Gold Resource Corporation Reports Second Quarter Net Income of $7.8 Million, or $0.14 per Share; Maintains 2014 Production Outlook
COLORADO SPRINGS, CO--(Marketwired - Aug 7, 2014) - Gold Resource Corp. (
2014 Q2 HIGHLIGHTS
- 24,172 ounces AuEq mill production
- 20,647 ounces AuEq sold
- $438 total cash cost per ounce AuEq (after by-product credits and including 5% royalty)
- 32% decrease in total cash cost per ounce AuEq from Q2 2013
- $19.4 million Cash Flow from Mine Site Operations
- $7.8 million net income, or $0.14 per share
- $1.6 million dividend distributions, or $0.03 per share for quarter
- $10.2 million Cash and Cash Equivalents increase from prior quarter to $29.6 million
- 1,098 tonnes milled per day, a 27% increase over 2013 annual average
- $8.5 million by-product credits, or $411 per ounce AuEq sold
Overview of Q2 2014 El Aguila Project Results
Gold Resource Corp.'s El Aguila Project produced 24,172 ounces AuEq at a total cash cost of $438 per ounce. Realized average metal price sales during the quarter were $1,276 per ounce gold and $19 per ounce silver. Net income totaled $7.8 million, or $0.14 per share. Cash Flow from Mine Site Operations totaled $19.4 million. The Company paid $1.6 million to shareholders in dividends or $0.03 per share during the quarter. Cash and cash equivalents at quarter end totaled $29.6 million, increasing 98% during the first six months of 2014. Gold and silver prices decreased 7.9% and 17.4%, respectively, from the second quarter of 2013.
"The Company delivered strong second quarter operating results with production increasing 2% compared to first quarter, and increasing 17% over second quarter of 2013," stated Gold Resource Corp.'s CEO and President, Mr. Jason Reid. "Total cash costs of $438 per precious metal gold equivalent ounce sold, calculated after by-product credits and including royalties, was 32% lower than second quarter of 2013. The Aguila Project continues to generate profits even in today's lower precious metal price environment, allowing the Company to invest in its Oaxaca Mining Unit, build its treasury, and distribute monthly dividends to our shareholders. The Company remains on track to meet its annual production outlook of 85,000 to 100,000 ounces of precious metal gold equivalent."
Below is a table of the key production statistics for our El Aguila Project during the three and six months ended June 30, 2014 and 2013:
| Production and Sales Statistics - La Arista Underground Mine | |||||||||||||
| Three months ended June 30, | Six months ended June 30, | ||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||
| Production Summary | |||||||||||||
| Milled: | |||||||||||||
| Tonnes Milled | 99,876 | 72,740 | 204,225 | 148,924 | |||||||||
| Tonnes Milled per Day | 1,098 | 808 | 1,128 | 823 | |||||||||
| Grade: | |||||||||||||
| Average Gold Grade (g/t) | 3.41 | 3.83 | 3.33 | 3.75 | |||||||||
| Average Silver Grade (g/t) | 315 | 349 | 300 | 347 | |||||||||
| Average Copper Grade (%) | 0.40 | 0.38 | 0.37 | 0.39 | |||||||||
| Average Lead Grade (%) | 1.34 | 1.12 | 1.28 | 1.11 | |||||||||
| Average Zinc Grade (%) | 3.18 | 2.61 | 3.31 | 2.70 | |||||||||
| Recoveries: | |||||||||||||
| Average Gold Recovery (%) | 93 | 90 | 92 | 89 | |||||||||
| Average Silver Recovery (%) | 93 | 92 | 92 | 92 | |||||||||
| Average Copper Recovery (%) | 79 | 72 | 79 | 78 | |||||||||
| Average Lead Recovery (%) | 75 | 70 | 73 | 70 | |||||||||
| Average Zinc Recovery (%) | 82 | 74 | 82 | 77 | |||||||||
| Mill production (before payable metal deductions)(1) | |||||||||||||
| Gold (ozs.) | 10,205 | 8,015 | 20,163 | 15,913 | |||||||||
| Silver (ozs.) | 940,268 | 747,646 | 1,819,226 | 1,525,317 | |||||||||
| Copper (tonnes) | 314 | 202 | 606 | 450 | |||||||||
| Lead (tonnes) | 994 | 573 | 1,923 | 1,159 | |||||||||
| Zinc (tonnes) | 2,603 | 1,405 | 5,523 | 3,081 | |||||||||
| Payable metal sold | |||||||||||||
| Gold (ozs.) | 8,328 | 7,297 | 16,914 | 16,250 | |||||||||
| Silver (ozs.) | 829,351 | 755,746 | 1,595,886 | 1,618,898 | |||||||||
| Copper (tonnes) | 264 | 194 | 523 | 499 | |||||||||
