Gold Resource Corporation (NYSE American:
GORO) (the “Company”) is pleased to announce its
year-to-date and quarterly operational results from its Don David
Gold Mine (DDGM) near Oaxaca, Mexico, and a corporate update on its
other activities.
Year-to-Date Highlights Include:
- Produced and sold 14,777 ounces of gold and 777,977 ounces of
silver
- Produced and sold 8,772 tonnes of zinc, 904 tonnes of copper,
and 3,681 tonnes of lead
- Total cash cost after co-product credits for the quarter was
$1,839 per gold equivalent ounce
- Cash balance of $6.7 million with no debt and working capital
of $13.8 million at September 30, 2023
- Completed Back Forty Optimization Study that indicates
after-Tax: a $214 million NPV6% with a 25.7% IRR and a 2.5 year
payback
“Our quarterly operational results to date continue to remain in
line with our 2023 mine plan and guidance even though our financial
results continue to be lower than planned,” stated Allen Palmiere,
President and CEO for the Company. “Factors that are out of our
control continue to affect our bottom line, including a
strengthening Mexican Peso to the US dollar, increased local power
costs, and lower metal prices for our co-product metals of copper,
lead, and zinc. We continue to identify and implement opportunities
for cost reductions and other operational efficiencies to offset
these factors. Our exploration drilling program at DDGM continues
to yield encouraging drill results from our underground exploration
program with the goal of increasing the average grade of our 2024
mine plan and life of mine resources. Earlier in 2023, we filed our
inaugural Environmental, Social, and Governance report, and we are
seeing very positive reception from the local communities and
government. We were also very successful this quarter in completing
the optimization work around the Back Forty project and filing an
S-K 1300 that resulted in a more robust project with an improved
project valuation and increased economic returns, while reducing
environment impacts.”
Review of Strategic Alternatives
Notwithstanding the technical successes noted above, in light of
the continued challenges facing the Company, the Company’s Board of
Directors has decided to initiate a formal review process, with the
assistance of outside financial and legal advisors, to evaluate
strategic alternatives for the Company. The comprehensive process
will begin immediately and will evaluate a broad range of options
to maximize shareholder value, including a potential sale of the
Company. The Company has engaged Cormark Securities Inc. as
financial advisor to assist in its review of strategic
alternatives. Davis Graham & Stubbs LLP has been appointed as
legal advisor in connection with the review process.
There is no deadline or definitive timetable for the completion
of the strategic alternatives review process, and there can be no
assurance regarding the results or outcome of this review. The
Company does not intend to comment further on this strategic review
process until it has been completed or the Company determines that
a disclosure is required by law or otherwise deemed
appropriate.
Third Quarter Operational Results
Don David Gold Mine
- No lost time incidents during the quarter. Our year-to-date
Lost Time Injury Frequency Rate safety record is 0.11 as compared
to the Mexican average of 0.89 (in US equivalent). Safety at Gold
Resource Corporation is paramount. Even with a good track record at
the DDGM, the Company continues to strive each quarter for improved
measures, awareness, and training.
- The DDGM diamond drilling program continued as planned during
the third quarter, using five drill rigs with encouraging results.
Drilling continued to advance on two fronts: (1) Infill drilling
designed to upgrade Inferred resources to the Indicated category;
and (2) Expansion drilling with the objective of identifying
additional Inferred resources via step-out drilling. The drilling
during the third quarter was successful in testing the northern
extensions of the Splay 31 and Marena North veins of the Arista
system, as well as in expanding the Three Sisters and Gloria vein
systems to the northwest and down-dip (Switchback system).
Back Forty Project
- Optimization work related to the metallurgy and the economic
model for the Back Forty Project in Michigan, USA, was completed,
and the Company released the Technical Report Summary (S-K 1300)
for the Back Forty Project as Exhibit 96.1 to Form 8-K filed on
October 26, 2023. Results of the work indicate a more robust
economic project with no planned impacts to wetlands that is more
protective of the environment, which should facilitate a successful
mine permitting process.
