SOURCE: Gold Resource Corporation

Gold Resource Corporation

November 03, 2015 17:15 ET

Gold Resource Corporation Reports Third Quarter Results

COLORADO SPRINGS, CO--(Marketwired - Nov 3, 2015) - Gold Resource Corporation (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 Corporation 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 Corporation'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 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 54,179,369 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 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 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     $ -  

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