| Lead (tonnes) | 922 | 496 | 1,734 | 1,139 | |||||||||
| Zinc (tonnes) | 2,249 | 1,180 | 4,407 | 2,915 | |||||||||
| Average metal prices realized (2) | |||||||||||||
| Gold (oz.) | $ | 1,276 | $ | 1,386 | $ | 1,286 | $ | 1,530 | |||||
| Silver (oz.) | $ | 19 | $ | 23 | $ | 20 | $ | 27 | |||||
| Copper (tonne) | $ | 6,742 | $ | 7,114 | $ | 6,840 | $ | 7,652 | |||||
| Lead (tonne) | $ | 2,109 | $ | 2,127 | $ | 2,101 | $ | 2,308 | |||||
| Zinc (tonne) | $ | 2,116 | $ | 1,848 | $ | 2,083 | $ | 2,030 | |||||
| Precious metal gold equivalent ounces produced (mill production)(1)(4)(5) | |||||||||||||
| Gold Ounces | 10,205 | 8,015 | 20,163 | 15,913 | |||||||||
| Gold Equivalent Ounces from Silver | 13,967 | 12,559 | 27,733 | 27,086 | |||||||||
| Total Precious Metal Gold Equivalent Ounces | 24,172 | 20,574 | 47,896 | 42,999 | |||||||||
| Precious metal gold equivalent ounces sold(3)(4)(5) | |||||||||||||
| Gold Ounces | 8,328 | 7,297 | 16,914 | 16,250 | |||||||||
| Gold Equivalent Ounces from Silver | 12,319 | 12,695 | 24,327 | 28,748 | |||||||||
| Total Precious Metal Gold Equivalent Ounces | 20,647 | 19,992 | 41,241 | 44,998 | |||||||||
| Total cash cost (before by-product credits) per precious metal gold equivalent ounce sold (including royalties) (3) | $ | 849 | $ | 876 | $ | 828 | $ | 822 | |||||
| Total cash costs, after by-product credits, per precious metal gold equivalent ounce sold (including royalties) (3) | $ | 438 | $ | 645 | $ | 430 | $ | 547 | |||||
| (1) | Mill production represents metal contained in concentrates produced at the mill, which is before payable metal deductions are levied by the buyer of our concentrates. Payable metal deduction quantities are defined in our contracts with the buyer of our concentrates and represent an estimate of metal contained in the concentrates produced at our mill, for which the buyer cannot recover through the smelting process. There are inherent limitations and differences in the sampling method and assaying of estimated metal contained in concentrates that are shipped, and those contained metal estimates derived from sampling methods and assaying throughout the mill production process. The Company monitors these differences to ensure that precious metal mill production quantities are materially correct. |
| (2) | Average metal prices realized vary from the market metal prices due to out of period 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. |
| (3) | A reconciliation of this Non-GAAP measure to total mine cost of sales, the most comparable U.S. GAAP measure, can be found in Management's Discussion and Analysis contained in the report on Form 10-Q for the period ended June 30, 2014 filed with the Securities and Exchange Commission. |
| (4) | Precious metal gold equivalent mill production for the three months ended June 30, 2014 of 24,172 ounces differs from gold equivalent ounces sold for the same period of 20,647 due principally to buyer (smelter) concentrate processing deductions of approximately 3,341 gold equivalent ounces and an increase in gold equivalent ounces contained in ending inventory of approximately 184 ounces. |
| (5) | Precious metal gold equivalent mill production for the six months ended June 30, 2014 of 47,896 ounces differs from gold equivalent ounces sold for the same period of 41,241 principally due to buyer (smelter) concentrate processing deductions of approximately 5,459 gold equivalent ounces and an increase in gold equivalent ounces contained in ending inventory of approximately 1,196 ounces. |
About GRC:
Gold Resource Corp. is a mining company focused on production and pursuing development of gold and silver projects that feature low operating costs and produce high returns on capital. The Company has 100% interest in six potential high-grade gold and silver properties in Mexico's southern state of Oaxaca. The Company has 54,179,369 shares outstanding and no warrants. Gold Resource Corp. offers 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 Corp.'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 Corp. 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.
