~$1.0 million and $1.3~~$0.6 million of other operating income for the ~~three~~nine months ended September 30, 2017 and 2016, respectively. The net amount for the 2017 period consists primarily of a refund of value added tax from Argentina (see Note 7). The net amount for the 2016 period consists primarily of net gains2023 mainly related to the sale of ~~certain assets and non-strategic exploration properties.~~

~~Depreciation, depletion and amortization.~~ ~~During~~non-core assets. We recorded $1.3 million in the ~~three~~nine months ended September 30, ~~2017~~2022 mainly related to the amortization of deferred income related to the option agreement for the sale of the Santa Maria property.

Depreciation, depletion and ~~2016 we incurred~~amortization. We recorded $0.4 million and $0.2 million during the nine-month periods ended September 30, 2023 and 2022, respectively, for depreciation, depletion and amortization expense of $0.1 million and $0.3 million, respectively. The decrease in depreciation, depletion and amortization expense during the 2017 period is primarily the result of certain equipment at our Velardeña Properties having been fully depreciated.expense.

Interest and other ~~income.~~expense, net. We recorded a nominal amount of interest and other ~~income~~expense, net for each of the ~~three~~nine-month periods ended September 30, 2023 and 2022.

Litigation settlement expense. During the nine months ended September 30, ~~2017 and 2016 respectively, primarily related~~2023 we recorded approximately $0.3 million to ~~cash balances held~~expense to settle the Unifin matter discussed below in ~~banks.~~

~~Warrant derivative (loss) gain.~~item 1 of Part II. During the ~~three~~nine months ended September 30, ~~2016~~2022 we recorded ~~a loss of~~ approximately ~~$0.5~~$0.0 million ~~related~~ to an increase in the fair value of the liability recorded for warrants to acquire the Company’s common stock (see Note 12 of our consolidated financial statements filed as part of this Form 10-Q). We did not record any warrant derivative gains or losses during 2017 following a change in accounting principle and the subsequent reclassification of the warrant liabilities to equity retroactively to the beginning of 2017 (see Note 3 to the consolidated financial statements filed as part of this Form 10-Q).expense.

Gain ~~(Loss)~~(loss) on foreign currency. We recorded ~~a nominal~~$0.1 million and $0.3 million in foreign currency ~~loss and~~ gain for the ~~three~~nine months ended September 30, ~~2017~~2023 and ~~2016~~2022, respectively. Foreign currency gains and losses are primarily related to the effect of currency fluctuations on monetary ~~assets net of liabilities held~~transactions incurred by our foreign subsidiaries that are denominated in currencies other than US dollars.

Income taxes. We recorded ~~no income~~ tax expense ~~or benefit for the three months ended September 30, 2017 and September 30, 2016.~~

~~Table~~ of ~~Contents~~

~~Nine Months Ended September 30, 2017~~

~~Revenue from oxide plant lease.~~ ~~We recorded revenue of $5.1 million and $4.8 million during the nine months ended September 30, 2017 and 2016, respectively, related to the lease of our Velardeña oxide plant to a third party.~~

~~Oxide plant lease costs.~~ We recorded $1.7 million and $1.5 million of costs related to the oxide plant lease during the nine month periods ended September 30, 2017 and 2016, respectively. The costs consist primarily of reimbursable labor and utility costs which for accounting purposes are also included in revenue from the oxide plant lease.

~~Exploration Expense.~~ ~~Our exploration expense, including work at the Santa Maria and Rodeo properties, property holding costs and allocated administrative expenses, totaled $2.0 million~~less than $1,000 for the nine months ended September 30, 2017, as compared to $2.9 million for the nine months ended September 30, 2016. Exploration expense for both years was incurred primarily in Mexico. The higher exploration expenses in 2016 are primarily related to test mining activity occurring at the Santa Maria property in 2016 and drilling at the San Luis del Cordero property.

~~Velardeña shutdown and care and maintenance costs~~. We recorded $1.1 million and $1.6 million for the nine months ended September 30, 2017 and 2016, respectively, for expenses related to shut down and care and maintenance at our Velardeña Properties as the result of the suspension of mining and processing activities in November 2015. The 2016 expense included certain one-time repair and maintenance costs associated with the plant shut down.

~~El Quevar project expense.~~ During the nine months ended September 30, 2017 and 2016 we incurred $0.5 million and $0.3 million, respectively, primarily related to holding costs for the Yaxtché deposit at our El Quevar project in Argentina. The amount for the 2017 period is higher than the same period in 2016 due to an increase in evaluation activities at the El Quevar project, as discussed above.

~~Administrative expense.~~ Administrative expenses totaled $2.6 million for the nine months ended September 30, 2017 compared to $3.1 million for the nine months ended September 30, 2016. Administrative expenses, including costs associated with being a public company, are incurred primarily by our corporate activities in support of the Velardeña Properties, El Quevar project and our exploration portfolio. The $2.6 million of administrative expenses we incurred during the nine months ended September 30, 2017 is comprised of $1.1 million of employee compensation and directors’ fees, $0.7 million of professional fees and $0.8 million of insurance, rents, travel expenses, utilities and other office costs. The $3.1 million of administrative expenses we incurred during the nine months ended September 30, 2016 is comprised of $1.1 million of employee compensation and directors’ fees, $1.2 million of professional fees and $0.8 million of insurance, rents, travel expenses, utilities and other office costs.

