EX-99.1 2 ex-99d1.htm EX-99.1 goro_EX_99-1

Picture 1

 

 

 

 

FOR IMMEDIATE RELEASE

NEWS

October 31, 2017

         NYSE American: GORO

 

GOLD RESOURCE CORPORATION REPORTS THIRD QUARTER NET INCOME OF $0.08 PER SHARE, MAINTAINS 2017 PRODUCTION OUTLOOK

COLORADO SPRINGS – October 31, 2017 – Gold Resource Corporation (NYSE American: GORO) (the “Company or GRC”) reported production results for the third quarter ended September  30, 2017 of 6,465 ounces of gold and 392,153 ounces of silver, which along with base metal revenue generated $31.1 million in net revenue and $4.6 million in net income for the quarter.  Gold Resource Corporation is a gold and silver producer, developer and explorer with operations in Oaxaca, Mexico and Nevada, U.S.A.  The Company has returned $110 million to its shareholders in monthly dividends since commercial production commenced July 1, 2010, and offers its shareholders the option to convert their cash dividends into physical gold and silver and take delivery.

 

Q3 2017 HIGHLIGHTS

·

$4.6 million net income, or $0.08 per share

·

$31.1 million net sales

·

6,465 gold ounces produced

·

392,153 silver ounces produced

·

$2 total cash cost per gold equivalent ounce sold (after by-product credits)

·

$639 total all-in sustaining cost per precious metal gold equivalent ounce sold

·

$18.0 million base metal by-product credits, or $1,707 per precious metal gold ounce sold

·

$0.3 million dividend distributions, or $0.005 per share for quarter

·

$15.8 million cash and cash equivalents

Overview of Q3 2017 Results

 

Gold Resource Corporation’s Aguila Project sold 10,573 precious metal gold equivalent ounces at a total cash cost of $2 per ounce (after by-product credits),  benefiting from strong base metal production and sales.  Average realized metal prices  during the quarter included  $1,289 per ounce gold and $17.00 per ounce silver*. The Company recorded net income of $4.6 million, or $0.08 per share. The Company paid $0.3 million to its shareholders in dividends, or $0.005 per share during the quarter. Cash and cash equivalents at quarter end totaled $15.8 million.

 

Production totals for the first nine months of 2017 included 18,908 ounces of gold, 1,217,713 ounces of silver, 804 tonnes of copper, 3,583 tonnes of lead and 11,447 tonnes of zinc. The Company maintains its 2017 Annual Outlook, targeting a plus or minus 5 percent production of 27,500 gold ounces and 1,850,000 silver ounces.

 

* Average realized metal prices include final settlement adjustments for previously unsettled provisional sales.  Provisional sales may remain unsettled from one quarter into the next.  Realized prices will therefore vary from average spot metal market prices upon final settlement. 

1

 

The following Production and Sales Statistics table summarizes certain information about our mining operations for the three and nine months ended September  30, 2017 and 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production and Sales Statistics

 

 

Three months ended September 30, 

 

Nine months ended September 30, 

 

 

2017

    

2016

 

2017

 

2016

Milled

 

 

 

 

 

 

 

 

 

 

 

 

Tonnes Milled (1)

 

 

114,678

 

 

113,945

 

 

329,798

 

 

331,423

Tonnes Milled per Day (2)

 

 

1,346

 

 

1,278

 

 

1,282

 

 

1,269

Grade

 

 

 

 

 

 

 

 

 

 

 

 

Average Gold Grade (g/t)

 

 

2.09

 

 

1.86

 

 

2.10

 

 

2.36

Average Silver Grade (g/t)

 

 

117

 

 

128

 

 

125

 

 

146

Average Copper Grade (%)

 

 

0.35

 

 

0.24

 

 

0.32

 

 

0.31

Average Lead Grade (%)

 

 

1.73

 

 

1.18

 

 

1.44

 

 

1.18

Average Zinc Grade (%)

