GORO 10-Q

Goldgroup Mining Inc. (GORO)

10-Q 2024-11-06 For: 2024-09-30

View Original

Added on August 02, 2026


a
Title of each class	Trading Symbol	Name of each exchange where registered
Common Stock	GORO	NYSE American



Large accelerated filer	◻	Accelerated filer	◻

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

		Page
	Third Quarter 2024 Summary	3

	Part I - FINANCIAL INFORMATION	5
Item 1.	Condensed Consolidated Interim Financial Statements and Notes	5
	Ø Condensed Consolidated Interim Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023	5
	Ø Condensed Consolidated Interim Statements of Operations for the three and nine months ended September 30, 2024 and 2023 (unaudited)	6
	Ø Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2024 and 2023 (unaudited)	7
	Ø Condensed Consolidated Interim Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (unaudited)	9
	Ø Notes to the Condensed Consolidated Interim Financial Statements (unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	52
Item 4.	Controls and Procedures	53

	Part II - OTHER INFORMATION	53
Item 1.	Legal Proceedings	53
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 3.	Defaults upon Senior Securities	54
Item 4.	Mine Safety Disclosures	54
Item 5.	Other Information	54
Item 6.	Exhibits	55
Signatures		56


		As of		As of
		September 30,		December 31,
	Note	2024		2023
ASSETS
Current assets:
Cash and cash equivalents		$	1,352	$	6,254
Accounts receivable, net			5,413		4,335
Inventories, net	5		7,824		9,294
Prepaid expenses and other current assets	7		7,383		6,612
Total current assets			21,972		26,495
Property, plant, and mine development, net	8		130,888		138,626
Deferred tax assets, net	6		239		13,301
Other non-current assets	9		2,347		5,464
Total assets		$	155,446	$	183,886
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	12,374	$	7,614
Mining royalty taxes payable, net			159		1,199
Accrued expenses and other current liabilities	10		3,346		2,512
Total current liabilities			15,879		11,325
Reclamation and remediation liabilities	12		10,681		11,795
Gold and silver stream agreements liability	11		51,288		44,932
Deferred tax liabilities, net	6		14,922		14,077
Contingent consideration	13		3,336		3,548
Other non-current liabilities	10		2,031		1,516
Total liabilities			98,137		87,193

Commitments and contingencies	13

Shareholders’ equity:
Common stock - $0.001 par value, 200,000,000 shares authorized:
93,523,028 and 88,694,038 shares outstanding at September 30, 2024 and December 31, 2023, respectively			94		89
Additional paid-in capital			114,831		111,970
Accumulated deficit			(50,561)		(8,311)
Treasury stock at cost, 336,398 shares			(5,884)		(5,884)
Accumulated other comprehensive loss			(1,171)		(1,171)
Total shareholders’ equity			57,309		96,693
Total liabilities and shareholders’ equity		$	155,446	$	183,886


		For the three months ended				For the nine months ended
		September 30,				September 30,
	Note	2024		2023		2024		2023

Sales, net	4	$	13,272	$	20,552	$	52,756	$	76,587
Cost of sales:
Production costs			17,198		18,957		51,074		59,109
Depreciation and amortization			4,178		5,790		14,221		19,518
Reclamation and remediation			566		216		1,892		611
Total cost of sales			21,942		24,963		67,187		79,238
Mine gross loss			(8,670)		(4,411)		(14,431)		(2,651)
Costs and expenses:
General and administrative expenses			1,293		1,764		2,975		5,087
Mexico exploration expenses			767		1,540		1,850		3,974
Michigan Back Forty Project expenses			202		420		549		1,265
Stock-based compensation	17		203		(102)		647		502
Other expense, net	18		2,977		1,967		10,846		4,147
Total costs and expenses			5,442		5,589		16,867		14,975
Loss before income taxes			(14,112)		(10,000)		(31,298)		(17,626)
Income tax (benefit) provision	6		(3,617)		(2,659)		10,952		(4,666)
Net loss		$	(10,495)	$	(7,341)	$	(42,250)	$	(12,960)
Net loss per common share:
Basic and diluted net loss per common share	19	$	(0.11)	$	(0.08)	$	(0.46)	$	(0.15)

Weighted average shares outstanding:
Basic and diluted	19		93,279,750		88,499,327		91,005,507		88,458,276


