Gold Resource Corporation Reports Third Quarter 2012 Results; Increases Production by 54% Over Prior Quarter
COLORADO SPRINGS, CO -- (Marketwire) -- 11/15/12 -- Gold Resource Corporation (NYSE MKT: GORO) (the Company) today announced results for its third quarter ending September 30, 2012. Gold Resource Corporation is a low-cost gold producer with operations in the southern state of Oaxaca, Mexico.
2012 Q3 HIGHLIGHTS
- 22,336 ounces precious metal gold equivalent (AuEq) produced
- 18,059 ounces (AuEq) sold
- 54% AuEq production increase over prior quarter
- $23.8 million mine gross profit generated
- $13.1 million pretax income, or $0.26 per share
- $7.3 million net income, or $0.14 per share
- $9.5 million dividend distribution, or $0.18 per share
- $6.6 million physical gold and silver in treasury
- Continued physical gold and silver dividend program
Overview of Third Quarter 2012 Results from El Aguila Project
Gold Resource Corporation's El Aguila Project produced 22,336 ounces (AuEq) before payable metal deductions. The Company sold 18,059 ounces precious metal gold equivalent (AuEq) at a total cash cost of $459 per ounce AuEq in the third quarter. Average prices realized on sales during the quarter were $1,769 per ounce gold and $32 per ounce silver. Mine gross profit generated was $23.8 million. The Company paid $9.5 million to shareholders in dividends. The Company continued its physical dividend program where shareholders have the option to convert their cash dividends to physical gold and/or silver.
"Our 54% increase in third quarter production was the result of overcoming many challenges including increasing water, increasing CO2 gas and mine development hurdles," stated Gold Resource Corporation's President, Mr. Jason Reid. "We continued to upgrade our management team which I believe was in large part the reason behind the increase in production. The positive takeaway from the quarter should include increased production, continued profitability, lowered total cash costs, and returning $9.5 million in dividends to the owners of the Company," stated Mr. Reid.
The Company will host a conference call at 11:00 a.m. EST on Thursday, November 15. Conference call details can be found on the Company website at www.goldresourcecorp.com.
Below is a table of the key production statistics for our El Aguila Project during the three and nine months ended September 30, 2012:
Production and Sales Statistics
La Arista La Arista Underground
Underground Mine Mine
------------------- ---------------------
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September September September September
30, 30, 30, 30,
--------- --------- ---------- ----------
2012 2011 2012 2011
--------- --------- ---------- ----------
Production Summary
Milled:
Tonnes Milled 76,786 57,156 211,792 112,372
Tonnes Milled per Day 835 621 773 621
Grade:
Average Gold Grade (g/t) 4.17 3.89 4.08 3.02
Average Silver Grade (g/t) 320 491 365 438
Average Copper Grade (%) 0.43 0.47 0.44 0.44
Average Lead Grade (%) 2.14 1.30 1.88 1.18
Average Zinc Grade (%) 4.43 2.91 4.01 2.58
Recoveries:
Average Gold Recovery (%) 88 89 89 90
Average Silver Recovery (%) 94 93 93 93
Average Copper Recovery (%) 75 78 74 75
Average Lead Recovery (%) 64 77 69 78
Average Zinc Recovery (%) 80 77 77 73
Mill production (before payable metal
deductions)(2)
Gold (ozs.) 9,047 6,371 24,611 9,855
Silver (ozs.) 739,576 841,820 2,317,110 1,472,486
Copper (tonnes) 245 211 687 369
Lead (tonnes) 1,051 569 2,734 1,027
Zinc (tonnes) 2,705 1,281 6,567 2,117
Payable metal sold(2)