 

 

5.04

 

 

3.45

 

 

4.19

 

 

3.71

Recoveries

 

 

 

 

 

 

 

 

 

 

 

 

Average Gold Recovery (%)

 

 

84

 

 

89

 

 

85

 

 

90

Average Silver Recovery (%)

 

 

91

 

 

92

 

 

92

 

 

92

Average Copper Recovery (%)

 

 

72

 

 

78

 

 

76

 

 

77

Average Lead Recovery (%)

 

 

73

 

 

74

 

 

75

 

 

72

Average Zinc Recovery (%)

 

 

80

 

 

82

 

 

83

 

 

84

Mill production (before payable metal deductions) (3)

 

 

 

 

 

 

 

 

 

 

 

 

Gold (ozs.)

 

 

6,465

 

 

6,066

 

 

18,908

 

 

22,540

Silver (ozs.)

 

 

392,153

 

 

431,335

 

 

1,217,713

 

 

1,437,975

Copper (tonnes)

 

 

291

 

 

213

 

 

804

 

 

777

Lead (tonnes)

 

 

1,449

 

 

1,000

 

 

3,583

 

 

2,847

Zinc (tonnes)

 

 

4,628

 

 

3,232

 

 

11,447

 

 

10,306

Payable metal sold

 

 

 

 

 

 

 

 

 

 

 

 

Gold (ozs.)

 

 

5,672

 

 

6,683

 

 

17,521

 

 

21,096

Silver (ozs.)

 

 

371,754

 

 

410,337

 

 

1,121,870

 

 

1,337,668

Copper (tonnes)

 

 

328

 

 

200

 

 

769

 

 

739

Lead (tonnes)

 

 

1,389

 

 

893

 

 

3,299

 

 

2,629

Zinc (tonnes)

 

 

4,326

 

 

2,480

 

 

9,452

 

 

8,503

Average metal prices realized (4)

 

 

 

 

 

 

 

 

 

 

 

 

Gold ($ per oz.)

 

 

1,289

 

 

1,339

 

 

1,262

 

 

1,271

Silver ($ per oz.)

 

 

17.00

 

 

20.79

 

 

17.33

 

 

17.45

Copper ($ per tonne)

 

 

6,341

 

 

4,791

 

 

6,042

 

 

4,577

Lead ($ per tonne)

 

 

2,349

 

 

1,908

 

 

2,293

 

 

1,808

Zinc ($ per tonne)

 

 

2,936

 

 

2,421

 

 

2,790

 

 

2,012

Precious metal gold equivalent ounces produced (mill production) (3)

 

 

 

 

 

 

 

 

 

 

 

 

Gold Ounces

 

 

6,465

 

 

6,066

 

 

18,908

 

 

22,540

Gold Equivalent Ounces from Silver

 

 

5,172

 

 

6,697

 

 

16,722

 

 

19,741

Total Precious Metal Gold Equivalent Ounces

 

 

11,637

 

 

12,763

 

 

35,630

 

 

42,281

Precious metal gold equivalent ounces sold

 

 

 

 

 

 

 

 

 

 

 

 

Gold Ounces

 

 

5,672

 

 

6,683

 

 

17,521

 

 

21,096

Gold Equivalent Ounces from Silver

 

 

4,901

 

 

6,371

 

 

15,411

 

 

18,364

Total Precious Metal Gold Equivalent Ounces

 

 

10,573

 

 

13,054

 

 

32,932

 

 

39,460

Total cash cost before by-product credits per precious metal gold equivalent ounce sold (5)

 

$

1,709

 

$

1,287

 

$

1,353

 

$

1,152

Total cash cost after by-product credits per precious metal gold equivalent ounce sold (5)

 

$

 2

 

$

623

 

$

181

 

$

511

Total all-in sustaining cost per precious metal gold equivalent ounce sold (5)

 

$

639

 

$

757

 

$

664

 

$

765

Total all-in cost per precious metal gold equivalent ounce sold (5)

 

$

756

 

$

902

 

$

768

 

$

919

(1)

For the third quarter of 2017 and 2016 and first nine months of 2017 and 2016, this includes 2,108, 11,459, 42,079, and 38,764 tonnes, respectively of open pit ore.

