Golden Minerals Co

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 in December 2022 the Company filed its answer to the complaint. As a preemptive measure, Unifin obtained a preliminary court order freezing Minera William’s bank accounts in Mexico, which limited the Company’s and Minera William’s ability to access approximately US$153,000 according to current currency exchange rates.

The Company and Unifin agreed to settle the dispute in late 2023. During the first quarter of 2024, the Court unfroze the Minera William bank accounts, and the bank remitted the funds to Unifin as per the settlement agreement. Subsequent to March 31, 2024, the Company paid Unifin the remaining amount of the $250,000 agreed upon in the settlement. On April 30, 2024, the Court published a writ stating that the parties complied with the settlement agreement and declared that Unifin has withdrawn the lawsuit against Minera William.

On July 4, 2024, Minera William challenged the judgment in the commercial proceeding initiated by UNIFIN against Minera William, Procesadora de Minerales de Durango, and Jorge Alberto Samaniego Mota (collectively referred to as the “Defendants”). The judgment declared that the Defendants were jointly and severally liable (obligados solidarios) to UNIFIN, creating a potential risk for Minera William. If Procesadora de Minerales de Durango or Jorge Alberto Samaniego Mota pays UNIFIN, they could demand that Minera William reimburse them for its corresponding share of the debt.

Under Mexican law, parties typically challenge such judgments through a direct amparo, as it concludes the proceedings. However, the admissibility of a direct amparo for Minera William was questionable. Once UNIFIN withdrew its action against Minera William, Minera William could have been considered a non-party and thus a third-party stranger to the trial (tercero extraño a juicio). Consequently, Minera William filed both an indirect and a direct amparo claim against the judgment, with the former being the appropriate method for challenging judgments as a third-party stranger to the trial.

On August 7, 2024, Minera William’s direct amparo was admitted by the twelfth Collegiate Circuit Court for Civil Matters in Mexico City under docket 539/2024. UNIFIN now has 15 business days to file an adhesive direct amparo (amparo directo adhesivo) and submit pleadings. Following this, the case will be assigned to one of the three Magistrates, who will have 90 business days to resolve the amparo.

On the other hand, the indirect amparo was initially assigned to the Fourteenth District Court for Civil Matters in Mexico City under docket number 799/2024. On July 9, 2024, the District Court ruled that Minera William was not a third-party stranger to the trial, making the indirect amparo an inappropriate method for challenging the judgment. As a result, the court transferred the docket to a Collegiate Circuit Court to be processed as a direct amparo. The case was then assigned to the Twelfth Collegiate Circuit Court for Civil Matters in Mexico City under docket 522/2024. On August 7, 2024, the Collegiate Court rejected Minera William’s amparo claim 522/2024. The content of the ruling is not yet known, but the claim was likely dismissed because Minera William’s originally filed amparo claim, docket 539/2024, had already been admitted by the same Collegiate Circuit Court.

Employee Labor Claims

During the three months ended June 30, 2024, a group of employees of some of the Company’s Mexican subsidiaries, filed labor claims against the subsidiary companies claiming the companies had not compensated them properly for their termination. There are currently 12 employees who have filed labor claims. A severance accrual has been estimated and recorded in connection with these lawsuits for $525K.

Supplier Lawsuits

During the three months ended June 30, 2024, four suppliers of some of the Company’s subsidiaries in Mexico filed lawsuits against the subsidiary companies for non-payment of services rendered. In total, this group of four suppliers is seeking approximately $214K and this amount is recorded in accounts payable as of June 30, 2024.