- SOLD 42,757 GOLD EQUIVALENT OUNCES, EXCEEDING 2022
GUIDANCE
- NET LOSSES OF $6.3 MILLION AND EBITDA OF $29.5 MILLION
- STRONG CASH BALANCE OF $23.7 MILLION AT YEAR END
- MINERAL RESOURCE AND RESERVES REPLACED 88% AND 74%,
RESPECTIVELY
- 2022 FINANCIAL RESULTS REMAIN UNAUDITED, BDO USA, LLP, STILL TO
COMPLETE FINAL AUDIT PROCEDURES AND RESULTS WILL BE RELEASED WITH
THE 10-K
Gold Resource Corporation (NYSE American: GORO) (the “Company”)
sold a total of 30,119 ounces of gold and 1,057,209 ounces of
silver in 2022 for a total of 42,757 gold equivalent ounces.
Additionally, during the year, the Company sold 14,157 tonnes of
zinc, 1,348 tonnes of copper, and 5,391 tonnes of lead. For the
year ended December 31, 2022, the company reported a net loss of
$6.3 million with revenue of $138.7 million and mine gross profit
of $29.7 million from operations. A total of $31.3 million was
invested in the Don David Gold Mine and Back Forty Project.
Allen Palmiere, President and CEO, said, “Despite global
challenges faced this year, such as inflation, and localized
challenges such as ground support and ventilation, gold and silver
production at the Don David Gold Mine in Mexico still ended the
year above guidance. We also made excellent strides with our
operations, capital, and exploration programs. The results of the
Q4 2022 drilling at DDGM are very promising and have confirmed the
ongoing 2023 drill program is on the right track to potentially
deliver higher grade resources into the near- and mid-term mine
plan. With improved access and ventilation our team can now
aggressively continue with the underground infill and expansion
drilling to follow-up these positive results. While our grade
profile is expected to decline in 2023, we continue to identify and
implement productivity improvements. Work continues with the
feasibility study to advance the Back Forty Project in Michigan
with a deliberate and measured approach. Upon completion,
preparation of State of Michigan permits will follow. In both
Mexico and Michigan, we are focused on collaborating with local
communities to ensure sustainability.”
2022 HIGHLIGHTS
Additional highlights for the year ended December 31, 2022, are
summarized below:
Strategic:
- Cash inflow of $14.2 million from operating activities for
2022, which included $18.6 million of income tax payments for tax
years 2021 and 2022.
- Distributions to shareholders of $3.5 million in shareholder
dividends prior to the February 13th, 2023, announcement of the
suspension of future quarterly dividends to protect our balance
sheet and to focus capital resources on exploration and growth
opportunities.
- Investments of Canadian dollar (“C$”) 2.4 million
(approximately $1.7 million) in Maritime Resources Corp. (TSX-V:
MAE.V) (“Maritime”) in exchange for 9.9% of Maritime’s shares in a
private placement.
Don David Gold Mine:
- The DDGM safety program aims to bolster the overall health and
safety culture of our employees.
- There were six lost time incidents during 2022. The incidents
were thoroughly investigated, and the appropriate actions were
taken.
- The full year lost time injury frequency rate per million hours
of 2.5 which is substantially below the 5.7 Camimex (Mexican
Chamber of Mines) benchmark.
- Don David Gold Mine (“DDGM”) total cash costs (after co-product
credits) and total all-in sustaining cost per gold equivalent
(“AuEq”) ounce sold were $458 and $788, respectively (See
“Reconciliation of Non-GAAP Financial Measures” below).
- During the year, exploration continued to focus on infill
drilling with encouraging results from the Arista, Three Sisters,
and Switchback vein systems. However, we faced localized ground
conditions and ventilation challenges that slowed drift extensions
to multiple underground drill stations. Those technical issues have
been addressed, and we have commenced step-out drilling in multiple
highly prospective areas.
Back Forty Project:
- The feasibility study work for the Back Forty Project in
Michigan, USA progressed during 2022. Work related to metallurgy
and the economic model will continue with a deliberate and measured
approach and is expected to be completed in the first half of
2023.
