Attached files
| file | filename |
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| 8-K - 8-K - GOLD RESOURCE CORP | f8-k.htm |
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FOR IMMEDIATE RELEASE |
NEWS |
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October 30, 2018 |
NYSE American: GORO |
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GOLD RESOURCE CORPORATION REPORTS THIRD QUARTER RESULTS, MAINTAINS 2018 PRODUCTION OUTLOOK
COLORADO SPRINGS – October 30, 2018 – 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.
1
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:
|
|
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Three months ended September 30, |
|
Nine months ended September 30, |
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|
|
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2018 |
|
2017 |
|
2018 |
|
2017 |
||||
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Arista Mine |
|
|
|
|
|
|
|
|
|
|
|
|
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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 |
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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 |
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|
4.23 |
|
|
4.25 |
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Recoveries |
|
|
|
|
|
|
|
|
|
|
|
|
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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 |
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Aguila Open Pit Mine |
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|
|
|
|
|
|
|
|
|
|
|
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Milled |
|
|
|
|
|
|
|
|
|
|
|
|
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Tonnes Milled |
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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 |
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Mirador Mine |
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|
|
|
|
|
|
|
|
|
|
|
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Milled |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tonnes Milled |
|
|
3,561 |
|
|
3,330 |
|
|
11,244 |
|
|
3,330 |
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Grade |
|
|
|
|
|
|
|
|
|
|
|
|
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Average Gold Grade (g/t) |
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|
1.41 |
|
|
1.08 |
|
|
1.40 |
|
|
1.08 |
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Average Silver Grade (g/t) |
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|
105 |
|
|
102 |
|
|
158 |
|
|
102 |
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Recoveries |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Gold Recovery (%) |
|
|
81 |
|
|
62 |
|
|
75 |
|
|
62 |
|
Average Silver Recovery (%) |
|
|
65 |
|
|
54 |
|
|
76 |
|
|
54 |
|
Combined |
|
|
|
|
|
|
|
|
|
|
|
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Tonnes milled |
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158,075 |
|
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113,547 |
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|
447,671 |
|
|
328,667 |
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Tonnes Milled per Day (1) |
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|
1,796 |
|
|
1,336 |
|
|
1,724 |
|
|
1,279 |
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Metal production (before payable metal deductions) (2) |
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|
|
|
|
|
|
|
|
|
|
|
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Gold (ozs.) |
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6,411 |
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|
6,465 |
|
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18,864 |
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|
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 |
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Zinc (tonnes) |
|
|
4,970 |
|
|
4,628 |
|
|
14,236 |
|
|
11,447 |
|
Precious metal gold equivalent ounces produced (mill production) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
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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 |
|
(1) |
Based on actual days the mill operated during the period. |
2
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, |
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Nine months ended September 30, |
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2018 |
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2017 |
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2018 |
|
2017 |
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|
|
|
|
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|
|
|
|
|
|
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Metal sold |
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|
|
|
|
|
|
|
|
|
|
|
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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) |
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|
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 |
|
(1) |
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. |
|
(2) |
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. |
|
(3) |
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.
3
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 |
4
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, |
||||||||
|
|
|
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 |
5
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 |
6
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.
Contacts:
Corporate Development
Greg Patterson
303-320-7708
www.Goldresourcecorp.com
7