See Accompanying Tables
The following information summarizes the results of operations for Gold Resource Corp. for the three and six months ended June 30, 2014 and 2013, its financial condition at June 30, 2014 and December 31, 2013 and its cash flows for the six months ended June 30, 2014 and 2013. The summary data for the three and six months ended June 30, 2014 is unaudited; the summary data for the year ended December 31, 2013 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2013, 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 ounce contained in this press release is a non-GAAP financial measure. Please see "Management's Discussion and Analysis and Results of Operation" 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.
| GOLD RESOURCE CORPORATION | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| for the three and six months ended June 30, 2014 and 2013 | ||||||||||||||||
| (U.S. dollars in thousands, except shares and per share amounts) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Sales of metals concentrate, net | $ | 33,669 | $ | 26,660 | $ | 64,821 | $ | 68,971 | ||||||||
| Mine cost of sales: | ||||||||||||||||
| Production costs | 14,801 | 14,931 | 29,021 | 30,642 | ||||||||||||
| Depreciation and amortization | 1,044 | 557 | 1,789 | 1,093 | ||||||||||||
| Reclamation and remediation | - | 28 | - | 57 | ||||||||||||
| Total mine cost of sales | 15,845 | 15,516 | 30,810 | 31,792 | ||||||||||||
| Mine gross profit | 17,824 | 11,144 | 34,011 | 37,179 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| General and administrative expenses | 2,249 | 3,457 | 5,262 | 7,842 | ||||||||||||
| Exploration expenses | 1,597 | 2,806 | 2,885 | 6,105 | ||||||||||||
| Facilities and mine construction | - | 5,649 | - | 11,654 | ||||||||||||
| Total costs and expenses | 3,846 | 11,912 | 8,147 | 25,601 | ||||||||||||
| Operating income (loss) | 13,978 | (768 | ) | 25,864 | 11,578 | |||||||||||
| Other income (expense) | 214 | (1,862 | ) | 683 | (1,898 | ) | ||||||||||
| Income (loss) before income taxes | 14,192 | (2,630 | ) | 26,547 | 9,680 | |||||||||||
| Provision (benefit) for income taxes | 6,384 | (1,257 | ) | 11,613 | 3,667 | |||||||||||
| Net income (loss) | $ | 7,808 | $ | (1,373 | ) | $ | 14,934 | $ | 6,013 | |||||||
| Other comprehensive income (loss): | ||||||||||||||||
| Currency translation gain | - | (45 | ) | - | (11 | ) | ||||||||||
| Comprehensive income (loss) | $ | 7,808 | $ | (1,418 | ) | $ | 14,934 | $ | 6,002 | |||||||
| Net income (loss) per common share: | ||||||||||||||||
| Basic: | $ | 0.14 | $ | (0.03 | ) | $ | 0.28 | $ | 0.11 | |||||||
| Diluted: | $ | 0.14 | $ | (0.03 | ) | $ | 0.27 | $ | 0.11 | |||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 54,179,369 | 53,272,776 | 54,057,822 | 52,977,712 | ||||||||||||
| Diluted | 54,556,217 | 53,272,776 | 54,629,512 | 55,434,474 | ||||||||||||
| GOLD RESOURCE CORPORATION | |||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| (U.S. dollars in thousands, except shares) | |||||||||
| June 30, | December 31, | ||||||||
| 2014 | 2013 | ||||||||
| ASSETS | (Unaudited) | ||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 29,627 | $ | 14,973 | |||||
| Gold and silver bullion | 3,785 | 3,801 | |||||||
| Accounts receivable | 6,083 | 2,307 | |||||||
| Inventories | 6,358 | 7,468 | |||||||
| Income taxes receivable | - | 6,488 | |||||||
| Deferred tax assets | 3,973 | 3,973 | |||||||
| Prepaid expenses and other assets | 5,374 | 5,808 | |||||||
| Total current assets | 55,200 | 44,818 | |||||||
| Land and mineral rights | 227 | 227 | |||||||
| Property, equipment and mine development - net | 24,508 | 18,127 | |||||||
| Inventories | 903 | 903 | |||||||
| Deferred tax assets | 27,663 | 27,663 | |||||||
| Investments (including $2,710 and nil, respectively, measured at fair value) | 2,941 | 231 | |||||||
