8-K
Fortitude Gold Corp (FTCO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of the earliest event reported): October 31, 2023
Commission file number: 333-249533
FORTITUDE GOLD CORPORATION
(Exact name of registrant as specified in its charter)
| Colorado | 85-2602691 |
|---|---|
| (State of Other Jurisdiction of incorporation or Organization) | (I.R.S. Employer Identification No.) |
| | |
| 2886 Carriage Manor Point , Colorado Springs , CO **** | 80906 |
| (Address of principal executive offices) | (Zip code) |
Registrant’s telephone number, including area code: ( 719 ) 717-9825
Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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|---|---|---|---|---|
| Title of Each Class | | Trading Symbol(s) | | Name Of Each Exchange<br><br>On Which Registered |
| N/A | | N/A | | N/A |
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Item 2.02 Results of Operations and Financial Condition.
On October 31, 2023, Fortitude Gold Corporation issued a news release reporting its financial results for the quarter ended September 30, 2023. A copy of the news release is attached as Exhibit 99.1 to this report.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any of the Company’s filings or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are furnished with this report:
99.1
News Release dated October 31, 2023.
104
Inline XBRL for the cover page of this Current Report on Form 8-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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|---|---|---|
| Date: October 31, 2023 | FORTITUDE GOLD CORPORATION | |
| | | |
| | | |
| | By: | /s/ Jason D. Reid |
| | | Jason D. Reid, Chief Executive Officer |
Exhibit 99.1
FOR IMMEDIATE RELEASE NEWS
October 31, 2023 OTCQB: FTCO
FORTITUDE GOLD REPORTS THIRD QUARTER NET INCOME OF $5.7 MILLION, MAINTAINS 2023 PRODUCTION OUTLOOK
COLORADO SPRINGS – October 31, 2023 - Fortitude Gold Corporation (OTCQB: FTCO) (the “Company”) reported results for the third quarter ended September 30, 2023, including $21.3 million net sales, $5.7 million net income, or $0.24 per share, and increased its cash balance to $52.0 million at quarter end. The Company produced 11,122 gold ounces during the third quarter and maintains its 2023 production outlook. Fortitude Gold is a gold producer, developer, and explorer with operations in Nevada, U.S.A. offering investors exposure to both gold production and dividend yield.
THIRD QUARTER 2023 FINANCIAL RESULTS AND HIGHLIGHTS
| ● | $21.3 million net sales |
|---|---|
| ● | $5.7 million net income or $0.24 per share |
| --- | --- |
| ● | $52.0 million cash balance on September 30, 2023 |
| --- | --- |
| ● | 11,122 gold ounces produced |
| --- | --- |
| ● | 2.04 grams per tonne average gold grade mined |
| --- | --- |
| ● | $98.1 million working capital at September 30, 2023 |
| --- | --- |
| ● | $11.8 million mine gross profit |
| --- | --- |
| ● | $3.8 million exploration expenditures |
| --- | --- |
| ● | $547 total cash cost after by-product credits per gold ounce sold |
| --- | --- |
| ● | $651 per ounce total all-in sustaining cost |
| --- | --- |
| ● | $2.9 million dividends paid |
| --- | --- |
Fortitude Gold sold 11,042 gold ounces at a total cash cost of $547 per ounce (after by-product credits) and an all-in-sustaining-cost per ounce of $651. Realized metal prices during the quarter averaged $1,931 per ounce gold*. The Company recorded net income of $5.7 million, or $0.24 per share and reported cash and cash equivalents at quarter end of $52.0 million. The Company produced 11,122 ounces of gold during the quarter, 32,293 ounces of gold year-to-date, and maintains its 2023 Annual Outlook targeting 40,000 gold ounces (a range of 36,000 to 40,000 ounces).
“The third quarter was another strong quarter on numerous fronts including production, sales, income, and profitability that allowed us to increase our cash balance by over five million dollars,” stated Mr. Jason Reid, CEO and President of Fortitude Gold. “We are on pace to reach our annual production goals and continue with an aggressive drill program which has discovered additional mineralization on the Isabella Pearl trend as we await assay results from our recent East Camp Douglas drill campaign.”
Mr. Reid continued, “We await regulatory feedback from the Bureau of Land Management on our Plan of Operations for the County Line project and we successfully submitted the Plan of Operations for our Golden Mile project as well.”
