Gold Resource Corporation Reports First Quarter Net Income Of $0.01 Per Share, Maintains 2019 Production Outlook
May 07 2019 - 4:35PM
Gold Resource Corporation (NYSE American: GORO) (the “Company” or
“GRC”) reported production results for the first quarter ended
March 31, 2019 of 6,538 ounces of gold and 364,653 ounces of
silver, which along with base metal revenue generated $26.6 million
in net revenue and $0.9 million, or $0.01 per share in net income
for the quarter. Gold Resource Corporation is a gold and
silver producer, developer and explorer with operations in Oaxaca,
Mexico and Nevada, USA. The Company has returned $111 million
to its shareholders in consecutive monthly dividends since July
2010 and offers its shareholders the option to convert their cash
dividends into physical gold and silver and take delivery.
Q1 2019 HIGHLIGHTS
- $0.9 million net income, or $0.01 per share
- $8.5 million cash and cash equivalents (a $0.8 million
increase)
- $26.6 million net sales
- 6,538 gold ounces produced
- 364,653 silver ounces produced
- $340 total cash cost per gold equivalent ounce sold (after
by-product credits)
- $834 total all-in sustaining cost per precious metal gold
equivalent ounce sold
- $18.4 million base metal by-product credits, or $2,327 per
precious metal gold ounce sold
- $0.3 million dividend distributions, or $0.005 per share for
quarter
- $3.7 million gold and silver bullion
- Connected the Aguila project, Oaxaca, Mexico to the federal
power grid in March 2019
- Began circulating first leach solution to the Isabella Pearl
pad in March 2019
Overview of Q1 2019 Results
Gold Resource Corporation sold 7,911 precious metal gold
equivalent ounces at a total cash cost of $340 per ounce (after
by-product credits), benefiting from strong base metal production
and sales. Average realized metal prices during the quarter
included $1,339 per ounce gold and $15.74 per ounce silver*. The
Company recorded net income of $0.9 million, or $0.01 per share.
The Company paid $0.3 million to its shareholders in dividends, or
$0.005 per share during the quarter. Cash and cash equivalents at
quarter end totaled $8.5 million.
Production totals for the first quarter of 2019 included 6,538
ounces of gold, 364,653 ounces of silver, 433 tonnes of copper,
2,153 tonnes of lead and 5,838 tonnes of zinc. The Company
maintains its 2019 Annual Outlook, targeting a plus or minus 10
percent production of 27,000 gold ounces and 1,700,000 silver
ounces.
*Average realized metal prices include final settlement
adjustments for previously unsettled provisional sales.
Provisional sales may remain unsettled from one quarter into the
next. Realized prices will therefore vary from average spot
metal market prices upon final settlement.
The following Production Statistics table summarizes certain
information about our Oaxaca Mining Unit operations for three
months ended March 31, 2019 and 2018:
|
|
|
|
|
Three months ended March 31, |
|
2019 |
|
2018 |
Arista
Mine |
|
|
|
Milled |
|
|
|
Tonnes Milled |
150,061 |
|
130,789 |
Grade |
|
|
|
Average Gold Grade (g/t) |
1.51 |
|
1.92 |
Average Silver Grade (g/t) |
74 |
|
106 |
Average Copper Grade (%) |
0.36 |
|
0.39 |
Average Lead Grade (%) |
1.87 |
|
1.63 |
Average Zinc Grade (%) |
4.67 |
|
4.41 |
Aguila Open Pit
Mine |
|
|
|
Milled |
|
|
|
Tonnes Milled |
11,464 |
|
5,108 |
Grade |
|
|
|
Average Gold Grade (g/t) |
2.11 |
|
2.16 |
Average Silver Grade (g/t) |
43 |
|
45 |
Mirador
Mine |
|
|
|
Milled |
|
|
|
Tonnes Milled |
4,113 |
|
3,192 |
Grade |
|
|
|
Average Gold Grade (g/t) |
1.26 |
|
1.16 |
Average Silver Grade (g/t) |
226 |
|
182 |
Combined |
|
|
|
Tonnes milled |
165,638 |
|
139,089 |
Tonnes Milled per Day (1) |
1,917 |
|
1,636 |
Metal production (before payable metal deductions)
(2) |
|
|
|
Gold (ozs.) |
6,538 |
|
6,647 |
Silver (ozs.) |
364,653 |
|
425,884 |
Copper (tonnes) |
433 |
|
385 |
Lead (tonnes) |
2,153 |
|
1,615 |
Zinc (tonnes) |
5,838 |
|
4,793 |
Precious metal gold equivalent ounces produced (mill
production) (2) |
|
|
|
Gold Ounces |
6,538 |
|
6,647 |
Gold Equivalent Ounces from Silver |
4,287 |
|
5,262 |
Total Precious Metal Gold Equivalent Ounces |
10,825 |
|
11,909 |
|
____________________
(1) |
Based on actual days the mill operated during the period. |
(2) |
The difference between what we report as "ounces/tonnes produced"
and "payable ounces/tonnes sold" is attributable to the difference
between the quantities of metals contained in the concentrates we
produce versus the portion of those metals actually paid for by our
customers according to the terms of our sales contracts.