Financial
- Total cash cost after co-product credits for the quarter was
$1,839 per gold equivalent (“AuEq”) ounce, and total all-in
sustaining cost (“AISC”) after co-product credits for the quarter
was $2,669 per AuEq ounce. The year-to-date total cash cost after
co-product credits of $1,210 and total AISC after co-product
credits of $1,852 are no longer within the guidance due to the
strengthening of the peso and lower zinc prices. (See Item
2—Management’s Discussion and Analysis of Financial Condition and
Results of Operations – Non-GAAP Measures below for a
reconciliation of non-GAAP measures to applicable GAAP
measures).
2023 Capital and Exploration Investment Summary
For the nine months ended
September 30, 2023
2023 full year
guidance
(in thousands)
Sustaining Investments:
Underground Development
Capital
$
3,464
Infill Drilling
Capitalized Exploration
3,315
Other Sustaining Capital
Capital
1,485
Surface and Underground Exploration
Development & Other
Capitalized Exploration
1,131
Subtotal of Sustaining Investments:
9,395
$
9 - 11 million
Growth Investments:
DDGM growth:
Surface Exploration / Other
Exploration
2,058
Underground Exploration Drilling
Exploration
1,916
Underground Exploration Development
Capitalized Exploration
356
Back Forty growth:
Back Forty Project Optimization &
Permitting
Exploration
1,265
Subtotal of Growth Investments:
5,595
$
6 - 7 million
Total Capital and Exploration:
$
14,990
$
15 - 18 million
Trending Highlights
2022
2023
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Operating Data
Total tonnes milled
136,844
129,099
110,682
116,616
117,781
113,510
116,626
Average Grade
-
Gold (g/t)
3.00
2.63
1.98
2.51
2.33
1.59
1.52
Silver (g/t)
81
64
80
109
94
86
73
Copper (%)
0.41
0.32
0.37
0.45
0.37
0.37
0.32
Lead (%)
1.97
1.99
1.59
1.58
1.73
1.64
1.29
Zinc (%)
4.89
4.00
4.21
4.27
3.88
3.72
3.24
Metal production (before payable metal
deductions)
Gold (ozs.)
11,187
9,317
5,851
7,767
7,171
4,637
4,443
Silver (ozs.)
332,292
249,088
261,256
370,768
322,676
289,816
247,159
Copper (tonnes)
431
303
296
406
336
334
276
Lead (tonnes)
2,073
2,020
1,249
1,323
1,559
1,389
1,048
Zinc (tonnes)
5,562
4,282
3,901
4,198
3,837
3,569
3,223
Metal produced and sold
Gold (ozs.)
8,381
8,746
5,478
7,514
6,508
4,287
3,982
Silver (ozs.)
265,407
231,622
225,012
335,168
294,815
274,257
208,905
Copper (tonnes)
408
286
282
372
332
327
245
Lead (tonnes)
1,639
1,755
1,056
941
1,417
1,317
947
Zinc (tonnes)
4,359
3,590
2,943
3,265
3,060
3,141
2,571
Average metal prices realized
Gold ($ per oz.)
$ 1,898
$ 1,874
$ 1,627
$ 1,734
$ 1,915
$ 2,010
$ 1,934
Silver ($ per oz.)
