Gold Resource Corporation (NYSE American:
GORO) (the “Company”) is pleased to announce its
full-year operational results from its Don David Gold Mine (“DDGM”)
near Oaxaca, Mexico, and a corporate update on its other
activities.
2023 Highlights include:
- Produced and sold 18,534 ounces of gold and 1,036,229 ounces of
silver
- Produced and sold 10,954 tonnes of zinc, 904 tonnes of copper,
and 3,681 tonnes of lead
- Total cash cost after co-product credits for the full year was
$1,250 per gold equivalent ounce
- Cash balance of $6.3 million with no debt and working capital
of $15.2 million at December 31, 2023
- Completed Back Forty Optimization Study that indicates an
After-Tax of $214 million NPV6% with a 25.7% IRR and a 2.5 year
payback
“Our operational results for the final quarter of 2023 were in
line with our mine plan and guidance even though our financial
results were lower than planned,” stated Allen Palmiere, President
and CEO for the Company. “Factors that are out of our control
affected our bottom line, including a strengthened 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
be committed to the identification and implementation of
opportunities that will reduce costs and increase efficiencies to
offset these factors as we move forward. Our exploration drilling
program at DDGM yielded encouraging drill results from our
underground exploration program and will continue with the goal of
increasing the average grade of our 2024 mine plan and life of mine
resources. We also completed the optimization work for the Back
Forty project and filed an inaugural S-K 1300 that resulted in an
improved project valuation and increased economic returns, while
reducing environment impacts.”
Corporate and Financial:
- The Company closed the year with a $6.3 million cash balance as
at December 31, 2023. The decrease of $17.4 million from December
31, 2022 is attributable to a cash outflow of $12.5 million for
capital investments and a cash outflow of $5.2 million from
operating activities for 2023, which included $7.8 million of
income tax payments for the tax years 2022 and 2023, exploration
investment of $4.2 million at the DDGM, and $1.6 million in
spending on the Back Forty Project optimization work, offset by a
$0.2 million increase in the value of cash due to the strengthening
of the peso.
- Working capital at December 31, 2023, was $15.2 million, a 29%
decrease from the December 31, 2022, working capital of $21.4
million. The decrease is primarily driven by the decline in cash
balance discussed above.
- DDGM total cash costs (after co-product credits) and total
all-in sustaining cost per gold equivalent (“AuEq”)1 ounce sold
were $1,250 and $1,630, respectively. See Item 7. 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.
- The Company’s At-The-Market Offering Agreement with H.C.
Wainwright & Co., LLC (the “Agent”), which was entered into in
November 2019 (the “ATM Agreement”), pursuant to which the Agent
agreed to act as the Company’s sales agent with respect to the
offer and sale from time to time of the Company’s common stock
having an aggregate gross sales price of up to $75.0 million, was
renewed in June 2023.
- On February 13, 2023, the Company announced the suspension of
future quarterly dividends to protect the balance sheet and to
focus capital resources on exploration and resource and reserve
development.
- In November 2023, the Company’s Board of Directors 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, which is ongoing, is
evaluating a broad range of options to maximize shareholder value,
including a potential sale or merger of the Company.
Don David Gold Mine:
- The Don David Gold Mine (“DDGM”) safety program aims to bolster
the overall health and safety culture of our employees.
- In 2023, two incidents resulting in lost time were recorded.
Despite their low potential for harm, comprehensive investigations
were conducted, and requisite measures were implemented
accordingly.
- The full year lost time injury frequency rate per million hours
was 0.96, which is substantially below the 3.95 Camimex (Mexican
Chamber of Mines) benchmark.2
- DDGM received the Mexican Empresa Socialmente Responsable
(“ESR”) award in 2023 for the ninth consecutive year.
- The Don David Gold Mine produced and sold a total of 31,085
gold equivalent ounces, comprising of 18,534 gold ounces and
1,036,229 silver ounces, sold at an average price per ounce of
$1,955 and $23.68, respectively.
