- Cash Balance of $33.7 Million at Year End
- $34.8 Million Operating Cash Flows for 2021
- Revenue Strong at $125.2 Million
- $25.5 Million Invested in the Don David Gold Mine
- Filter Press Plant and Dry Stack Tailings Facility
Complete
- Implemented Profit Sharing With Our Employees
- Acquired the Back Forty Project in Michigan, USA
Gold Resource Corporation (NYSE American: GORO) (the
“Company”, “We”, “Our” or “GRC”)
produced and sold 22,644 gold ounces, 1,066,581 silver ounces,
1,420 copper tonnes, 5,999 lead tonnes and 13,553 zinc tonnes. For
the year ended December 31, 2021, we reported net income of $8.0
million with revenue of $125.2 million and mine gross profit of
$36.7 million from operations.
Allen Palmiere, President and CEO said, “Our operations
delivered excellent results during a transformative year. We
reinvested $6.6 million into exploration and infrastructure
improvements at the Don David Gold Mine during the fourth quarter,
bringing our year-to-date investment to $25.5 million. Our
investment in Mexico is focused on favorably impacting our
environment, social and governance programs while creating
operational efficiencies and longevity. Construction of the filter
press plant and dry stack tailings facilities is now complete. The
dry stack facilities will conserve and recirculate water, eliminate
risks related to traditional tailings facilities, accelerate
reclamation of the open pit mine, and extend the life of the
operations. Our strong operating cash flow per share and dividend
yield puts us among the top of our peer group which is currently
not reflected in our share price.”
On December 10, 2021, The Company completed the acquisition of
all the issued and outstanding common shares of Aquila Resources
Inc. Aquila’s principal asset is its 100% interest in the Back
Forty Project located in Menominee County, Michigan, USA. The Back
Forty Project has a polymetallic (gold, silver, copper, silver,
lead and zinc) Volcanogenic Massive Sulfide deposit. The Back Forty
Project controls surface and mineral rights through ownership,
leases with the State of Michigan, and royalties with private
parties.
2021 HIGHLIGHTS
Additional highlights for the year ended December 31, 2021, are
summarized below:
Strategic
- In December, the Company successfully completed the acquisition
of all the issued and outstanding common shares of Aquila Resources
Inc., the owner of the Back Forty Project. The Back Forty Project
is an advanced exploration stage property in Michigan, USA, for
which the Company is currently preparing a definitive feasibility
study.
- $3.4 million was distributed in shareholder dividends, totaling
over $119 million since 2010.
Operational
- Don David Gold Mine (“DDGM”) initiated a safety program that
aims to bolster the health and safety culture. Despite program
progress, four lost time incidents occurred during 2021, with one
occurring in the fourth quarter. All incidents are thoroughly
investigated, and the appropriate actions taken.
- DDGM received the Mexican ESR award for the seventh consecutive
year in 2021. Additionally, in September the Company released it’s
2020 Sustainability Accounting Standards Report.
- During the year, the Company announced encouraging results from
our DDGM exploration program. Vein structures were confirmed up to
250 meters above the current production area and drilling confirmed
the potential for the down-dip extension of the Switchback vein
system.
Financial
- Working capital was $29.3 million as at December 31, 2021.
- Don David Gold Mine total cash costs (after co-product credits)
and total all-in sustaining cost per precious metal gold equivalent
ounce sold were $414 and $922, respectively.
2022 Guidance
The Company’s focus continues to be on unlocking the value of
the Don David Gold Mine, existing infrastructure, and large
property position in Oaxaca, Mexico and therefore we plan to make
significant investments for infrastructure and exploration in 2022.
Additionally, significant capital will be invested in delivery of
the Back Forty definitive feasibility study, permitting
applications, and exploration in the immediate vicinity of the
proposed project.