$ 23.94
$ 22.05
$ 18.54
$ 21.25
$ 23.04
$ 24.93
$ 23.61
Copper ($ per tonne)
$ 10,144
$ 9,275
$ 7,115
$ 8,221
$ 9,172
$ 8,397
$ 8,185
Lead ($ per tonne)
$ 2,347
$ 2,168
$ 1,882
$ 1,954
$ 2,158
$ 2,153
$ 2,196
Zinc ($ per tonne)
$ 3,842
$ 4,338
$ 3,186
$ 2,577
$ 3,195
$ 2,485
$ 2,195
Gold equivalent ounces sold
Gold Ounces
8,381
8,746
5,478
7,514
6,508
4,287
3,982
Gold Equivalent Ounces from Silver
3,348
2,729
2,564
4,107
3,547
3,402
2,550
Total AuEq oz
11,729
11,475
8,042
11,621
10,055
7,689
6,532
Financial Data
Total sales, net (in thousands)
$ 45,417
$ 37,064
$ 23,869
$ 32,374
$ 31,228
$ 24,807
$ 20,552
Production Costs (in thousands)
$ 20,074
$ 21,722
$ 19,380
$ 19,773
$ 19,850
$ 20,302
$ 18,957
Production Costs/Tonnes Milled
$ 147
$ 168
$ 175
$ 170
$ 169
$ 179
$ 163
Operating Cash Flows (in thousands)
$ 4,230
$ 7,976
($ 4,292)
$ 6,243
$ 1,024
($ 551)
($ 7,475)
Net income (loss) (in thousands)
$ 4,019
$ 2,673
($ 9,730)
($ 3,283)
($ 1,035)
($ 4,584)
($ 7,341)
Earnings (loss) per share - basic
$ 0.05
$0.03
($ 0.11)
($ 0.04)
($ 0.01)
($ 0.05)
($ 0.08)
Trending Highlights of Non-GAAP Measures
2022
2023
Q1
Q2
Q3
Q4
Q1
Q2
Q3
(in thousands, except per oz)
Gold equivalent ounces sold (oz)
11,729
11,475
8,042
11,621
10,055
7,689
6,532
Total production costs (1)
$ 20,074
$ 21,722
$ 19,380
$ 19,773
$ 19,850
$ 20,302
$ 18,957
Treatment and refining charges (2)
2,748
3,137
2,860
3,327
3,184
3,328
2,788
Co-product credits (3)
(24,732)
(22,027)
(13,369)
(13,314)
(15,881)
(13,384)
(9,733)
Total cash cost after co-product
credits
($ 1,910)
$ 2,832
$ 8,871
$ 9,786
$ 7,153
$ 10,246
$ 12,012
Total cash cost after co-product
credits per AuEq oz sold
($ 163)
$ 247
$ 1,103
$ 842
$ 711
$ 1,333
$ 1,839
Sustaining - capitalized expenditure
(4)
$ 4,596
$ 4,028
$ 3,605
$ 4,110
$ 2,588
$ 2,187
$ 3,489
Sustaining - Exploration Expenditure
(4)
-
-
-
-
548
531
52
Reclamation and remediation (5)
62
61
58
620
195
200
216
Subtotal of DDGM sustaining costs
$ 4,658
$ 4,089
$ 3,663
$ 4,730
$ 3,331
$ 2,918
$ 3,757
DDGM all-in sustaining cost after
co-product credits per AuEq oz sold
$ 234
$ 603
$ 1,559
$ 1,249
$ 1,043
$ 1,712
$ 2,414
Sustaining - general and administrative,
including stock-based compensation expenses (6)
$ 2,673
$ 2,313
$ 2,249
$ 2,768
$ 1,790
$ 2,137
$ 1,662
Consolidated all-in sustaining cost after
co-product credits
$ 5,421
$ 9,234
$ 14,783
$ 17,284
$ 12,274
$ 15,301
$ 17,431
Total consolidated all-in sustaining
cost after co-product credits per AuEq oz sold
$ 462
$ 805
$ 1,838
$ 1,487
$ 1,221
$ 1,990
$ 2,669
Non-sustaining cost- capital expenditure
(4)
$ 1,353
$ 541
$ -
$ -
$ -
$ 147
$ 209
Non-sustaining cost- exploration
expenditure (1)
2,305
2,837
4,973
2,934
1,839
1,440
1,960
Subtotal of non-sustaining costs
$ 3,658
$ 3,378
$ 4,973
$ 2,934
$ 1,839
$ 1,587
$ 2,169
Total all-in cost after co-product
credits
$ 9,079
$ 12,612
$ 19,756
$ 20,218
$ 14,113
$ 16,888
$ 19,600
Total all-in cost after co-product
credits per AuEq oz sold
$ 774
$ 1,099
$ 2,457
$ 1,740
$ 1,404
$ 2,196
$ 3,001
(1)
Refer to Production costs in the current
and previously filed Item 1—Condensed Consolidated Interim
Financial Statements and Notes (unaudited) in Condensed
Consolidated Interim Statements of Operations.