~~Stock based compensation.~~ During the nine months ended September 30, 2017 we incurred $0.3 million of expense related to stock based compensation compared to $0.7 million for nine months ended September 30, 2016. Stock based compensation varies from period to period depending on the number and timing of shares granted, the type of grant, the market value of the shares on the date of grant and other variables. The 2017 and 2016 nine-month stock based compensation amounts include $0.2 million and $0.4 million, respectively, related to KELTIP grants made to two officers (see Note 14 to the consolidated financial statements filed as part of this Form 10-Q for a discussion of KELTIP grants).

~~Reclamation and accretion expense.~~ During each of the nine months ended September 30, 2017 and 2016 we incurred approximately $0.1 million of reclamation expense related to the accretion of an asset retirement obligation at the Velardeña Properties.

~~Other operating income, net.~~ We recorded $1.8 million and $1.6 million of other operating income for the nine months ended September 30, 2017 and 2016, respectively. The net amount for the 2017 period consists primarily of a refund of value added tax from Argentina (see Note 7 to the consolidated financial statements filed as part of this Form 10-Q), net gains related to the sale of equipment to Minera Indé, discussed above, a gain related to the reduction of the asset retirement obligation liability at our Velardeña Properties and the sale of certain assets and non-strategic exploration properties. The net amount for the 2016 period is primarily related to the sale of certain assets and non-strategic exploration properties.

~~Depreciation, depletion and amortization.~~ During the nine months ended September 30, 2017 we incurred depreciation, depletion and amortization expense of $0.5 million compared to $1.3 million for the nine months ended September 30, 2016. The decrease in depreciation, depletion and amortization expense during the 2017 period is primarily the result of certain equipment at our Velardeña Properties having been fully depreciated.

~~Table of Contents~~

~~Interest and other income.~~2023. We recorded a nominal amount of interest and other income for the nine months ended September 30, 2017, including accrued interest related to the sale of equipment to Minera Indé, discussed above. During the nine months ended September 30, 2016 we recorded only a nominal amount of interest and other income primarily related to cash balances held in banks.

~~Warrant derivative (loss) gain.~~ During the nine months ended September 30, 2016 we recorded a loss of approximately $2.8 million related to an increase in the fair value of the liability recorded for warrants to acquire the Company’s common stock (see Note 12 of our consolidated financial statements filed as part of this Form 10-Q). We did not record any warrant derivative gains or losses during 2017 following a change in accounting principle and the subsequent reclassification of the warrant liabilities to equity retroactively to the beginning of 2017 (see Note 3 to the consolidated financial statements filed as part of this Form 10-Q).

~~Derivative loss.~~ For the nine months ended September 30, 2016 we recorded a $0.8 million loss related to the fair value adjustment to the beneficial conversion feature of the Sentient Note, which constitutes an imbedded derivative (see Note 12 of our consolidated financial statements filed as part of this Form 10-Q). There were no such amounts recorded for the nine months ended September 30, 2017 as the Sentient Note was fully converted and no longer outstanding as of September 30, 2016.

~~Loss on foreign currency.~~ We recorded a nominal foreign currency loss and a $0.1 million foreign currency loss for the nine months ended September 30, 2017 and 2016 respectively. Foreign currency gains and losses are primarily related to the effect of currency fluctuations on monetary assets net of liabilities held by our foreign subsidiaries that are denominated in currencies other than US dollars.

~~Income taxes.~~ ~~We recorded no income tax expense or benefit for the nine months ended September 30, 2017. We recorded a nominal income~~$90,000 tax benefit for the nine months ended September 30, ~~2016 related to mark-to-market held for sale investment gains recorded as other comprehensive income.~~ 2022.

Liquidity, Capital Resources and Going Concern

2023 Liquidity Forecast and Going Concern Qualification

We do not currently have sufficient resources to meet our expected cash needs during the twelve months ended September 30, 2024. At September 30, ~~2017, our aggregate~~2023, we had current assets of approximately $5.9 million, including cash and cash equivalents ~~totaled $5.0~~of approximately $1.6 million. On the same date, we had accounts payable and other current liabilities of approximately $5.6 million. Because we have ceased mining at the Rodeo mine, our only near-term opportunity to generate cash flow from mining to support continued operations is the Velardeña mine.

On November 8, 2023, the Company closed the November 2023 Offering which raised $4.2 million ~~$2.4~~and netted approximately $3.8 million ~~greater than~~after expenses (see Note 23 in the ~~$2.6~~interim condensed consolidated financial statements). These funds were anticipated in the Company’s forecast. Also included in the Company’s forecast is the projected receipt of additional capital of $3.0 to $4.5 million in similar assets held at December 31, 2016. The net increase is due in part from the following expenditures and cash inflows for the nine months ended September 30, 2017. Expenditures totaled $6.2 million from the following:

~~$2.0 million in exploration expenditures, including work at the Santa Maria, Mogotes and Rodeo properties;~~

~~$1.1 million in care and maintenance costs at the Velardeña Properties;~~

~~$0.5 million in evaluation activities, care and maintenance and property holding costs at the El Quevar project; and~~

~~$2.6 million in general and administrative expenses.~~

~~The foregoing expenditures were offset by cash inflows of $8.6 million from the following:~~

~~$3.4 million of net operating margin received pursuant to the oxide plant lease (defined as oxide plant lease revenue less oxide plant lease costs);~~

~~$1.9 million from Hecla comprised of $1.0 million for an~~ option to extend the oxide plant lease for an additional period of up to two years and $1.0 million for the purchase 1.8 million shares of the Company’s common stock issued at a price of $0.55 per share, less $0.1 million in legal and stock exchange issuance costs;