Differences can also arise from inventory changes incidental to
shipping schedules, or variances in ore grades which impact the
amount of metals contained in concentrates produced and sold. |
|
|
The following Sales Statistics table summarizes certain
information about our combined Oaxaca Mining Unit operations for
three months ended March 31, 2019 and 2018:
|
|
|
|
|
|
|
Three months ended March 31, |
|
2019 |
|
2018 |
|
|
|
|
|
|
Metal
sold |
|
|
|
|
|
Gold (ozs.) |
|
4,758 |
|
|
5,563 |
|
Silver (ozs.) |
|
268,189 |
|
|
381,366 |
|
Copper (tonnes) |
|
338 |
|
|
340 |
|
Lead (tonnes) |
|
1,653 |
|
|
1,493 |
|
Zinc (tonnes) |
|
4,506 |
|
|
3,778 |
|
Average metal prices
realized (1) |
|
|
|
|
|
Gold ($ per oz.) |
|
1,339 |
|
|
1,342 |
|
Silver ($ per oz.) |
|
15.74 |
|
|
16.58 |
|
Copper ($ per tonne) |
|
6,291 |
|
|
7,156 |
|
Lead ($ per tonne) |
|
2,063 |
|
|
2,573 |
|
Zinc ($ per tonne) |
|
2,856 |
|
|
3,805 |
|
Precious metal gold
equivalent ounces sold |
|
|
|
|
|
Gold Ounces |
|
4,758 |
|
|
5,563 |
|
Gold Equivalent Ounces from Silver |
|
3,153 |
|
|
4,712 |
|
Total Precious Metal Gold Equivalent Ounces |
|
7,911 |
|
|
10,275 |
|
Total cash cost before by-product credits per precious metal gold
equivalent ounce sold (2) |
$ |
2,667 |
|
$ |
1,694 |
|
Total cash cost (credit) after by-product credits per precious
metal gold equivalent ounce sold (2) (3) |
$ |
340 |
|
$ |
(316 |
) |
Total all-in sustaining cost per precious metal gold equivalent
ounce sold (2) |
$ |
834 |
|
$ |
347 |
|
____________________
(1) |
Average metal prices realized vary from the market metal prices due
to final settlement adjustments from our provisional invoices when
they are settled. Our average metal prices realized will therefore
differ from the market average metal prices in most cases. |
(2) |
For a reconciliation of this non-GAAP measure to total mine cost of
sales, which is the most comparable U.S. GAAP measure, please see
Non-GAAP Measures in our most recently filed
Form 10-K. |
(3) |
Total cash cost after by-product credits are significantly affected
by base metals sales during the periods presented. |
|
|
See Accompanying Tables
The following information summarizes Gold Resource Corporation’s
financial condition at March 31, 2019 and December 31, 2018,
its results of operations including the three
months ended March 31, 2019 and 2018, and its cash flows
for the three months ended March 31, 2019 and 2018. The
summary data as of March 31, 2019 and for the three months ended
March 31, 2019 and 2018 is unaudited; the summary data for the year
ended December 31, 2018 is derived from our audited financial
statements contained in our annual report on Form 10-K for the year
ended December 31, 2018, but do not include the footnotes and other
information that is included in the complete financial statements.
Readers are urged to review the Company’s Form 10-K in its
entirety, which can be found on the SEC's website
at www.sec.gov.