(2)

Based on actual days the mill operated during the period.

(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 which the buyer deducts from payment. 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. We monitor 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.

2

 

(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 56,891,484 shares outstanding, zero warrants and has returned over $110 million back to its shareholders since commercial production commenced July 1, 2010.  Gold Resource Corporation offers its 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 Form 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.

 

Contacts:

Corporate Development

Greg Patterson

303-320-7708

www.Goldresourcecorp.com 

 

See Accompanying Tables

 

The following information summarizes the results of operations for Gold Resource Corporation for the three and nine months ended September  30, 2017 and 2016, its financial condition at September  30, 2017 and December 31, 2016 and its cash flows for the nine months ended September  30, 2017 and 2016. The summary data as of September 30, 2017 and for the three and nine months ended September  30, 2017 and 2016 is unaudited; the summary data as of December 31, 2016 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2016, 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 precious metal gold equivalent ounce, total all-in sustaining cost per precious metal gold equivalent ounce and total all-in cost per precious metal gold equivalent ounce contained in this press release are non-GAAP financial measures.  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.

3

 

 

GOLD RESOURCE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 

 

December 31, 

 

 

2017

 

2016

 

    

(Unaudited)

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

15,832

 

$

14,166

Gold and silver rounds/bullion

 

 

3,831

 

 

3,307

Accounts receivable

 

 

3,664

 

 

630

Inventories, net

 

 

9,890

 

 

8,946

Income tax receivable, net

 

 

1,025

 

 

626

Prepaid expenses and other current assets

 

 

1,822

 

 

1,587

Total current assets

 

 

36,064

 

 

29,262

Property, plant and mine development, net

 

 

79,447

 

 

70,059

Deferred tax assets, net

 

 

18,645

 

 

17,580

Other non-current assets

 

 

945

 

 

1,542

Total assets

 

$
135,101

 

$

118,443

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

8,883

 

$

5,383

Loan payable, current

 

 

562

 

 

 -

Mining royalty taxes payable

 

 

1,222

 

 

2,033

Accrued expenses and other current liabilities

 

 

2,165

 

 

1,526

Total current liabilities

 

 

12,832

 

 

8,942

Reclamation and remediation liabilities

 

 

2,790

 

 

2,425

Loan payable, long-term

 

 

1,789

 

 

 -

Total liabilities

 

 

17,411

 

 

11,367

Shareholders' equity:

 

 

 

 

 

 

Common stock - $0.001 par value, 100,000,000 shares authorized:

 

 

 

 

 

 

56,891,484 and 56,566,874 shares outstanding at September 30, 2017 and December 31, 2016, respectively

 

 

57

 

 

57

Additional paid-in capital

 

 

114,211

 

 

112,034

Retained earnings

 

 

10,477

 

 

2,040

Treasury stock at cost, 336,398 shares

 

 

(5,884)

 

 

(5,884)

Accumulated other comprehensive loss

 

 

(1,171)

 

 

(1,171)

Total shareholders' equity

 

 

117,690

 

 

107,076

Total liabilities and shareholders' equity

 

$

135,101

 

$

118,443

 

 

 

 

 

4

 

GOLD RESOURCE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 

 (U.S. dollars in thousands, except share and per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 

 

Nine months ended September 30, 

 

    

2017

    

2016

    

2017

    

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales, net

 

$
31,122

 

$

21,367

 

$

76,849

 

$

64,968

Mine cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

Production costs

 

 
16,122

 

 

12,767

 

 

39,634

 

 

34,570

Depreciation and amortization

 

 
3,762

 

 

