Gold Resource Corporation Reports Improved Year Over Year Financial Results and Strong Balance Sheet for the Second Quarter 2022

  • CASH BALANCE OF OVER $33.3 MILLION AFTER OVER $15 MILLION INVESTED IN CAPITAL AND EXPLORATION
  • OPERATING CASH FLOW OF $12.2 MILLION AND EBITDA OF $29.0 MILLION
  • REITERATE 2022 PRODUCTION AND COST GUIDANCE

DENVER–(BUSINESS WIRE)–Gold Resource Corporation (NYSE American: GORO) (the “Company”) sold a total of 8,746 ounces of gold and 231,622 ounces of silver in Q2 2022 for a gold equivalent total of 11,475 ounces. Additionally, the Company sold 3,590 tonnes of zinc, 286 tonnes of copper, and 1,755 tonnes of lead.

Allen Palmiere, President and CEO said “Production remains solid at the Don David Gold Mine in Mexico with significant improvements in financial measures over the same period last year. The volume of tonnes processed during the quarter declined slightly from Q1 as we continue to address ground support challenges common to our type of mineral deposit. Grades and improved recoveries helped ensure we delivered another quarter of over 10 thousand gold equivalent ounces. We continue to be committed to having a disciplined focus on costs in the current inflationary market and would like to reiterate our 2022 guidance. Likewise, our continued reinvestment into exploration and infrastructure improvements at the Don David Gold Mine and progressing the feasibility study and permitting initiatives at the Back Forty Project in Michigan are focused on favorably impacting our environment, social and governance programs while creating operational efficiencies and longevity.”

Q2 2022 HIGHLIGHTS

Additional highlights for the second quarter ended June 30, 2022, are summarized below:

  • Total cash cost for the quarter was $247 per gold equivalent (“AuEq”) ounce (after co-product credits) and total all-in sustaining cost for the quarter was $799 per AuEq ounce (after co-product credits). Both non-GAAP measures were favorably impacted by higher co-product credits for base metals sold.1
  • For the eighth consecutive year, the Don David Gold Mine (“DDGM”) earned the prestigious Empresa Socialmente Responsable (“ESR”) award from the Mexican Center for Philanthropy (CEMEFI). Awards are given to organizations who demonstrate a commitment to supporting social and environmental protection programs within their local communities.
  • During the quarter, the Company continued to process tailings material from a nearby community in an effort to ensure the proper environmental treatment and storage of the material.
  • The Company’s Annual Meeting of Shareholders was held in person on May 19, 2022. During the meeting, shareholders approved the current five Directors to serve another annual term and ratified the appointment of BDO USA, LLP as the independent auditor for the fiscal year ending December 31, 2022.
  • $0.9 million was distributed in shareholder dividends this quarter, totaling over $121 million since 2010.
  • Working capital was $37.1 million as of June 30, 2022, $7.8 million higher than as of December 31, 2021. The increase is primarily due to a decrease in the liability related to the zinc zero cost collar.

Trending Highlights

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

2021

 

 

2022

 

 

Q1

 

Q2

 

Q3

 

Q4

 

 

Q1

 

Q2

Operating Data

 

 

 

 

 

 

 

 

 

 

 

 

 

Total tonnes milled

 

 

138,980

 

 

129,590

 

 

98,010

 

 

135,398

 

 

 

136,844

 

 

129,099

Average Grade

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold (g/t)

 

 

1.68

 

 

1.93

 

 

2.68

 

 

1.93

 

 

 

3.00

 

 

2.63

Silver (g/t)

 

 

72

 

 

77

 

 

91

 

 

82

 

 

 

81

 

 

64

Copper (%)

 

 

0.43

 

 

0.36

 

 

0.37

 

 

0.38

 

 

 

0.41

 

 

0.32

Lead (%)

 

 

1.70

 

 

1.63

 

 

2.29

 

 

2.17

 

 

 

1.97

 

 

1.99

Zinc (%)

 

 

4.29

 

 

3.64

 

 

4.79

 

 

4.77

 

 

 

4.89

 

 

4.00

Metal production (before payable metal deductions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold (ozs.)

 

 

6,097

 

 

6,555

 

 

6,933

 

 

6,853

 

 

 

11,187

 

 

9,317

Silver (ozs.)