- During the year, our exploration program was executed as
planned, maintaining a dual focus on both infill and expansion
drilling, with encouraging results from targets in the Switchback,
Arista, and Three Sisters vein systems. The 2023 expansion
(step-out) drilling program proved highly successful, culminating
in the discovery of the Gloria vein system, located immediately
north of the Three Sisters system, as well as successfully testing
the projected northern extensions of the Splay 31 and Marena North
veins of the Arista system.
- The Company purchased over two thousand tonnes of tailings
material for $0.3 million from a third-party artisanal mining
operation as a collaborative initiative with the local community at
the end of 2022. Some of this material was processed in early 2023
to ensure the proper environmental treatment and storage of the
material.
- During the fourth quarter of 2023, negotiations were
successfully undertaken to decrease the royalty fee from 5% to 3%
for the mining claims at La Tehuana, El Aguila, and Mina El
Aire.
Back Forty Project:
- Optimization work related to the metallurgy and the economic
model for the Back Forty Project in Michigan, USA was completed,
and the Company filed the Back Forty Project Technical Report
Summary, which was prepared in accordance with subpart 1300 of
Regulation S-K (“S-K 1300”), as Exhibit 96.1 to the Form 8-K filed
on October 26, 2023 (the “Back Forty Project Technical Report
Summary”). Results of the work indicate a more robust economic
project with no planned impacts to wetlands that is more protective
of the environment, which should facilitate a successful mine
permitting process.
Full Year 2023 Financial Results
Financial Measures (Unaudited) ($’s in
millions)
Cash balance at December 31, 2023
$6.3
For the Year Ended December
31, 2023
Cash used in operating activities
$(5.2)
Net loss
$(16.0)
Net sales
$97.7
Production costs
$76.1
Depreciation, amortization, &
reclamation
$26.1
Mining gross loss
$(5.3)
EBITDA
$4.4
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
$
4,386
Infill Drilling
Capitalized Exploration
4,096
Other Sustaining Capital
Capital
1,420
Surface and Underground Exploration
Development & Other
Capitalized Exploration
1,139
Subtotal of Sustaining Investments:
11,041
$
9 - 11 million
Growth Investments:
DDGM growth:
Surface Exploration / Other
Exploration
2,240
Underground Exploration Drilling
Exploration
1,927
Underground Exploration Development
Capitalized Exploration
357
Back Forty growth:
Back Forty Project Optimization &
Permitting
Exploration
1,642
Subtotal of Growth Investments:
6,166
$
6 - 7 million
Total Capital and Exploration:
$
17,207
$
15 - 18 million
Trending Highlights
2022
2023
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Operating Data
Total tonnes milled
136,844
129,099
110,682
116,616
117,781
113,510
116,626
111,254
Average Grade
-
Gold (g/t)
3.00
2.63
1.98
2.51
2.33
1.59
1.52
1.44
Silver (g/t)
81
64
80
109
94
86
73
85
Copper (%)
0.41
0.32
0.37
0.45
0.37
0.37
0.32
0.39
Lead (%)
1.97
1.99
1.59
1.58
1.73
1.64
1.29
1.39
Zinc (%)
4.89
4.00
4.21
4.27
3.88
3.72
3.24
2.95
Metal production (before payable metal
deductions)
Gold (ozs.)
11,187
9,317
5,851
7,767
7,171
4,637
4,443
4,077
Silver (ozs.)
332,292
249,088
261,256
370,768
322,676
289,816
247,159
282,487
Copper (tonnes)
431
303
296
406
336
334
276
341
Lead (tonnes)
2,073
2,020
1,249
1,323
1,559
1,389
1,048
1,072
Zinc (tonnes)
5,562
4,282
3,901
4,198
3,837
3,569
3,223
2,884
Metal produced and sold
Gold (ozs.)
8,381
8,746
5,478
7,514
6,508
4,287
3,982
3,757
Silver (ozs.)
265,407
231,622
225,012
335,168
294,815
274,257
208,905
258,252
Copper (tonnes)
408
286
282
372
332
327
245
327
Lead (tonnes)
1,639
1,755
1,056
941
1,417
1,317
947
820
Zinc (tonnes)
4,359
3,590
2,943
3,265
3,060
3,141
2,571
2,182
Average metal prices realized
Gold ($ per oz.)