Gold (ozs.) 7,287 5,605 20,317 13,219
Silver (ozs.) 599,501 780,317 1,982,868 1,356,806
Copper (tonnes) 214 189 596 270
Lead (tonnes) 869 497 2,231 888
Zinc (tonnes) 1,993 938 5,003 1,422
Average metal prices realized
Gold (oz.) $ 1,769 $ 1,702 $ 1,690 $ 1,553
Silver (oz.) $ 32 $ 38 $ 31 $ 37
Copper ( tonne) $ 8,161 $ 8,835 $ 8,162 $ 8,869
Lead (tonne) $ 2,107 $ 2,346 $ 2,080 $ 2,402
Zinc ( tonne) $ 1,999 $ 2,182 $ 1,997 $ 2,185
Gold equivalent ounces produced (mill
production)(2)
Gold Ounces 9,047 6,371 24,611 9,397
Gold Equivalent Ounces from
Silver 13,289 18,918 42,038 31,270
--------- --------- ---------- ----------
Total Gold Equivalent Ounces 22,336 25,289 66,649 40,667
--------- --------- ---------- ----------
Gold equivalent ounces sold(2)
Gold Ounces 7,287 5,605 20,317 13,219
Gold Equivalent Ounces from
Silver 10,772 17,535 35,974 32,651
--------- --------- ---------- ----------
Total Gold Equivalent Ounces 18,059 23,140 56,291 45,870
--------- --------- ---------- ----------
Total Cash Cost per Gold
Equivalent Ounce(1) $ 459 $ 260 $ 396 $ -
(1) A reconciliation of this non-GAAP measure to mine cost of sales, the most comparable GAAP measure, can be found below in Non-GAAP Measures. Total cash cost per gold equivalent ounce sold for the combined La Arista underground mine and the El Aguila open pit mine for the for the nine months ended September 30, 2011, can be found in the Non-GAAP Measures in the Form 10-Q for the period ended September 30, 2012.
(2) Mill production represents metal contained in concentrates produced at the mill, which is before payable metal deductions are levied by the buyer of the Company's concentrates. In addition, mill production quantities for the nine months ended September 30, 2012 do not reflect any deduction for 757 gold ounces and 43,435 silver ounces (approximately 1,800 gold equivalent ounces) resulting from the settlement agreement with the buyer of the Company's concentrates as discussed in Note 13 of the Consolidated Financial Statements in the Form 10-Q for the period ended September 30, 2012. Gold equivalent ounces sold for the nine months ended September 30, 2012 have been reduced by approximately 1,800 gold equivalent ounces as a result of the settlement.
Production and Sales Statistics
El Aguila
Open Pit Mine
-------------
Nine Months
Ended
September 30,
-------------
2011 (1)
-------------
Production Summary
Milled:
Tonnes Milled 46,409
Tonnes Milled per Day 829
Grade:
Average Gold Grade (g/t) 4.18
Average Silver Grade (g/t) 53
Recoveries:
Average Gold Recovery (%) 89
Average Silver Recovery (%) 75
Mill production (before payable metal deductions)
Gold (ozs.) 5,559
Silver (ozs.) 58,309
Payable metal sold
Gold (ozs.) 3,917
Silver (ozs.) 43,605
Average metal prices realized
Gold (oz.) $ 1,383
Silver (oz.) $ 34
Gold equivalent ounces produced (mill production)
Gold Ounces 5,559
Gold Equivalent Ounces from Silver (2) -
-------------
Total Gold Equivalent Ounces 5,559
-------------
Gold equivalent ounces sold
Gold Ounces 3,917
Gold Equivalent Ounces from Silver (2) -
-------------
Total Gold Equivalent Ounces 3,917
-------------
(1) No activity for the three months ended September 30, 2011.
(2) Silver ounces were considered a by-product in arriving at the total cash cost per ounce equivalent.
(3) Total cash cost per gold equivalent ounce sold for the combined La Arista underground mine and the El Aguila open pit mine for the for the nine months ended September 30, 2011 can be found in the Non-GAAP Measures in the Form 10-Q for the period ended September 30, 2012.