The calculation of our cash cost per precious metal gold
equivalent per ounce and total all-in sustaining cost per precious
metal gold equivalent per ounce contained in this press release are
non-GAAP financial measures. Please see "Management's Discussion
and Analysis and Results of Operations" contained in the Company’s
most recent Form 10-K for a complete discussion and reconciliation
of the non-GAAP measures.
|
GOLD RESOURCE CORPORATION |
CONSOLIDATED BALANCE SHEETS |
(U.S. dollars in thousands, except share and per share
amounts) |
|
|
March 31, |
|
December 31, |
|
2019 |
|
2018 |
|
(Unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
8,527 |
|
|
$ |
7,762 |
|
Gold and silver rounds/bullion |
|
3,650 |
|
|
|
3,637 |
|
Accounts receivable |
|
4,515 |
|
|
|
1,744 |
|
Inventories, net |
|
20,464 |
|
|
|
14,342 |
|
Prepaid taxes |
|
1,957 |
|
|
|
1,126 |
|
Prepaid expenses and other current assets |
|
2,607 |
|
|
|
2,450 |
|
Total current assets |
|
41,720 |
|
|
|
31,061 |
|
Property, plant and mine
development, net |
|
119,617 |
|
|
|
111,242 |
|
Operating lease assets,
net |
|
12,681 |
|
|
|
- |
|
Deferred tax assets, net |
|
6,570 |
|
|
|
7,372 |
|
Other non-current assets |
|
575 |
|
|
|
656 |
|
Total assets |
$ |
181,163 |
|
|
$ |
150,331 |
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
18,176 |
|
|
$ |
12,429 |
|
Loans payable, current |
|
840 |
|
|
|
765 |
|
Finance lease liabilities, current |
|
418 |
|
|
|
412 |
|
Operating lease liabilities, current |
|
7,868 |
|
|
|
- |
|
Mining royalty taxes payable, net |
|
2,003 |
|
|
|
1,926 |
|
Accrued expenses and other current liabilities |
|
1,889 |
|
|
|
2,030 |
|
Total current liabilities |
|
31,194 |
|
|
|
17,562 |
|
Reclamation and remediation
liabilities |
|
3,811 |
|
|
|
3,298 |
|
Loans payable, long-term |
|
1,444 |
|
|
|
1,378 |
|
Finance lease liabilities,
long-term |
|
724 |
|
|
|
831 |
|
Operating lease liabilities,
long-term |
|
4,816 |
|
|
|
- |
|
Total liabilities |
|
41,989 |
|
|
|
23,069 |
|
Shareholders' equity: |
|
|
|
|
|
Common stock - $0.001 par value, 100,000,000 shares
authorized: |
|
|
|
|
|
61,496,813 and 58,850,431 shares outstanding at March 31, 2019 and
December 31, 2018, respectively |
|
95 |
|
|
|
69 |
|
Additional paid-in capital |
|
132,903 |
|
|
|
121,592 |
|
Retained earnings |
|
13,231 |
|
|
|
12,656 |
|
Treasury stock at cost, 336,398 shares |
|
(5,884 |
) |
|
|
(5,884 |
) |
Accumulated other comprehensive loss |
|
(1,171 |
) |
|
|
(1,171 |
) |
Total shareholders' equity |
|
139,174 |
|
|
|
127,262 |
|
Total liabilities and shareholders' equity |
$ |
181,163 |
|
|
$ |
150,331 |
|
|
GOLD RESOURCE CORPORATION |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(U.S. dollars in thousands, except share and per share
amounts) |
(Unaudited) |
|
|
Three months ended March 31, |
|
2019 |
|
2018 |
Sales, net |
$ |
26,578 |
|
$ |
32,151 |
Mine cost of sales: |
|
|
|
|
|
Production costs |
|
17,679 |
|
|
15,535 |
Depreciation and amortization |
|
3,444 |
|
|
3,493 |
Reclamation and remediation |
|
16 |
|
|
203 |
Total mine cost of sales |
|
21,139 |
|
|
19,231 |
Mine gross profit |
|
5,439 |
|
|
12,920 |
Costs and expenses: |
|
|
|
|
|
General and administrative expenses |
|
2,011 |
|
|
2,354 |
Exploration expenses |
|
1,450 |
|
|
1,185 |
Other expense, net |
|
25 |
|
|
278 |
Total costs and expenses |
|
3,486 |
|
|
3,817 |
Income before income
taxes |
|
1,953 |
|
|
9,103 |
Provision for income taxes |
|
1,071 |
|
|
3,646 |
Net income |
$ |
882 |
|
$ |
5,457 |
Net income per common
share: |
|
|
|
|
|
Basic |
$ |
0.01 |
|
$ |
0.10 |
Diluted |
$ |
0.01 |
|
$ |
0.09 |
Weighted average shares
outstanding: |
|
|
|
|
|
Basic |
|
60,672,133 |
|
|
57,120,077 |
Diluted |
|
61,142,088 |
|
|
57,911,299 |
|
GOLD RESOURCE CORPORATION |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(U.S. dollars in thousands) |
(Unaudited) |
|
|
Three months ended March 31, |
|
2019 |
|
2018 |
Cash flows from
operating activities: |
|
|
|
|
|
Net income |
$ |
882 |
|
|
$ |
5,457 |
|
Adjustments to reconcile net income to net cash from operating
activities: |
|
|
|
|
|
Deferred income taxes |
|
895 |
|
|
|
412 |
|
Depreciation and amortization |
|
3,561 |
|
|
|
