Consolidated Results of Operations – Three Months Ended March
31, 2022 Compared to Three Months Ended March 31, 2021
For the three
months ended March 31, 2022, consolidated sales, net were $15.4 as
compared to $20.7 million for the same period in 2021. The decrease
is attributable to lower sales volumes. First quarter 2022 gold
sales volumes decreased 28% from the same period in 2021 as a
result of lower production due to lower-grade ore processed. Mine
operations in the first quarter focused primarily on waste removal
of the phase one open-pit layback. With phase-one now complete, the
Company is now focused on phase-two mining with access to the
mine’s high-grade Pearl zone.
Mine gross profit. For the three
months ended March 31, 2022, we recorded $6.8 million mine gross
profit compared to $10.9 million mine gross profit for the same
period in 2021. The change is attributable to lower sales, as
General and administrative. For
the three months ended March 31, 2022, general and administrative
expenses totaled $1.2 million as compared to $6.2 million for the
same period in 2021. The decrease in 2022 was primarily the result
of costs incurred in 2021 to fully staff the Company post spin-off
as a standalone entity.
Exploration expenses. For the
three months ended March 31, 2022, property exploration expenses
totaled $2.5 million as compared to $1.3 million for the same
period of 2021. The increased exploration expense was the result of
drilling at the Golden Mile property to further define the resource
and move toward a development decision.
Other expense, net. For the
three months ended March 31, 2022, other expense, net did not
materially change from the same period in 2021.
Income and mining tax expense.
For the three months ended March 31, 2022, income and mining tax
expense was $0.4 million as compared to $1.0 million for the same
period in 2021. The decrease is the result of our decreased income
before income and mining taxes and decreased Nevada net proceeds of
minerals tax as a result of decreased metal sales. See
the Condensed Consolidated
income. For the three
months ended March 31, 2022 we
recorded net income of $2.6 million as compared to $2.4 million in
the corresponding period for 2021. The increase is due to the
changes in our consolidated results of operations as discussed
In March 2020, the World Health Organization classified the
COVID-19 outbreak as a pandemic based on the rapid increase in
global exposure. In response to the pandemic, many jurisdictions,
including the United States, instituted restrictions on travel,
public gatherings, and certain business operations.
During 2022 and 2021, and as of the date of this report, the mining
industry is listed as an essential business in the state of Nevada.
Accordingly, we continue to operate the Isabella Pearl Mine
while utilizing safety measures and protocols. In an effort to
mitigate the spread of COVID-19 and protect the health and safety
of our employees, contractors, and communities, we have taken
precautionary measures including specialized training, social
distancing, screening workers before they enter facilities, a work
from home mandate where possible, and close monitoring of national
and regional COVID-19 impacts and governmental guidelines. As our
non-mining workforce is able to work remotely using various
technology tools, we have been able to maintain our operations and
internal controls over financial reporting and disclosures.
The extent of the impact of the COVID-19 pandemic on our
operational and financial performance will depend on future
developments, including widely available and utilized vaccines, the
duration and severity of the pandemic and related restrictions, all
of which are uncertain and cannot be predicted.
Throughout this report, we have provided information prepared or
calculated according to U.S. GAAP and have referenced some non-GAAP
performance measures which we believe will assist with
understanding the performance of