Gold Resource Corporation Reports Third Quarter Results, Maintains 2018 Production Outlook
-- Published: Tuesday, 30 October 2018 | Print | Disqus
COLORADO SPRINGS, Colo., Oct. 30, 2018 (GLOBE NEWSWIRE) -- Gold Resource Corporation (NYSE American: GORO) (the “Company” or “GRC”) reported production results for the third quarter ended September 30, 2018 of 6,411 ounces of gold and 321,590 ounces of silver, which along with base metal revenue generated $24.3 million in net revenue 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 $111 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 2018 HIGHLIGHTS
$24.3 million net sales
6,411 gold ounces produced
321,590 silver ounces produced
$582 total cash cost per precious metal gold equivalent ounce sold (after by-product credits)
$13.0 million base metal by-product credits, or $1,372 per precious metal gold equivalent ounce sold
$0.3 million dividend distributions, or $0.005 per share for quarter
$16.6 million cash and cash equivalents
$3.4 million gold and silver bullion
Heap leach pad construction 80% complete at Isabella Pearl Project, Nevada
First ore blast at Isabella Pearl Project, Nevada in September 2018
Overview of Q3 2018 Results
During the third quarter of 2018, the Company sold 9,466 precious metal gold equivalent ounces at a total cash cost of $582 per ounce (after by-product credits). Average realized metal prices during the quarter included $1,183 per ounce gold and $14.69 per ounce silver*. The Company recorded a net loss of ($0.8 million), or ($0.01) per share, driven primarily by lower commodity prices and unfavorable price settlements of prior period sales. Declining metal prices during the prior four months caused adjustments under the provisional pricing mechanism in the Company’s sales contracts to aggregate a negative settlement of $3.2 million in final payments during the third quarter.
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 $16.6 million.
Production totals for the first nine months of 2018 included 18,864 ounces of gold, 1,341,429 ounces of silver, 1,206 tonnes of copper, 5,274 tonnes of lead and 14,236 tonnes of zinc. The Company maintains its 2018 Annual Outlook, targeting a plus or minus 10 percent production of 27,000 gold ounces and 1,700,000 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 Statistics table summarizes certain information about our mining operations for three and nine months ended September 30, 2018 and 2017:
Three months ended September 30,
Nine months ended September 30,
2018
2017
2018
2017
Arista Mine
Milled
Tonnes Milled
143,110
108,109
410,697
283,258
Grade
Average Gold Grade (g/t)
1.51
2.16
1.64
2.20
Average Silver Grade (g/t)
72
120
106
140
Average Copper Grade (%)
0.37
0.36
0.37
0.37
Average Lead Grade (%)
1.82
1.76
1.64
1.63
Average Zinc Grade (%)
4.21
5.14
4.23
4.25
Recoveries
Average Gold Recovery (%)
80
85
79
86
Average Silver Recovery (%)
91
92
91
92
Average Copper Recovery (%)
82
75
79
77
Average Lead Recovery (%)
81
76
78
77
Average Zinc Recovery (%)
83
83
82
84
Aguila Open Pit Mine
Milled
Tonnes Milled
11,404
2,108
25,730
42,079
Grade
Average Gold Grade (g/t)
2.30
1.02
2.11
1.52
Average Silver Grade (g/t)
39
41
41
34
Recoveries
Average Gold Recovery (%)
86
71
83
73
Average Silver Recovery (%)
76
65
80
80
Mirador Mine
Milled
Tonnes Milled
3,561
3,330
11,244
3,330
Grade
Average Gold Grade (g/t)
1.41
1.08
1.40
1.08
Average Silver Grade (g/t)
105
102
158
102
Recoveries
Average Gold Recovery (%)
81
62
75
62
Average Silver Recovery (%)
65
54
76
54
Combined
Tonnes milled
158,075
113,547
447,671
328,667
Tonnes Milled per Day (1)
1,796
1,336
1,724
1,279
Metal production (before payable metal deductions) (2)
Gold (ozs.)
6,411
6,465
18,864
18,908
Silver (ozs.)
321,590
392,153
1,341,429
1,217,713
Copper (tonnes)
434
291
1,206
804
Lead (tonnes)
2,119
1,449
5,274
3,583
Zinc (tonnes)
4,970
4,628
14,236
11,447
Precious metal gold equivalent ounces produced (mill production) (2)
Gold Ounces
6,411
6,465
18,864
18,908
Gold Equivalent Ounces from Silver
3,993
5,172
16,939
16,722
Total Precious Metal Gold Equivalent Ounces
10,404
11,637
35,803
35,630
Based on actual days the mill operated during the period.
