- CASH BALANCE OF OVER $22 MILLION
- OVER $24 MILLION INVESTED IN CAPITAL AND EXPLORATION
- THIRD QUARTER LOSS OF $9.7 MILLION IS A RESULT OF
- LOWER METAL PRICES
- HIGHER DEPRECIATION EXPENSE DUE TO LOWER MINERAL RESERVE
BASE
- BACK FORTY PROJECT FEASIBILITY STUDY WORK & PERMITTING
EXPENSES
Gold Resource Corporation (NYSE American: GORO) (the “Company”)
sold a total of 5,478 ounces of gold and 225,012 ounces of silver
in Q3 2022 for a gold equivalent total of 8,042 ounces.
Additionally, the Company sold 2,943 tonnes of zinc, 282 tonnes of
copper, and 1,056 tonnes of lead.
Allen Palmiere, President and CEO said “The implementation of
safety programs has been our top priority in 2021 and 2022 to
address ground support and ventilation issues. The disciplined
approach had an impact on production volumes, mine development and
exploration. With that said, we are still on track to meet our 2022
guidance. We are putting safety first at the temporary cost of
production. During the quarter we continued to advance the
feasibility study and permitting initiatives at the Back Forty
Project in Michigan.”
Q3 2022 HIGHLIGHTS
Additional highlights for the third quarter ended September 30,
2022, include:
- Our balance sheet remains strong, with $22.5 million in cash as
of September 30, 2022. The decrease of $11.2 million since December
31, 2021, is after:
- year-to-date cash inflow of $7.9 million from operating
activities, net of $16.2 million in income tax payments for tax
years 2021 and 2022;
- $6.9 million investment in the Back Forty Project feasibility
study and permitting work;
- investing Canadian dollar (“C$”) 2.4 million (or US dollar $1.7
million) in Maritime Resources Corp., ticker symbol “MAE.V” on the
Toronto Stock Exchange—Venture Exchange (“TSX-V”), in exchange for
9.9% of the company’s issued and outstanding shares via a private
placement;
- investing $14.1 million in capital expenditures; and
- distributing to shareholders $2.7 million in dividends ($0.9
million this quarter, totaling over $122 million since 2010).
- The Don David Gold Mine safety program aims to bolster the
overall health and safety culture.
- There were no lost time incidents during the third quarter of
2022.
- The year-to-date lost time injury frequency rate per million
hours of 2.76 is substantially below the Camimex (Mexican Chamber
of Mines) benchmark of 5.281.
- During the third quarter of 2022, production, mine development,
and exploration were deliberately and temporarily slowed to improve
safety specific to ground support and ventilation.
- Working capital was $28.9 million at September 30, 2022, $0.4
million lower than at December 31, 2021. The decrease is primarily
due to a decrease in cash discussed above.
- Total cash cost for the quarter was $1,103 per gold equivalent
(“AuEq”) ounce (after co-product credits) and Total all-in
sustaining cost for the quarter was $1,831 per AuEq ounce (after
co-product credits). Both non-GAAP measures were higher in the
quarter due to the impact of lower co-product credits as a result
of lower base metal prices 2
Trending Highlights
2021
2022
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Operating Data
Total tonnes milled
138,980
129,590
98,010
135,398
136,844
129,099
110,682
Average Grade
Gold (g/t)
1.68
1.93
2.68
1.93
3.00
2.63
1.98
Silver (g/t)
72
77
91
82
81
64
80
Copper (%)
0.43
0.36
0.37
0.38
0.41
0.32
0.37
Lead (%)
1.70
1.63
2.29
2.17
1.97
1.99
1.59
Zinc (%)
4.29
3.64
4.79
4.77
4.89
4.00
4.21
Metal production (before payable metal
deductions)
Gold (ozs.)
6,097
6,555
6,933
6,853
11,187
9,317
5,851
Silver (ozs.)
307,610
295,979
265,829
330,873
332,292
249,088
261,256
Copper (tonnes)
441
368
284
413
431
303
296
Lead (tonnes)
1,737
1,654
1,808
2,345
2,073
2,020
1,249
Zinc (tonnes)
4,377
3,683
3,920
5,349
5,562
4,282
3,901
Metal produced and sold
Gold (ozs.)
5,019
5,697
5,809
6,119
8,381
8,746
5,478
Silver (ozs.)
253,061
270,321
255,394
287,805
265,407
231,622
225,012
Copper (tonnes)
382
365
268
405
408
286
282
Lead (tonnes)
1,176
1,214
1,550
2,059
1,639
1,755
1,056
Zinc (tonnes)
3,134
3,193
3,059
4,167
4,359
3,590
2,943
Average metal prices realized
Gold ($ per oz.)
$
1,787
$
1,822
$
1,762
$
1,811
$
1,898
$
1,874
$
1,627
Silver ($ per oz.)