About GRC:
Gold Resource Corporation 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 52,679,369 shares outstanding, no warrants and no debt. Gold Resource Corporation is the only Company to offer its shareholders a dividend option to obtain physical gold or silver in addition to cash. 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.
See Accompanying Tables
The following information summarizes the results of operations for Gold Resource Corporation for the three months and nine months ended September 30, 2012 and 2011, its financial condition at September 30, 2012 and December 31, 2011 and its cash flows for the three months and nine months ended September 30, 2012 and 2011. The summary data for the three and nine months ended September 30, 2012 and 2011 is unaudited; the summary data for the year ended December 31, 2011 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2011, 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.
GOLD RESOURCE CORPORATION
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and nine months ended September 30, 2012 and 2011
(U.S. dollars in thousands, except shares and per share amounts)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2012 2011 2012 2011
----------- ----------- ----------- -----------
Sales of metals
concentrate, net $ 36,490 $ 37,781 $ 103,399 $ 69,725
----------- ----------- ----------- -----------
Mine cost of sales:
Production costs 12,141 7,690 31,838 16,967
Depreciation and
amortization 556 184 940 327
Accretion 20 20 60 63
----------- ----------- ----------- -----------
Total mine cost of
sales 12,717 7,894 32,838 17,357
----------- ----------- ----------- -----------
Mine gross profit 23,773 29,887 70,561 52,368
Costs and expenses:
General and
administrative
expenses 2,933 1,812 8,922 4,790
Exploration expenses 1,882 1,735 5,466 3,271
Construction and
development 5,394 4,467 13,492 13,557
----------- ----------- ----------- -----------
Total costs and
expenses 10,209 8,014 27,880 21,618
----------- ----------- ----------- -----------
Operating income 13,564 21,873 42,681 30,750
Other income (expense) (485) 2,476 (1,782) 2,333
----------- ----------- ----------- -----------
Income before income
taxes 13,079 24,349 40,899 33,083
Provision for income
taxes 5,782 9,131 16,398 10,937
----------- ----------- ----------- -----------
Net income before
extraordinary item 7,297 15,218 24,501 22,146
Extraordinary items:
Flood loss, net of
income tax benefit of
$750 - - - (1,756)
----------- ----------- ----------- -----------
Net income $ 7,297 $ 15,218 $ 24,501 $ 20,390
=========== =========== =========== ===========
Other comprehensive
(loss) income:
Currency translation
gain (loss) 2,168 (4,227) 1,943 (3,844)
----------- ----------- ----------- -----------
Net comprehensive income $ 9,465 $ 10,991 $ 26,444 $ 16,546
=========== =========== =========== ===========
Net income per common
share:
Basic:
Before extraordinary
item $ 0.14 $ 0.29 $ 0.46 $ 0.41
Extraordinary item $ - $ - $ - $ (0.03)
----------- ----------- ----------- -----------
Net income $ 0.14 $ 0.29 $ 0.46 $ 0.38
=========== =========== =========== ===========
Diluted:
Before extraordinary
item $ 0.13 $ 0.27 $ 0.43 $ 0.39
Extraordinary item $ - $ - $ - $ (0.03)
----------- ----------- ----------- -----------
Net income $ 0.13 $ 0.27 $ 0.43 $ 0.36
=========== =========== =========== ===========
Weighted average shares
outstanding:
Basic 52,848,586 52,997,194 52,885,640 52,997,929
=========== =========== =========== ===========
Diluted 56,254,632 56,357,096 56,365,316 56,475,441
=========== =========== =========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
GOLD RESOURCE CORPORATION
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except shares)
September December
30, 31,
2012 2011
----------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 36,242 $ 51,960
Gold and silver bullion 6,560 2,549
Accounts receivable 16,090 14,281
Inventories 5,086 4,243
Deferred tax assets 11,118 11,118