- Once the feasibility study is completed, the Company’s Board of
Directors will evaluate the current economic climate and make a
decision on how to move forward with the permitting and
construction of the Back Forty Mine.
- The Company continues to meet with the community and government
agencies to demonstrate the value of this project.
Full Year 2022 Financial Results
Financial Measures (Unaudited)
($’s in millions)
Cash balance at December 31, 2022
$23.7
For the Year Ended December
31, 2022
Cash from continuing operating
activities
$14.2
Net loss
$(6.3)
Net sales
$138.7
Production costs
$80.9
Depreciation, amortization, &
reclamation
$28.0
Mining gross profit
$29.7
EBITDA
$29.5
2022 Capital and Exploration Investment Summary
For the year ended December
31, 2022
(in thousands)
Sustaining Investments:
Underground Development
Capital
$
6,619
Underground Exploration Development
Capital
3,034
Infill Drilling
Capital
3,459
Other Sustaining Capital
Capital
3,227
Growth Investments:
Surface Exploration & Other
Exploration
1,929
Underground Exploration Drilling
Exploration
2,315
Back Forty Feasibility Study &
Permits
Exploration
8,805
Gold Regrind
Capital
745
Dry Stack Completion
Capital
1,149
Total Capital and Exploration:
$
31,282
Reconciliations of Non-GAAP Financial Measures
The 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. The
following table reconciles these non-GAAP measures to GAAP
measures:
For the year ended December
31,
2022
2021
(in thousands, except per oz)
Gold equivalent ounces sold (oz)
42,757
37,526
Total production
$
80,949
$
72,234
Treatment and refining charges
12,072
11,485
Co-product credits
(73,442
)
(69,061
)
Total cash cost after co-product
credits
19,579
14,658
Total cash cost after co-product
credits per AuEq oz sold
$
458
$
391
Sustaining - capitalized expenditure
13,305
11,307
Reclamation and remediation
801
219
Subtotal of DDGM sustaining costs
14,106
11,526
DDGM all-in sustaining cost after
co-product credits per AuEq oz sold
$
788
$
698
Sustaining - general and administrative,
including stock-based compensation expenses
10,003
7,775
Consolidated all-in sustaining cost after
co-product credits
43,688
33,959
Total consolidated all-in sustaining
cost after co-product credits per AuEq oz sold
$
1,022
$
905
Non-sustaining cost- capital
expenditure
1,894
9,303
Non-sustaining cost- exploration
expenditure
13,049
4,886
Subtotal of non-sustaining costs
14,943
14,189
Total all-in cost after co-product
credits
58,631
48,148
Total all-in cost after co-product
credits per AuEq oz sold
$
1,371
$
1,283
2023 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
2023.
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 co-product credits per
gold AuEq ounce (1) (2)
$1,000 to $1,050
All-in Sustaining Costs after co-product
credits per AuEq ounce (1) (2)
$1,250 to $1,350 (DDGM) $1,650 to $1,750
(Consolidated)
Capital Investment
$6 to $7 million
Exploration Commitment
$3 to $4 million Sustaining $6 to $7
million Growth
G & A, excluding Stock-based
Compensation
$8.5 million to $9.5 million
(1)
Calculations of 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.
See “Reconciliation of Non-GAAP Financial Measures” above.
(2)
Co-product credits directly impact the
Cash Costs and All-in Sustaining Costs 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 $1.40 per pound metal price.
Trending Highlights (unaudited)
2021
2022
Q3
Q4
Q1
Q2
Q3
Q4
Full Year
Operating Data
Total tonnes milled
98,010
135,398
136,844
129,099
110,682
116,616
493,241
Average Grade
Gold (g/t)
2.68
1.93
3.00
2.63
1.98
2.51
2.56
Silver (g/t)
91
82
81
64
80
109
83
Copper (%)
0.37
0.38
0.41
0.32
0.37
0.45
0.39
Lead (%)
2.29
2.17
1.97
1.99
1.59
1.58
1.80
Zinc (%)
4.79
4.77
4.89
4.00
4.21
4.27
4.36
Metal production (before payable metal
deductions)
Gold (ozs.)
6,933
6,853
11,187
9,317
5,851
7,767
34,122
Silver (ozs.)
