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Gold Resource Corporation Reports Third Quarter Net Income of $0.08 per Share, Maintains 2017 Production Outlook

 -- Published: Tuesday, 31 October 2017 | Print  | Disqus 

COLORADO SPRINGS, CO--(Marketwired - Oct 31, 2017) - Gold Resource Corporation (NYSE American: GORO) (the "Company or GRC") reported production results for the third quarter ended September 30, 2017 of 6,465 ounces of gold and 392,153 ounces of silver, which along with base metal revenue generated $31.1 million in net revenue and $4.6 million in net income for the quarter. Gold Resource Corporation is a gold and silver producer, developer and explorer with operations in Oaxaca, Mexico and Nevada, U.S.A. The Company has returned $110 million to its shareholders in monthly dividends since commercial production commenced July 1, 2010, and offers its shareholders the option to convert their cash dividends into physical gold and silver and take delivery.

Q3 2017 HIGHLIGHTS

  • $4.6 million net income, or $0.08 per share
  • $31.1 million net sales
  • 6,465 gold ounces produced
  • 392,153 silver ounces produced
  • $2 total cash cost per gold equivalent ounce sold (after by-product credits)
  • $639 total all-in sustaining cost per precious metal gold equivalent ounce sold
  • $18.0 million base metal by-product credits, or $1,707 per precious metal gold ounce sold
  • $0.3 million dividend distributions, or $0.005 per share for quarter
  • $15.8 million cash and cash equivalents

Overview of Q3 2017 Results

Gold Resource Corporation's Aguila Project sold 10,573 precious metal gold equivalent ounces at a total cash cost of $2 per ounce (after by-product credits), benefiting from strong base metal production and sales. Average realized metal prices during the quarter included $1,289 per ounce gold and $17.00 per ounce silver*. The Company recorded net income of $4.6 million, or $0.08 per share. The Company paid $0.3 million to its shareholders in dividends, or $0.005 per share during the quarter. Cash and cash equivalents at quarter end totaled $15.8 million.

Production totals for the first nine months of 2017 included 18,908 ounces of gold, 1,217,713 ounces of silver, 804 tonnes of copper, 3,583 tonnes of lead and 11,447 tonnes of zinc. The Company maintains its 2017 Annual Outlook, targeting a plus or minus 5 percent production of 27,500 gold ounces and 1,850,000 silver ounces.

* Average realized metal prices include final settlement adjustments for previously unsettled provisional sales. Provisional sales may remain unsettled from one quarter into the next. Realized prices will therefore vary from average spot metal market prices upon final settlement.

The following Production and Sales Statistics table summarizes certain information about our mining operations for the three and nine months ended September 30, 2017 and 2016:

