via NEWMEDIAWIRE -- Gold Resource Corporation (NYSE American: GORO)
(the “Company” or “GRC”) reported consolidated production results
for the first quarter ended March 31, 2020 of 10,142 ounces of gold
and 407,625 ounces of silver. In addition to precious
metals, the Company produced base metals resulting in net revenue
of $28 million and $5 million operating cash flow for the
quarter. At the end of the quarter the Mexican
government declared a country-wide health emergency and mandatory
non-essential business suspension due to the novel coronavirus
(COVID-19) global pandemic. The Company was required by
the Mexican government to suspend its Mexico operations and the
Company subsequently withdrew its 2020 production
outlook. Gold Resource Corporation is a gold and silver
producer, developer and explorer with operations in Oaxaca, Mexico
and Nevada, USA. The Company has returned $114 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 2020 HIGHLIGHTS
- Strong balance sheet with $18.4 million cash and cash
equivalents;
- $28.0 million net sales;
- Operating cash flow of $5 million;
- Precious metal quarterly production on target with 10,142
gold ounces and 407,625 silver ounces produced;
- $4.1 million gold and silver bullion inventory; and
- $0.01 per share dividend distribution for quarter.
Overview of Q1 2020 Results
Production from both mining units were within
targeted ranges prior to the Company withdrawing its 2020
production outlook due to the pandemic. First quarter
Oaxaca Mining Unit (OMU) production totaled 6,450 ounces of gold,
402,542 ounces of silver, 488 tonnes of copper, 2,514 tonnes of
lead and 5,844 tonnes of zinc. First quarter production
from the Company’s Nevada Mining Unit (NMU) totaled 3,692 ounces of
gold.
The Company sold 8,614 precious metal gold
equivalent ounces at a total cash cost of $918 per ounce (after
by-product credits) at its OMU. Falling base metal
markets and record high treatment charges negatively impacted
revenues and costs during the quarter. OMU average
realized metal prices during the quarter included $1,670 per ounce
gold and $17.03 per ounce silver*. The Company sold
3,755 gold ounces from its Isabella Pearl mine at a total cash cost
of $1,327 per ounce (after by-product credits) at an average
realized price of $1,575 per gold ounce*. The Company
recorded a net loss of $3.1 million, or $0.05 per share because of
lower revenues and higher non-cash depreciation and
amortization. The Company generated $5 million in
operating cash flow, and paid $0.7 million to its shareholders in
dividends, or $0.01 per share during the quarter. Cash and cash
equivalents at quarter end totaled $18.4 million.
Oaxaca Mining Unit operations were suspended on
April 1, 2020 when the Mexican government declared a national
emergency due to the COVID-19 global pandemic. At that
time, the Company put its OMU operations into care and maintenance
and withdrew its 2020 production outlook. The national
emergency declaration is currently set to expire on May 30,
2020. Based on government signaling of potential early
business restarts for less COVID-19 impacted zones, the Company has
recently submitted its early-start proposal to the Mexican federal
government due to Oaxaca being one of zones least impacted by the
virus.
*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.
COVID-19
With the NMU continuing to operate, and in
preparation for restarting our OMU, the Company strives to mitigate
the spread of COVID-19 and protect the health and safety of our
employees, contractors, and communities in which we
operate. The Company has taken precautionary measures
including specialized training, social distancing, a work-from-home
mandate where possible, and close monitoring of national and
regional COVID-19 impacts and governmental
guidelines. To date, the Company is not aware of any
cases of COVID-19 at its operations. With the ever changing
and fluid nature of the pandemic impact, Company management
analyzed various scenarios whereby a forced and/or prolonged
suspension of one or both mining units were
sustained.
“First quarter production at both our mining units
were within expected production ranges,” stated Mr. Jason Reid,
President and CEO of Gold Resource Corporation. “While
the mandated business suspension at the end of the quarter isn’t
ideal for business, I was pleased to see Mexico join in global
efforts to combat the COVID-19 virus. During these
unprecedented times, we have taken the precautionary measure of
raising additional capital just shy of $12 million in part to put
the Company in a much stronger financial position to weather an
extended suspension of one or both of our operations, if need be.
