SOURCE: Gold Resource Corporation

Gold Resource Corporation

May 04, 2016 16:47 ET

Gold Resource Corporation Reports First Quarter Results

COLORADO SPRINGS, CO--(Marketwired - May 4, 2016) - Gold Resource Corporation (NYSE MKT: GORO) (the "Company") reported production results for the first quarter ended March 31, 2016 of 6,463 ounces of gold and 434,142 ounces of silver, which generated $17.4 million in net revenue for the quarter. Gold Resource Corporation is a gold and silver producer with operations in Oaxaca, Mexico and exploration in Nevada, USA. The Company has returned $108 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.

2016 Q1 HIGHLIGHTS

  • $0.8 million net income, or $0.01 per share
  • $17.4 million sales, net
  • $667 total cash cost per ounce AuEq (after by-product credits)
  • 6,463 gold ounces produced
  • 6,215 gold ounces sold
  • 434,142 silver ounces produced
  • 378,794 silver ounces sold
  • $6.4 million adjusted cash flow from mine site operations
  • $0.3 million dividend distributions, or $0.005 per share for quarter

Overview of Q1 2016 Aguila Project Results

Gold Resource Corporation's Aguila Project produced 6,463 ounces of gold and 434,142 ounces of silver at a total cash cost of $667 per precious metal gold equivalent ounce (after by-product credits). Realized average metal price sales during the quarter were $1,199 per ounce gold and $14.38 per ounce silver. The Company recorded net income of $0.8 million, or $0.01 per share. Adjusted cash flow from mine site operations totaled $6.4 million. The Company paid $0.3 million to shareholders in dividends, or $0.005 per share during the quarter. Cash and cash equivalents at quarter end totaled $10.3 million. Realized silver prices decreased 14% compared to the first quarter of 2015.

The Company maintains its 2016 annual production Outlook which targets 26,000 gold ounces and 1,900,000 silver ounces.

The following table summarizes certain information about our mining operations for the three months ended March 31, 2016 and 2015:

         
Production and Sales Statistics
    Three months ended March 31,
    2016   2015
Milled            
  Tonnes Milled (1)     113,145     92,359
  Tonnes Milled per Day (2)     1,301     1,026
Grade            
  Average Gold Grade (g/t)     1.99     3.13
  Average Silver Grade (g/t)     131     287
  Average Copper Grade (%)     0.29     0.42
  Average Lead Grade (%)     1.06     1.46
  Average Zinc Grade (%)     3.43     3.71
Recoveries            
  Average Gold Recovery (%)     89     90
  Average Silver Recovery (%)     91     93
  Average Copper Recovery (%)     74     76
  Average Lead Recovery (%)     70     75
  Average Zinc Recovery (%)     84     81
Mill production (before payable metal deductions) (3)            
  Gold (ozs.)     6,463     8,348
  Silver (ozs.)     434,142     790,300
  Copper (tonnes)     244     293
  Lead (tonnes)     838     1,013
  Zinc (tonnes)     3,261     2,762
Payable metal sold            
  Gold (ozs.)     6,215     8,678
  Silver (ozs.)     378,794     727,315
  Copper (tonnes)     220     277
  Lead (tonnes)     762     920
  Zinc (tonnes)     2,599     2,205
Average metal prices realized (4)            
  Gold ($ per oz.)     1,199     1,203
  Silver ($ per oz.)     14.38     16.74
  Copper ($ per tonne)     4,146     5,532
  Lead ($ per tonne)     1,807     1,731
  Zinc ($ per tonne)     1,717     2,008
Precious metal gold equivalent ounces produced (mill production) (3)            
  Gold Ounces     6,463     8,348
  Gold Equivalent Ounces from Silver     5,206     10,999
  Total Precious Metal Gold Equivalent Ounces     11,669     19,347
Precious metal gold equivalent ounces sold            
  Gold Ounces     6,215     8,678
  Gold Equivalent Ounces from Silver     4,542     10,122
  Total Precious Metal Gold Equivalent Ounces     10,757     18,800
  Total cash cost (before by-product credits) per precious metal gold equivalent ounce sold (including royalties) (5)   $ 1,295   $ 818
  Total cash cost, after by-product credits, per precious metal gold equivalent ounce sold (including royalties) (5)   $ 667   $ 416
               
(1)   Includes 16,697 tonnes of low-grade stockpile open pit ore.
(2)   Based on actual days the mill operated during the year. Note that this includes 195 tonnes attributable to processing a portion of the low-grade stockpile open pit ore.
(3)   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.
(4)   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.
(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 in the Company's most recently filed 10-Q.
     