             
Production and Sales Statistics
  Three months ended September 30, Nine months ended September 30,
  2017 2016 2017 2016
Milled            
 Tonnes Milled (1)  114,678  113,945  329,798  331,423
 Tonnes Milled per Day (2)  1,346  1,278  1,282  1,269
Grade            
 Average Gold Grade (g/t)  2.09  1.86  2.10  2.36
 Average Silver Grade (g/t)  117  128  125  146
 Average Copper Grade (%)  0.35  0.24  0.32  0.31
 Average Lead Grade (%)  1.73  1.18  1.44  1.18
 Average Zinc Grade (%)  5.04  3.45  4.19  3.71
Recoveries            
 Average Gold Recovery (%)  84  89  85  90
 Average Silver Recovery (%)  91  92  92  92
 Average Copper Recovery (%)  72  78  76  77
 Average Lead Recovery (%)  73  74  75  72
 Average Zinc Recovery (%)  80  82  83  84
Mill production (before payable metal deductions) (3)            
 Gold (ozs.)  6,465  6,066  18,908  22,540
 Silver (ozs.)  392,153  431,335  1,217,713  1,437,975
 Copper (tonnes)  291  213  804  777
 Lead (tonnes)  1,449  1,000  3,583  2,847
 Zinc (tonnes)  4,628  3,232  11,447  10,306
Payable metal sold            
 Gold (ozs.)  5,672  6,683  17,521  21,096
 Silver (ozs.)  371,754  410,337  1,121,870  1,337,668
 Copper (tonnes)  328  200  769  739
 Lead (tonnes)  1,389  893  3,299  2,629
 Zinc (tonnes)  4,326  2,480  9,452  8,503
Average metal prices realized (4)            
 Gold ($ per oz.)  1,289  1,339  1,262  1,271
 Silver ($ per oz.)  17.00  20.79  17.33  17.45
 Copper ($ per tonne)  6,341  4,791  6,042  4,577
 Lead ($ per tonne)  2,349  1,908  2,293  1,808
 Zinc ($ per tonne)  2,936  2,421  2,790  2,012
Precious metal gold equivalent ounces produced (mill production) (3)            
 Gold Ounces  6,465  6,066  18,908  22,540
 Gold Equivalent Ounces from Silver  5,172  6,697  16,722  19,741
 Total Precious Metal Gold Equivalent Ounces  11,637  12,763  35,630  42,281
Precious metal gold equivalent ounces sold            
 Gold Ounces  5,672  6,683  17,521  21,096
 Gold Equivalent Ounces from Silver  4,901  6,371  15,411  18,364
 Total Precious Metal Gold Equivalent Ounces  10,573  13,054  32,932  39,460
 Total cash cost before by-product credits per precious metal gold equivalent ounce sold (5) $1,709 $1,287 $1,353 $1,152
 Total cash cost after by-product credits per precious metal gold equivalent ounce sold (5) $2 $623 $181 $511
 Total all-in sustaining cost per precious metal gold equivalent ounce sold (5) $639 $757 $664 $765
 Total all-in cost per precious metal gold equivalent ounce sold (5) $756 $902 $768 $919
             
(1) For the third quarter of 2017 and 2016 and first nine months of 2017 and 2016, this includes 2,108, 11,459, 42,079, and 38,764 tonnes, respectively of open pit ore.
(2) Based on actual days the mill operated during the period.
(3) 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 which the buyer deducts from payment. 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. We monitor these differences to ensure that precious metal mill production quantities are materially correct.
(4) 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.
(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 in the Company's most recently filed 10-Q.
   
   

See Accompanying Tables

The following information summarizes the results of operations for Gold Resource Corporation for the three and nine months ended September 30, 2017 and 2016, its financial condition at September 30, 2017 and December 31, 2016 and its cash flows for the nine months ended September 30, 2017 and 2016. The summary data as of September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016 is unaudited; the summary data as of December 31, 2016 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2016, 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 precious metal gold equivalent ounce, total all-in sustaining cost per precious metal gold equivalent ounce and total all-in cost per precious metal gold equivalent ounce contained in this press release are non-GAAP financial measures. Please see "Management's Discussion and Analysis and Results of Operations" 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, 
  2017  2016 
  (Unaudited)    
ASSETS        
Current assets:        
 Cash and cash equivalents $15,832  $14,166 
 Gold and silver rounds/bullion  3,831   3,307 
 Accounts receivable  3,664   630 
 Inventories, net  9,890   8,946 
 Income tax receivable, net  1,025   626 
 Prepaid expenses and other current assets  1,822   1,587 
  Total current assets  36,064   29,262 
Property, plant and mine development, net  79,447   70,059 
Deferred tax assets, net  18,645   17,580 
Other non-current assets  945   1,542 
  Total assets $135,101  $118,443 
LIABILITIES AND SHAREHOLDERS' EQUITY        
Current liabilities:        
 Accounts payable $8,883  $5,383 
 Loan payable, current  562   - 
 Mining royalty taxes payable  1,222   2,033 
 Accrued expenses and other current liabilities  2,165   1,526 
  Total current liabilities  12,832   8,942 
Reclamation and remediation liabilities  2,790   2,425 
Loan payable, long-term  1,789   - 
  Total liabilities  17,411   11,367 
Shareholders' equity:        
 Common stock - $0.001 par value, 100,000,000 shares authorized:        
  56,891,484 and 56,566,874 shares outstanding at September 30, 2017 and December 31, 2016, respectively  57   57 
 Additional paid-in capital  114,211   112,034 
 Retained earnings  10,477   2,040 
 Treasury stock at cost, 336,398 shares  (5,884)  (5,884)
 Accumulated other comprehensive loss  (1,171)  (1,171)
  Total shareholders' equity  117,690   107,076 
  Total liabilities and shareholders' equity $135,101  $118,443 
         
