Gold Resource Corporation Reports Financial Results for the First Quarter 2024

Rhea-AI Summary

Gold Resource reported its financial results for the first quarter of 2024, highlighting the production and sale of gold, silver, zinc, copper, and lead. The company also provided a corporate update on its activities, including operational challenges, exploration programs, and safety measures. Despite a net loss of $4.0 million for the quarter, the company maintained a cash balance of $5.7 million with no debt. The first quarter saw successful progress in the underground drilling program at the Don David Gold Mine, with positive results in identifying high-grade ore shoots. The company continues to focus on improving recoveries and cost efficiency amidst challenges such as lower base metal prices.

Positive

• The successful progress in the underground diamond drilling program at the Don David Gold Mine during the first quarter, with positive results in identifying high-grade ore shoots.

• The company's cash balance of $5.7 million with no debt and working capital of $13.6 million at March 31, 2024, demonstrating financial stability.

• The focus on adjusting the mine plan to provide higher grade ore and lower costs to offset challenges such as lower base metal prices.

Negative

• A net loss of $4.0 million or $0.05 per share for the quarter, after $0.9 million in expenses for DDGM exploration development and underground drilling.

• Total cash cost after co-product credits for the quarter was $1,667 per gold equivalent (“AuEq”) ounce and total all-in sustaining cost (“AISC”) after co-product credits for the quarter was $2,295 per AuEq ounce.

• Operational challenges such as fluctuations in water quality affecting plant throughput and lower recoveries during the first few weeks of the quarter until solutions were achieved.

Insights

Financial Analyst

The report from Gold Resource Corporation illuminates several key financial and operational metrics that are critical for a retail investor's understanding of the company's current status. A net loss of $4.0 million, or <$0.05> per share, indicates a challenging quarter, likely reflecting broader market conditions or internal operational issues. The costs per gold equivalent ounce, both in terms of total cash cost ($1,667) and all-in sustaining cost ($2,295), are significant figures as they can be compared against industry averages to gauge the firm's efficiency and cost-competitiveness. However, the positive mentions of no debt and a solid cash balance of $5.7 million with working capital of $13.6 million suggest a stable financial position that might provide some resilience. Given the mixed indicators—negative net income yet reasonable liquidity and no debt—the outlook for the stock can be considered neutral until subsequent performance results provide a clearer direction.

Mining Sector Analyst

From a sector-specific standpoint, the production and sales volume figures show a dip in the production and sales of metals with gold ounces and silver ounces production declining. These metrics are vital to understanding the company's operational capacity and, by extension, its potential revenue streams. Moreover, the company's exploration activities, especially the infill drilling at the Don David Gold Mine, emphasize its strategic focus on upgrading inferred resources to measured and indicated categories, which can potentially increase the asset value on balance sheets in the future. The report also mentions reparations and improvements made to address operational issues, which might suggest upcoming improvements in efficiency and throughput. However, several external factors like the strong Mexican peso and lower base metal prices have had an adverse impact, compensating these operational advancements. Thus, for an investor, this represents a mixed signal where operational stability and potential resource upgrades are somewhat overshadowed by macroeconomic headwinds.

Safety and Environmental Analyst

A noteworthy non-financial aspect covered in the report is the company's focus on safety and environmental considerations, as indicated by the successful closure of one of their tailings storage facility cells and the maintenance of a zero Lost Time Injury Frequency Rate. These aspects are increasingly becoming a pivot point for investor sentiment as they reflect the company's commitment to sustainable practices, potentially influencing its long-term reputation and license to operate. Additionally, these practices can mitigate the risk of operational shutdowns or legal liabilities associated with workplace accidents or environmental mishaps, thereby indirectly contributing to financial stability. For socially responsible investors or those attentive to ESG (Environmental, Social and Governance) considerations, this aspect of the report may provide a positive outlook on the company's responsible management practices.

DENVER--(BUSINESS WIRE)-- Gold Resource Corporation (NYSE American: GORO) (the “Company”) is pleased to announce its first quarter operational results from its Don David Gold Mine (“DDGM”) near Oaxaca, Mexico, and a corporate update on its other activities.