 

 

307,610

 

 

295,979

 

 

265,829

 

 

330,873

 

 

 

332,292

 

 

249,088

Copper (tonnes)

 

 

441

 

 

368

 

 

284

 

 

413

 

 

 

431

 

 

303

Lead (tonnes)

 

 

1,737

 

 

1,654

 

 

1,808

 

 

2,345

 

 

 

2,073

 

 

2,020

Zinc (tonnes)

 

 

4,377

 

 

3,683

 

 

3,920

 

 

5,349

 

 

 

5,562

 

 

4,282

Metal produced and sold

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold (ozs.)

 

 

5,019

 

 

5,697

 

 

5,809

 

 

6,119

 

 

 

8,381

 

 

8,746

Silver (ozs.)

 

 

253,061

 

 

270,321

 

 

255,394

 

 

287,805

 

 

 

265,407

 

 

231,622

Copper (tonnes)

 

 

382

 

 

365

 

 

268

 

 

405

 

 

 

408

 

 

286

Lead (tonnes)

 

 

1,176

 

 

1,214

 

 

1,550

 

 

2,059

 

 

 

1,639

 

 

1,755

Zinc (tonnes)

 

 

3,134

 

 

3,193

 

 

3,059

 

 

4,167

 

 

 

4,359

 

 

3,590

Average metal prices realized

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold ($ per oz.)

 

$

1,787

 

$

1,822

 

$

1,762

 

$

1,811

 

 

$

1,898

 

$

1,874

Silver ($ per oz.)

 

$

26.77

 

$

26.88

 

$

23.19

 

$

23.51

 

 

$

23.94

 

$

22.05

Copper ($ per tonne)

 

$

8,873

 

$

10,375

 

$

9,092

 

$

9,768

 

 

$

10,144

 

$

9,275

Lead ($ per tonne)

 

$

2,082

 

$

2,162

 

$

2,397

 

$

2,339

 

 

$

2,347

 

$

2,168

Zinc ($ per tonne)

 

$

2,797

 

$

2,945

 

$

3,032

 

$

3,466

 

 

$

3,842

 

$

4,338

Precious metal gold equivalent ounces sold

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold Ounces

 

 

5,019

 

 

5,697

 

 

5,809

 

 

6,119

 

 

 

8,381

 

 

8,746

Gold Equivalent Ounces from Silver

 

 

3,791

 

 

3,999

 

 

3,356

 

 

3,736

 

 

 

3,348

 

 

2,729

Total AuEq oz

 

 

8,810

 

 

9,696

 

 

9,165

 

 

9,855

 

 

 

11,729

 

 

11,475

Financial Data ($’s in thousands except for per ounce)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total sales, net

 

$

27,268

 

$

30,836

 

$

29,029

 

$

38,063

 

 

$

45,417

 

$

37,064

Earnings from mining operations before depreciation and amortization

 

 

11,974

 

 

11,259

 

 

11,766

 

 

17,744

 

 

 

25,281

 

 

15,281

Total cash cost after co-product credits per AuEq oz sold

 

 

408

 

 

713

 

 

466

 

 

73

 

 

 

(121)

 

 

247

Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold

 

 

937

 

 

1,280

 

 

1,031

 

 

451

 

 

 

499

 

 

799

Production Costs

 

 

15,243

 

 

19,523

 

 

17,216

 

 

20,252

 

 

 

20,074

 

 

21,722

Production Costs/Tonnes Milled

 

 

110

 

 

151

 

 

176

 

 

150

 

 

 

147

 

 

168

Earnings before interest, taxes, depreciation and amortization

 

 

8,520

 

 

7,413

 

 

7,402

 

 

10,304

 

 

 

15,328

 

 

13,716

Operating Cash Flows

 

 

6,831

 

 

9,298

 

 

5,743

 

 

12,911

 

 

 

4,230

 

 

7,976

Net income

 

 

2,527

 

 

1,283

 

 

1,529

 

 

2,689

 

 

 

4,019

 

 

2,626

Earnings per share – basic

 

$

0.03

 

$

0.02

 

$

0.02

 

$

0.03

 

 

$

0.05

 