         
  
GOLD RESOURCE CORPORATION 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(U.S. dollars in thousands, except share and per share amounts) 
(Unaudited) 
  
              
  Three months ended September 30, Nine months ended September 30, 
  2017 2016 2017 2016 
              
Sales, net $31,122 $21,367 $76,849 $64,968 
Mine cost of sales:             
 Production costs  16,122  12,767  39,634  34,570 
 Depreciation and amortization  3,762  3,189  10,271  9,049 
 Reclamation and remediation  37  48  101  139 
  Total mine cost of sales  19,921  16,004  50,006  43,758 
Mine gross profit  11,201  5,363  26,843  21,210 
Costs and expenses:             
 General and administrative expenses  1,950  2,027  5,437  5,875 
 Exploration expenses  1,457  881  3,415  2,027 
 Other expense (income), net  110  74  1,183  (1,170)
  Total costs and expenses  3,517  2,982  10,035  6,732 
Income before income taxes  7,684  2,381  16,808  14,478 
 Provision for income taxes  3,103  787  6,987  6,479 
Net income $4,581 $1,594 $9,821 $7,999 
Net income per common share:             
 Basic $0.08 $0.03 $0.17 $0.15 
 Diluted $0.08 $0.03 $0.17 $0.14 
Weighted average shares outstanding:             
 Basic  56,888,115  55,781,382  56,841,897  54,994,430 
 Diluted  57,455,805  57,597,392  57,617,030  55,589,307 
              
              
  
GOLD RESOURCE CORPORATION 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(U.S. dollars in thousands) 
(Unaudited) 
  
         
  Nine months ended September 30, 
  2017  2016 
         
Cash flows from operating activities:        
  Net income $9,821  $7,999 
  Adjustments to reconcile net income to net cash from operating activities:        
   Deferred income taxes  3,033   250 
   Depreciation and amortization  10,602   9,343 
   Stock-based compensation  877   997 
   Other operating adjustments  392   (531)
  Changes in operating assets and liabilities:        
   Accounts receivable  (3,034)  (2,092)
   Inventories  (945)  (657)
   Prepaid expenses and other current assets  958   1,203 
   Accounts payable and other accrued liabilities  3,319   (2,774)
   Mining royalty and income taxes payable/receivable  (1,556)  3,690 
   Other noncurrent assets  36   64 
  Net cash provided by operating activities  23,503   17,492 
Cash flows from investing activities:        
   Capital expenditures  (20,382)  (12,637)
   Proceeds from the sale of equity investments  -   749 
   Other investing activities  (265)  (315)
   Net cash used in investing activities  (20,647)  (12,203)
Cash flows from financing activities:        
   Proceeds from the exercise of stock options  -   391 
   Dividends paid  (852)  (818)
   Repayment of loan payable  (46)  - 
   Repayment of capital leases  (21)  (606)
  Net cash used in financing activities  (919)  (1,033)
Effect of exchange rate changes on cash and cash equivalents  (271)  (13)
Net increase in cash and cash equivalents  1,666   4,243 
Cash and cash equivalents at beginning of period  14,166   12,822 
Cash and cash equivalents at end of period $15,832  $17,065 
Supplemental Cash Flow Information        
 Income and mining taxes paid $2,764  $256 
Non-cash investing activities:        
  Increase (decrease) in accrued capital expenditures $510  $(2,764)
  Equipment purchased through loan payable  2,397   - 
  Equipment purchased under capital lease  21   300 
  Common stock issued for the acquisition of mineral rights $1,300  $13,910 
         
         

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 56,891,484 shares outstanding, zero warrants and has returned over $110 million back to its shareholders since commercial production commenced July 1, 2010. Gold Resource Corporation offers its 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 Form 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.

 


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 -- Published: Tuesday, 31 October 2017 | E-Mail  | Print  | Source: GoldSeek.com

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