265,829
330,873
332,292
249,088
261,256
370,768
1,213,404
Copper (tonnes)
284
413
431
303
296
406
1,436
Lead (tonnes)
1,808
2,345
2,073
2,020
1,249
1,323
6,665
Zinc (tonnes)
3,920
5,349
5,562
4,282
3,901
4,198
17,943
Metal produced and sold
Gold (ozs.)
5,809
6,119
8,381
8,746
5,478
7,514
30,119
Silver (ozs.)
255,394
287,805
265,407
231,622
225,012
335,168
1,057,209
Copper (tonnes)
268
405
408
286
282
372
1,348
Lead (tonnes)
1,550
2,059
1,639
1,755
1,056
941
5,391
Zinc (tonnes)
3,059
4,167
4,359
3,590
2,943
3,265
14,157
Average metal prices realized
Gold ($ per oz.)
1,762
1,811
$ 1,898
$ 1,874
$ 1,627
$ 1,734
1,801
Silver ($ per oz.)
23.19
23.51
$ 23.94
$ 22.05
$ 18.54
$ 21.25
21.53
Copper ($ per tonne)
9,092
9,768
$ 10,144
$ 9,275
$ 7,115
$ 8,221
8,795
Lead ($ per tonne)
2,397
2,339
$ 2,347
$ 2,168
$ 1,882
$ 1,954
2,129
Zinc ($ per tonne)
3,032
3,466
$ 3,842
$ 4,338
$ 3,186
$ 2,577
3,539
Precious metal gold equivalent ounces
sold
Gold Ounces
5,809
6,119
8,381
8,746
5,478
7,514
30,119
Gold Equivalent Ounces from Silver
3,356
3,736
3,348
2,729
2,564
4,107
12,638
Total AuEq oz
9,165
9,855
11,729
11,475
8,042
11,621
42,757
Financial Data ($’s in thousands except
for per ounce)
Total sales, net
$ 29,029
$ 38,063
$ 45,417
$ 37,064
$ 23,869
$ 32,374
$ 138,724
Earnings from mining operations before
depreciation and amortization
11,766
17,744
25,281
15,281
4,431
11,981
56,974
Total cash cost after co-product credits
per AuEq oz sold
466
73
(121)
247
1,103
842
458
Total all-in sustaining cost after
co-product credits per AuEq oz sold
1,031
451
499
799
1,831
1,226
1,022
Production Costs
17,216
20,252
20,074
21,722
19,380
19,773
80,949
Production Costs/Tonnes Milled
176
150
147
168
175
170
164
Earnings before interest, taxes,
depreciation, depletion, and amortization
7,402
10,304
15,328
13,716
(3,338)
3,758
29,464
Operating Cash Flows
5,743
12,911
4,230
7,976
(4,292)
6,242
14,156
Net income (loss)
1,529
2,689
4,019
2,673
(9,730)
(3,283)
(6,321)
Earnings per share – basic
$ 0.02
$ 0.03
$ 0.05
$ 0.03
($ 0.11)
($ 0.04)
($ 0.07)
Year-End 2022 Conference Call
The Company will host a conference call Friday, March 3, 2023,
at 10:00 a.m. Eastern Time. Our 2022 Form 10-K will be filed at a
future date, no later than March 15, 2023, once our External Audit
Firm, BDO USA, LLP, completes their audit procedures.
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://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.
Forward-Looking 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, our ability
to add to our mineral resource estimate at DDGM in the near- or
mid-term; scope and timing of work at the Back Forty Project; and
guidance for 2023, including payable production, cash costs after
co-product credits, all-in sustaining costs, capital investment,
exploration spending, and G&A spending. 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. Factors that could cause or
contribute to such differences include, but are not limited to,
those discussed in the Company’s filings with the SEC. Additional
factors that could cause or contribute to such differences include,
but are not limited to, volatility in commodity prices; changes in
interpretations of geological, metallurgical, mining or processing
information; interpretations of the information resulting from
exploration, analysis or mining and processing experience;
unexpected increases in costs; general economic conditions; and
other factors 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/20230302005906/en/
Kim Perry Chief Financial Officer Kim.Perry@GRC-USA.com
www.GoldResourcecorp.com
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