~~$1.1 million~~ ~~in refunds of previous VAT payments made in Argentina during 2012 and 2013~~;

~~Table of Contents~~

~~$0.8 million from final payments related to the sale of excess mining equipment to Minera Indé;~~

~~$0.7 million of net proceeds received from the issuance of our common stock under the ATM Program;~~

~~$0.3 million from the farm out of certain nonstrategic mineral claims to Santacruz;~~

~~$0.2 million of net proceeds from the sale of other nonstrategic exploration properties and mining equipment; and~~

~~$0.2 million from a decrease in working capital.~~

In addition to our $5.0 million cash balance at September 30, 2017, we also expect to receive approximately $4.6 million in net operating margin from the lease of the oxide plant and $0.8 million from the aforementioned exploration property farm out during the next ~~twelve month~~twelve-month period ending September 30, ~~2018. With~~2024. In order to commence and maintain production at Velardeña, the ~~transactions referred~~Company expects to ~~above and if no~~spend approximately $3.0 to $3.5 over the first five months of production primarily for additional ~~sales of common stock under~~underground development, which is included in the ATM Program occur, we project we would end 2017 with a cash balance of approximately $3.5 million and end September 30, 2018 with a cash balance of approximately $2.5 million based on the following forecasted expenditures during the next twelve months ending September 30, 2018:

Approximately $2.0 million on exploration activities and property holding costs related to our portfolio of exploration properties located primarily in Mexico, including project assessment and evaluation costs relating to Santa Maria, Rodeo, Mogotes and other properties;

~~Approximately $1.5 million at the Velardeña Properties for care and maintenance;~~

~~Approximately $1.0 million at the El Quevar project to fund ongoing exploration and evaluation activities, care and maintenance and property holding costs; and~~

~~Approximately $3.4 million on general and administrative costs.~~

capital forecast discussed above. The actual amount of ~~cash that we receive or the expenditures that we incur~~additional capital inflows required during the ~~remainder of 2017 and the first three quarters of 2018 and the projected cash balances at December 31, 2017 and~~twelve-month period ending September 30, ~~2018~~2024 may vary significantly from the amounts specified above and will depend on a number of factors, including variations ~~from~~in the anticipated ~~care and maintenance~~administrative costs, costs to restart Velardeña, costs at ~~the Velardeña Properties~~El Quevar, and costs for continued exploration, project assessment, and ~~development at~~advancement of our other exploration ~~properties, including~~properties. Assuming that we are

Table of Contents

successful in restarting production and that we meet our production objectives at the Velardeña Properties, cash flow from Velardeña is expected to be positive by the end of the second quarter of 2024. Additional capital inflows may take the form of non-core asset sales (as the one described below), equity financing activities, debt financing, production-based financing (such as streaming or royalty financing), collection of our outstanding VAT receivable, or otherwise. After the November 2023 Offering, the Company’s available shares authorized but not issued, outstanding or reserved are approximately 2.2 million shares. Should the Company desire to make future stock offerings of more than 2.2 million shares, the number of authorized shares will need to be increased which will require shareholder approval.

In regards to the sale of non-core assets, we executed a non-binding letter of intent for the sale of our Santa Maria ~~Mogotes, Rodeo~~property for a total consideration consisting of (i) initial cash proceeds of $1.5 million (plus an additional $0.24 million in VAT payment that we would retain) and ~~El Quevar. Moreover, if revenues~~(2) a 1.5% net smelter return royalty on the Santa Maria concession up to a cap of $1.0 million (which may be purchased by the potential buyer from ~~our oxide plant lease~~us for $0.5 million at any time prior to the commencement of commercial production on the Santa Maria property). If that transaction is consummated, the funds would likely be received in November 2023 or ~~payments from the exploration farm out agreement are less than anticipated, we may reduce our planned expenditures accordingly.~~later. We have also held discussions with various financing parties with regard to equity and/or debt financing as well as streaming or royalty arrangements involving future production at Velardeña.

The interim condensed consolidated financial statements have been prepared on a going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the normal course of business. However, as noted above, our continuing long-term operations ~~are~~will be dependent upon our ability to secure sufficient funding ~~and~~ to generate future profitable operations. The underlying value and recoverability of the amounts shown as property, plant and equipment in our interim condensed consolidated financial statements are dependent on our ability to continue to generate positive cash flows from operations and to continue to fund ~~exploration~~general administrative, and ~~development~~exploration activities that would lead to additional profitable mining and processing activities or to generate proceeds from the disposition of property, plant and equipment. ~~There can be no assurance that we will be successful in generating future profitable operations or securing additional funding in~~

The ability of the ~~future~~Company to maintain a positive cash balance for a period of twelve months beyond the filing date of this Quarterly Report on ~~terms acceptable~~Form 10-Q is dependent upon its ability to ~~us or at all. We believe the continuing~~generate sufficient cash flow from operations, collect VAT accounts receivable from the ~~lease~~Mexican government, reduce expenses, sell non-core assets, and raise sufficient funds through equity or external sources. These material uncertainties cast significant doubt on the Company’s ability to continue as a going concern. Therefore, the Company cannot conclude that substantial doubt does not exist as to the Company’s ability to continue as a going concern for the twelve months following the filing date of this Quarterly Report on Form 10-Q. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or liabilities which might be necessary should the Company not continue as a going concern.