3,652 |
|
Stock-based compensation |
|
336 |
|
|
|
236 |
|
Other operating adjustments |
|
(128 |
) |
|
|
(906 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
(2,771 |
) |
|
|
1,242 |
|
Inventories |
|
(6,122 |
) |
|
|
(1,283 |
) |
Prepaid expenses and other current assets |
|
221 |
|
|
|
868 |
|
Other non-current assets |
|
40 |
|
|
|
65 |
|
Accounts payable and other accrued liabilities |
|
3,222 |
|
|
|
2,726 |
|
Mining royalty and income taxes payable, net |
|
(784 |
) |
|
|
1,489 |
|
Net cash (used in) provided by operating activities |
|
(648 |
) |
|
|
13,958 |
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
Capital expenditures |
|
(8,786 |
) |
|
|
(7,332 |
) |
Other investing activities |
|
1 |
|
|
|
2 |
|
Net cash used in investing activities |
|
(8,785 |
) |
|
|
(7,330 |
) |
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
Proceeds from the exercise of stock options |
|
98 |
|
|
|
244 |
|
Proceeds from at-the-market sales |
|
10,806 |
|
|
|
- |
|
Dividends paid |
|
(303 |
) |
|
|
(285 |
) |
Repayment of loan payable |
|
(187 |
) |
|
|
(140 |
) |
Repayment of finance leases |
|
(101 |
) |
|
|
(93 |
) |
Net cash provided by (used in) financing activities |
|
10,313 |
|
|
|
(274 |
) |
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
(115 |
) |
|
|
(127 |
) |
Net increase in cash and cash
equivalents |
|
765 |
|
|
|
6,227 |
|
Cash and cash equivalents at
beginning of period |
|
7,762 |
|
|
|
22,390 |
|
Cash and cash equivalents at
end of period |
$ |
8,527 |
|
|
$ |
28,617 |
|
|
|
|
|
|
|
Supplemental Cash Flow
Information |
|
|
|
|
|
Interest expense paid |
$ |
42 |
|
|
$ |
49 |
|
Income and mining taxes paid |
$ |
209 |
|
|
$ |
730 |
|
Non-cash investing
activities: |
|
|
|
|
|
Change in accrued capital expenditures |
$ |
2,303 |
|
|
$ |
(193 |
) |
Change in estimate for asset retirement cost |
$ |
462 |
|
|
$ |
- |
|
Equipment purchased through loan payable |
$ |
330 |
|
|
$ |
- |
|
About GRC:
Gold Resource Corporation is a gold and silver producer,
developer and explorer with operations in Oaxaca, Mexico and
Nevada, USA. The Company targets low capital expenditure
projects with potential for generating high returns on
capital. The Company has returned $111 million back to its
shareholders in consecutive monthly dividends since July 2010 and
offers its shareholders the option to convert their cash dividends
into physical gold and silver and take delivery. For more
information, please visit GRC’s website, located at
www.goldresourcecorp.com and read the Company’s 10-K for an
understanding of the risk factors involved.
Cautionary Statements:
This press release contains forward-looking statements that
involve risks and uncertainties. The statements contained in this
press release that are not purely historical are forward-looking
statements within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act. When used in this press
release, the words “plan”, “target”, "anticipate," "believe,"
"estimate," "intend" and "expect" and similar expressions are
intended to identify such forward-looking statements. Such
forward-looking statements include, without limitation, the
statements regarding Gold Resource Corporation’s strategy, future
plans for production, future expenses and costs, future liquidity
and capital resources, and estimates of mineralized material. All
forward-looking statements in this press release are based upon
information available to Gold Resource Corporation on the date of
this press release, and the company assumes no obligation to update
any such forward-looking statements. Forward looking statements
involve a number of risks and uncertainties, and there can be no
assurance that such statements will prove to be accurate. The
Company's actual results could differ materially from those
discussed in this press release. In particular, there can be no
assurance that production will continue at any specific rate.
Factors that could cause or contribute to such differences include,
but are not limited to, those discussed in the Company’s 10-K filed
with the SEC.
Contacts:
Corporate DevelopmentGreg
Patterson303-320-7708www.Goldresourcecorp.com
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