Like much of the rest of the world, we look forward to getting back
to work in Mexico in the safest manner and as soon as
possible.”
Mr. Reid continued, “We continue to revise, where
possible, our Oaxaca mine plan in an effort to target zones with
higher precious metal values in the Arista mine to help offset
lower base metal market prices experienced thus far in
2020. We are also contemplating additional cost cutting
measures.
“Our Isabella Pearl operations in Nevada continued
to make good progress during the quarter removing overburden at the
high-grade Pearl zone in the deposit,” stated Mr. Reid. “We
are pleased to report that we have recently exposed the top portion
of this high grade Pearl zone and have had several days mining
grades up to 2.7 grams per tonne gold where the block model
indicated 1.5 grams per tonne gold. While there is still
significant overburden to remove at Pearl before getting into
larger tonnages of this high grade zone, we remain on schedule to
access significant portions of this material by mid-year
2020. We continue to be on track for our targeted gold
production ramp up by the end of Q3 and more so in
Q4. Eighty percent of the ore in the Isabella Pearl
deposit is located in the Pearl zone and it’s great to have mined
down to bench levels where the top of the Pearl zone is now
exposed.”
The following Production Statistics tables
summarize certain information about our Oaxaca and Nevada Mining
Unit operations for the three months ended March 31, 2020 and
2019:
Oaxaca Mining Unit
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
2020 |
|
2019 |
Arista
Mine |
|
|
|
|
|
|
Milled |
|
|
|
|
|
|
Tonnes Milled |
|
|
158,036 |
|
|
150,061 |
Grade |
|
|
|
|
|
|
Average Gold Grade (g/t) |
|
|
1.54 |
|
|
1.51 |
Average Silver Grade (g/t) |
|
|
82 |
|
|
74 |
Average Copper Grade (%) |
|
|
0.39 |
|
|
0.36 |
Average Lead Grade (%) |
|
|
1.99 |
|
|
1.87 |
Average Zinc Grade (%) |
|
|
4.67 |
|
|
4.67 |
Aguila Open Pit
Mine |
|
|
|
|
|
|
Milled |
|
|
|
|
|
|
Tonnes Milled |
|
|
14,248 |
|
|
11,464 |
Grade |
|
|
|
|
|
|
Average Gold Grade (g/t) |
|
|
1.26 |
|
|
2.11 |
Average Silver Grade (g/t) |
|
|
38 |
|
|
43 |
Mirador
Mine |
|
|
|
|
|
|
Milled |
|
|
|
|
|
|
Tonnes Milled |
|
|
2,204 |
|
|
4,113 |
Grade |
|
|
|
|
|
|
Average Gold Grade (g/t) |
|
|
1.86 |
|
|
1.26 |
Average Silver Grade (g/t) |
|
|
198 |
|
|
226 |
Combined |
|
|
|
|
|
|
Tonnes milled |
|
|
174,488 |
|
|
165,638 |
Tonnes Milled per Day (1) |
|
|
1,994 |
|
|
1,917 |
Metal production (before payable metal
deductions) (2) |
|
|
|
|
|
|
Gold (ozs.) |
|
|
6,450 |
|
|
6,538 |
Silver (ozs.) |
|
|
402,542 |
|
|
364,653 |
Copper (tonnes) |
|
|
488 |
|
|
433 |
Lead (tonnes) |
|
|
2,514 |
|
|
2,153 |
Zinc (tonnes) |
|
|
5,844 |
|
|
5,838 |
- Based on actual days the mill operated during the
period.
- 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 according to the terms of our sales contracts. Differences
can also arise from inventory changes incidental to shipping
schedules, or variances in ore grades and recoveries which impact
the amount of metals contained in concentrates produced and
sold.