2023 Liquidity Discussion

At September 30, 2023, our aggregate cash and cash equivalents totaled $1.6 million, compared to the $4.0 million in similar assets held at December 31, 2022. The September 30, 2023 decrease is the result of the ~~oxide plant~~following expenditures and ~~prior asset dispositions make it probable that we will have sufficient~~ cash ~~to meet our financial obligations and continue our business strategy beyond one year from the filing of our consolidated financial statements~~inflows for the ~~period~~nine months ended September 30, ~~2017.~~ 2023. Expenditures totaled $8.6 million from the following:

●

$2.9 million in exploration expenditures;

●

$0.9 million in care and maintenance costs at the Velardeña Properties;

●

$0.4 million in care and maintenance costs at the El Quevar project, net of reimbursements from Barrick;

●

$3.7 million in general and administrative expenses; and

●

$0.7 million of net operating margin from the Rodeo operation (defined as revenue from the sale of metals less the cost of metals sold)

The above expenditures were offset by cash inflows of $6.2 million from the following:

●

$1.2 million of net operating margin from sales of concentrate produced from Velardeña material mined in 2022;

Table of Contents

●

$1.8 million, net of fees from our ATM Program (as further described in Note 16);

●

$1.9 million, net of fees from the Transactions (as further described in Note 16); and

●

$1.3 million from changes in working capital (mainly due to a decrease in inventory associated with the end of operations at Rodeo.)

Recent Accounting Pronouncements

~~In July 2017,~~There were no new accounting pronouncements issued during 2023 that would affect the ~~FASB issued ASU 2017-11,~~ “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part 1) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Non public Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception” (“ASU 2017-11”). Part I relates to the accounting for certain financial instruments with down round features in Subtopic 815-40, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception

~~Table of Contents~~

from derivative accounting. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced based on the pricing of future equity offerings. An entity still is required to determine whether instruments would be classified as equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities. For us, ASU 2017-11 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted, including in an interim period. We early adopted ASU 2017-11 during the interim period ended September 30, 2017 (see Note 3 of our consolidated financial statements filed as part of this Form 10-Q).

~~In March 2016, the FASB issued ASU 2016-08,~~ “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”), which clarifies principal versus agent when another party, along with the entity, is involved in providing a goodCompany or ~~service to a customer. Topic 606,~~

In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”), which will require lessees to recognize a right-of-use asset and a lease liability for all leases that are not short-term in nature. For a lessor, the accounting applied is also largely unchanged from previous guidance. The new rules will be effective for us in the first quarter of 2019. We do not anticipate early adoption. We do not expect the adoption of ASU 2016-02 to materially change the amounts related to leases that are currently recorded as none of its operating leases are material and therefore we do not expect the adoption to have a material impact on ~~our~~its consolidated financial position or results of operations.

In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which amended its standards related to the accounting of certain financial instruments. This amendment addresses certain aspects of recognition, measurement, presentation and disclosure. Specifically, available for sale investments will not run through other comprehensive income. The new rules will become effective for annual and interim periods beginning after December 15, 2017. Early adoption is not permitted. We are in the process of evaluating the impact the amendment will have on our consolidated financial position or results of operations.

In May 2014, FASB and the International Accounting Standards Board issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized and the related cash flows. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017; early adoption is not permitted. ASU 2014-09 was originally effective December 15, 2016 but ASU 2015-14 deferred the effective date by one year. As our current accounting practices per the guidance of ASU 2014-09 are comparable to the requirements of ASU 2014-09, we do not expect the adoption of this update to result in a material impact to our consolidated financial position or results of operations.

Forward-Looking Statements

Some information contained in or incorporated by reference into this Quarterly Report on Form 10-Q may contain forward-looking ~~statements.~~statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable securities laws. These statements include comments relating toto: (i) our anticipated near-term capital needs, and potential sources of capital; (ii) our plans ~~expectations and assumptions concerning the oxide plant lease,~~for a restart of mining activities at Velardeña, including ~~the expected term, anticipated revenues, and potential future tailings expansion; the Santa Maria property, including~~ ~~the PEA results (including life of mine and production expectations), and other~~our expectations regarding future commodity prices and concentrate sales terms, the ~~project, including future drilling~~results of our internal cash flow forecast, and our expectation regarding the timing for restart; (iii) our plans ~~timing~~regarding further advancement of ~~initial drill results, expansion potential for the existing deposit and general cost expectations; the Rodeo property, including~~ ~~the Company's general evaluation plans and cost expectations; the Celaya property, including farm-out terms and possible future drill testing; the Mogotes property, including future drilling plans and evaluation activities;~~ the El Quevar project and reimbursements paid by Barrick under the Earn-in Agreement, to fund the El Quevar project; (iv) information regarding the Yoquivo property, including ~~timing~~the estimates included in our initial mineral resource study, our future evaluation and drilling plans, information gained from drilling activities, and exploration activities; (v) our plans to defend against claims by Unifin and a potential settlement agreement between Minera William and Unifin; (vi) expectations pertaining to the recovery of ~~evaluation activities; our financial outlook~~VAT refunds from the Mexican government; (vii) projected revenue and spending for the ~~remainder of 2017~~twelve months ending September 30, 2024; and ~~through the end of the third quarter 2018, including anticipated income and expenditures during those periods; expected need for external financing and~~(viii) statements concerning our financial condition, business strategies and business and legal ~~risks.~~risks and our financial outlook for 2023, including anticipated expenditures and cash inflows during the year.

