- CASH BALANCE OF OVER $33.3 MILLION AFTER OVER $15 MILLION
INVESTED IN CAPITAL AND EXPLORATION
- OPERATING CASH FLOW OF $12.2 MILLION AND EBITDA OF $29.0
MILLION
- REITERATE 2022 PRODUCTION AND COST GUIDANCE
Gold Resource Corporation (NYSE American: GORO) (the “Company”)
sold a total of 8,746 ounces of gold and 231,622 ounces of silver
in Q2 2022 for a gold equivalent total of 11,475 ounces.
Additionally, the Company sold 3,590 tonnes of zinc, 286 tonnes of
copper, and 1,755 tonnes of lead.
Allen Palmiere, President and CEO said “Production remains solid
at the Don David Gold Mine in Mexico with significant improvements
in financial measures over the same period last year. The volume of
tonnes processed during the quarter declined slightly from Q1 as we
continue to address ground support challenges common to our type of
mineral deposit. Grades and improved recoveries helped ensure we
delivered another quarter of over 10 thousand gold equivalent
ounces. We continue to be committed to having a disciplined focus
on costs in the current inflationary market and would like to
reiterate our 2022 guidance. Likewise, our continued reinvestment
into exploration and infrastructure improvements at the Don David
Gold Mine and progressing the feasibility study and permitting
initiatives at the Back Forty Project in Michigan are focused on
favorably impacting our environment, social and governance programs
while creating operational efficiencies and longevity.”
Q2 2022 HIGHLIGHTS
Additional highlights for the second quarter ended June 30,
2022, are summarized below:
- Total cash cost for the quarter was $247 per gold equivalent
(“AuEq”) ounce (after co-product credits) and total all-in
sustaining cost for the quarter was $799 per AuEq ounce (after
co-product credits). Both non-GAAP measures were favorably impacted
by higher co-product credits for base metals sold.1
- For the eighth consecutive year, the Don David Gold Mine
(“DDGM”) earned the prestigious Empresa Socialmente Responsable
(“ESR”) award from the Mexican Center for Philanthropy (CEMEFI).
Awards are given to organizations who demonstrate a commitment to
supporting social and environmental protection programs within
their local communities.
- During the quarter, the Company continued to process tailings
material from a nearby community in an effort to ensure the proper
environmental treatment and storage of the material.
- The Company’s Annual Meeting of Shareholders was held in person
on May 19, 2022. During the meeting, shareholders approved the
current five Directors to serve another annual term and ratified
the appointment of BDO USA, LLP as the independent auditor for the
fiscal year ending December 31, 2022.
- $0.9 million was distributed in shareholder dividends this
quarter, totaling over $121 million since 2010.
- Working capital was $37.1 million as of June 30, 2022, $7.8
million higher than as of December 31, 2021. The increase is
primarily due to a decrease in the liability related to the zinc
zero cost collar.
Trending Highlights
2021
2022
Q1
Q2
Q3
Q4
Q1
Q2
Operating Data
Total tonnes milled
138,980
129,590
98,010
135,398
136,844
129,099
Average Grade
Gold (g/t)
1.68
1.93
2.68
1.93
3.00
2.63
Silver (g/t)
72
77
91
82
81
64
Copper (%)
0.43
0.36
0.37
0.38
0.41
0.32
Lead (%)
1.70
1.63
2.29
2.17
1.97
1.99
Zinc (%)
4.29
3.64
4.79
4.77
4.89
4.00
Metal production (before payable metal
deductions)
Gold (ozs.)
6,097
6,555
6,933
6,853
11,187
9,317
Silver (ozs.)
307,610
295,979
265,829
330,873
332,292
249,088
Copper (tonnes)
441
368
284
413
431
303
Lead (tonnes)
1,737
1,654
1,808
2,345
2,073
2,020
Zinc (tonnes)
4,377
3,683
3,920
5,349
5,562
4,282
Metal produced and sold
Gold (ozs.)
5,019
5,697
5,809
6,119
8,381
8,746
Silver (ozs.)
253,061
270,321
255,394
287,805
265,407
231,622
Copper (tonnes)
382
365
268
405
408
286
Lead (tonnes)
1,176
1,214
1,550
2,059
1,639
1,755
Zinc (tonnes)
3,134
3,193
3,059
4,167
4,359
3,590
Average metal prices realized
Gold ($ per oz.)
$
1,787
$
1,822
$
1,762
$
1,811
$
1,898
$
1,874
Silver ($ per oz.)
