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Gold Resource Corporation Reports Third Quarter Results

 -- Published: Tuesday, 3 November 2015 | Print  | Disqus 

COLORADO SPRINGS, CO--(Marketwired - Nov 3, 2015) - Gold Resource Corporation (NYSE MKT: GORO) (the "Company") reported production results for the third quarter ended September 30, 2015 of 6,825 ounces of gold, 561,985 ounces of silver ounces, or 14,133 precious metal gold equivalent (AuEq) ounces (calculated at actual sales price ratio of 77:1), which generated $19.4 million in net revenue for the quarter. Gold Resource Corporation is a gold and silver producer with operations in Oaxaca, Mexico and exploration in Nevada, USA. The Company has returned over $107 million to shareholders in monthly dividends since commercial production commenced July 1, 2010, and offers shareholders the option to convert their cash dividends and take delivery in physical gold and silver.

2015 Q3 HIGHLIGHTS

  • 14,133 ounces AuEq mill production
  • 12,773 ounces AuEq sold
  • $19.4 million sales, net
  • $603 total cash cost per ounce AuEq (after by-product credits)
  • $6.4 million adjusted cash flow from mine site operations
  • $8.3 million by-product credits, or $647 per ounce AuEq sold
  • $1.6 million dividend distributions, or $0.03 per share for quarter

Overview of Q3 2015 Aguila Project Results

Gold Resource Corporation's Aguila Project produced 14,133 ounces AuEq at a total cash cost of $603 per ounce (after by-product credits). Realized average metal price sales during the quarter were $1,115 per ounce gold and $14.50 per ounce silver. The Company recorded a net loss of $0.5 million, or $(0.01) per share. Adjusted cash flow from mine site operations totaled $6.4 million. The Company paid $1.6 million to shareholders in dividends, or $0.03 per share during the quarter. Cash and cash equivalents at quarter end totaled $14.1 million. Realized gold and silver prices decreased 14% and 28%, respectively, compared to the third quarter of 2014.

Production for the first three quarters of 2015 totaled 21,960 ounces of gold and 1,932,611 ounces of silver. With the weaker than expected 2015 second and third quarter performance, the Company confirms its prior announcement related to the revised 2015 Outlook which reduced annual production targets to 29,600 gold ounces and 2,500,000 silver ounces, a reduction of 6% for gold ounces, and 16% for silver ounces.

The following table summarizes certain information about our mining operations for the three and nine months ended September 30, 2015 and 2014:

Production and Sales Statistics - Arista Underground Mine

         
  Three months ended September 30, Nine months ended September 30,
  2015 2014 2015 2014
Milled            
 Tonnes Milled  105,309  79,568  300,190  283,793
 Tonnes Milled per Day  1,143  865  1,104  1,040
Grade            
 Average Gold Grade (g/t)  2.25  2.78  2.52  3.18
 Average Silver Grade (g/t)  180  291  216  297
 Average Copper Grade (%)  0.41  0.47  0.39  0.40
 Average Lead Grade (%)  1.41  2.12  1.37  1.52
 Average Zinc Grade (%)  4.02  5.67  3.78  3.97
Recoveries            
 Average Gold Recovery (%)  90  92  90  92
 Average Silver Recovery (%)  92  92  93  92
 Average Copper Recovery (%)  80  76  79  78
 Average Lead Recovery (%)  75  80  75  76
 Average Zinc Recovery (%)  83  85  82  83
             
Mill production (before payable metal deductions)(1)            
 Gold (ozs.)  6,825  6,523  21,960  26,687
 Silver (ozs.)  561,985  687,240  1,932,611  2,506,466
 Copper (tonnes)  343  284  929  891
 Lead (tonnes)  1,114  1,350  3,071  3,273
 Zinc (tonnes)  3,499  3,816  9,299  9,340
Payable metal sold            
 Gold (ozs.)  6,220  2,932  21,994  19,846
 Silver (ozs.)  503,929  575,413  1,770,093  2,171,298
 Copper (tonnes)  332  228  877  751
 Lead (tonnes)  1,049  1,204  2,875  2,938
 Zinc (tonnes)  2,905  2,976  7,668  7,383
Average metal prices realized (2)            
 Gold ($ per oz.)  1,115  1,295  1,177  1,287
 Silver ($ per oz.)  14.50  20.24  16.09  19.77
 Copper ($ per tonne)  4,883  7,103  5,436  6,920
 Lead ($ per tonne)  1,619  2,238  1,746  2,157
 Zinc ($ per tonne)  1,701  2,394  1,981  2,209
Precious metal gold equivalent ounces produced (mill production) (1)(3)(4)            
 Gold Ounces  6,825  6,523  21,960  26,687
 Gold Equivalent Ounces from Silver  7,308  10,739  26,410  38,495
 Total Precious Metal Gold Equivalent Ounces  14,133  17,262  48,370  65,182
Precious metal gold equivalent ounces sold (3)(4)            
 Gold Ounces  6,220  2,932  21,994  19,846
 Gold Equivalent Ounces from Silver  6,553  8,991  24,189  33,348
 Total Precious Metal Gold Equivalent Ounces  12,773  11,923  46,183  53,194
 Total cash cost (before by-product credits) per precious metal gold equivalent ounce sold (including royalties) (5) $1,250 $1,324 $1,046 $958
 Total cash costs, after by-product credits, per precious metal gold equivalent ounce sold (including royalties) (5) $603 $364 $505 $434
              