(2)
Refer to Treatment and refining charges in
the current and previously filed Item 1—Condensed Consolidated
Interim Financial Statements and Notes (unaudited): Note 3 –
Revenue.
(3)
Refer to Realized/Unrealized Derivatives
for copper, zinc, and lead in the current and previously filed Item
1—Condensed Consolidated Interim Financial Statements and Notes
(unaudited): Note 20 – Fair Value Measurement. Note that Co-product
credits for the prior year (2022) comparable numbers were adjusted
to include realized embedded derivatives only for co-products
(which better represents the cash cost after co-product credits
because it now excludes unrealized gains or losses) and align with
the current year presentation.
(4)
Refer to Capital expenditures in the
current and previously filed Item 1—Condensed Consolidated Interim
Financial Statements and Notes (unaudited): Condensed Consolidated
Interim Statements of Cash Flows.
(5)
Refer to Reclamation and remediation in
the current and previously filed Item 1—Condensed Consolidated
Interim Financial Statements and Notes (unaudited): Condensed
Consolidated Interim Statements of Operations. Note that the prior
year’s (2022) comparable numbers were adjusted to include
Reclamation and remediation (which better represents the all-in
sustaining cost after co-product credits because Reclamation and
remediation are part of normal operating activities) and to align
with the current year’s presentation.
(6)
Refer to General and administrative
expenses and Stock-based compensation in the current and previously
filed Item 1—Condensed Consolidated Interim Financial Statements
and Notes (unaudited): Condensed Consolidated Interim Statements of
Operations.
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.
Q3 2023 Conference Call
The Company will host a conference call on Tuesday, November 7,
2023 at 12:00 p.m. Eastern Time.
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, Alberto Reyes, Chief Operating Officer, and Chet
Holyoak, Chief Financial 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=1637564&tp_key=c391b292bd
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:
67122083
Please connect to the conference call at least 10 minutes prior
to the start time using one of the connection options listed
above.
Forward-Looking Statements:
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. In some cases, you can identify forward-looking statements by
the following words: "may," "might," "will," "could," "would,"
"should," "expect," "plan," "anticipate," "intend," "seek,"
"believe," "estimate," "predict," "potential," "continue,"
"contemplate," "possible," or the negative of these terms or other
comparable terminology, although not all forward-looking statements
contain these words. They are not historical facts, nor are they
guarantees of future performance. Any express or implied statements
contained in this announcement that are not statements of
historical fact may be deemed to be forward-looking statements,
including, without limitation, statements regarding the timing and
scope of a process to explore strategic alternatives for the
Company, including a potential sale of the Company. It is possible
that the Company’s actual results, financial condition, and
developments may differ, possibly materially, from the anticipated
results, developments, and financial condition indicated in these
forward-looking statements. Management believes that these
forward-looking statements are reasonable as of the time made.
However, caution should be taken not to place undue reliance on any
such forward-looking statements because such statements speak only
as of the date when made. Our Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise, except
as required by law. These forward-looking statements are neither
promises nor guarantees, but involve known and unknown risks and
uncertainties that could cause actual results to differ materially
from those projected, including, without limitation: whether the
objectives of the strategic alternative review process will be
achieved; the terms, structure, benefits and costs of any strategic
transaction; the timing of any transaction and whether any
transaction will be consummated at all; the risk that the strategic
alternatives review and its announcement could have an adverse
effect on the ability of the Company to retain and hire key
personnel and maintain relationships with suppliers, employees,
shareholders, and other business relationships, and on its
operating results and business generally; the risk the strategic
alternatives review could divert the attention and time of the
Company’s management; the risk of any unexpected costs or expenses
resulting from the review; the risk of any litigation relating to
the review; and the risks and uncertainties described in “Item 1A.
Risk Factors” in our Annual report on Form 10-K for the year ended
December 31, 2022 and those described from time to time in our
future reports filed with the Securities and Exchange
Commission.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231106923792/en/
For further information, please contact: Chet Holyoak
Chief Financial Officer Chet.holyoak@grc-usa.com
www.GoldResourceCorp.com
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