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

Rhea-AI Summary

Gold Resource Corporation (GORO) reported solid Q2 2022 performance with gold equivalent sales of 11,475 ounces. The company achieved an operating cash flow of $12.2 million and EBITDA of $29.0 million, while reinforcing 2022 production and cost guidance. Cash balance exceeded $33.3 million after investing over $15 million in capital and exploration. The Don David Gold Mine received the Empresa Socialmente Responsable award for the eighth consecutive year. Shareholder dividends reached $0.9 million this quarter.

Positive

• Operating cash flow of $12.2 million and EBITDA of $29.0 million.
• Cash balance over $33.3 million after $15 million in investments.
• Gold equivalent sales totaled 11,475 ounces in Q2 2022.
• Total cash cost per gold equivalent ounce was $247, and all-in sustaining cost was $799.

Negative

• Slight decline in tonnes processed compared to Q1 2022 due to ground support challenges.

• 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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220727006193/en/

Kim Perry

Chief Financial Officer

Kim.Perry@GRC-USA.com

www.GoldResourcecorp.com

Source: Gold Resource Corporation

FAQ

What were Gold Resource Corporation's Q2 2022 financial results?

In Q2 2022, GORO achieved an operating cash flow of $12.2 million and EBITDA of $29.0 million.

How much gold equivalent did GORO sell in Q2 2022?

Gold Resource Corporation sold a total of 11,475 ounces of gold equivalent in Q2 2022.

What is the current cash balance of Gold Resource Corporation?

GORO reported a cash balance of over $33.3 million after significant investments.

What is the total cash cost for GORO's gold equivalent ounces sold in Q2 2022?

The total cash cost per gold equivalent ounce sold was $247 in Q2 2022.

What production challenges did GORO face in Q2 2022?

GORO experienced a slight decline in tonnes processed due to ground support challenges.