Gold Resource Corp. Reports Third Quarter Results
COLORADO SPRINGS, CO--(Marketwired - Nov 3, 2015) - Gold Resource Corp. (NYSE MKT: GORO) (the "Company") reported production results for the third quarter ended September 30, 2015 of 6,825 ounces of gold, 561,985 ounces of silver ounces, or 14,133 precious metal gold equivalent (AuEq) ounces (calculated at actual sales price ratio of 77:1), which generated $19.4 million in net revenue for the quarter. Gold Resource Corp. is a gold and silver producer with operations in Oaxaca, Mexico and exploration in Nevada, USA. The Company has returned over $107 million to shareholders in monthly dividends since commercial production commenced July 1, 2010, and offers shareholders the option to convert their cash dividends and take delivery in physical gold and silver.
2015 Q3 HIGHLIGHTS
- 14,133 ounces AuEq mill production
- 12,773 ounces AuEq sold
- $19.4 million sales, net
- $603 total cash cost per ounce AuEq (after by-product credits)
- $6.4 million adjusted cash flow from mine site operations
- $8.3 million by-product credits, or $647 per ounce AuEq sold
- $1.6 million dividend distributions, or $0.03 per share for quarter
Overview of Q3 2015 Aguila Project Results
Gold Resource Corp.'s Aguila Project produced 14,133 ounces AuEq at a total cash cost of $603 per ounce (after by-product credits). Realized average metal price sales during the quarter were $1,115 per ounce gold and $14.50 per ounce silver. The Company recorded a net loss of $0.5 million, or $(0.01) per share. Adjusted cash flow from mine site operations totaled $6.4 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 $14.1 million. Realized gold and silver prices decreased 14% and 28%, respectively, compared to the third quarter of 2014.
Production for the first three quarters of 2015 totaled 21,960 ounces of gold and 1,932,611 ounces of silver. With the weaker than expected 2015 second and third quarter performance, the Company confirms its prior announcement related to the revised 2015 Outlook which reduced annual production targets to 29,600 gold ounces and 2,500,000 silver ounces, a reduction of 6% for gold ounces, and 16% for silver ounces.
The following table summarizes certain information about our mining operations for the three and nine months ended September 30, 2015 and 2014:
Production and Sales Statistics - Arista Underground Mine
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| Milled | |||||||||||||
| Tonnes Milled | 105,309 | 79,568 | 300,190 | 283,793 | |||||||||
| Tonnes Milled per Day | 1,143 | 865 | 1,104 | 1,040 | |||||||||
| Grade | |||||||||||||
| Average Gold Grade (g/t) | 2.25 | 2.78 | 2.52 | 3.18 | |||||||||
| Average Silver Grade (g/t) | 180 | 291 | 216 | 297 | |||||||||
| Average Copper Grade (%) | 0.41 | 0.47 | 0.39 | 0.40 | |||||||||
| Average Lead Grade (%) | 1.41 | 2.12 | 1.37 | 1.52 | |||||||||
| Average Zinc Grade (%) | 4.02 | 5.67 | 3.78 | 3.97 | |||||||||
| Recoveries | |||||||||||||
| Average Gold Recovery (%) | 90 | 92 | 90 | 92 | |||||||||
| Average Silver Recovery (%) | 92 | 92 | 93 | 92 | |||||||||
| Average Copper Recovery (%) | 80 | 76 | 79 | 78 | |||||||||
| Average Lead Recovery (%) | 75 | 80 | 75 | 76 | |||||||||
| Average Zinc Recovery (%) | 83 | 85 | 82 | 83 | |||||||||
| Mill production (before payable metal deductions)(1) | |||||||||||||
| Gold (ozs.) | 6,825 | 6,523 | 21,960 | 26,687 | |||||||||
| Silver (ozs.) | 561,985 | 687,240 | 1,932,611 | 2,506,466 | |||||||||
| Copper (tonnes) | 343 | 284 | 929 | 891 | |||||||||
| Lead (tonnes) | 1,114 | 1,350 | 3,071 | 3,273 | |||||||||
| Zinc (tonnes) | 3,499 | 3,816 | 9,299 | 9,340 | |||||||||
| Payable metal sold | |||||||||||||
| Gold (ozs.) | 6,220 | 2,932 | 21,994 | 19,846 | |||||||||
| Silver (ozs.) | 503,929 | 575,413 | 1,770,093 | 2,171,298 | |||||||||
| Copper (tonnes) | 332 | 228 | 877 | 751 | |||||||||
| Lead (tonnes) | 1,049 | 1,204 | 2,875 | 2,938 | |||||||||
| Zinc (tonnes) | 2,905 | 2,976 | 7,668 | 7,383 | |||||||||
| Average metal prices realized (2) | |||||||||||||
| Gold ($ per oz.) | 1,115 | 1,295 | 1,177 | 1,287 | |||||||||
| Silver ($ per oz.) | 14.50 | 20.24 | 16.09 | 19.77 | |||||||||
| Copper ($ per tonne) | 4,883 | 7,103 | 5,436 | 6,920 | |||||||||
| Lead ($ per tonne) | 1,619 | 2,238 | 1,746 | 2,157 | |||||||||
| Zinc ($ per tonne) | 1,701 | 2,394 | 1,981 | 2,209 | |||||||||
| Precious metal gold equivalent ounces produced (mill production) (1)(3)(4) | |||||||||||||
| Gold Ounces | 6,825 | 6,523 | 21,960 | 26,687 | |||||||||