$
26.77
$
26.88
$
23.19
$
23.51
$
23.94
$
22.05
Copper ($ per tonne)
$
8,873
$
10,375
$
9,092
$
9,768
$
10,144
$
9,275
Lead ($ per tonne)
$
2,082
$
2,162
$
2,397
$
2,339
$
2,347
$
2,168
Zinc ($ per tonne)
$
2,797
$
2,945
$
3,032
$
3,466
$
3,842
$
4,338
Precious metal gold equivalent ounces
sold
Gold Ounces
5,019
5,697
5,809
6,119
8,381
8,746
Gold Equivalent Ounces from Silver
3,791
3,999
3,356
3,736
3,348
2,729
Total AuEq oz
8,810
9,696
9,165
9,855
11,729
11,475
Financial Data ($'s in thousands except
for per ounce)
Total sales, net
$
27,268
$
30,836
$
29,029
$
38,063
$
45,417
$
37,064
Earnings from mining operations before
depreciation and amortization
11,974
11,259
11,766
17,744
25,281
15,281
Total cash cost after co-product credits
per AuEq oz sold
408
713
466
73
(121)
247
Total consolidated all-in sustaining cost
after co-product credits per AuEq oz sold
937
1,280
1,031
451
499
799
Production Costs
15,243
19,523
17,216
20,252
20,074
21,722
Production Costs/Tonnes Milled
110
151
176
150
147
168
Earnings before interest, taxes,
depreciation and amortization
8,520
7,413
7,402
10,304
15,328
13,716
Operating Cash Flows
6,831
9,298
5,743
12,911
4,230
7,976
Net income
2,527
1,283
1,529
2,689
4,019
2,626
Earnings per share - basic
$
0.03
$
0.02
$
0.02
$
0.03
$
0.05
$
0.03
2022 Capital and Exploration Investment Summary
For the six months ended June
30, 2022
2022 full year
guidance
(in thousands)
Sustaining Investments:
Underground Development
Capital
$
3,168
$
8.5 - 9.5 million
Infill Drilling and Exploration
Development
Capital
4,040
7.0 - 7.5 million
Other Sustaining Capital
Capital
1,416
4.0 - 4.5 million
Subtotal of Sustaining Investments:
8,624
Growth Investments:
DDGM growth:
Gold Regrind
Capital
745
-
Dry Stack Completion
Capital
1,149
-
Surface Exploration / Other
Exploration
935
2.5 - 3.0 million
Underground Exploration Drilling
Exploration
1,112
3.0 - 3.5 million
Back Forty growth:
Back Forty Feasibility Study &
Permits
Exploration
3,095
8.0-9.0 million
Subtotal of Growth Investments:
7,036
Total Capital and Exploration:
$
15,660
$
33.0 - 37.0 million
The Company’s investment in Mexico continued in Q2 2022 totaling
$12.6 million year-to-date. Our investment in Mexico is focused on
favorably impacting our environment, social and governance programs
while creating operational efficiencies and longevity. Year-to-date
at the Back Forty Project, $3.1 million has been invested in
feasibility and permitting initiatives.
Gold Regrind Project: Zinc tailings
are being reground and leached to produce doré bars. Gold recovery
is expected to continue to increase, and we have seen an
approximate 5% increase in the gold recovery since the same period
in 2021. Completion and commissioning were finalized in Q2 2022. A
total of $1.8 million was invested in this project, $1.1 million in
2021.
Dry Stack Tailings Project:
Construction of the tailings filtration plant and dry stack
facility were completed in 2021. During the first half of 2022,
work continued to optimize the operations of the filtration plant.
Currently 85% of the tails are sent to the dry stack facility, and
the remaining 15% is sent to the underground operations in the form
of paste fill for ground support. The dry stack facilities will
conserve and recirculate water, eliminate risks related to
traditional tailings facilities, accelerate reclamation of certain
areas of the open pit mine, and extend the life of the operations.
As of June 30, 2022, a total of $15.1 million has been invested in
this project, $14.0 million through 2021.
Underground and Exploration
Development: Mine development during the quarter included
ramps and accesses to different areas of the deposit, vertical
shafts, and exploration development drifts. A total of 2,346 meters
of development, at a cost of $5.3 million (1,252 meters at a cost
of $2.9 million in Q2), was completed during the first half of
2022. For the first half of 2022, underground mine development was
$3.2 million and exploration development was $2.1 million (included
in Infill Drilling and Exploration Development in the table above).
We plan to invest a total of $8.5 million to $9.5 million in
underground development and an additional $4.0 million to $4.5
million in exploration development in 2022.
Back Forty Feasibility and
Permitting: Work on the optimized feasibility study
progressed during Q2 2022. Current initiatives are focused on mine
planning and process plant design. Environmental considerations are
a key factor in the overall site layout and infrastructure
decisions being made. The feasibility study work for the Back Forty
Project in Michigan, USA progressed during Q2 2022 with completion
expected in the second half of this year, followed by permit
applications being submitted with state agencies in Michigan.
Q2 2022 Conference Call
The Company will host a conference call tomorrow, Thursday, July
28, 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, Alberto Reyes, Chief Operating Officer and Kim
Perry, Chief Financial 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://app.webinar.net/AgbarDeZeBK
To join the call via telephone, please use the following dial-in
details: Participant Toll Free: (888) 440-2094 International: (438)
803-0544 Conference ID: 1047419
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.
____________________
1 See Management’s Discussion and Analysis
of Financial Condition and Results of Operations – Non-GAAP
Measures below for a reconciliation of non-GAAP measures to
applicable GAAP measures.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220727006193/en/
Kim Perry Chief Financial Officer Kim.Perry@GRC-USA.com
www.GoldResourcecorp.com
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