~~The~~We use ~~of any of~~ the words “anticipate,” ~~“continues,~~“continue,” “likely,” “estimate,” “expect,” “may,” “believe,” “will,” “project,” “should,” “could,” “believe” and similar expressions ~~are intended~~(including negative and grammatical variations) to identify ~~uncertainties. We~~forward-looking statements. Although we believe the expectations and assumptions reflected in those forward-looking statements are ~~reasonable. However,~~reasonable, we cannot assure you that these expectations and assumptions will prove to be correct. ~~Actual~~Our actual results could differ materially from those ~~anticipated~~expressed or implied in these forward-looking statements as a result of the factors set forth below and other factors set forth in, or incorporated by reference into this report:

~~Table of Contents~~

●

Lower revenue than anticipated from the oxide lease, which could result from delays or problems at the third party’s mine or at the oxide plant, permitting problems at the third party’s mine or the oxide plant, delays in constructing additional tailings capacity at the oxide plant, earlier than expected termination of the lease or other causes;

~~Higher than anticipated~~ ~~care and maintenance costs at the Velardeña Properties in Mexico or at El Quevar in Argentina~~;

~~Continued decreases or insufficient increases in silver and gold prices~~;

~~Whether~~whether we are able to raise the necessary capital required to continue our business on terms acceptable to us or at ~~all,~~all;

●

higher than anticipated care and maintenance costs at the ~~likely negative effect of continued low~~Properties in Mexico or at El Quevar in Argentina;

●

decreases in silver and gold ~~prices or unfavorable exploration results~~;

prices;

●

~~Unfavorable~~risks related to our exploration properties, including unfavorable results from exploration ~~at the Santa Maria, Rodeo, Mogotes or other exploration properties~~ and whether we will be able to advance ~~these or other~~our exploration ~~properties;~~

properties

●

Risks related to the El Quevar project in Argentina, including unfavorable results from our evaluation activities, the feasibility and economic viability and unexpected costs of maintaining the project, and whether we will be able to find a joint venture partner to further advance the project;

~~Variations~~variations in the nature, quality and quantity of any mineral deposits that are or may be located at the Velardeña Properties or ~~the Company’s~~our exploration properties, changes in interpretations of geological information, ~~and~~ unfavorable results of metallurgical and other tests,;

and the timing and scope of our further evaluation activities at the Velardeña Properties;

●

~~Whether~~whether we will be able to continue or begin to mine and sell minerals successfully or profitably at any of our current properties at current or future silver and gold prices and achieve our objective of becoming a mid-tier mining company;

●

~~Potential~~potential delays in our exploration activities or other activities to advance properties towards mining resulting from environmental consents or permitting delays or problems, accidents, problems with contractors, disputes under agreements related to exploration properties, unanticipated costs and other unexpected events;

Table of Contents

●

~~Our~~our ability to retain key management and mining personnel necessary to successfully operate and grow our business;

●

~~Economic~~economic and political events negatively affecting the market prices for gold, silver, zinc, lead and other minerals that may be found on our exploration properties;

●

~~Political~~political and economic instability in Mexico, Argentina, and other countries in which we conduct our business, and future actions of any of these governments with respect to nationalization of natural resources or other changes in mining or taxation policies;

●

~~Volatility~~volatility in the market price of our common stock; and

●

~~The~~the factors discussed under ~~"Risk Factors"~~“Risk Factors” in our 2022 Annual ~~Report on Form 10-K for the year ended December 31, 2016 and item 1A of this Report on Form 10-Q.~~

Report.

These factors are not intended to represent a complete list of the general or specific factors that could affect us. Many of these factors are beyond our ability to control or predict. Although we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, such expectations may prove to be materially incorrect due to known and unknown risks and uncertainties. You should not unduly rely on ~~these~~any of our forward-looking statements. These statements speak only as of the date of this Quarterly Report on Form 10-Q. ~~Except as required by law, we are not obligated~~We undertake no obligation to publicly ~~release~~update any ~~revisions~~forward-looking statement, whether written or oral, that may be made from time to ~~these forward-looking statements to reflect~~time, whether as a result of new information, future ~~events~~developments or ~~developments.~~otherwise.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

~~Cautionary Statement Regarding Mineralized Material~~

“Mineralized material” as used in this Quarterly Report on Form 10-Q, although permissible under the SEC Industry Guide 7, does not indicate “reserves” by SEC standards. We cannot be certain that any deposits at the El Quevar, Santa Maria or Rodeo properties or any deposits at our other exploration properties, will ever be confirmed or converted into SEC Industry Guide 7 compliant “reserves”. Investors are cautioned not to assume that all or any part of the disclosed mineralized material estimates will ever be confirmed or converted into reserves or that mineralized material can be economically or legally extracted.

~~Table of Contents~~

~~Item 3. Quantitative and Qualitative Disclosures About Market Risk~~

Interest Rate Risk

We invest substantially all of our excess cash in U.S. government and debt securities rated “investment grade” or better. The rates received on such investments may fluctuate with changes in economic conditions. Based on the average cash and investment balances outstanding during the first nine months of ~~2017,~~2023, a 1% decrease in interest rates would have resulted in only a nominal reduction in interest income for the period.

Foreign Currency Exchange Risk

Although most of our expenditures are in U.S. dollars, certain purchases of labor, supplies and capital assets are denominated in other currencies, primarily in Mexico. As a result, currency exchange fluctuations may impact the costs of our exploration and mining activities. To reduce this risk, we maintain minimum cash balances in foreign currencies and complete most of our purchases in U.S. dollars.

