Gold Resource Corporation (NYSE American: GORO) (the “Company,”
“We,” “Our” or “GRC”) remains focused on unlocking the value of our
Mexican mine, existing infrastructure, and large property position.
Additionally, the Company remains committed to optimizing the mine
plan and process flowsheets for the Back Forty Project. With that
said, the 2022 market volatility, challenging economic conditions
and the lower grade profile of our current Mineral Reserves and
Mineral Resources, have collectively contributed to an adverse
impact on our 2022 cash flows and consolidated earnings. While we
are focused on organic growth and disciplined cost cutting
initiatives, the lower grade profile is expected to continue
through 2023 and is projected to negatively impact operating cash
flows and total cash costs per gold equivalent ounce, as reflected
in the guidance table below.
Allen Palmiere, President and CEO, said, “2022 was a challenging
year for the Company on a number of fronts; however, we made
excellent strides with our operations, capital and exploration
programs. Further, I remain very proud of how our workforce
embraced our objectives and values around safety, operational
process improvement and collaboration with our internal and
external stakeholders. We will continue identifying operational
efficiencies and cost improvement opportunities in 2023; however,
as per our 2023 guidance, lower gold grades will result in less
production in 2023 than 2022 and further significantly contribute
to an increased Cash Costs and All-in Sustaining Costs. More
importantly, we are eager to advance the exploration drilling at a
number of highly prospective underground targets in Mexico. With
the Back Forty Project, we will continue work on the feasibility
study with a deliberate and measured approach. I remain optimistic
that this year will provide opportunities to grow the Company in
new directions.”
Measure
2023 Guidance
Payable Production
17,000 to 19,000 Gold Ounces
900,000 to
1,000,000 Silver Ounces
30,000 to 31,000 Gold Equivalent
Ounces
Cash Costs after by-product
credits per gold equivalent (“AuEq”) ounce 1, 2
$1,000 to $1,050
All-in Sustaining Costs after
by-product credits per AuEq ounce 1, 2
DDGM: $1,250 to $1,350
Consolidated: $1,650 to
$1,750
Capital Investment
$6 to $7 million
Exploration Commitment
$3 to $4 million Sustaining
$6 to $7 million Growth
G & A
$8.5 to $9.5 million
excluding Stock-based
Compensation
(1)
Calculations of cash cost after
co-product credits per gold equivalent ounce and all-in sustaining
cost after co-product credits per gold equivalent ounce are
non-GAAP financial measures. Please see the “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations – Non-GAAP Measures” for a complete definition and
explanation of non-GAAP measures and how they reconcile to U.S.
GAAP.
(2)
Co-product credits directly
impact the Cash Costs and AISC per AuEq ounce calculation. Guidance
is based on approximately 4,200 tonnes of lead sold at an $0.91 per
pound metal price, approximately 1,200 tonnes of copper sold at a
$3.80 per pound metal prices, and 11,200 tonnes of zinc sold at a
$1.40 per pound metal price.
We continue to be optimistic that underground exploration
targets will return favorable results that will both provide
improved overall mineral grades and extend the life of the mine. In
2022, we faced several technical challenges that slowed drift
extensions to multiple underground targets. Those technical
challenges have been addressed and we are well positioned to
conduct step-out drilling in multiple highly prospective areas of
Switchback and Arista. These targets are higher in the vein systems
where we have historically seen higher precious metal grades.
At this time, the Board of Directors and Management feel the
best way to maximize shareholder value is to protect our balance
sheet and focus our capital resources on exploration and growth
opportunities. Therefore, we will suspend the quarterly dividend
until such time that it may become practicable to reinstate.
Year-End Conference Call:
We would like to remind readers that we plan to file our 2022
Form 10-K on March 2, 2023 and will host a conference call on
Friday, March 3, 2023 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://viavid.webcasts.com/starthere.jsp?ei=1594268&tp_key=1f4ada6e2c
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: 38298670
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 projected performance during 2023, including
production, production costs, capital investment, exploration
costs, and general and administrative expenses. 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. Also, there can be no assurance that production will
continue at any specific rate. Forward-looking statements are
subject to risks and uncertainties, including the possibility of
lower than anticipated revenue or higher than anticipated costs at
the Don David Gold Mine; volatility in commodity prices; results of
continued evaluation of the Back Forty project; and declines in
general economic conditions. Additional risks related to the
Company may be found in the periodic and current reports filed with
the SEC by the Company, including the Company’s annual report on
Form 10-K for the year ended December 31, 2021.
This press release includes certain terms or performance
measures commonly used in the mining industry that are not defined
under the United States of America generally accepted accounting
principles (“GAAP”), including free cash flow, cash costs and AISC
per payable gold equivalent ounce sold, realized metal prices,
earnings before interest, taxes, depreciation and amortization
(“EBITDA”), adjusted attributable net income, adjusted basic
attributable earnings per share, consolidated cash and consolidated
net cash. Non-GAAP measures do not have any standardized meaning
prescribed under GAAP and, therefore, they may not be comparable to
similar measures employed by other companies. We believe that, in
addition to conventional measures prepared in accordance with GAAP,
certain investors use this information to evaluate our performance.
The data presented is intended to provide additional information
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230213005340/en/
Kim Perry Chief Financial Officer Kim.Perry@GRC-USA.com
www.goldresourcecorp.com
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