	For the three months ended September 30, 2024 and 2023
	Number of Common Shares	Par Value of Common Shares		Additional Paid- in Capital		Retained Earnings (Accumulated Deficit)		Treasury Stock		Accumulated Other Comprehensive Loss		Total Shareholders' Equity
Balance, June 30, 2023	88,804,940	$	89	$	111,580	$	2,087	$	(5,884)	$	(1,171)	$	106,701
Stock-based compensation	-		-		105		-		-		-		105
Common stock issued for vested restricted stock units	41,668		-		-		-		-		-		-
Issuance of common stock, net of issuance costs ⁽¹⁾	130,199		-		56		-		-		-		56
Surrender of common stock for taxes due on vesting	(12,044)		-		(7)		-		-		-		(7)
Net loss	-		-		-		(7,341)		-		-		(7,341)
Balance, September 30, 2023	88,964,763	$	89	$	111,734	$	(5,254)	$	(5,884)	$	(1,171)	$	99,514

Balance, June 30, 2024	92,629,246	$	93	$	114,049	$	(40,066)	$	(5,884)	$	(1,171)	$	67,021
Stock-based compensation	-		-		184		-		-		-		184
Issuance of common stock, net of issuance costs ⁽¹⁾	1,230,180		1		598		-		-		-		599
Net loss	-		-		-		(10,495)		-		-		(10,495)
Balance, September 30, 2024	93,859,426	$	94	$	114,831	$	(50,561)	$	(5,884)	$	(1,171)	$	57,309


	For the nine months ended September 30, 2024 and 2023
	Number of Common Shares	Par Value of Common Shares		Additional Paid- in Capital		Retained Earnings (Accumulated Deficit)		Treasury Stock		Accumulated Other Comprehensive Loss		Total Shareholders' Equity
Balance, December 31, 2022	88,734,507	$	89	$	111,024	$	7,706	$	(5,884)	$	(1,171)	$	111,764
Stock-based compensation	-		-		672		-		-		-		672
Common stock issued for vested restricted stock units	130,238		-		-		-		-		-		-
Issuance of common stock, net of issuance costs ⁽¹⁾	130,199		-		56		-		-		-		56
Surrender of common stock for taxes due on vesting	(30,181)		-		(18)		-		-		-		(18)
Net loss	-		-		-		(12,960)		-		-		(12,960)
Balance, September 30, 2023	88,964,763	$	89	$	111,734	$	(5,254)	$	(5,884)	$	(1,171)	$	99,514

Balance, December 31, 2023	89,030,436	$	89	$	111,970	$	(8,311)	$	(5,884)	$	(1,171)	$	96,693
Stock-based compensation	-		-		463		-		-		-		463
Common stock issued for vested restricted stock units	196,991		-		-		-		-		-		-
Issuance of common stock, net of issuance costs ⁽¹⁾	4,708,993		5		2,429		-		-		-		2,434
Surrender of common stock for taxes due on vesting	(76,994)		-		(31)		-		-		-		(31)
Net loss	-		-		-		(42,250)		-		-		(42,250)
Balance, September 30, 2024	93,859,426	$	94	$	114,831	$	(50,561)	$	(5,884)	$	(1,171)	$	57,309


	2024		2023

	(in thousands)
Reclamation liabilities – balance at beginning of period	$	2,233	$	1,949
Foreign currency exchange (gain) loss		(311)		284
Reclamation liabilities – balance at end of period		1,922		2,233

Asset retirement obligation – balance at beginning of period ⁽¹⁾		9,562		8,417
Changes in estimate ⁽¹⁾		-		(1,221)
Liability for Aquila drillhole capping		-		404
Accretion		528		689
Foreign currency exchange (gain) loss		(1,331)		1,273
Asset retirement obligation – balance at end of period		8,759		9,562
Total period end balance	$	10,681	$	11,795


	Gold		Silver		Copper		Lead		Zinc			Total
	(ounces)		(ounces)		(tonnes)		(tonnes)		(tonnes)
Under contract		1,104		202,922		53		779		2,187
Average forward price (per ounce or tonne)	$	2,523	$	30.10	$	9,352	$	2,074	$	2,803
Unsettled sales contracts value (in thousands)	$	2,785	$	6,108	$	496	$	1,616	$	6,130	$	17,135


	Stock Options	Weighted Average Exercise Price (per share)
Outstanding as of December 31, 2022	1,475,316	$	2.90
Expired or Forfeited	(414,569)		2.69
Outstanding as of September 30, 2023	1,060,747	$	2.98

Outstanding as of December 31, 2023	840,612	$	2.99
Grant / Exercise / Forfeiture	-		-
Outstanding as of September 30, 2024	840,612	$	2.99

Vested and exercisable as of September 30, 2024	840,612	$	2.99


	Restricted Stock Units	Aggregate Intrinsic Value (in thousands)
Nonvested as of December 31, 2022	575,548	$	881
Granted	779,192
Vested but not redeemed (deferred)	(106,955)
Vested and redeemed	(100,057)
Vested and forfeited for net settlement	(30,181)
Forfeited	(270,292)
Nonvested as of September 30, 2023	847,255	$	363