The following Production Statistics table summarize certain information about our operations for the three and nine months ended September 30, 2023 and 2022:
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|---|---|---|---|---|---|---|---|---|
| | | | | **** | | | | |
| | | Three months ended September 30, | | Nine months ended September 30, | ||||
| | **** | 2023 | **** | 2022 | **** | 2023 | **** | 2022 |
| Ore mined | ||||||||
| Ore (tonnes) | 110,456 | 113,111 | 329,765 | 490,764 | ||||
| Gold grade (g/t) | 2.04 | 5.69 | 3.07 | 3.30 | ||||
| Low-grade stockpile | | |||||||
| Ore (tonnes) | — | — | 2,118 | 34,501 | ||||
| Gold grade (g/t) | — | — | 0.46 | 0.43 | ||||
| Waste (tonnes) | 312,614 | 202,201 | 965,312 | 1,696,225 | ||||
| Metal production (before payable metal deductions)^(1)^ | ^^ | ^^ | ^^ | ^^ | ^^ | ^^ | ^^ | ^^ |
| Gold (ozs.) | 11,122 | 9,500 | 32,293 | 30,355 | ||||
| Silver (ozs.) | 25,012 | 12,497 | 56,272 | 45,047 |
| (1) | The difference between what we report as “metal production” and “metal sold” is attributable to the difference between the quantities of metals contained in the doré we produce versus the portion of those metals actually paid for according to the terms of our sales contracts. Differences can also arise from |
|---|---|
| inventory changes incidental to shipping schedules, or variances in ore grades and recoveries which impact the amount of metals contained in doré produced and sold. | |
| --- |
The following Sales Statistics table summarizes certain information about our operations for three and nine months ended September 30, 2023 and 2022:
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | **** | | | | | | |
| | | Three months ended September 30, | | Nine months ended September 30, | ||||||||
| | **** | 2023 | **** | 2022 | **** | 2023 | **** | 2022 | ||||
| Metal sold | | | | | | | | | ||||
| Gold (ozs.) | | | 11,042 | | 9,419 | | | 32,173 | | 30,567 | ||
| Silver (ozs.) | | | 24,694 | | 12,111 | | | 55,638 | | 44,819 | ||
| Average metal prices realized ^(1)^ | | | ^^ | ^^ | | ^^ | | | ^^ | ^^ | | ^^ |
| Gold ($per oz.) | | | 1,931 | | 1,719 | | | 1,934 | | 1,871 | ||
| Silver ($per oz.) | | | 23.54 | | 19.44 | | | 23.51 | | 23.34 | ||
| Precious metal gold equivalent ounces sold | | | | | | | | | | | | |
| Gold Ounces | | | 11,042 | | | 9,419 | | | 32,173 | | | 30,567 |
| Gold Equivalent Ounces from Silver | | | 301 | | | 137 | | | 676 | | | 559 |
| | | | 11,343 | | | 9,556 | | | 32,849 | | | 31,126 |
| | | | | | | | | | | | | |
| Total cash cost before by-product credits per gold ounce sold | | $ | 600 | | $ | 638 | | $ | 564 | | $ | 685 |
| Total cash cost after by-product credits per gold ounce sold | | $ | 547 | | $ | 613 | | $ | 523 | | $ | 652 |
| Total all-in sustaining cost per gold ounce sold | | $ | 651 | | $ | 687 | | $ | 633 | | $ | 749 |
| (1) | 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. |
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*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.
See Accompanying Tables
The following information summarizes the results of operations for Fortitude Gold Corporation for the three and nine months ended September 30, 2023 and 2022, its financial condition at September 30, 2023 and December 31, 2022, and its cash flows for the nine months ended September 30, 2023 and 2022. The summary data as of September 30, 2023 and for the three and nine months ended September 30, 2023 and 2022 is unaudited; the summary data as of December 31, 2022 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2022, 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 its cash cost before by-product credits per gold ounce sold, total cash cost after by-product credits per gold ounce sold and total all-in sustaining cost per gold ounce sold 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-K for a complete discussion and reconciliation of the non-GAAP measures.