2024 Q1 Highlights include:

• Produced and sold 3,557 ounces of gold and 216,535 ounces of silver
• Produced and sold 1,682 tonnes of zinc, 264 tonnes of copper, and 667 tonnes of lead
• Cash balance of $5.7 million with no debt and working capital of $13.6 million at March 31, 2024

“Work during the first quarter, included reparations for the planned closure of the third cell of our tailings storage facility (“TSF”) and solving fluctuations in the water quality returned to the processing plant from the TSF pond. As a result, plant throughput was reduced, and recoveries were lower during the first few weeks of the quarter until solutions were achieved. Work will continue during the second quarter to further improve recoveries.” stated Allen Palmiere, President and CEO. “The Mexican peso continued to remain strong against the US dollar and base metal prices were lower than expected for the quarter. To offset most of these challenges, the mine plan was adjusted to provide higher grade ore and lower our costs. We also continued with our exploration program to better define the areas that have been returning very positive and encouraging results.”

Corporate and Financial:

• Net loss was $4.0 million or $0.05 per share for the quarter, which was after $0.9 million in expenses for DDGM exploration development and underground drilling.
• Total cash cost after co-product credits for the quarter was $1,667 per gold equivalent (“AuEq”) ounce and total all-in sustaining cost (“AISC”) after co-product credits for the quarter was $2,295 per AuEq ounce. (See Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Measures for a reconciliation of non-GAAP measures to applicable GAAP measures).

Don David Gold Mine:

• In the first quarter of 2024, DDGM produced and sold a total of 5,965 gold equivalent ounces, comprised of 3,557 gold ounces and 216,535 silver ounces at an average sales price per ounce of $2,094 and $23.29, respectively.
• The underground diamond drilling program progressed as planned and on schedule during the first quarter, using two drill rigs with continued positive results. During the first quarter, infill drilling focused mainly on upgrading Inferred Resources to the Measured and Indicated Resource categories with a specific focus on the recently discovered Three Sisters and Gloria vein systems. Infill drilling during the first quarter was successful in identifying and defining high-grade ore shoots specifically in the Sandy 1 and Sandy 2 veins of the Three Sisters system. Grade control drilling continued on veins scheduled for production in both the Arista and Switchback systems.
• There were no lost time incidents during the quarter, resulting in a year-to-date Lost Time Injury Frequency Rate (“LTIFR”) safety record of Zero. Safety at Gold Resource Corporation is paramount. Even with a good track record at DDGM, the Company continues to strive each quarter for improved measures, awareness, and training.

2024 Capital and Exploration Investment Summary

			For the three months ended March 31, 2024			2024 full year guidance
				(in thousands)
Sustaining Investments:
Underground Development	Capital		$	1,350
Other Sustaining Capital	Capital			282
Infill Drilling	Capitalized Exploration			441
Surface and Underground Exploration Development & Other	Capitalized Exploration			2
Subtotal of Sustaining Investments:				2,075		$	8.8 - 11.0 million
Growth Investments:
DDGM growth:
Surface Exploration / Other	Exploration			899
Back Forty growth:
Back Forty Project Optimization & Permitting	Exploration			205
Subtotal of Growth Investments:				1,104		$	3.2 - 5.2 million
Total Capital and Exploration:			$	3,179		$	12.0 - 16.2 million