Nonvested as of December 31, 2023	847,255	$	319
Granted	832,091
Granted in lieu of bonus	637,929
Vested but not redeemed (deferred)	(134,257)
Vested and redeemed	(119,997)
Vested and forfeited for net settlement	(76,994)
Forfeited	(54,769)
Nonvested as of September 30, 2024	1,931,258	$	675


	Performance Share Units		Liability Balance (in thousands)
Outstanding as of December 31, 2022	695,041	$	332
Granted	534,890
Forfeited	(349,005)
Outstanding as of September 30, 2023	880,926	$	182

Outstanding as of December 31, 2023	880,926	$	164
Granted	682,367
Forfeited	(33,113)
Redeemed	(201,258)
Outstanding as of September 30, 2024	1,328,922	$	235



	Deferred Stock Units		Liability Balance (in thousands)
Outstanding as of December 31, 2022	360,699	$	552
Granted	278,663
Granted in lieu of board fees	63,624
Granted in lieu of executive bonus	212,407
Redeemed	(373,489)
Outstanding as of September 30, 2023	541,904	$	233

Outstanding as of December 31, 2023	586,291	$	223
Granted in lieu of board fees	183,208
Outstanding as of September 30, 2024	769,499	$	269


		For the three months ended September 30,				For the nine months ended September 30,				Statements of Operations Classification
		2024		2023		2024		2023

	Note	(in thousands)
Realized and unrealized derivative (loss) gain, net	15	$	(54)	$	339	$	1,093	$	(205)	Sales, net


	Oaxaca, Mexico		Michigan, USA		Corporate and Other		Consolidated
As of September 30, 2024
Total current assets	$	20,419	$	66	$	1,487	$	21,972
Total non-current assets ⁽¹⁾		41,400		91,770		304		133,474
Total assets	$	61,819	$	91,836	$	1,791	$	155,446
Total current liabilities	$	14,538		51		1,290	$	15,879
Total non-current liabilities		12,688		69,148		422		82,258
Total shareholders’ equity		34,593		22,637		79		57,309
Total liabilities and shareholders’ equity	$	61,819	$	91,836	$	1,791	$	155,446

As of December 31, 2023
Total current assets	$	25,155	$	116	$	1,224	$	26,495
Total non-current assets ⁽¹⁾		62,368		93,287		1,736		157,391
Total assets	$	87,523	$	93,403	$	2,960	$	183,886
Total current liabilities	$	10,029	$	59	$	1,237	$	11,325
Total non-current liabilities		12,559		62,792		517		75,868
Total shareholders’ equity		64,935		30,552		1,206		96,693
Total liabilities and shareholders’ equity	$	87,523	$	93,403	$	2,960	$	183,886


		For the nine months ended September 30,
	Note	2024		2023
Cash flows from operating activities:
Net loss		$	(42,250)	$	(12,960)
Adjustments to reconcile net loss to net cash used in operating activities:
Deferred income tax expense (benefit)			10,775		(5,520)
Depreciation and amortization			15,589		19,586
Stock-based compensation			647		502
Interest on streaming liabilities			6,356		1,237
Other operating adjustments, net	21		4,446		1,210
Changes in operating assets and liabilities:
Accounts receivable			(1,078)		371
Inventories			1,185		1,580
Prepaid expenses and other current assets			(1,291)		300
Other non-current assets			(154)		-
Accounts payable and other accrued liabilities			4,937		(6,856)
Cash settled liability awards			(67)		-
Mining royalty and income taxes payable, net			(1,048)		(6,452)
Net cash used in operating activities			(1,953)		(7,002)

Cash flows from investing activities:
Capital expenditures			(6,353)		(9,751)
Proceeds from the sale of investment in Maritime			1,178		-
Net cash used in investing activities			(5,175)		(9,751)

Cash flows from financing activities:
Proceeds from the ATM sales, net of issuance costs			2,434		56
Other financing activities			(33)		(23)
Net cash provided by financing activities			2,401		33
Effect of exchange rate changes on cash and cash equivalents			(175)		(249)

Net decrease in cash and cash equivalents			(4,902)		(16,969)
Cash and cash equivalents at beginning of period			6,254		23,675
Cash and cash equivalents at end of period		$	1,352	$	6,706

Supplemental Cash Flow Information
Income and mining taxes paid		$	1,088	$	7,064
Non-cash investing or financing activities:
Value of common shares issued for RSU redemption		$	49	$	79


	For the three months ended September 30,				For the nine months ended September 30,
	2024		2023		2024		2023