FORTITUDE GOLD CORPORATION CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands, except share and per share amounts)
| | | | | | | |
|---|---|---|---|---|---|---|
| | | September 30, | | December 31, | ||
| | **** | 2023 | **** | 2022 | ||
| | | (Unaudited) | | | ||
| ASSETS | | | | | ||
| Current assets: | | | | | ||
| Cash and cash equivalents | | $ | 52,035 | | $ | 45,054 |
| Gold and silver rounds/bullion | | | 945 | | | — |
| Inventories | | 50,858 | | 47,155 | ||
| Prepaid taxes | | | 624 | | | 710 |
| Prepaid expenses and other current assets | | 1,022 | | 730 | ||
| Total current assets | | 105,484 | | 93,649 | ||
| Property, plant and mine development, net | | 26,839 | | 30,581 | ||
| Operating lease assets, net | | 1,095 | | 3,826 | ||
| Deferred tax assets | | | 1,889 | | | 1,282 |
| Other non-current assets | | 359 | | 1,818 | ||
| Total assets | | $ | 135,666 | | $ | 131,156 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | ||||
| Current liabilities: | | | ||||
| Accounts payable | | $ | 2,906 | | $ | 2,524 |
| Operating lease liabilities, current | | 1,095 | | 3,826 | ||
| Mining taxes payable | | 2,096 | | 1,857 | ||
| Other current liabilities | | 1,268 | | 1,327 | ||
| Total current liabilities | | 7,365 | | 9,534 | ||
| Asset retirement obligations | | 6,248 | | 5,863 | ||
| Total liabilities | | 13,613 | | 15,397 | ||
| Shareholders' equity: | | | ||||
| Preferred stock - $0.01 par value, 20,000,000 shares authorized and nil outstanding at September 30, 2023 and December 31, 2022 | | — | | — | ||
| Common stock - $0.01 par value, 200,000,000 shares authorized and 24,084,542 shares outstanding at September 30, 2023 and 24,024,542 shares outstanding at December 31, 2022 | | 241 | | 240 | ||
| Additional paid-in capital | | 103,961 | | 103,731 | ||
| Retained earnings | | 17,851 | | 11,788 | ||
| Total shareholders' equity | | 122,053 | | 115,759 | ||
| Total liabilities and shareholders' equity | | $ | 135,666 | | $ | 131,156 |
FORTITUDE GOLD CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS For the three and nine months ended September 30, 2023 and 2022 (U.S. dollars in thousands, except share and per share amounts) (Unaudited)
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | **** | Three months ended | | Nine months ended | | ||||||||
| | | September 30, | | September 30, | | ||||||||
| | **** | 2023 | **** | 2022 | **** | 2023 | **** | 2022 | | ||||
| Sales, net | | $ | 21,268 | | $ | 16,122 | | $ | 62,027 | | $ | 55,476 | |
| Mine cost of sales: | | | | | | ||||||||
| Production costs | | 5,992 | | 5,703 | | 16,665 | | 19,673 | | ||||
| Depreciation and amortization | | 3,349 | | 3,005 | | 9,733 | | 9,938 | | ||||
| Reclamation and remediation | | 91 | | 60 | | 231 | | 183 | | ||||
| Total mine cost of sales | | 9,432 | | 8,768 | | 26,629 | | 29,794 | | ||||
| Mine gross profit | | 11,836 | | 7,354 | | 35,398 | | 25,682 | | ||||
| Costs and expenses: | | | | | | ||||||||
| General and administrative expenses | | 1,335 | | 1,638 | | 3,481 | | 3,912 | | ||||
| Exploration expenses | | 3,833 | | 3,687 | | 13,582 | | 8,627 | | ||||
| Other (income) expense, net | | (491) | | 60 | | (1,252) | | 142 | | ||||
| Total costs and expenses | | 4,677 | | 5,385 | | 15,811 | | 12,681 | | ||||
| Income before income and mining taxes | | 7,159 | | 1,969 | | 19,587 | | 13,001 | | ||||
| Mining and income tax expense | | 1,437 | | 248 | | 3,893 | | 2,097 | | ||||
| Net income | | $ | 5,722 | | $ | 1,721 | | $ | 15,694 | | $ | 10,904 | |
| Net income per common share: | | | | | | ||||||||
| Basic | | $ | 0.24 | | $ | 0.07 | | $ | 0.65 | | $ | 0.45 | |
| Diluted | | $ | 0.24 | | $ | 0.07 | | $ | 0.65 | | $ | 0.45 | |
| Weighted average shares outstanding: | | | | | | ||||||||
| Basic | | | 24,084,542 | | | 24,024,542 | | | 24,077,772 | | | 24,014,959 | |
| Diluted | | 24,212,436 | | 24,190,375 | | 24,217,420 | | 24,201,239 | |