Nevada Mining Unit
|
|
|
|
|
|
|
|
|
Three months
endedMarch 31, |
|
|
2020 |
|
2019 |
|
|
|
|
|
|
|
Ore mined |
|
|
|
|
|
|
Ore (tonnes) |
|
|
158,754 |
|
|
- |
Gold grade (g/t) |
|
|
1.15 |
|
|
- |
Low-grade stockpile (tonnes) |
|
|
|
|
|
|
Ore (tonnes) |
|
|
18,490 |
|
|
- |
Gold grade (g/t) |
|
|
0.57 |
|
|
- |
Waste (tonnes) |
|
|
1,791,048 |
|
|
- |
Metal production (before payable metal
deductions) (1) |
|
|
|
|
|
|
Gold (ozs.) |
|
|
3,692 |
|
|
- |
Silver (ozs.) |
|
|
5,083 |
|
|
- |
- 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.
The following Sales Statistics tables summarize
certain information about our Oaxaca and Nevada Mining Unit
operations for the three months ended March 31, 2020 and 2019:
Oaxaca Mining Unit
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
2020 |
|
2019 |
|
|
|
|
|
|
|
Metal
sold |
|
|
|
|
|
|
Gold (ozs.) |
|
|
4,992 |
|
|
4,758 |
Silver (ozs.) |
|
|
355,228 |
|
|
268,189 |
Copper (tonnes) |
|
|
428 |
|
|
338 |
Lead (tonnes) |
|
|
1,964 |
|
|
1,653 |
Zinc (tonnes) |
|
|
4,356 |
|
|
4,506 |
Average metal prices
realized (1) |
|
|
|
|
|
|
Gold ($ per oz.) |
|
|
1,670 |
|
|
1,339 |
Silver ($ per oz.) |
|
|
17.03 |
|
|
15.74 |
Copper ($ per tonne) |
|
|
5,530 |
|
|
6,291 |
Lead ($ per tonne) |
|
|
1,691 |
|
|
2,063 |
Zinc ($ per tonne) |
|
|
1,888 |
|
|
2,856 |
Precious metal gold
equivalent ounces sold |
|
|
|
|
|
|
Gold Ounces |
|
|
4,992 |
|
|
4,758 |
Gold Equivalent Ounces from Silver |
|
|
3,622 |
|
|
3,153 |
Total Precious Metal Gold Equivalent Ounces |
|
|
8,614 |
|
|
7,911 |
Total cash cost before by-product credits per precious metal gold
equivalent ounce sold |
|
$ |
2,534 |
|
$ |
2,641 |
Total cash cost after by-product credits per precious metal gold
equivalent ounce sold (2) |
|
$ |
918 |
|
$ |
314 |
Total all-in sustaining cost per precious metal gold equivalent
ounce sold |
|
$ |
1,229 |
|
$ |
808 |
- 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.
- Total cash cost after by-product credits are
significantly affected by base metals sales during the periods
presented.
Nevada Mining Unit
|
|
|
|
|
|
|
|
|
Three months
endedMarch 31, |
|
|
2020 |
|
2019 |
|
|
|
|
|
|
|
Metal
sold |
|
|
|
|
|
|
Gold (ozs.) |
|
|
3,755 |
|
|
- |
Silver (ozs.) |
|
|
5,579 |
|
|
- |
Average metal prices
realized (1) |
|
|
|
|
|
|
Gold ($ per oz.) |
|
|
1,575 |
|
|
- |
Silver ($ per oz.) |
|
|
16.63 |
|
|
- |
|
|
|
|
|
|
|
Total cash cost before by-product
credits per gold ounce sold |
|
$ |
1,352 |
|
$ |
- |
Total cash cost after by-product
credits per gold ounce sold |
|
$ |
1,327 |
|
$ |
- |
Total all-in sustaining cost per
gold ounce sold |
|
$ |
1,330 |
|
$ |
- |
- 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.