| Gold Equivalent Ounces from Silver | 7,308 | 10,739 | 26,410 | 38,495 | |||||||||
| Total Precious Metal Gold Equivalent Ounces | 14,133 | 17,262 | 48,370 | 65,182 | |||||||||
| Precious metal gold equivalent ounces sold (3)(4) | |||||||||||||
| Gold Ounces | 6,220 | 2,932 | 21,994 | 19,846 | |||||||||
| Gold Equivalent Ounces from Silver | 6,553 | 8,991 | 24,189 | 33,348 | |||||||||
| Total Precious Metal Gold Equivalent Ounces | 12,773 | 11,923 | 46,183 | 53,194 | |||||||||
| Total cash cost (before by-product credits) per precious metal gold equivalent ounce sold (including royalties) (5) | $ | 1,250 | $ | 1,324 | $ | 1,046 | $ | 958 | |||||
| Total cash costs, after by-product credits, per precious metal gold equivalent ounce sold (including royalties) (5) | $ | 603 | $ | 364 | $ | 505 | $ | 434 | |||||
| (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 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 are 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 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. | |
| (3) | For the three months ended September 30, 2015, precious metal gold equivalent mill production differs from gold equivalent ounces sold due principally to buyer (smelter) concentrate processing and other deductions of approximately 1,204 gold equivalent ounces and a decrease in gold equivalent ounces contained in ending inventory of approximately 121 ounces. | |
| (4) | For the nine months ended September 30, 2015, precious metal gold equivalent mill production differs from gold equivalent ounces sold due principally to buyer (smelter) concentrate processing and other deductions of approximately 3,687 gold equivalent ounces and a decrease in gold equivalent ounces contained in ending inventory of approximately 279 ounces. | |
| (5) | 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. | |
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 at its producing Oaxaca, Mexico Mining Unit and exploration properties at its Nevada, USA, Mining Unit. The Company has 54,179,369 shares outstanding, no warrants, no long term debt and has returned over $107 million back to shareholders since commercial production commenced July 1, 2010. 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 nine months ended September 30, 2015 and 2014, its financial condition at September 30, 2015 and December 31, 2014 and its cash flows for the nine months ended September 30, 2015 and 2014. The summary data for the three and nine months ended September 30, 2015 is unaudited; the summary data for the year ended December 31, 2014 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2014, 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 BALANCE SHEETS | ||||||||||
| (U.S. dollars in thousands, except share and per share amounts) | ||||||||||
| September 30, | December 31, | |||||||||
| 2015 | 2014 | |||||||||
| (Unaudited | ) | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 14,105 | $ | 27,541 | ||||||
| Gold and silver bullion | 3,160 | 3,447 | ||||||||
| Accounts receivable | 1,851 | 1,416 | ||||||||
| Inventories | 9,347 | 7,295 | ||||||||
| IVA taxes receivable | 1,870 | 575 | ||||||||
| Deferred tax assets | 3,891 | 3,891 | ||||||||
| Prepaid expenses and other current assets | 1,932 | 2,935 | ||||||||
| Total current assets | 36,156 | 47,100 | ||||||||
| Property, plant and mine development, net | 47,808 | 32,348 | ||||||||
| Deferred tax assets | 27,040 | 25,519 | ||||||||
| Investments in equity securities | 894 | 2,620 | ||||||||
| Other non-current assets | 2,964 | 4,078 | ||||||||
| Total assets | $ | 114,862 | $ | 111,665 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 8,201 | $ | 3,892 | ||||||
| Accrued expenses and other current liabilities | 5,124 | 3,923 | ||||||||
| Capital lease obligations | 1,220 | 1,498 | ||||||||
| Income taxes payable | 3,348 | 7,907 | ||||||||
| Dividends payable | 542 | 542 | ||||||||
| Total current liabilities | 18,435 | 17,762 | ||||||||
| Capital lease obligations | - | 834 | ||||||||
| Reclamation and remediation liabilities | 2,537 | 2,993 | ||||||||
| Total liabilities | 20,972 | 21,589 | ||||||||
| 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 shares issued and outstanding | 55 | 55 | ||||||||
| Additional paid-in capital | 96,387 | 93,094 | ||||||||
| Retained earnings | 4,503 | 3,982 | ||||||||
| Treasury stock at cost, 336,398 shares | (5,884 | ) | (5,884 | ) | ||||||
| Accumulated other comprehensive loss | (1,171 | ) | (1,171 | ) | ||||||