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 at its producing Oaxaca, Mexico Mining Unit and exploration properties at its Nevada, USA, Mining Unit. The Company has 54,266,706 shares outstanding, no warrants, no long term debt and has returned $108 million back to shareholders since commercial production commenced July 1, 2010. Gold Resource Corporation 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 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, 2016 and 2015, its financial condition at March 31, 2016 and December 31, 2015 and its cash flows for the three months ended March 31, 2016 and 2015. The summary data for the three months ended March 31, 2016 is unaudited; the summary data for the year ended December 31, 2015 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2015, 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 Operations" 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)  
             
    March 31,     December 31,  
    2016     2015  
    (Unaudited)        
ASSETS                
Current assets:                
  Cash and cash equivalents   $ 10,325     $ 12,822  
  Gold and silver bullion     3,413       2,988  
  Accounts receivable     907       321  
  Inventories     9,318       8,753  
  IVA taxes receivable     1,331       1,332  
  Income tax receivable     3,887       3,794  
  Prepaid expenses and other current assets     2,434       2,608  
    Total current assets     31,615       32,618  
Property, plant and mine development, net     53,073       51,637  
Deferred tax assets     20,494       21,064  
Investments in equity securities     231       231  
Other non-current assets     937       985  
  Total assets   $ 106,350     $ 106,535  
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities:                
  Accounts payable   $ 10,901     $ 11,600  
  Accrued expenses and other current liabilities     2,079       2,140  
  Capital lease obligations     696       842  
  Mining royalty taxes payable     3       230  
  Dividends payable     90       90  
    Total current liabilities     13,769       14,902  
Capital lease obligations     24       -  
Reclamation and remediation liabilities     2,795       2,815  
    Total liabilities     16,588       17,717  
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: 54,603,104 and 54,266,706 shares issued and outstanding, respectively, at March 31, 2016 and December 31, 2015     55       55  
  Additional paid-in capital     96,913       96,766  
  Accumulated deficit     (151 )     (948 )
  Treasury stock at cost, 336,398 shares     (5,884 )     (5,884 )
  Accumulated other comprehensive loss     (1,171 )     (1,171 )
    Total shareholders' equity     89,762       88,818  
    Total liabilities and shareholders' equity   $ 106,350     $ 106,535  
                 
   
   
GOLD RESOURCE CORPORATION  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME  
for the three months ended March 31, 2016 and 2015  
(U.S. dollars in thousands, except share and per share amounts)  
(Unaudited)  
   
           
    Three months ended March 31,  
    2016   2015  
               
Sales, net   $ 17,403   $ 28,372  
Mine cost of sales:              
  Production costs     11,096     12,934  
  Depreciation and amortization     2,806     1,392  
  Reclamation and remediation     47     23  
    Total mine cost of sales     13,949     14,349  
Mine gross profit     3,454     14,023  
Costs and expenses:              
  General and administrative expenses     2,178     2,731  
  Exploration expenses     504     1,712  
    Total costs and expenses     2,682     4,443  
Operating income     772     9,580  
Other income (expense), net     706     (504 )
Income before income taxes     1,478     9,076  
  Provision for income taxes     681     4,023  
Net income   $ 797   $ 5,053  
Net income per common share:              
  Basic and diluted   $ 0.01   $ 0.09  
Weighted average shares outstanding:              
  Basic and diluted     54,266,706     54,179,369  
               
   
   
GOLD RESOURCE CORPORATION  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
for the three months ended March 31, 2016 and 2015  
(U.S. dollars in thousands)  
(Unaudited)  
   
             
    Three months ended March 31,  
    2016     2015  
                 
Cash flows from operating activities:                
  Net income   $ 797     $ 5,053  
  Adjustments to reconcile net income to net cash from operating activities:                
    Deferred income taxes     515       6  
    Depreciation, depletion and amortization     2,856       1,457  
    Stock-based compensation     418       1,066  
    Other operating adjustments     (608 )     286  
  Changes in operating assets and liabilities:                
    Accounts receivable     (586 )     (6,043 )
    Inventories     (566 )     (724 )
    Prepaid expenses and other current assets     394       (24 )
    Accounts payable and other accrued liabilities     815       1,046  
    Mining and income taxes payable/receivable     (331 )     (1,255 )
    Other noncurrent assets     26       -  
  Net cash provided by operating activities     3,730       868  
Cash flows from investing activities:                
    Capital expenditures     (5,687 )     (4,937 )
    Proceeds from the sale of equity investments     163       -  
    Other investing activities     2       7  
  Net cash used in investing activities     (5,522 )     (4,930 )
Cash flows from financing activities:                
    Dividends paid     (271 )     (1,625 )
    Repayment of capital leases     (424 )     (372 )
  Net cash used in financing activities     (695 )     (1,997 )
Effect of exchange rate changes on cash and cash equivalents     (10 )     (38 )
Net decrease in cash and cash equivalents     (2,497 )     (6,097 )
Cash and cash equivalents at beginning of period     12,822       27,541  
Cash and cash equivalents at end of period   $ 10,325     $ 21,444  
Supplemental Cash Flow Information                
  Interest expense paid   $ 8     $ 24  
  Income and mining taxes paid   $ 256     $ 5,239  

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