FORTITUDE GOLD CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 2023 and 2022 (U.S. dollars in thousands, except share and per share amounts) (Unaudited)
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|---|---|---|---|---|---|---|
| | | Nine months ended | ||||
| | | September 30, | ||||
| | **** | 2023 | **** | 2022 | ||
| Cash flows from operating activities: | | | ||||
| Net income | | $ | 15,694 | | $ | 10,904 |
| Adjustments to reconcile net income to net cash from operating activities: | | | ||||
| Depreciation and amortization | | 9,804 | | 10,052 | ||
| Stock-based compensation | | | 171 | | | 143 |
| Deferred taxes | | | (607) | | | (982) |
| Reclamation and remediation accretion | | | 231 | | | 183 |
| Other operating adjustments | | (22) | | (38) | ||
| Changes in operating assets and liabilities: | | | ||||
| Accounts receivable | | — | | (101) | ||
| Inventories | | (3,016) | | (2,199) | ||
| Prepaid expenses and other current assets | | (292) | | 1,269 | ||
| Other non-current assets | | (19) | | (31) | ||
| Accounts payable and other accrued liabilities | | 347 | | 1,866 | ||
| Income and mining taxes payable | | 325 | | (36) | ||
| Net cash provided by operating activities | | 22,616 | | 21,030 | ||
| | | | | | | |
| Cash flows from investing activities: | | | ||||
| Capital expenditures | | (5,047) | | (10,184) | ||
| Purchase of gold and silver rounds/bullion | | | (978) | | | — |
| Net cash used in investing activities | | (6,025) | | (10,184) | ||
| | | | | | | |
| Cash flows from financing activities: | | | ||||
| Dividends paid | | | (9,631) | | | (8,645) |
| Proceeds from exercise of stock options | | | 60 | | | 63 |
| Repayment of loans payable | | (30) | | (65) | ||
| Repayment of capital leases | | (9) | | (20) | ||
| Net cash used in financing activities | | (9,610) | | (8,667) | ||
| | | | | | | |
| Net increase in cash and cash equivalents | | 6,981 | | 2,179 | ||
| Cash and cash equivalents at beginning of period | | 45,054 | | 40,017 | ||
| Cash and cash equivalents at end of period | | $ | 52,035 | | $ | 42,196 |
| | | | | | | |
| Supplemental Cash Flow Information | | | ||||
| Income and mining taxes paid | | $ | 4,174 | | $ | 3,149 |
| Non-cash investing and financing activities: | | | ||||
| Change in capital expenditures in accounts payable | | $ | 15 | | $ | (343) |
| Change in estimate for asset retirement costs | | $ | — | | $ | 710 |
| Right-of-Use assets acquired through operating lease | | $ | — | | $ | 3,899 |
About Fortitude Gold Corporation
Fortitude Gold is a U.S. based gold producer targeting projects with low operating costs, high margins, and strong returns on capital. The Company’s strategy is to grow organically, remain debt-free and distribute substantial dividends. The Company’s Nevada Mining Unit consists of five high-grade gold properties located in the Walker Lane Mineral Belt and a sixth high-grade gold property in west central Nevada. The Isabella Pearl gold mine, located on the Isabella Pearl mineralized trend, is currently in production. Nevada, U.S.A. is among the world’s premier mining friendly jurisdictions.
Cautionary Statements: This press release contains forward-looking statements that involve risks and uncertainties. If you are risk-averse you should NOT buy shares in Fortitude Gold Corp. 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 of 1933 and Section 21E of the Securities Exchange Act of 1934. 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 the Company’s strategy, future plans for production, future expenses and costs, future liquidity and capital resources, and estimates of mineralized material are forward-looking statements. All forward-looking statements in this press release are based upon information available to the Company 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.
Contact: Greg Patterson 719-717-9825 greg.patterson@fortitudegold.com www.Fortitudegold.com