Commodity Price Risk

We are primarily engaged in the exploration and mining of properties containing gold, silver, zinc, lead and other minerals. As a result, decreases in the price of any of these metals have the potential to negatively impact our ability to establish reserves and mine on our properties. We currently hold no commodity derivative positions.

~~Item 4. Controls and Procedures~~

Item 4.

Controls and Procedures

~~(a)~~ Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, ~~2017,~~2023, (the “Evaluation Date”). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure.

Table of Contents

~~(b)~~ Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II. OTHER ~~INFORMATION~~INFORMATION

Item 1.

Legal Proceedings

During April 2021, we became aware of a lawsuit in Mexico against one of the Company’s Mexican subsidiaries, Minera William, S.A. de C.V. (“Minera William”). The plaintiff in the matter is Unifin Financiera, S.A.B de C.V. (“Unifin”). The lawsuit was assigned to the Fifth Specialized Commercial District Court. In November 2022, the Company was formally served with the complaint in connection with the lawsuit and in December 2022 the Company filed its answer to the complaint. Unifin is alleging that a representative of Minera William signed certain documents in July 2011 purporting to bind Minera William as a guarantor of payment obligations owed by a third party to Unifin in connection with that third party’s acquisition of certain drilling equipment. At the time the documentation was allegedly signed, Minera William was a subsidiary of ECU Silver Mining prior to the Company’s acquisition of ECU in September 2011. As a preemptive measure, Unifin has obtained a preliminary court order freezing Minera William’s bank accounts in Mexico, which has limited the Company’s and Minera William’s ability to access approximately US$153,000 according to current currency exchange rates. Notwithstanding this action, the restrictions imposed on Minera William’s bank accounts do not impact the Company’s ability to operate the Rodeo mine, which is held through a different Mexico subsidiary. Likewise, the action does not impact the Company’s ability to continue with the Company’s evaluation plans for a potential Velardeña mine restart or move forward with any of the Company’s other exploration programs in Mexico. However, because the Velardeña mine and processing plants are held by Minera William, any adverse outcome to the action may have a material impact on our ability to restart production at Velardeña. Unifin is seeking recovery for as much as US$12.5 million. The Company believes there is no basis for this claim. A preliminary hearing was initially scheduled to take place in April 2023 but was rescheduled to June 2023. In June 2023 Minera William and Unifin agreed to pursue discussions to settle the matter and the Court agreed to suspend trial to allow Minera William and Unifin to negotiate a settlement agreement. Subsequent to September 30, 2023, tentative terms were reached to settle the dispute in exchange for a payment by the Company of $250,000, although no definitive settlement agreement has yet been executed. An accrued liability has been recorded for $250,000 as of September 30, 2023.

~~Item 1. Legal Proceedings~~

Item 1A.

Risk Factors

~~None.~~

~~Item 1A. Risk Factors~~

~~The~~Other than the risk factors set out below, the risk factors for the ~~quarter~~nine months ended September 30, ~~2017,~~2023, are substantially the same as those set forth in Part I, Item 1A of our 2022 Annual Report and in our prior quarterly reports on Form ~~10-K for the year ended December 31, 2016.~~10-Q.

~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds

None.

~~Item 3. Defaults Upon Senior Securities~~
Item 3.
Defaults Upon Senior Securities

None.

~~Item 4. Mine Safety Disclosures~~
Item 4.
Mine Safety Disclosures

Not applicable.

~~Item 5. Other Information~~
Item 5.
Other Information

None.

Table of Contents

~~Item 6. Exhibits~~
Item 6.
Exhibits


3.1	Amended and Restated Certificate of Incorporation of Golden Minerals Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on March 30, 2009).
3.2	First Amendment to the Amended and Restated Certificate of Incorporation of Golden Minerals Company dated September 2, 2011 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on September 9, 2011).
3.3	Second Amendment to the Amended and Restated Certificate of Incorporation of Golden Minerals Company dated May 19, 2016 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 20, 2016).
3.4	Third Amendment to the Amended and Restated Certificate of Incorporation of Golden Minerals Company dated June 11, 2020 (incorporated by reference to Appendix A of the Company’s Proxy Statement on Schedule 14A filed on March 25, 2021).
3.5	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Golden Minerals Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 30, 2023).
3.6	Amended and Restated Bylaws of Golden Minerals Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on March 1, 2023).
4.1	Form of Series A Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 19, 2019).
4.2	Form of Series B Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on July 19, 2019).
4.3	Form of Series A Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 23, 2020).
4.4	Form of Series B Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 23, 2020).
4.5	Form of Common Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on June 29, 2023).
4.6	Form of Pre-Funded Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on June 29, 2023).
4.7	Form of Pre-Funded Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current report on Form 8-K filed on November 9, 2023
4.8	Form of Series A Warrant (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 9, 2023).
4.9	Form of Series B Warrant (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 9, 2023).
10.1	~~Option Agreement dated August 2, 2017 among~~ Golden Minerals Company ~~and Hecla Mining Company. (1)~~2023 Equity Incentive Plan (incorporated by reference Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 30, 2023).
10.2	~~Second Amendment~~Securities Purchase Agreement between Golden Minerals Company and certain institutional investors, dated as of June 26, 2023 (incorporated by reference to Exhibit 10.1 to the ~~Master~~Company’s Current Report on Form 8-K filed on June 29, 2023).
10.3	Form of Restricted Stock Unit Award Agreement Pursuant to the 2023 Equity Incentive Plan.*
10.4	Securities Purchase Agreement between Golden Minerals Company and ~~Lease Agreement~~certain institutional investors, dated ~~August 2, 2017 among Minera William S.A. de C.V. and Minera Hecla S.A. de C.V. (1)~~as of November 6, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 9, 2023).
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.*
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.*
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act).**
101.INS	Inline XBRL Instance Document*
101.SCH	Inline XBRL Taxonomy Extension Schema Document*
101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document*
101.DEF	Inline XBRL Taxonomy Definition Document*
101.LAB	Inline XBRL Taxonomy Label Linkbase Document*
101.PRE	Inline XBRL Taxonomy Presentation Linkbase Document*
104	Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document)