Measure
2022 Guidance
Payable Production
24,000 to 26,000 Gold Ounces
900,000 to 1,000,000 Silver Ounces
Cash Costs after co-product credits per
gold equivalent (“AuEq”) ounce
$425 to $475
All-in Sustaining Costs after co-product
credits per AuEq ounce (1) (2)
$950 to $1,050 (DDGM) $1,200 to $1,300
(Consolidated)
Capital Investment
$13 to $14 million DDGM Sustaining $8 to
$9 million Back Forty Growth
Exploration Commitment
$7 to $8 million Sustaining $5 to $6
million Growth
G & A
$8.5 million to $9 million, excluding
Stock-based Compensation & Restructuring
(1)
Calculations of cash cost after co-product
credits per gold equivalent ounce and all-in sustaining cost after
co-product credits per AuEq ounce are non-GAAP financial measures.
Please see the Non-GAAP Measures section of the Management's
Discussion and Analysis and Results of Operations for a complete
reconciliation of the non-GAAP measures to US GAAP.
(2)
Co-product credits directly impact the
Cash Costs and All-in Sustaining Costs per AuEq ounce calculation.
Guidance is based on approximately 7,000 tonnes of lead sold at an
$0.94 per pound metal price, approximately 1,675 tonnes of copper
sold at a $4.00 per pound metal prices and 20,000 tonnes of zinc
sold at a $1.25 per pound metal price.
Trending Highlights
2020
2021
Q3
Q4
Q1
Q2
Q3
Q4
Full Year
Operating Data
Total tonnes milled
153,531
149,762
138,980
129,590
98,010
135,398
501,978
Average Grade
Gold (g/t)
1.26
1.79
1.68
1.93
2.68
1.93
2.01
Silver (g/t)
68
59
72
77
91
82
80
Copper (%)
0.40
0.40
0.43
0.36
0.37
0.38
0.39
Lead (%)
1.93
1.93
1.70
1.63
2.29
2.17
1.93
Zinc (%)
5.02
4.93
4.29
3.64
4.79
4.77
4.36
Metal production (before payable metal
deductions)
Gold (ozs.)
4,728
6,854
6,097
6,555
6,933
6,853
26,438
Silver (ozs.)
324,592
276,902
307,610
295,979
265,829
330,873
1,200,291
Copper (tonnes)
428
431
441
368
284
413
1,506
Lead (tonnes)
2,157
1,914
1,737
1,654
1,808
2,345
7,544
Zinc (tonnes)
5,538
5,310
4,377
3,683
3,920
5,349
17,329
Metal produced and sold
Gold (ozs.)
3,619
6,314
5,019
5,697
5,809
6,119
22,644
Silver (ozs.)
316,993
255,945
253,061
270,321
255,394
287,805
1,066,581
Copper (tonnes)
447
398
382
365
268
405
1,420
Lead (tonnes)
1,849
1,755
1,176
1,214
1,550
2,059
5,999
Zinc (tonnes)
4,586
4,281
3,134
3,193
3,059
4,167
13,553
Average metal prices realized
Gold ($ per oz.)
1,887
1,867
1,787
1,822
1,762
1,811
1,796
Silver ($ per oz.)
25.47
24.18
26.77
26.88
23.19
23.51
25.06
Copper ($ per tonne)
6,711
7,360
8,873
10,375
9,092
9,768
9,553
Lead ($ per tonne)
1,902
1,870
2,082
2,162
2,397
2,339
2,268
Zinc ($ per tonne)
2,392
2,650
2,797
2,945
3,032
3,466
3,091
Precious metal gold equivalent ounces
sold
Gold Ounces
3,619
6,314
5,019
5,697
5,809
6,119
22,644
Gold Equivalent Ounces from Silver
4,279
3,315
3,791
3,999
3,356
3,736
14,882
Total AuEq oz
7,898
9,629
8,810
9,696
9,165
9,855
37,526
Financial Data ($'s in thousands except
for per ounce)
Total sales, net
$ 26,435
$ 29,587
$ 27,268
$ 30,836
$ 29,029
$ 38,063
$ 125,196
Earnings from mining operations before
depreciation and amortization
10,105
11,770
11,974
11,259
11,766
17,744
52,743
Total cash cost after co-product credits
per AuEq oz sold
612
647
408
713
466
73
414
Total all-in sustaining cost after
co-product credits per AuEq oz sold
1,109
1,357
937
1,280
1,031
451
922
Production Costs
16,286
17,770
15,243
19,523
17,216
20,252
72,234
Production Costs/Tonnes Milled
106
119
110
151
176
150
144
Earnings before interest, taxes,
depreciation and amortization (from continuing operations)
7,020
6,750
8,520
7,413
7,402
10,304
33,639
Operating Cash Flows
6,396
9,125
6,831
9,298
5,743
12,911
34,783
Net income (loss)
(251)
(3,119)
2,527
1,283
1,529
2,689
8,028
Earnings per share - basic (from
continuing operations)
($ 0.00)
($ 0.04)
$ 0.03
$ 0.02
$ 0.02
$ 0.03
$ 0.11
2021 Capital and Exploration Investment Summary
For the year ended December
31, 2021
2021 full year
guidance
(in thousands)
Sustaining Investments:
Underground Development
Capital
4,935
5,000
Infill Drilling
Capital
1,959
1,600
Other Sustaining Capital
Capital
4,413
4,100
Growth Investments:
Surface Exploration Expense
Exploration
3,983
3,000
Underground Exploration Drilling
Exploration
903
1,000
Surface Exploration & Other
Capital
1,931
1,600
Gold Regrind
Capital
$
1,025
$
700
Dry Stack Completion
Capital
6,347
6,200
Total
$
25,496
$
23,200
The Company’s investment in Mexico continued in 2021 with
investments totaling $25.5 million.
