SOURCE: Gold Resource Corporation

Gold Resource Corporation

May 08, 2013 17:27 ET

Gold Resource Corporation Reports First Quarter Results; Maintains 2013 Production Outlook

COLORADO SPRINGS, CO--(Marketwired - May 8, 2013) - Gold Resource Corporation (NYSE MKT: GORO) (the "Company") reported its production results for the first quarter ended March 31, 2013 of 22,330 ounces precious metal gold equivalent ("AuEq", calculated at actual sales price ratio of 54:1). Gold Resource Corporation is a low-cost gold producer with operations in the southern state of Oaxaca, Mexico. The Company has returned over $81 million to shareholders in monthly dividends since declaring commercial production July 1, 2010, and offers shareholders the option to convert their cash dividends into physical gold and silver and take delivery.

2013 Q1 HIGHLIGHTS

  • 22,330 ounces mill production, precious metal gold equivalent (AuEq)
  • 24,972 precious metal AuEq ounces sold
  • $25.9 million Cash Flow from Mine Site Operations
  • Accumulated deficit reduced to zero
  • Total cash cost of $515 per ounce AuEq (including 5% royalty)
  • Net income of $7.4 million or $0.14 per share
  • Dividend distributions of $9.5 million, or $0.18 per share for quarter

Overview of Q1 2013 Results from El Aguila Project

Gold Resource Corporation's El Aguila Project produced 22,330 ounces of precious metal gold equivalent (AuEq) at a total cash cost of $515 per AuEq ounce and realized average prices of $1,648 per ounce gold and $31 per ounce silver for its sales during the first quarter. Gold and silver prices decreased 3.3% and 6.1%, respectively, from the first quarter of 2012. Cash Flow from Mine Site Operations was $25.9 million. The Company paid $9.5 million to shareholders in dividends.

"First quarter 2013 was on track with our annual production targets," stated Gold Resource Corporation's President, Mr. Jason Reid. "At this point, we are maintaining our 2013 production goal, targeting a range of 80,000 to 100,000 precious metal gold equivalent ounces."

Mr. Reid continued, "The first quarter of 2013 marked a milestone for the Company as our accumulated deficit was reduced to zero. We achieved this milestone while distributing over $81 million to our shareholders. Both speak to our efficiency of capital deployed on behalf of our shareholders."

Below is a table of the key production statistics for our El Aguila Project during the three months ended March 31, 2013.

 
Production and Sales Statistics - La Arista Underground Mine
    Three months ended March 31, 2013
Production Summary      
Milled:      
  Tonnes Milled     76,184
  Tonnes Milled per Day     846
Grade:      
  Average Gold Grade (g/t)     3.67
  Average Silver Grade (g/t)     345
  Average Copper Grade (%)     0.39
  Average Lead Grade (%)     1.10
  Average Zinc Grade (%)     2.79
Recoveries:      
  Average Gold Recovery (%)     88
  Average Silver Recovery (%)     92
  Average Copper Recovery (%)     84
  Average Lead Recovery (%)     70
  Average Zinc Recovery (%)     79
Mill production (before payable metal deductions)(1)      
  Gold (ozs.)     7,898
  Silver (ozs.)     777,671
  Copper (tonnes)     248
  Lead (tonnes)     586
  Zinc (tonnes)     1,676
Payable metal sold      
  Gold (ozs.)     8,953
  Silver (ozs.)     863,152
  Copper (tonnes)     305
  Lead (tonnes)     642
  Zinc (tonnes)     1,735
Average metal prices realized      
  Gold (oz.)   $ 1,648
  Silver (oz.)   $ 31
  Copper (tonne)   $ 7,996
  Lead (tonne)   $ 2,448
  Zinc (tonne)   $ 2,154
Precious metal gold equivalent ounces produced (millproduction)(1)(3)      
  Gold Ounces     7,898
  Gold Equivalent Ounces from Silver     14,432
  Total Precious Metal Gold Equivalent Ounces     22,330
Precious metal gold equivalent ounces sold(2)(3)      
  Gold Ounces     8,953
  Gold Equivalent Ounces from Silver     16,019
  Total Precious Metal Gold Equivalent Ounces     24,972
  Total Cash Cost per Precious Metal Gold Equivalent Ounce Sold(2)   $ 515
       
(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.
(2) A reconciliation of this Non-GAAP measure to mine cost of sales, the most comparable U.S. GAAP measure, can be found in the Company's quarterly report on Form 10-Q for the period ended March 31, 2013 filed with the SEC and available at http://www.sec.gov/.
(3) Precious metal gold equivalent mill production for the first quarter of 2013 of 22,330 ounces differs from gold equivalent ounces sold for 2013 of 24,972 due principally to buyer (smelter) concentrate processing deductions of approximately 2,255 gold equivalent ounces and a decrease in gold equivalent ounces contained in ending inventory of approximately 4,897 ounces.
   