Table of Contents

* Filed herewith

** Furnished herewith

~~(1) Incorporated by reference to our Current Report on Form 8-K filed with the SEC on August 3, 2017.~~

Table of Contents

SIGNATURES

~~SIGNATURES~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

GOLDEN MINERALS COMPANY


Date:	November ~~7, 2017~~10, 2023	By:	/s/ Warren M. Rehn
			Warren M. Rehn
			President and Chief Executive Officer



Date:	November ~~7, 2017~~10, 2023	By:	/s/ ~~Robert P. Vogels~~Julie Z. Weedman
			~~Robert P. Vogels~~Julie Z. Weedman
			Senior Vice President and Chief Financial Officer

3942


		PAGE

PART I – FINANCIAL INFORMATION
		3
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	3

ITEM 2.	~~MANAGEMENT'S~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	26

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36 37

ITEM 4.	CONTROLS AND PROCEDURES	36 37

PART II – OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	37 39

ITEM 1A.	RISK FACTORS	37 39

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	37 39

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	37 39

ITEM 4.	MINE SAFETY DISCLOSURES	37 39

ITEM 5.	OTHER INFORMATION.	37 39

ITEM 6.	EXHIBITS	38
			40


SIGNATURES		39


				42


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
	(in thousands except per share data)				(in thousands, except per share data)
Revenue:
Oxide plant lease (Note 15)	$	1,771	$	1,729	$	5,107	$	4,768
Total revenue		1,771		1,729		5,107		4,768
Costs and expenses:
Oxide plant lease costs (Note 15)		(619)		(549)		(1,704)		(1,478)
Exploration expense		(977)		(927)		(1,968)		(2,865)
El Quevar project (expense) income		(183)		65		(524)		(308)
Velardeña shutdown and care and maintenance costs		(379)		(456)		(1,098)		(1,589)
Administrative expense		(694)		(897)		(2,592)		(3,141)
Stock based compensation		7		(95)		(300)		(666)
Reclamation expense		(49)		(47)		(146)		(144)
Other operating income, net (Notes 7 and 8)		951		1,281		1,813		1,558
Depreciation and amortization		(138)		(346)		(456)		(1,317)
Total costs and expenses		(2,081)		(1,971)		(6,975)		(9,950)
Loss from operations		(310)		(242)		(1,868)		(5,182)
Other income and (expense):
Interest expense (Note 11)		—		—		—		(515)
Interest and other income (Note 16)		15		10		37		12
Warrant derivative loss (Notes 3 and 17)		—		(545)		—		(2,821)
Derivative loss (Note 17)		—		—		—		(778)
Loss on debt extinguishment (Note 11)		—		—		—		(1,653)
Loss on foreign currency		(23)		(21)		(20)		(63)
Total other income (expense)		(8)		(556)		17		(5,818)
Loss from operations before income taxes		(318)		(798)		(1,851)		(11,000)
Income tax benefit		—		—		—		26
Net loss	$	(318)	$	(798)	$	(1,851)	$	(10,974)
Comprehensive loss, net of tax:
Unrealized (loss) gain on securities		11		107		(92)		278
Comprehensive loss	$	(307)	$	(691)	$	(1,943)	$	(10,696)
Net loss per common share — basic
Loss	$	(0.00)	$	(0.01)	$	(0.02)	$	(0.14)
Weighted average Common Stock outstanding - basic (1)		91,097,279		88,878,371		90,028,480		78,080,858



								Accumulated
				Additional				Other
	Common Stock			Paid-in		Accumulated		Comprehensive		Total
	Shares	Amount		Capital		Deficit		Income (loss)		Equity
	(in thousands except share data)
Balance, December 31, 2015	53,335,333	$	534	$	484,742	$	(477,378)	$	(127)	$	7,771
Stock compensation accrued and shares issued for vested stock awards	317,968		2		250		—		—		252
Shares issued on conversion of Sentient Note (Note 11)	27,366,740		273		6,944		—		—		7,217
Registered offering common stock, net and warrants (Note 14)	8,000,000		80		3,519		—		—		3,599
Unrealized gain on marketable equity securities, net of tax	—		—		—		—		182		182
Net loss	—		—		—		(10,659)		—		(10,659)
Balance, December 31, 2016	89,020,041	$	889	$	495,455	$	(488,037)	$	55	$	8,362
Cumulative adjustment related to change in accounting principle (Note 3)	—		—		19,046		(17,148)		—		1,898
Adjusted balance at January 1, 2017	89,020,041	$	889	$	514,501	$	(505,185)	$	55	$	10,260
Stock compensation accrued and shares issued for vested stock awards	150,000		1		149		—		—		150
Shares issued under the at-the-market offering agreement, net (Note 14)	1,024,392		11		671		—		—		682
Consideration shares sold to Hecla, net (Note 15)	1,811,015		18		911		—		—		929
Deemed dividend on warrants (Note 3)	—		—		5		(5)		—		—
Unrealized loss on marketable equity securities, net of tax	—		—		—		—		(92)		(92)
Net loss	—		—		—		(1,851)		—		(1,851)
Balance, September 30, 2017	92,005,448	$	919	$	516,237	$	(507,041)	$	(37)	$	10,078