(1) Mill production represents metal contained in concentrates produced at the mill, which is before payable metal deductions are levied by the buyer of our concentrates. Payable metal deduction quantities are defined in our contracts with the buyer of our concentrates and represent an estimate of metal contained in the concentrates produced at our mill which the buyer cannot recover through the smelting process. There are inherent limitations and differences in the sampling method and assaying of estimated metal contained in concentrates that are shipped, and those contained metal estimates are derived from sampling methods and assaying throughout the mill production process. The Company monitors these differences to ensure that precious metal mill production quantities are materially correct.
(2) Average metal prices realized vary from the market metal prices due to final settlement adjustments from our provisional invoices when they are settled. Our average metal prices realized will therefore differ from the market average metal prices in most cases.
(3) For the three months ended September 30, 2015, precious metal gold equivalent mill production differs from gold equivalent ounces sold due principally to buyer (smelter) concentrate processing and other deductions of approximately 1,204 gold equivalent ounces and a decrease in gold equivalent ounces contained in ending inventory of approximately 121 ounces.
(4) For the nine months ended September 30, 2015, precious metal gold equivalent mill production differs from gold equivalent ounces sold due principally to buyer (smelter) concentrate processing and other deductions of approximately 3,687 gold equivalent ounces and a decrease in gold equivalent ounces contained in ending inventory of approximately 279 ounces.
(5) For a reconciliation of this non-GAAP measure to total mine cost of sales, which is the most comparable U.S. GAAP measure, please see Non-GAAP Measures.
   

About GRC:
Gold Resource Corporation is a mining company focused on production and pursuing development of gold and silver projects that feature low operating costs and produce high returns on capital. The Company has 100% interest in six potential high-grade gold and silver properties at its producing Oaxaca, Mexico Mining Unit and exploration properties at its Nevada, USA, Mining Unit. The Company has 54,179,369 shares outstanding, no warrants, no long term debt and has returned over $107 million back to shareholders since commercial production commenced July 1, 2010. Gold Resource Corporation offers shareholders the option to convert their cash dividends into physical gold and silver and take delivery. For more information, please visit GRC's website, located at www.Goldresourcecorp.com and read the Company's 10-K for an understanding of the risk factors involved.

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 Gold Resource Corporation's strategy, future plans for production, future expenses and costs, future liquidity and capital resources, and estimates of mineralized material. 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. In particular, 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 10-K filed with the SEC.

See Accompanying Tables

The following information summarizes the results of operations for Gold Resource Corporation for the three and nine months ended September 30, 2015 and 2014, its financial condition at September 30, 2015 and December 31, 2014 and its cash flows for the nine months ended September 30, 2015 and 2014. The summary data for the three and nine months ended September 30, 2015 is unaudited; the summary data for the year ended December 31, 2014 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2014, but do not include the footnotes and other information that is included in the complete financial statements. Readers are urged to review the Company's Form 10-K in its entirety, which can be found on the SEC's website at www.sec.gov.

The calculation of our cash cost per ounce contained in this press release is a non-GAAP financial measure. Please see "Management's Discussion and Analysis and Results of Operation" contained in the Company's most recent Form 10-Q and Form 10-K for a complete discussion and reconciliation of the non-GAAP measures.

  
  
GOLD RESOURCE CORPORATION 
CONDENSED CONSOLIDATED BALANCE SHEETS 
(U.S. dollars in thousands, except share and per share amounts) 
       