Trending Highlights

	2023									2024
	Q1		Q2		Q3		Q4			Q1
Operating Data
Total tonnes milled		117,781		113,510		116,626		111,254			98,889
Average Grade		-
Gold (g/t)		2.33		1.59		1.52		1.44			1.89
Silver (g/t)		94		86		73		85			88
Copper (%)		0.37		0.37		0.32		0.39			0.37
Lead (%)		1.73		1.64		1.29		1.39			1.25
Zinc (%)		3.88		3.72		3.24		2.95			2.82
Metal production (before payable metal deductions)
Gold (ozs.)		7,171		4,637		4,443		4,077			4,757
Silver (ozs.)		322,676		289,816		247,159		282,487			251,707
Copper (tonnes)		336		334		276		341			280
Lead (tonnes)		1,559		1,389		1,048		1,072			812
Zinc (tonnes)		3,837		3,569		3,223		2,884			2,310
Metal produced and sold
Gold (ozs.)		6,508		4,287		3,982		3,757			3,557
Silver (ozs.)		294,815		274,257		208,905		258,252			216,535
Copper (tonnes)		332		327		245		327			264
Lead (tonnes)		1,417		1,317		947		820			667
Zinc (tonnes)		3,060		3,141		2,571		2,182			1,682
Average metal prices realized
Gold ($ per oz.)	$ 1,915		$ 2,010		$ 1,934		$ 1,985			$ 2,094
Silver ($ per oz.)	$ 23.04		$ 24.93		$ 23.61		$ 23.14			$ 23.29
Copper ($ per tonne)	$ 9,172		$ 8,397		$ 8,185		$ 8,205			$ 8,546
Lead ($ per tonne)	$ 2,158		$ 2,153		$ 2,196		$ 2,122			$ 1,977
Zinc ($ per tonne)	$ 3,195		$ 2,485		$ 2,195		$ 2,516			$ 2,483
Gold equivalent ounces sold
Gold Ounces		6,508		4,287		3,982		3,757			3,557
Gold Equivalent Ounces from Silver		3,547		3,402		2,550		3,011			2,408
Total AuEq oz		10,055		7,689		6,532		6,768			5,965
Financial Data
Total sales, net (in thousands)	$ 31,228		$ 24,807		$ 20,552		$ 21,141			$ 18,702
Production Costs (in thousands)	$ 19,850		$ 20,302		$ 18,957		$ 17,034			$ 16,108
Production Costs/Tonnes Milled	$ 169		$ 179		$ 163		$ 153			$ 163
Operating Cash Flows (in thousands)	$ 1,024		($ 551)		($ 7,475)		$ 1,783			$ 1,482
Net loss (in thousands)	($ 1,035)		($ 4,584)		($ 7,341)		($ 3,057)			($ 4,021)
Loss per share - basic	($ 0.01)		($ 0.05)		($ 0.08)		($ 0.03)			($ 0.05)

Q1 2024 Conference Call

The Company will host a conference call Friday, May 3, 2024, at 10:00 a.m. Mountain 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://onlinexperiences.com/Launch/QReg/ShowUUID=617944F2-FF66-4B11-A082-3804BF9CF029

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

Participant Toll Free:			+1 (800) 717-1738
International:			+1 (289) 514-5100
Conference ID:			45398

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. Base metals, critical to the United States, are also produced as a by-product. 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.

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, 2023, 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/20240502192046/en/

Chet Holyoak

Chief Financial Officer

Chet.holyoak@grc-usa.com

www.GoldResourceCorp.com

Source: Gold Resource Corporation

FAQ

What were the highlights of Gold Resource 's first quarter operational results in 2024?

Gold Resource produced and sold 3,557 ounces of gold, 216,535 ounces of silver, 1,682 tonnes of zinc, 264 tonnes of copper, and 667 tonnes of lead in the first quarter of 2024.

What was the cash balance of Gold Resource at the end of the first quarter of 2024?

Gold Resource had a cash balance of $5.7 million with no debt and working capital of $13.6 million at the end of March 31, 2024.

What was the net loss for Gold Resource in the first quarter of 2024?

Gold Resource reported a net loss of $4.0 million or $0.05 per share for the first quarter of 2024.

What was the total cash cost after co-product credits for Gold Resource in the first quarter of 2024?

The total cash cost after co-product credits for Gold Resource in the first quarter of 2024 was $1,667 per gold equivalent (“AuEq”) ounce.

What operational challenges did Gold Resource face in the first quarter of 2024?

Gold Resource faced operational challenges such as fluctuations in water quality affecting plant throughput and lower recoveries during the first few weeks of the quarter.