Gold Recovery Project:
Metallurgical testing, full-scale design, and engineering of the
zinc tailings regrind circuit was completed through Q2 2021. In Q3
2021, work began to repurpose the existing ball mill and refurbish
floatation cells while new flotation cells are expected to be
delivered later in Q1 2022. Regrinding of the zinc tailings is
expected to increase gold recovery by 6% to 10%. The reground
material will be leached to produce doré bars. Completion and
commissioning are expected in Q1 2022. As of December 31, 2021, $1
million has been invested in this project.
Dry Stack Tailings Project:
Construction and commissioning of the filtration plant and dry
stack tailings project is complete. The dry-stacked tailings will
accelerate reclamation of certain areas of the open pit mine,
extend the life of the operation, and reduce water consumption as
approximately 80% of the process water will be available for reuse.
As of December 31, 2021, $14 million has been invested in this
project.
Underground and Exploration
Development: Mine development during the quarter included
ramps and accesses to different areas of the deposit and
exploration development drifts. A total of 2,501 meters of
underground development and exploration development, at a cost of
$4.9 million, was completed during the year, including access to
new exploration drill stations on level 17.
Year-End 2021 Conference Call
The Company will host a conference call tomorrow, Friday, March
11, 2022, at 10:00 a.m. Eastern Time.
The conference call will be recorded and posted to the Company’s
website later in the day following the conclusion of the call.
Following prepared remarks, Allen Palmiere, President and Chief
Executive Officer, Kim Perry, Chief Financial Officer and Alberto
Reyes, Chief Operating Officer will host a live question and answer
(Q&A) session. There are two ways to join the conference
call.
To join the conference via webcast, please click on the
following link:
https://onlinexperiences.com/Launch/QReg/ShowUUID=1267460F-8274-4CFB-B8E6-EDBFAEC0D986
To join the call via telephone please use one of the following
dial-in details: Participant Toll Free: 888-440-2094 International:
438-803-0544
Please connect to the conference call at least 10 minutes prior
to the start time using one of the connection options listed
above.
About GRC:
Gold Resource Corporation is a gold and silver producer,
developer, and explorer with its operations centered on the Don
David Gold Mine in Oaxaca, Mexico. Under the direction of an
experienced board and senior leadership team, the company’s focus
is to unlock the significant upside potential of its existing
infrastructure and large land position surrounding the mine in
Oaxaca, Mexico and to develop the Back Forty Project in Michigan,
USA. For more information, please visit GRC’s website, located at
www.goldresourcecorp.com and read the company’s Form 10-K for an
understanding of the risk factors associated with its business.
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-Q filed with the SEC.
Additional factors that could cause or contribute to such
differences include, but are not limited to, those discussed in the
periodic and current reports filed by the Company with the
Securities and Exchange Commission, including the Company’s Annual
Report on Form 10-K for the year ended December 31, 2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220310006046/en/
Kim Perry Chief Financial Officer Kim.Perry@GRC-USA.com
www.goldresourcecorp.com
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