| Total shareholders' equity | 93,890 | 90,076 | ||||||||
| Total liabilities and shareholders' equity | $ | 114,862 | $ | 111,665 | ||||||
| GOLD RESOURCE CORPORATION | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
| for the three and nine months ended September 30, 2015 and 2014 | |||||||||||||||||
| (U.S. dollars in thousands, except share and per share amounts) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||
| Sales, net | $ | 19,437 | $ | 21,052 | $ | 71,082 | $ | 85,873 | |||||||||
| Mine cost of sales: | |||||||||||||||||
| Production costs | 13,411 | 13,025 | 40,462 | 43,107 | |||||||||||||
| Depreciation and amortization | 1,579 | 1,180 | 5,195 | 2,969 | |||||||||||||
| Reclamation and remediation | 6 | - | 36 | - | |||||||||||||
| Total mine cost of sales | 14,996 | 14,205 | 45,693 | 46,076 | |||||||||||||
| Mine gross profit | 4,441 | 6,847 | 25,389 | 39,797 | |||||||||||||
| Costs and expenses: | |||||||||||||||||
| General and administrative expenses | 2,913 | 4,361 | 8,032 | 9,623 | |||||||||||||
| Exploration expenses | 1,810 | 2,901 | 6,416 | 5,786 | |||||||||||||
| Total costs and expenses | 4,723 | 7,262 | 14,448 | 15,409 | |||||||||||||
| Operating (loss) income | (282 | ) | (415 | ) | 10,941 | 24,388 | |||||||||||
| Other (expense) income, net | (1,033 | ) | 69 | (2,080 | ) | 766 | |||||||||||
| (Loss) income before income taxes | (1,315 | ) | (346 | ) | 8,861 | 25,154 | |||||||||||
| Provision for income taxes | (846 | ) | 1,109 | 3,465 | 12,264 | ||||||||||||
| Net (loss) income | $ | (469 | ) | $ | (1,455 | ) | $ | 5,396 | $ | 12,890 | |||||||
| Net (loss) income per common share: | |||||||||||||||||
| Basic | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0.10 | $ | 0.24 | |||||||
| Diluted | $ | (0.01 | ) | $ | (0.03 | ) | $ | 0.10 | $ | 0.24 | |||||||
| Weighted average shares outstanding: | |||||||||||||||||
| Basic | 54,179,369 | 54,179,369 | 54,179,369 | 54,098,783 | |||||||||||||
| Diluted | 54,179,369 | 54,179,369 | 54,201,274 | 54,698,748 | |||||||||||||
| GOLD RESOURCE CORPORATION | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| for the nine months ended September 30, 2015 and 2014 | ||||||||||
| (U.S. dollars in thousands) | ||||||||||
| (Unaudited) | ||||||||||
| 2015 | 2014 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net income | $ | 5,396 | $ | 12,890 | ||||||
| Adjustments to reconcile net income to net cash from operating activities: | ||||||||||
| Depreciation, depletion and amortization | 6,331 | 3,107 | ||||||||
| Stock-based compensation | 3,293 | 3,847 | ||||||||
| Deferred income taxes | (1,522 | ) | - | |||||||
| Currency exchange (gain) loss | (326 | ) | 545 | |||||||
| Unrealized loss (gain) on investments | 1,726 | (1,504 | ) | |||||||
| Other operating adjustments | 1,072 | 162 | ||||||||
| Changes in operating assets and liabilities: | ||||||||||
| Accounts receivable | (435 | ) | (3,699 | ) | ||||||
| Inventories | (1,149 | ) | (1,582 | ) | ||||||
| Prepaid expenses and other current assets | (897 | ) | 1,354 | |||||||
| Accounts payable and other accrued liabilities | 5,069 | (731 | ) | |||||||
| Income taxes payable/receivable | (4,528 | ) | 11,907 | |||||||
| Other noncurrent assets | 466 | - | ||||||||
| Net cash provided by operating activities | 14,496 | 26,296 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Capital expenditures | (21,837 | ) | (10,524 | ) | ||||||
| Investments | - | (1,805 | ) | |||||||
| Proceeds from sale of building | - | 1,737 | ||||||||
| Other investing activities | 40 | 23 | ||||||||
| Net cash used in investing activities | (21,797 | ) | (10,569 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Proceeds from exercise of stock options | - | 100 | ||||||||
| Dividends paid | (4,876 | ) | (4,868 | ) | ||||||
| Repayment of capital leases | (1,123 | ) | (1,099 | ) | ||||||
| Net cash used in financing activities | (5,999 | ) | (5,867 | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (136 | ) | (33 | ) | ||||||
| Net (decrease) increase in cash and cash equivalents | (13,436 | ) | 9,827 | |||||||
| Cash and cash equivalents at beginning of period | 27,541 | 14,973 | ||||||||
| Cash and cash equivalents at end of period | $ | 14,105 | $ | 24,800 | ||||||
| Supplemental Cash Flow Information | ||||||||||
| Interest expense paid | $ | 65 | $ | 139 | ||||||
| Income and mining taxes paid | $ | 8,464 | $ | - | ||||||
Contact
Contacts:
Corporate Development
Greg Patterson
303-320-7708
www.Goldresourcecorp.com