See Accompanying TablesThe
following information summarizes the results of operations for Gold
Resource Corporation for the three months ended March 31, 2020 and
2019, its financial condition at March 31, 2020 and December 31,
2019, and its cash flows for the three months ended March 31, 2020
and 2019. The summary data as of March 31, 2020 and for the three
months ended March 31, 2020 and 2019 is unaudited; the summary data
as of December 31, 2019 is derived from our audited financial
statements contained in our annual report on Form 10-K for the year
ended December 31, 2019, 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, total all-in sustaining cost per
precious metal gold equivalent per ounce and total all-in 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
CORPORATIONCONSOLIDATED BALANCE
SHEETS(U.S. dollars in thousands, except share and per
share amounts)
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2020 |
|
2019 |
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
18,366 |
|
$ |
11,076 |
Gold and silver rounds/bullion |
|
|
4,111 |
|
|
4,265 |
Accounts receivable, net |
|
|
4,043 |
|
|
8,362 |
Inventories, net |
|
|
24,805 |
|
|
24,131 |
Prepaid taxes |
|
|
118 |
|
|
786 |
Prepaid expenses and other current assets |
|
|
1,266 |
|
|
2,032 |
Total current assets |
|
|
52,709 |
|
|
50,652 |
Property, plant and mine
development, net |
|
|
124,450 |
|
|
125,259 |
Operating lease assets,
net |
|
|
5,305 |
|
|
7,436 |
Deferred tax assets, net |
|
|
8,433 |
|
|
4,635 |
Other non-current assets |
|
|
5,176 |
|
|
5,030 |
Total assets |
|
$ |
196,073 |
|
$ |
193,012 |
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
12,092 |
|
$ |
14,456 |
Loans payable, current |
|
|
888 |
|
|
879 |
Finance lease liabilities, current |
|
|
452 |
|
|
446 |
Operating lease liabilities, current |
|
|
5,192 |
|
|
7,287 |
Income taxes payable, net |
|
|
1,289 |
|
|
- |
Mining royalty taxes payable, net |
|
|
1,018 |
|
|
1,538 |
Accrued expenses and other current liabilities |
|
|
3,563 |
|
|
3,366 |
Total current liabilities |
|
|
24,494 |
|
|
27,972 |
Reclamation and remediation
liabilities |
|
|
5,487 |
|
|
5,605 |
Loans payable, long-term |
|
|
556 |
|
|
782 |
Finance lease liabilities,
long-term |
|
|
320 |
|
|
435 |
Operating lease liabilities,
long-term |
|
|
124 |
|
|
160 |
Total liabilities |
|
|
30,981 |
|
|
34,954 |
Shareholders' equity: |
|
|
|
|
|
|
Common stock - $0.001 par value, 100,000,000 shares
authorized: |
|
|
|
|
|
|
69,541,527 and 65,691,527 shares outstanding at March 31, 2020 and
December 31, 2019, respectively |
|
|
70 |
|
|
66 |
Additional paid-in capital |
|
|
158,987 |
|
|
148,171 |
Retained earnings |
|
|
13,090 |
|
|
16,876 |
Treasury stock at cost, 336,398 shares |
|
|
(5,884) |
|
|
(5,884) |
Accumulated other comprehensive loss |
|
|
(1,171) |
|
|
(1,171) |
Total shareholders' equity |
|
|
165,092 |
|
|
158,058 |
Total liabilities and shareholders' equity |
|
$ |
196,073 |
|
$ |
193,012 |
GOLD RESOURCE
CORPORATIONCONSOLIDATED STATEMENTS OF
OPERATIONS (U.S. dollars in thousands, except
share and per share amounts)Unaudited
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2020 |
|
2019 |
|
Sales, net |
|
$ |
28,005 |
|
$ |
26,578 |
|
Mine cost of sales: |
|
|
|
|
|
|
|
Production costs |
|
|
20,885 |
|
|
17,477 |
|
Depreciation and amortization |
|
|
7,398 |
|
|
3,646 |
|
Reclamation and remediation |
|
|
38 |
|
|
16 |
|
Total mine cost of sales |
|
|
28,321 |
|
|
21,139 |
|
Mine gross (loss) profit |
|
|
(316) |
|
|
5,439 |
|
Costs and expenses: |
|
|
|
|
|
|
|