Metal production represents metal contained in concentrates and doré produced at our Aguila processing facility, which is before payable metal deductions are levied by the buyers. Payable metals deductions are defined in our contracts with the buyers and represent estimates of metals contained in the concentrates and doré which the buyers deduct from payment. There are inherent limitations and differences in the sampling method and assaying of estimated metal contained in concentrates and doré that are shipped, and those contained metal estimates are derived from sampling methods and assaying throughout the production process. We monitor these differences to ensure that precious metal production quantities are materially correct.
The following Sales Statistics table summarizes certain information about our combined mining operations for the three and nine months ended September 30, 2018 and 2017:
Three months ended September 30,
Nine months ended September 30,
2018
2017
2018
2017
Metal sold
Gold (ozs.)
5,721
5,672
16,744
17,521
Silver (ozs.)
301,717
371,754
1,244,092
1,121,870
Copper (tonnes)
378
328
1,101
769
Lead (tonnes)
1,905
1,389
4,862
3,299
Zinc (tonnes)
3,942
4,326
11,527
9,452
Average metal prices realized (1)
Gold ($ per oz.)
1,183
1,289
1,275
1,262
Silver ($ per oz.)
14.69
17.00
16.10
17.33
Copper ($ per tonne)
5,593
6,341
6,526
6,042
Lead ($ per tonne)
1,931
2,349
2,266
2,293
Zinc ($ per tonne)
1,825
2,936
2,899
2,790
Precious metal gold equivalent ounces sold
Gold Ounces
5,721
5,672
16,744
17,521
Gold Equivalent Ounces from Silver
3,745
4,901
15,710
15,411
Total Precious Metal Gold Equivalent Ounces
9,466
10,573
32,454
32,932
Total cash cost before by-product credits per precious metal gold equivalent ounce sold (2)
$
1,954
$
1,709
$
1,687
$
1,353
Total cash cost after by-product credits per precious metal gold equivalent ounce sold (2) (3)
$
582
$
2
$
97
$
181
Total all-in sustaining cost per precious metal gold equivalent ounce sold (2)
$
1,338
$
714
$
724
$
736
Total all-in cost per precious metal gold equivalent ounce sold (2)
$
1,406
$
756
$
774
$
768
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.
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 Form 10-Q.
Total cash cost after by-product credits are significantly affected by base metals sales during the periods presented.
See Accompanying Tables
The following information summarizes the results of operations for Gold Resource Corporation for the three and nine months ended September 30, 2018 and 2017, its financial condition at September 30, 2018 and December 31, 2017 and its cash flows for the nine months ended September 30, 2018 and 2017. The summary data as of September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017 is unaudited; the summary data as of December 31, 2017 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2017, 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,
2018
2017
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
16,601
$
22,390
Gold and silver rounds/bullion
3,405
3,812
Accounts receivable
1,428
2,884
Inventories, net
11,985
11,636
Income tax receivable, net
1,276
-
Prepaid expenses and other current assets
2,586
1,767
Total current assets
37,281
42,489
Property, plant and mine development, net
102,098
82,599
Deferred tax assets, net
7,576
6,854
Other non-current assets
835
981
Total assets
$
147,790
$
132,923
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
13,908
$
6,904
Loans payable, current
743
568
Capital leases, current
404
382
Income taxes payable, net
-
1,944
Mining royalty taxes payable, net
1,550
2,359
Accrued expenses and other current liabilities
3,042
2,851
Total current liabilities
19,647
15,008
Reclamation and remediation liabilities
3,673
2,946
Loans payable, long-term
1,572
1,645
Capital leases, long-term
929
1,218
Total liabilities
25,821
20,817
Shareholders' equity:
Common stock - $0.001 par value, 100,000,000 shares authorized:
57,718,676 and 56,916,484 shares outstanding at September 30, 2018 and December 31, 2017, respectively
58
57
Additional paid-in capital
116,877
114,584
Retained earnings
12,089
4,520
Treasury stock at cost, 336,398 shares
(5,884
)
(5,884
)
Accumulated other comprehensive loss
(1,171
)
(1,171
)
Total shareholders' equity
121,969
112,106
Total liabilities and shareholders' equity
$
147,790
$
132,923