| Total assets | $ | 111,442 | $ | 91,969 | |||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 4,773 | $ | 2,873 | |||||
| Accrued expenses | 4,796 | 5,613 | |||||||
| Capital lease obligations | 1,484 | 1,469 | |||||||
| IVA taxes payable | 1,131 | 925 | |||||||
| Income taxes payable | 5,161 | - | |||||||
| Dividends payable | 542 | 538 | |||||||
| Total current liabilities | 17,887 | 11,418 | |||||||
| Capital lease obligations | 1,641 | 2,387 | |||||||
| Reclamation and remediation liabilities | 2,894 | 2,887 | |||||||
| Total liabilities | 22,422 | 16,692 | |||||||
| Shareholders' equity: | |||||||||
| Preferred stock - $0.001 par value, 5,000,000 shares authorized: no shares issued and outstanding | - | - | |||||||
| Common stock - $0.001 par value, 100,000,000 shares authorized: 54,515,767 and 54,115,767 shares issued and outstanding, respectively | 55 | 54 | |||||||
| Additional paid-in capital | 90,095 | 88,044 | |||||||
| Retained earnings/Accumulated (deficit) | 5,925 | (5,766 | ) | ||||||
| Treasury stock at cost, 336,398 shares | (5,884 | ) | (5,884 | ) | |||||
| Accumulated other comprehensive (loss) | (1,171 | ) | (1,171 | ) | |||||
| Total shareholders' equity | 89,020 | 75,277 | |||||||
| Total liabilities and shareholders' equity | $ | 111,442 | $ | 91,969 | |||||
| GOLD RESOURCE CORPORATION | |||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| for the six months ended June 30, 2014 and 2013 | |||||||||
| (U.S. dollars in thousands) | |||||||||
| (Unaudited) | |||||||||
| 2014 | 2013 | ||||||||
| Cash flows from operating activities: | |||||||||
| Net income | $ | 14,934 | $ | 6,013 | |||||
| Adjustments to reconcile net income to net cash from operating activities: | |||||||||
| Depreciation and amortization | 1,895 | 1,188 | |||||||
| Reclamation and remediation | - | 57 | |||||||
| Stock-based compensation | 1,956 | 3,690 | |||||||
| Unrealized foreign currency exchange loss (gain) | 10 | 217 | |||||||
| Impairment loss on gold and silver bullion | - | 1,743 | |||||||
| Unrealized gain due to changes in fair value of investments | (802 | ) | - | ||||||
| Changes in operating assets and liabilities: | |||||||||
| Accounts receivable | (3,796 | ) | 3,086 | ||||||
| Inventories | 1,104 | 363 | |||||||
| Prepaid expenses and other assets | 433 | (2,250 | ) | ||||||
| Accounts payable | 1,588 | 1,642 | |||||||
| Accrued expenses | (1,359 | ) | 1,682 | ||||||
| IVA taxes payable/receivable | 204 | (370 | ) | ||||||
| Income taxes payable/receivable | 11,588 | (6,081 | ) | ||||||
| Net cash provided by operating activities | 27,755 | 10,980 | |||||||
| Cash flows from investing activities: | |||||||||
| Capital expenditures | (7,438 | ) | (5,113 | ) | |||||
| Purchases of gold and silver bullion | - | (806 | ) | ||||||
| Proceeds from conversion of gold and silver bullion | 16 | 1,048 | |||||||
| Investments | (1,805 | ) | (231 | ) | |||||
| Net cash used in investing activities | (9,227 | ) | (5,102 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Proceeds from exercise of stock options | 100 | 150 | |||||||
| Dividends paid | (3,243 | ) | (15,876 | ) | |||||
| Proceeds from capital leases | - | 4,501 | |||||||
| Repayment of capital leases | (731 | ) | - | ||||||
| Net cash used in financing activities | (3,874 | ) | (11,225 | ) | |||||
| Effect of exchange rates on cash and equivalents | - | (19 | ) | ||||||
| Net increase (decrease) in cash and cash equivalents | 14,654 | (5,366 | ) | ||||||
| Cash and equivalents at beginning of period | 14,973 | 35,780 | |||||||
| Cash and equivalents at end of period | $ | 29,627 | $ | 30,414 | |||||
| Supplemental Cash Flow Information | |||||||||
| Interest paid | $ | 96 | $ | - | |||||
| Income taxes paid | $ | - | $ | 9,823 | |||||