3,189

 

 

10,271

 

 

9,049

Reclamation and remediation

 

 
37

 

 

48

 

 

101

 

 

139

Total mine cost of sales

 

 

19,921

 

 

16,004

 

 

50,006

 

 

43,758

Mine gross profit

 

 

11,201

 

 

5,363

 

 

26,843

 

 

21,210

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 
1,950

 

 

2,027

 

 

5,437

 

 

5,875

Exploration expenses

 

 
1,457

 

 

881

 

 

3,415

 

 

2,027

Other expense (income), net

 

 

110

 

 

74

 

 

1,183

 

 

(1,170)

Total costs and expenses

 

 

3,517

 

 

2,982

 

 

10,035

 

 

6,732

Income before income taxes

 

 

7,684

 

 

2,381

 

 

16,808

 

 

14,478

Provision for income taxes

 

 
3,103

 

 

787

 

 

6,987

 

 

6,479

Net income

 

$

4,581

 

$

1,594

 

$

9,821

 

$

7,999

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.08

 

$

0.03

 

$

0.17

 

$

0.15

Diluted

 

$

0.08

 

$

0.03

 

$

0.17

 

$

0.14

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

56,888,115

 

 

55,781,382

 

 

56,841,897

 

 

54,994,430

Diluted

 

 

57,455,805

 

 

57,597,392

 

 

57,617,030

 

 

55,589,307

 

5

 

 

 

 

 

 

 

 

GOLD RESOURCE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (U.S. dollars in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Nine months ended September 30, 

 

    

2017

    

2016

 

 

 

 

 

 

 

Cash flows from operating activities:

    

 

 

 

 

 

Net income

 

$

9,821

 

$

7,999

Adjustments to reconcile net income to net cash from operating activities:

 

 

 

 

 

 

Deferred income taxes

 

 

3,033

 

 

250

Depreciation and amortization

 

 

10,602

 

 

9,343

Stock-based compensation

 

 

877

 

 

997

Other operating adjustments

 

 

392

 

 

(531)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(3,034)

 

 

(2,092)

Inventories

 

 

(945)

 

 

(657)

Prepaid expenses and other current assets

 

 

958

 

 

1,203

Accounts payable and other accrued liabilities

 

 

3,319

 

 

(2,774)

Mining royalty and income taxes payable/receivable

 

 

(1,556)

 

 

3,690

Other noncurrent assets

 

 

36

 

 

64

Net cash provided by operating activities

 

 

23,503

 

 

17,492

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(20,382)

 

 

(12,637)

Proceeds from the sale of equity investments

 

 

 -

 

 

749

Other investing activities

 

 

(265)

 

 

(315)

Net cash used in investing activities

 

 

(20,647)

 

 

(12,203)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from the exercise of stock options

 

 

 -

 

 

391

Dividends paid

 

 

(852)

 

 

(818)

Repayment of loan payable

 

 

(46)

 

 

 -

Repayment of capital leases

 

 

(21)

 

 

(606)

Net cash used in financing activities

 

 

(919)

 

 

(1,033)

Effect of exchange rate changes on cash and cash equivalents

 

 

(271)

 

 

(13)

Net increase in cash and cash equivalents

 

 

1,666

 

 

4,243

Cash and cash equivalents at beginning of period

 

 

14,166

 

 

12,822

Cash and cash equivalents at end of period

 

$

15,832

 

$

17,065

Supplemental Cash Flow Information

 

 

 

 

 

 

Income and mining taxes paid

 

$

2,764

 

$

256

Non-cash investing activities:

 

 

 

 

 

 

Increase (decrease) in accrued capital expenditures

 

$

510

 

$

(2,764)

Equipment purchased through loan payable

 

 

2,397

 

 

 -

Equipment purchased under capital lease

 

 

21

 

 

300

Common stock issued for the acquisition of mineral rights

 

$

1,300

 

$

13,910

 

6