Prepaid expenses and other assets 701 957
----------- -----------
Total current assets 75,797 85,108
Land and mineral rights 227 227
Property and equipment - net 12,959 10,318
Inventories 890 -
Deferred tax assets 19,517 19,517
----------- -----------
Total assets $ 109,390 $ 115,170
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,437 $ 1,691
Accrued expenses 4,314 4,879
IVA taxes payable 3,191 559
Income taxes payable 1,990 15,987
Dividends payable 3,170 2,645
----------- -----------
Total current liabilities 15,102 25,761
Asset retirement obligation 2,539 2,281
----------- -----------
Total liabilities 17,641 28,042
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: 53,015,767 and 52,998,303
shares issued and outstanding, respectively 53 53
Additional paid-in capital 112,201 132,529
(Deficit) accumulated during the exploration stage (15,021) (39,522)
Treasury stock at cost, 186,991 shares (3,449) (1,954)
Other comprehensive (loss) - currency translation
adjustment (2,035) (3,978)
----------- -----------
Total shareholders' equity 91,749 87,128
----------- -----------
Total liabilities and shareholders' equity $ 109,390 $ 115,170
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
GOLD RESOURCE CORPORATION
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the three and nine months ended September 30, 2012 and 2011
(U.S. dollars in thousands)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2012 2011 2012 2011
--------- --------- --------- ---------
Cash flows from operating
activities:
Net income $ 7,297 $ 15,218 $ 24,501 $ 20,390
--------- --------- --------- ---------
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities:
Depreciation and amortization 600 181 1,117 511
Accretion 20 21 60 63
Stock-based compensation 1,980 1,771 6,640 4,670
Currency translation gain
(loss) 2,168 (4,227) 1,943 (3,843)
Unrealized (gain) loss from
gold and silver bullion held (1,073) 287 (744) 287
Realized loss from gold and
silver bullion converted 19 - 109 -
Other 6 - 6 -
Changes in operating assets and
liabilities:
Accounts receivable (11,504) (12,137) (1,809) (13,549)
Inventories (689) 1,033 (1,733) (1,477)
Income tax receivable 712 - - -
Prepaid expenses and other
assets 168 (797) 256 (1,180)
Accounts payable 1,851 348 746 1,549
Accrued expenses 102 638 (565) 116
IVA taxes payable (485) 3,621 2,632 5,451
Income taxes payable 1,990 9,131 (13,997) 10,187
--------- --------- --------- ---------
Total adjustments (4,135) (130) (5,339) 2,785
--------- --------- --------- ---------
Net cash provided by operating
activities 3,162 15,088 19,162 23,175
--------- --------- --------- ---------
Cash flows from investing
activities:
Capital expenditures (814) (1,955) (3,763) (5,044)
Purchases of gold and silver
bullion (525) (2,012) (4,707) (2,012)
Proceeds from conversion of
gold and silver bullion 536 - 1,331 -
--------- --------- --------- ---------
Net cash used in investing
activities (803) (3,967) (7,139) (7,056)
--------- --------- --------- ---------
Cash flows from financing
activities:
Dividends paid (9,514) (6,890) (26,444) (17,490)
Treasury stock purchases (1,495) (972) (1,495) (972)
--------- --------- --------- ---------
Net cash (used in) financing
activities (11,009) (7,862) (27,939) (18,462)
--------- --------- --------- ---------
Effect of exchange rates on cash
and equivalents 114 (343) 198 (225)
--------- --------- --------- ---------
Net increase (decrease) in cash
and cash equivalents (8,536) 2,916 (15,718) (2,568)
Cash and equivalents at
beginning of period 44,778 42,098 51,960 47,582
--------- --------- --------- ---------
Cash and equivalents at end of
period $ 36,242 $ 45,014 $ 36,242 $ 45,014
========= ========= ========= =========
Supplemental Cash Flow
Information
Income taxes paid $ 2,003 $ - $ 30,395 $ -
========= ========= ========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
Contacts:
Corporate Development
Greg Patterson
303-320-7708
www.Goldresourcecorp.com