					Reported after
	As Previously			Cumulative	the Effect of a Change in
	Reported		Effect Adjustment		Accounting Principle
Balance Sheet Accounts Impacted by	December 31,		at the Beginning		at the Beginning
September 2012 and 2014 Warrants	2016		of 2017		of 2017
	(in thousands)
Warrant Liability - Related Party	$	976	$	(976)	$	—
Warrant Liability		922		(922)		—
Additional Paid-in Capital		495,455		19,046		514,501
Accumulated Deficit		(488,037)		(17,148)		(505,185)


			Estimated		Carrying
September 30, 2017	Cost		Fair Value		Value
		(in thousands)
Investments:
Short-term:
Available for sale common stock	$	275	$	242	$	242
December 31, 2016
Investments:
Short-term:
Available for sale common stock	$	275	$	334	$	334


	Level 1		Level 2		Level 3		Total
	(in thousands)
At September 30, 2017
Assets:
Cash and cash equivalents	$	4,966	$	—	$	—	$	4,966
Trade accounts receivable		387		—		—		387
Trade accounts receivable - related party		4		—		—		4
Short-term investments		242		—		—		242
	$	5,599	$	—	$	—	$	5,599

At December 31, 2016
Assets:
Cash and cash equivalents	$	2,588	$	—	$	—	$	2,588
Trade accounts receivable		380		—		—		380
Trade accounts receivable - related party		643		—		—		643
Short-term investments		334		—		—		334
	$	3,945	$	—	$	—	$	3,945
Liabilities:
Warrant liability - related party	$	—	$	—	$	976	$	976
Warrant liability		—		—		922		922
	$	—	$	—	$	1,898	$	1,898



	December 31,
	2016
Company's ending stock price	$	0.58
Company's stock volatility		110%
Applicable risk free interest rate		1.39%


		Weighted
		Average
		Exercise
	Number of	Price Per
Equity Plan Options	Shares	Share
Outstanding at December 31, 2016	95,810	$	8.02
Granted during the period	—		—
Forfeited or expired during period	(55,500)		8.00
Exercised during period	—		—
Outstanding at September 30, 2017	40,310	$	8.05
Exercisable at end of period	40,310	$	8.05
Granted and vested	40,310	$	8.05


	Nine Months Ended September 30,
	2017		2016
	(in thousands)
Cash flows from operating activities:
Net loss	$	(1,851)	$	(10,974)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and depreciation		456		1,317
Accretion of asset retirement obligation		146		143
Write off of loss contingency, net		—		(212)
Asset write off		—		24
Gain on reduction of asset retirement obligation		(56)		—
Gain on sale of assets		(605)		(1,522)
Amortization of deferred loan costs		—		57
Warrant liability fair market adjustment		—		2,821
Derivative liability fair market adjustment		—		778
Accretion of loan discount		—		372
Loss on debt extinguishment		—		1,653
Deferred income taxes		—		(26)
Stock compensation		299		666
Changes in operating assets and liabilities:
Decrease in trade accounts receivable		607		41
Decrease in prepaid expenses and other assets		137		150
(Increase) decrease in inventories		(22)		66
(Increase) decrease in value added tax recoverable, net		(3)		347
Increase in accrued interest payable net of amounts capitalized		—		86
Increase (decrease) in deferred revenue		967		(500)
Decrease in reclamation liability		(4)		(8)
Decrease in accounts payable and accrued liabilities		(34)		(389)
Decrease in deferred leasehold payments		(15)		(13)
Net cash provided by (used in) operating activities	$	22	$	(5,123)



							Exploration, El
			Costs		Depreciation,		Quevar, Velardeña
Three Months Ended			Applicable		Depletion and		and Administrative		Pre-Tax (gain)				Capital
September 30, 2017	Revenue		to Sales		Amortization		Expense		loss		Total Assets		Expenditures
Velardeña Properties	$	1,771	$	619	$	53	$	623	$	(2,016)			$	3
Corporate, Exploration & Other		—		—		85		1,609		2,334				2
	$	1,771	$	619	$	138	$	2,232	$	318			$	5

Nine Months Ended
September 30, 2017
Velardeña Properties	$	5,107	$	1,704	$	179	$	1,361	$	(3,667)	$	6,573	$	3
Corporate, Exploration & Other		—		—		277		4,820		5,518		8,329		2
	$	5,107	$	1,704	$	456	$	6,181	$	1,851	$	14,902	$	5

Three Months Ended
September 30, 2016
Velardeña Properties	$	1,729	$	549	$	249	$	509	$	(1,563)			$	15
Corporate, Exploration & Other		—		—		97		1,706		2,361				—
	$	1,729	$	549	$	346	$	2,215	$	798			$	15

Nine Months Ended
September 30, 2016
Velardeña Properties	$	4,768	$	1,478	$	982	$	2,100	$	(1,319)	$	8,370	$	35
Corporate, Exploration & Other		—		—		335		5,803		12,319		6,647		1
	$	4,768	$	1,478	$	1,317	$	7,903	$	11,000	$	15,017	$	36