$
26.77
$
26.88
$
23.19
$
23.51
$
23.94
$
22.05
$
18.54
Copper ($ per tonne)
$
8,873
$
10,375
$
9,092
$
9,768
$
10,144
$
9,275
$
7,115
Lead ($ per tonne)
$
2,082
$
2,162
$
2,397
$
2,339
$
2,347
$
2,168
$
1,882
Zinc ($ per tonne)
$
2,797
$
2,945
$
3,032
$
3,466
$
3,842
$
4,338
$
3,186
Precious metal gold equivalent ounces
sold
Gold Ounces
5,019
5,697
5,809
6,119
8,381
8,746
5,478
Gold Equivalent Ounces from Silver
3,791
3,999
3,356
3,736
3,348
2,729
2,564
Total AuEq oz
8,810
9,696
9,165
9,855
11,729
11,475
8,042
Financial Data ($'s in thousands except
for per ounce)
Total sales, net
$
27,268
$
30,836
$
29,029
$
38,063
$
45,417
$
37,064
$
23,869
Earnings from mining operations before
depreciation and amortization
11,974
11,259
11,766
17,744
25,281
15,281
4,431
Total cash cost after co-product credits
per AuEq oz sold
408
713
466
73
(121
)
247
1,103
Total consolidated all-in sustaining cost
after co-product credits per AuEq oz sold
937
1,280
1,031
451
499
799
1,831
Production Costs
15,243
19,523
17,216
20,252
20,074
21,722
19,380
Production Costs/Tonnes Milled
110
151
176
150
147
168
175
Earnings before interest, taxes,
depreciation and amortization
8,520
7,413
7,402
10,304
15,328
13,716
(3,338
)
Operating Cash Flows
6,831
9,298
5,743
12,911
4,230
7,976
(4,292
)
Net income
2,527
1,283
1,529
2,689
4,019
2,673
(9,730
)
Earnings per share - basic
$
0.03
$
0.02
$
0.02
$
0.03
$
0.05
$
0.03
($
0.11
)
2022 Capital and Exploration Investment Summary
For the nine months ended
September 30, 2022
2022 full year
projection
(in thousands)
Sustaining Investments:
Underground Development
Capital
$
5,251
$
7.0 - 8.0 million
Infill Drilling and Exploration
Development
Capital
5,056
7.0 - 7.5 million
Other Sustaining Capital
Capital
1,922
2.0 - 2.5 million
Subtotal of Sustaining Investments:
12,229
Growth Investments:
DDGM growth:
Gold Regrind
Capital
745
-
Dry Stack Completion
Capital
1,149
-
Surface Exploration / Other
Exploration
1,641
2.0 - 2.5 million
Underground Exploration Drilling
Exploration
1,549
2.0 - 2.5 million
Back Forty growth:
Back Forty Feasibility Study &
Permits
Exploration
6,925
9.0-9.5 million
Subtotal of Growth Investments:
12,009
Total Capital and Exploration:
$
24,238
$
29.0 - 32.5 million
The Company’s investment in Mexico continued in the third
quarter of 2022 totaling $17.3 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. At the Back Forty Project, $6.9 million has been
invested in feasibility and permitting initiatives
year-to-date.
Underground and Exploration
Development:
Mine development during the quarter included ramps and access to
different areas of the deposit, ventilation shafts, and exploration
development drifts. A total of 3,210 meters of development, at a
cost of $7.5 million (864 meters at a cost of $2.2 million in the
third quarter), was completed during the year through September 30,
2022. Through September 30, 2022, underground mine development was
$5.3 million and exploration development was $2.2 million (included
in Infill Drilling and Exploration Development in the table above).
As part of ongoing safety initiatives, the Company also invested in
additional ground support and improved ventilation for the mine,
which deliberately but temporarily slowed underground and
exploration development. We plan to invest a total of $7.0 million
to $8.0 million in underground development and an additional $3.5
million to $4.0 million in exploration development in 2022.
Back Forty Feasibility and
Permitting:
Work on the optimized feasibility study progressed during the
third quarter of 2022. Mine planning, process plant design and site
layout and infrastructure were significantly completed during the
quarter. Current initiatives are focused on finalizing the
financial models with operating and capital costs, which may be
subject to some volatility due to the inflationary market
conditions. Environmental and cultural resource considerations have
been a key factor in the overall project design. On August 5, 2022,
the Company was invited by Michigan’s Department of Environment,
Great Lakes and Energy to participate in a Scoping Environmental
Impact Assessment Meeting to present the initial site plan and
other key improvements being incorporated into the Back Forty
Project’s optimized feasibility study. This was an opportunity to
meet with tribal representatives to promote the Back Forty Project,
which is focused on favorably impacting our environment, social and
governance programs, while identifying economic and operational
efficiencies. The feasibility study work for the Back Forty Project
progressed during the third quarter of 2022. Work related to
metallurgy and the economic model is expected to continue into
2023. Permit applications will not be submitted with state agencies
in Michigan until the completion of the feasibility study.
Q3 2022 Conference Call
The Company will host a conference call Tuesday, November 1,
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/no36p6L10ja
To join the call via telephone, please use the following dial-in
details:
Participant Toll Free: +1 (888) 886-7786 International: +1 (416)
764-8658 Conference ID: 96525237
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
https://www.camimex.org.mx/index.php/estadisticas/Seguridad
2 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/20221031005904/en/
Kim Perry Chief Financial Officer Kim.Perry@GRC-USA.com
www.GoldResourcecorp.com
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