$ 1,898
$ 1,874
$ 1,627
$ 1,734
$ 1,915
$ 2,010
$ 1,934
$1,985
Silver ($ per oz.)
$ 23.94
$ 22.05
$ 18.54
$ 21.25
$ 23.04
$ 24.93
$ 23.61
$23.14
Copper ($ per tonne)
$ 10,144
$ 9,275
$ 7,115
$ 8,221
$ 9,172
$ 8,397
$ 8,185
$8,205
Lead ($ per tonne)
$ 2,347
$ 2,168
$ 1,882
$ 1,954
$ 2,158
$ 2,153
$ 2,196
$2,122
Zinc ($ per tonne)
$ 3,842
$ 4,338
$ 3,186
$ 2,577
$ 3,195
$ 2,485
$ 2,195
$2,516
Gold equivalent ounces sold
Gold Ounces
8,381
8,746
5,478
7,514
6,508
4,287
3,982
3,757
Gold Equivalent Ounces from Silver
3,348
2,729
2,564
4,107
3,547
3,402
2,550
3,011
Total AuEq oz
11,729
11,475
8,042
11,621
10,055
7,689
6,532
6,768
Financial Data
Total sales, net (in thousands)
$ 45,417
$ 37,064
$ 23,869
$ 32,374
$ 31,228
$ 24,807
$ 20,552
$21,141
Production Costs (in thousands)
$ 20,074
$ 21,722
$ 19,380
$ 19,773
$ 19,850
$ 20,302
$ 18,957
$17,034
Production Costs/Tonnes Milled
$ 147
$ 168
$ 175
$ 170
$ 169
$ 179
$ 163
$153
Operating Cash Flows (in thousands)
$ 4,230
$ 7,976
($ 4,292)
$ 6,243
$ 1,024
($ 551)
($ 7,475)
$1,783
Net income (loss) (in thousands)
$ 4,019
$ 2,673
($ 9,730)
($ 3,283)
($ 1,035)
($ 4,584)
($ 7,341)
$(3,057)
Earnings (loss) per share - basic
$ 0.05
$0.03
($ 0.11)
($ 0.04)
($ 0.01)
($ 0.05)
($ 0.08)
$(0.03)
Trending Highlights of Non-GAAP Measures
2022
2023
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
(in thousands, except per oz)
Gold equivalent ounces sold (oz)
11,729
11,475
8,042
11,621
10,055
7,689
6,532
6,768
Total production costs
$ 20,074
$ 21,722
$ 19,380
$ 19,773
$ 19,850
$ 20,302
$ 18,957
$ 17,034
Treatment and refining charges
2,748
3,137
2,860
3,327
3,184
3,328
2,788
2,330
Co-product credits (1)
(24,732)
(22,027)
(13,369)
(13,314)
(15,881)
(13,384)
(9,733)
(9,908)
Total cash cost after co-product
credits
($ 1,910)
$ 2,832
$ 8,871
$ 9,786
$ 7,153
$ 10,246
$ 12,012
$ 9,456
Total cash cost after co-product
credits per AuEq oz sold
($ 163)
$ 247
$ 1,103
$ 842
$ 711
$ 1,333
$ 1,839
$ 1,397
Sustaining - capitalized expenditure
$ 4,596
$ 4,028
$ 3,605
$ 4,110
$ 2,588
$ 2,187
$ 3,489
$ 1,638
Sustaining - Exploration Expenditure
-
-
-
-
548
531
52
8
Reclamation and remediation (2)
62
61
58
620
195
200
216
163
Subtotal of DDGM sustaining costs
$ 4,658
$ 4,089
$ 3,663
$ 4,730
$ 3,331
$ 2,918
$ 3,757
$ 1,809
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
$ 1,664
Sustaining - general and administrative,
including stock-based compensation expenses
$ 2,673
$ 2,313
$ 2,249
$ 2,768
$ 1,790
$ 2,137
$ 1,662
$ 1,675
Consolidated all-in sustaining cost after
co-product credits
$ 5,421
$ 9,234
$ 14,783
$ 17,284
$ 12,274
$ 15,301
$ 17,431
$ 12,940
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
$ 1,912
Non-sustaining cost- capital
expenditure
$ 1,353
$ 541
$ -
$ -
$ -
$ 147
$ 209
$ 1
Non-sustaining cost- exploration
expenditure
2,305
2,837
4,973
2,934
1,839
1,440
1,960
570
Subtotal of non-sustaining costs
$ 3,658
$ 3,378
$ 4,973
$ 2,934
$ 1,839
$ 1,587
$ 2,169
$ 571
Total all-in cost after co-product
credits
$ 9,079
$ 12,612
$ 19,756
$ 20,218
$ 14,113
$ 16,888
$ 19,600
$ 13,511
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
$ 1,996
(1)
Refer to Realized/Unrealized Derivatives
for copper, zinc, and lead in the Annual and Quarterly Reports,
Item 8— Financial Statements and Supplementary Data: Fair Value
Measurement and Item 1—Condensed Consolidated Interim Financial
Statements and Notes (unaudited): 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.