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 53,279,369 shares outstanding, no warrants and no debt. Gold Resource Corporation offers shareholders the option to convert their cash dividends into physical gold and silver. 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 ended March 31, 2013 and 2012, its financial condition at March 31, 2013 and December 31, 2012 and its cash flows for the three months ended March 31, 2013 and 2012. The summary data for the three months ended March 31, 2013 and 2012 is unaudited; the summary data for the year ended December 31, 2012 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2012, 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)  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
for the three months ended March 31, 2013 and 2012  
(U.S. dollars in thousands, except shares and per share amounts)  
(Unaudited)  
             
             
       
    2013     2012  
                 
Sales of metals concentrate, net   $ 42,311     $ 36,665  
Mine cost of sales:                
  Production costs     16,867       8,521  
  Depreciation and amortization     536       232  
  Accretion     29       20  
    Total mine cost of sales     17,432       8,773  
Mine gross profit     24,879       27,892  
Costs and expenses:                
  General and administrative expenses     4,385       2,633  
  Exploration expenses     3,299       1,353  
  Construction and development     4,848       2,358  
  Production start-up expense, net     -       -  
  Management contract expense     -       -  
    Total costs and expenses     12,532       6,344  
Operating income     12,347       21,548  
Other (expense) income     (36 )     (1,989 )
Income before income taxes     12,311       19,559  
  Provision for income taxes     4,924       6,055  
Net income before extraordinary item     7,387       13,504  
Extraordinary items:                
  Flood loss, net of income tax benefit of $750     -       -  
Net income   $ 7,387     $ 13,504  
Other comprehensive income:                
  Currency translation gain (loss)     34       1,464  
Comprehensive income   $ 7,421     $ 14,968  
Net income per common share:                
  Basic:   $ 0.14     $ 0.26  
  Diluted:   $ 0.13     $ 0.24  
                 
Weighted average shares outstanding:                
  Basic     52,679,369       52,898,984  
  Diluted     55,586,031       56,362,916  
                   
   
   
GOLD RESOURCE CORPORATION  
(An Exploration Stage Company)  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(U.S. dollars in thousands, except shares)  
             
             
    March 31,     December 31,  
    2013     2012  
    (unaudited)        
ASSETS                
Current assets:                
  Cash and cash equivalents   $ 29,026     $ 35,780  
  Gold and silver bullion     5,452       5,809  
  Accounts receivable     11,570       6,349  
  Inventories     6,538       7,533  
  Income tax receivable     1,024       419  
  Deferred tax assets     2,121       2,121  
  Prepaid expenses and other assets     3,047       973  
    Total current assets     58,778       58,984  
Land and mineral rights     227       227  
Property and equipment - net     17,079       14,050  
Inventories     797       809  
Deferred tax assets     31,559       31,559  
    Total assets   $ 108,440     $ 105,629  
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities:                
  Accounts payable   $ 5,077     $ 3,013  
  Accrued expenses     5,721       4,178  
  IVA taxes payable     1,389       2,673  
  Income taxes payable     857       -  
  Dividends payable     3,161       3,161  
    Total current liabilities     16,205       13,025  
Asset retirement obligation     2,970       2,790  
    Total liabilities     19,175       15,815  
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 shares issued and outstanding     53       53  
Additional paid-in capital     96,240       102,674  
(Deficit) accumulated during the exploration stage     -       (5,851 )
Treasury stock at cost, 336,398 shares     (5,884 )     (5,884 )
Accumulated other comprehensive - currency translation adjustment     (1,144 )     (1,178 )
    Total shareholders' equity     89,265       89,814  
    Total liabilities and shareholders' equity   $ 108,440     $ 105,629  
                     
                     
   
GOLD RESOURCE CORPORATION  
(An Exploration Stage Company)  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
for the three months ended March 31, 2013 and 2012  
(U.S. dollars in thousands)  
(Unaudited)  
             
             
             
    2013     2012  
                 
Cash flows from operating activities:                
  Net income   $ 7,387     $ 13,504  
  Adjustments to reconcile net income to net cash                
  from/(used in) operating activities:                
  Depreciation and amortization     653       296  
  Accretion     29       20  
  Asset retirement obligation     -       -  
  Stock-based compensation     1,512       2,056  
  Management fee paid in stock     -       -  
  Related party payable paid in stock     -       -  
  Unrealized foreign currency exchange (gain) loss     (119 )     1,983  
  Unrealized loss (gain) from gold and silver bullion held     178       (198 )
  Deferred tax assets     -       -  
  Other     -       -  
  Changes in operating assets and liabilities:                
  Accounts receivable     (4,887 )     842  
  Inventories     942       (2,769 )
  Prepaid expenses and other assets     (1,908 )     129  
  Accounts payable     1,910       (3,160 )
  Accrued expenses     1,469       3,134  
  IVA taxes payable/receivable     (1,216 )     1,184  
  Income taxes payable/receivable     263       (12,656 )
  Total adjustments     (1,174 )     (9,139 )
  Net cash provided by (used in) operating activities     6,213       4,365  
Cash flows from investing activities:                
  Capital expenditures     (3,682 )     (1,609 )
  Purchases of gold and silver bullion     (485 )     (2,879 )
  Proceeds from conversion of gold and silver bullion     664       -  
  Net cash used in investing activities     (3,503 )     (4,488 )
Cash flows from financing activities:                
  Proceeds from sales of common stock     -       -  
  Proceeds from exercise of stock options     -       -  
  Proceeds from debentures - founders     -       -  
  Dividends paid     (9,482 )     (7,935 )
  Treasury stock purchases     -       -  
  Proceeds from exploration funding agreement     -       -  
  Net cash (used in) provided by financing activities     (9,482 )     (7,935 )
  Effect of exchange rates on cash and equivalents     18       102  
  Net (decrease) increase in cash and cash equivalents     (6,754 )     (7,956 )
Cash and equivalents at beginning of period     35,780       51,960  
Cash and equivalents at end of period   $ 29,026     $ 44,004  
                 
Supplemental Cash Flow Information                
Income taxes paid   $ 3,496     $ 17,305  

Contact Information