$

0.03

2022 Capital and Exploration Investment Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six months

ended June 30, 2022

 

2022 full year

guidance

 

 

 

 

(in thousands)

Sustaining Investments:

 

 

 

 

 

 

 

 

Underground Development

 

Capital

 

$

3,168

 

$

8.5 – 9.5 million

Infill Drilling and Exploration Development

 

Capital

 

 

4,040

 

 

7.0 – 7.5 million

Other Sustaining Capital

 

Capital

 

 

1,416

 

 

4.0 – 4.5 million

Subtotal of Sustaining Investments:

 

 

 

 

8,624

 

 

 

Growth Investments:

 

 

 

 

 

 

 

 

DDGM growth:

 

 

 

 

 

 

 

 

Gold Regrind

 

Capital

 

 

745

 

 

Dry Stack Completion

 

Capital

 

 

1,149

 

 

Surface Exploration / Other

 

Exploration

 

 

935

 

 

2.5 – 3.0 million

Underground Exploration Drilling

 

Exploration

 

 

1,112

 

 

3.0 – 3.5 million

Back Forty growth:

 

 

 

 

 

 

 

 

Back Forty Feasibility Study & Permits

 

Exploration

 

 

3,095

 

 

8.0-9.0 million

Subtotal of Growth Investments:

 

 

 

 

7,036

 

 

 

Total Capital and Exploration:

 

 

 

$

15,660

 

$

33.0 – 37.0 million

The Company’s investment in Mexico continued in Q2 2022 totaling $12.6 million year-to-date. Our investment in Mexico is focused on favorably impacting our environment, social and governance programs while creating operational efficiencies and longevity. Year-to-date at the Back Forty Project, $3.1 million has been invested in feasibility and permitting initiatives.

Gold Regrind Project: Zinc tailings are being reground and leached to produce doré bars. Gold recovery is expected to continue to increase, and we have seen an approximate 5% increase in the gold recovery since the same period in 2021. Completion and commissioning were finalized in Q2 2022. A total of $1.8 million was invested in this project, $1.1 million in 2021.

Dry Stack Tailings Project: Construction of the tailings filtration plant and dry stack facility were completed in 2021. During the first half of 2022, work continued to optimize the operations of the filtration plant. Currently 85% of the tails are sent to the dry stack facility, and the remaining 15% is sent to the underground operations in the form of paste fill for ground support. The dry stack facilities will conserve and recirculate water, eliminate risks related to traditional tailings facilities, accelerate reclamation of certain areas of the open pit mine, and extend the life of the operations. As of June 30, 2022, a total of $15.1 million has been invested in this project, $14.0 million through 2021.

Underground and Exploration Development: Mine development during the quarter included ramps and accesses to different areas of the deposit, vertical shafts, and exploration development drifts. A total of 2,346 meters of development, at a cost of $5.3 million (1,252 meters at a cost of $2.9 million in Q2), was completed during the first half of 2022. For the first half of 2022, underground mine development was $3.2 million and exploration development was $2.1 million (included in Infill Drilling and Exploration Development in the table above). We plan to invest a total of $8.5 million to $9.5 million in underground development and an additional $4.0 million to $4.5 million in exploration development in 2022.

Back Forty Feasibility and Permitting: Work on the optimized feasibility study progressed during Q2 2022. Current initiatives are focused on mine planning and process plant design. Environmental considerations are a key factor in the overall site layout and infrastructure decisions being made. The feasibility study work for the Back Forty Project in Michigan, USA progressed during Q2 2022 with completion expected in the second half of this year, followed by permit applications being submitted with state agencies in Michigan.

Q2 2022 Conference Call

The Company will host a conference call tomorrow, Thursday, July 28, 2022 at 10:00 a.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 Kim Perry, 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://app.webinar.net/AgbarDeZeBK

To join the call via telephone, please use the following dial-in details:

Participant Toll Free: (888) 440-2094

International: (438) 803-0544

Conference ID: 1047419

Please connect to the conference call at least 10 minutes prior to the start time using one of the connection options listed above.

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.

____________________

1 See 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.

 

Contacts

Kim Perry

Chief Financial Officer

Kim.Perry@GRC-USA.com
www.GoldResourcecorp.com

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