GOLD RESOURCE CORPORATION CONDENSEDCONSOLIDATED 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,
2018
2017
2018
2017
Sales, net
$
24,258
$
31,122
$
87,177
$
76,849
Mine cost of sales:
Production costs
17,363
16,122
50,477
39,634
Depreciation and amortization
3,515
3,762
10,587
10,271
Reclamation and remediation
87
37
379
101
Total mine cost of sales
20,965
19,921
61,443
50,006
Mine gross profit
3,293
11,201
25,734
26,843
Costs and expenses:
General and administrative expenses
2,140
1,950
6,719
5,437
Exploration expenses
1,304
1,457
3,740
3,415
Other expense, net
568
110
1,356
1,183
Total costs and expenses
4,012
3,517
11,815
10,035
(Loss) income before income taxes
(719
)
7,684
13,919
16,808
Provision for income taxes
62
3,103
5,489
6,987
Net (loss) income
$
(781
)
$
4,581
$
8,430
$
9,821
Net (loss) income per common share:
Basic
$
(0.01
)
$
0.08
$
0.15
$
0.17
Diluted
$
(0.01
)
$
0.08
$
0.14
$
0.17
Weighted average shares outstanding:
Basic
57,642,966
56,888,115
57,361,809
56,841,897
Diluted
57,642,966
57,455,805
58,252,652
57,617,030
GOLD RESOURCE CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) (Unaudited)
Nine months ended September 30,
2018
2017
Cash flows from operating activities:
Net income
$
8,430
$
9,821
Adjustments to reconcile net income to net cash from operating activities:
Deferred income taxes
(467
)
3,033
Depreciation and amortization
11,096
10,602
Stock-based compensation
1,090
877
Other operating adjustments
706
392
Changes in operating assets and liabilities:
Accounts receivable
1,456
(3,034
)
Inventories
(340
)
(945
)
Prepaid expenses and other current assets
(390
)
958
Other noncurrent assets
132
36
Accounts payable and other accrued liabilities
3,536
3,319
Mining royalty and income taxes payable, net
(4,428
)
(1,556
)
Net cash provided by operating activities
20,821
23,503
Cash flows from investing activities:
Capital expenditures
(26,085
)
(20,382
)
Other investing activities
5
(265
)
Net cash used in investing activities
(26,080
)
(20,647
)
Cash flows from financing activities:
Proceeds from the exercise of stock options
1,261
-
Dividends paid
(860
)
(852
)
Repayment of loan payable
(424
)
(46
)
Repayment of capital leases
(285
)
(21
)
Net cash used in financing activities
(308
)
(919
)
Effect of exchange rate changes on cash and cash equivalents
(222
)
(271
)
Net (decrease) increase in cash and cash equivalents
(5,789
)
1,666
Cash and cash equivalents at beginning of period
22,390
14,166
Cash and cash equivalents at end of period
$
16,601
$
15,832
Supplemental Cash Flow Information
Interest expense paid
$
140
$
24
Income and mining taxes paid
$
6,822
$
2,764
Non-cash investing activities:
Increase in accrued capital expenditures
$
3,935
$
510
Change in estimate for asset retirement cost
$
527
$
-
Equipment purchased through loan payable
$
526
$
2,397
Equipment purchased under capital leases
$
17
$
21
Common stock issued for the acquisition of mineral rights
$
-
$
1,300
About GRC:
Gold Resource Corporation is a gold and silver producer, developer and explorer with operations in Oaxaca, Mexico and Nevada, USA. The Company targets low capital expenditure projects with potential for generating high returns on capital. The Company has returned $111 million back to its shareholders 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. 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.
The content on this site is protected
by U.S. and international copyright laws and is the property of GoldSeek.com
and/or the providers of the content under license. By "content" we mean any
information, mode of expression, or other materials and services found on GoldSeek.com.
This includes editorials, news, our writings, graphics, and any and all other
features found on the site. Please contact
us for any further information.
Live GoldSeek Visitor Map | Disclaimer
The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy
or completeness of the information (including news, editorials, prices, statistics,
analyses and the like) provided through its service. Any copying, reproduction
and/or redistribution of any of the documents, data, content or materials contained
on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC,
is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be
liable to any person for any decision made or action taken in reliance upon
the information provided herein.