(2)
Refer to Reclamation and remediation in
the Annual and Quarterly Reports, Item 8— Financial Statements and
Supplementary Data: Reclamation and Remediation and Item
1—Condensed Consolidated Interim Financial Statements and Notes
(unaudited): Reclamation and Remediation. 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.
2024 Guidance
The Company’s focus continues to be on unlocking the value of
the Don David Gold Mine, existing infrastructure, and large
property position in Oaxaca, Mexico and therefore we plan to make
significant investments for infrastructure and exploration in
2024.
Measure
2024 Guidance
Metals Produced & Sold
13,000 to 15,000 Gold Ounces
1,250,000 to 1,400,000 Silver Ounces 29,500 to 31,500 Gold
Equivalent Ounces
Cash Cost after Co-product Credits per
AuEq ounces (1) (2)
$1,100 to $1,300
All-in-Sustaining Cost after Co-Product
Credits per AuEq ounce (1)
$1,450 to $1,650 (DDGM) $1,600 to
$1,800 (Consolidated)
Capital Investment (DDGM)
$6.8 to $8.0 million (Sustaining
Capital) $2.0 to $3.0 million (Sustaining Capitalized Exploration)
$0.5 to $0.8 million (Non-Sustaining Capitalized Exploration)
Exploration Investment (DDGM)
$2.0 to $3.5 million
(Non-Sustaining Exploration Expense)
Back Forty Investment
$0.7 to $0.9 million
General & Administrative Expense
$5.0 to $6.0 million, excluding
Stock-based-Compensation
(1)
Calculations of cost after co-product
credits per gold equivalent ounce and all-in sustaining cost after
co-product credits per AuEq ounce are non-GAAP financial measures.
Please see Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations—Non-GAAP Measures in
the Annual Report for a complete reconciliation of the non-GAAP
measures to U.S. GAAP.
(2)
Co-product credits directly impact the
Cash Costs and All-in Sustaining Costs per AuEq ounce calculation.
Guidance is based on 3,630 tonnes of lead sold at a $0.95 per pound
metal price, 1,007 tonnes of copper sold at a $3.80 per pound metal
prices and 10,174 tonnes of zinc sold at a $1.15 per pound metal
price.
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.
Q4 2023 Conference Call
The Company will host a conference call on Thursday, March 14,
2024, at 10:00 p.m. Eastern Time. Our 2023 Form 10-K will be filed
at a future date, no later than April 1,2024, once our External
Audit Firm, BDO USA, P.C., completes their audit procedures.
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://onlinexperiences.com/Launch/QReg/ShowUUID=F24608AC-00ED-4198-B37C-E83FCE95DDEB
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: 34193701
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.
___________________________ 1 Gold equivalent is determined by
taking gold ounces produced and sold, plus silver ounces produced
and sold, converted to gold equivalent ounces using the gold to
silver average realized price ratio for the period. 2 Further
information regarding the Mexican Chamber of Mines benchmark can be
found at
https://camimex.org.mx/sostenibilidad2023/indicadores.html.
Information contained therein is not a part of this report and is
not incorporated by reference herein.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240313689211/en/
Chet Holyoak Chief Financial Officer Chet.holyoak@grc-usa.com
www.GoldResourceCorp.com
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