General and administrative expenses |
|
|
2,274 |
|
|
2,011 |
|
Exploration expenses |
|
|
1,155 |
|
|
1,450 |
|
Other expense, net |
|
|
1,513 |
|
|
25 |
|
Total costs and expenses |
|
|
4,942 |
|
|
3,486 |
|
(Loss) income before income
taxes |
|
|
(5,258) |
|
|
1,953 |
|
(Benefit) provision for income taxes |
|
|
(2,137) |
|
|
1,071 |
|
Net (loss) income |
|
$ |
(3,121) |
|
$ |
882 |
|
Net (loss) income per common
share: |
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.05) |
|
$ |
0.01 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
66,022,202 |
|
|
60,672,133 |
|
Diluted |
|
|
66,022,202 |
|
|
61,142,088 |
|
GOLD RESOURCE
CORPORATIONCONSOLIDATED STATEMENTS OF CASH
FLOWS (U.S. dollars in thousands, except share and
per share amounts)Unaudited
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2020 |
|
2019 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(3,121) |
|
$ |
882 |
|
Adjustments to reconcile net (loss) income to net cash from
operating activities: |
|
|
|
|
|
|
|
Deferred income taxes |
|
|
(4,650) |
|
|
895 |
|
Depreciation and amortization |
|
|
7,535 |
|
|
3,763 |
|
Stock-based compensation |
|
|
470 |
|
|
336 |
|
Other operating adjustments |
|
|
1,780 |
|
|
(128) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
|
|
4,320 |
|
|
(2,771) |
|
Inventories |
|
|
(3,495) |
|
|
(6,324) |
|
Prepaid expenses and other current assets |
|
|
175 |
|
|
221 |
|
Other non-current assets |
|
|
921 |
|
|
40 |
|
Accounts payable and other accrued liabilities |
|
|
(802) |
|
|
3,222 |
|
Mining royalty and income taxes payable, net |
|
|
1,844 |
|
|
(784) |
|
Net cash provided by (used in) operating activities |
|
|
4,977 |
|
|
(648) |
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
Capital expenditures |
|
|
(6,929) |
|
|
(8,786) |
|
Other investing activities |
|
|
1 |
|
|
1 |
|
Net cash used in investing activities |
|
|
(6,928) |
|
|
(8,785) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
Proceeds from the exercise of stock options |
|
|
- |
|
|
98 |
|
Proceeds from issuance of stock |
|
|
10,350 |
|
|
10,806 |
|
Dividends paid |
|
|
(657) |
|
|
(303) |
|
Repayment of loans payable |
|
|
(216) |
|
|
(187) |
|
Repayment of finance leases |
|
|
(109) |
|
|
(101) |
|
Net cash provided by financing activities |
|
|
9,368 |
|
|
10,313 |
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
|
(127) |
|
|
(115) |
|
Net increase in cash and cash
equivalents |
|
|
7,290 |
|
|
765 |
|
Cash and cash equivalents at
beginning of period |
|
|
11,076 |
|
|
7,762 |
|
Cash and cash equivalents at
end of period |
|
$ |
18,366 |
|
$ |
8,527 |
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow
Information |
|
|
|
|
|
|
|
Interest expense paid |
|
$ |
32 |
|
$ |
42 |
|
Income and mining taxes paid |
|
$ |
197 |
|
$ |
209 |
|
Non-cash investing
activities: |
|
|
|
|
|
|
|
Change in capital expenditures in accounts payable |
|
$ |
(950) |
|
$ |
2,303 |
|
Change in estimate for asset retirement costs |
|
$ |
435 |
|
$ |
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 $114 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, the scope, duration, and impact of the COVID-19
pandemic on mining operations, Company employees, and supply chains
as well as the scope, duration and impact of government action
aimed at mitigating the pandemic may cause the actual results and
future events to differ materially from those expressed or implied
by such forward-looking information. Also, 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
Gold Resource (AMEX:GORO)
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