  September 30,  December 31, 
  2015  2014 
   (Unaudited)    
ASSETS        
Current assets:        
 Cash and cash equivalents $14,105  $27,541 
 Gold and silver bullion  3,160   3,447 
 Accounts receivable  1,851   1,416 
 Inventories  9,347   7,295 
 IVA taxes receivable  1,870   575 
 Deferred tax assets  3,891   3,891 
 Prepaid expenses and other current assets  1,932   2,935 
  Total current assets  36,156   47,100 
Property, plant and mine development, net  47,808   32,348 
Deferred tax assets  27,040   25,519 
Investments in equity securities  894   2,620 
Other non-current assets  2,964   4,078 
  Total assets $114,862  $111,665 
LIABILITIES AND SHAREHOLDERS' EQUITY        
Current liabilities:        
 Accounts payable $8,201  $3,892 
 Accrued expenses and other current liabilities  5,124   3,923 
 Capital lease obligations  1,220   1,498 
 Income taxes payable  3,348   7,907 
 Dividends payable  542   542 
  Total current liabilities  18,435   17,762 
 Capital lease obligations  -   834 
 Reclamation and remediation liabilities  2,537   2,993 
  Total liabilities  20,972   21,589 
Shareholders' equity:        
 Preferred stock - $0.001 par value, 5,000,000 shares authorized:        
  no shares issued and outstanding  -   - 
 Common stock - $0.001 par value, 100,000,000 shares authorized:        
  54,515,767 shares issued and outstanding  55   55 
 Additional paid-in capital  96,387   93,094 
 Retained earnings  4,503   3,982 
 Treasury stock at cost, 336,398 shares  (5,884)  (5,884)
 Accumulated other comprehensive loss  (1,171)  (1,171)
  Total shareholders' equity  93,890   90,076 
  Total liabilities and shareholders' equity $114,862  $111,665 
         
 
 
GOLD RESOURCE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and nine months ended September 30, 2015 and 2014
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)
 
            
  Three months ended September 30,  Nine months ended September 30,
  2015  2014  2015  2014
                
Sales, net $19,437  $21,052  $71,082  $85,873
Mine cost of sales:               
 Production costs  13,411   13,025   40,462   43,107
 Depreciation and amortization  1,579   1,180   5,195   2,969
 Reclamation and remediation  6   -   36   -
  Total mine cost of sales  14,996   14,205   45,693   46,076
Mine gross profit  4,441   6,847   25,389   39,797
Costs and expenses:               
 General and administrative expenses  2,913   4,361   8,032   9,623
 Exploration expenses  1,810   2,901   6,416   5,786
  Total costs and expenses  4,723   7,262   14,448   15,409
Operating (loss) income  (282)  (415)  10,941   24,388
Other (expense) income, net  (1,033)  69   (2,080)  766
(Loss) income before income taxes  (1,315)  (346)  8,861   25,154
 Provision for income taxes  (846)  1,109   3,465   12,264
Net (loss) income $(469) $(1,455) $5,396  $12,890
Net (loss) income per common share:               
 Basic $(0.01) $(0.03) $0.10  $0.24
 Diluted $(0.01) $(0.03) $0.10  $0.24
Weighted average shares outstanding:               
 Basic  54,179,369   54,179,369   54,179,369   54,098,783
 Diluted  54,179,369   54,179,369   54,201,274   54,698,748
                
  
  
GOLD RESOURCE CORPORATION 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
for the nine months ended September 30, 2015 and 2014 
(U.S. dollars in thousands) 
(Unaudited) 
  
       
  2015  2014 
         
Cash flows from operating activities:        
 Net income $5,396  $12,890 
 Adjustments to reconcile net income to net cash from operating activities:        
  Depreciation, depletion and amortization  6,331   3,107 
  Stock-based compensation  3,293   3,847 
  Deferred income taxes  (1,522)  - 
  Currency exchange (gain) loss  (326)  545 
  Unrealized loss (gain) on investments  1,726   (1,504)
  Other operating adjustments  1,072   162 
 Changes in operating assets and liabilities:        
  Accounts receivable  (435)  (3,699)
  Inventories  (1,149)  (1,582)
  Prepaid expenses and other current assets  (897)  1,354 
  Accounts payable and other accrued liabilities  5,069   (731)
  Income taxes payable/receivable  (4,528)  11,907 
  Other noncurrent assets  466   - 
 Net cash provided by operating activities  14,496   26,296 
Cash flows from investing activities:        
  Capital expenditures  (21,837)  (10,524)
  Investments  -   (1,805)
  Proceeds from sale of building  -   1,737 
  Other investing activities  40   23 
 Net cash used in investing activities  (21,797)  (10,569)
Cash flows from financing activities:        
  Proceeds from exercise of stock options  -   100 
  Dividends paid  (4,876)  (4,868)
  Repayment of capital leases  (1,123)  (1,099)
 Net cash used in financing activities  (5,999)  (5,867)
Effect of exchange rate changes on cash and cash equivalents  (136)  (33)
Net (decrease) increase in cash and cash equivalents  (13,436)  9,827 
Cash and cash equivalents at beginning of period  27,541   14,973 
Cash and cash equivalents at end of period $14,105  $24,800 
Supplemental Cash Flow Information        
 Interest expense paid $65  $139 
 Income and mining taxes paid $8,464  $- 
Contact:

Corporate Development
Greg Patterson
303-320-7708
www.Goldresourcecorp.com

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 -- Published: Tuesday, 3 November 2015 | E-Mail  | Print  | Source: GoldSeek.com

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