	(in thousands)				(in thousands)
Doré sales, net
Gold	$	-	$	417	$	24	$	2,685
Silver		-		19		1		120
Less: Refining charges		-		(3)		(6)		(45)
Total doré sales, net		-		433		19		2,760
Concentrate sales
Gold		3,416		7,273		17,173		25,844
Silver		5,424		4,900		17,332		18,082
Copper		917		2,049		5,099		7,792
Lead		918		2,060		3,342		7,807
Zinc		4,045		6,283		13,108		23,762
Less: Treatment and refining charges		(1,394)		(2,785)		(4,410)		(9,255)
Total concentrate sales, net		13,326		19,780		51,644		74,032
Realized gain (loss) - embedded derivative,net ⁽¹⁾		344		(633)		1,333		249
Unrealized (loss) gain - embedded derivative, net		(398)		972		(240)		(454)
Total sales, net	$	13,272	$	20,552	$	52,756	$	76,587


	As of		As of
	September 30,		December 31,
	2024		2023

	(in thousands)
Stockpiles - underground mine	$	327	$	534
Concentrates		928		1,768
Doré, net		169		169
Subtotal - product inventories		1,424		2,471
Materials and supplies ⁽¹⁾		6,400		6,823
Total	$	7,824	$	9,294


	As of		As of
	September 30,		December 31,
	2024		2023

	(in thousands)
Asset retirement costs (“ARO asset”)	$	6,227	$	6,227
Construction-in-progress		1,147		243
Furniture and office equipment		1,762		1,781
Land		9,033		9,033
Mineral interest		79,543		79,543
Light vehicles and other mobile equipment		2,118		2,126
Machinery and equipment		44,617		42,887
Mill facilities and infrastructure		36,463		36,396
Mine development		120,084		115,230
Software and licenses		1,555		1,554
Subtotal		302,549		295,020
Accumulated depreciation and amortization		(171,661)		(156,394)
Total	$	130,888	$	138,626


	For the nine months ended September 30, 2024				2024 full year guidance
	2024		2023

Sustaining Investments:
Underground Development	$	3,812	$	3,464
Other Sustaining Capital		2,711		1,485
Infill Drilling		977		3,315
Surface and Underground Exploration Development & Other		65		1,131
Subtotal of Sustaining Investments:		7,565		9,395	$	8.8 - 11.0 million
Growth Investments:
DDGM growth:
Surface Exploration / Other		1,812		2,058
Underground Exploration Drilling		38		1,916
Underground Exploration Development		-		356
Back Forty growth:
Back Forty Project Optimization & Permitting		549		1,265
Subtotal of Growth Investments:		2,399		5,595	$	3.2 - 5.2 million
Total Capital and Exploration:	$	9,964	$	14,990	$	12.0 - 16.2 million



	2023				2024
	Q1	Q2	Q3	Q4	Q1	Q2	Q3
Operating Data
Total tonnes milled	117,781	113,510	116,626	111,254	98,889	93,687	83,690
Average Grade	-
Gold (g/t)	2.33	1.59	1.52	1.44	1.89	1.27	0.54
Silver (g/t)	94	86	73	85	88	102	83
Copper (%)	0.37	0.37	0.32	0.39	0.37	0.26	0.19
Lead (%)	1.73	1.64	1.29	1.39	1.25	1.00	1.01
Zinc (%)	3.88	3.72	3.24	2.95	2.82	2.59	2.63
Metal production (before payable metal deductions)
Gold (ozs.)	7,171	4,637	4,443	4,077	4,757	2,947	944
Silver (ozs.)	322,676	289,816	247,159	282,487	251,707	263,023	194,525
Copper (tonnes)	336	334	276	341	280	181	93
Lead (tonnes)	1,559	1,389	1,048	1,072	812	616	576
Zinc (tonnes)	3,837	3,569	3,223	2,884	2,310	2,020	1,741
Metal produced and sold
Gold (ozs.)	6,508	4,287	3,982	3,757	3,557	2,724	1,357
Silver (ozs.)	294,815	274,257	208,905	258,252	216,535	234,560	181,434
Copper (tonnes)	332	327	245	327	264	197	98
Lead (tonnes)	1,417	1,317	947	820	667	491	467
Zinc (tonnes)	3,060	3,141	2,571	2,182	1,682	1,771	1,473
Average metal prices realized
Gold ($ per oz.)	$ 1,915	$ 2,010	$ 1,934	$ 1,985	$ 2,094	$ 2,465	$ 2,561
Silver ($ per oz.)	$ 23.04	$ 24.93	$ 23.61	$ 23.14	$ 23.29	$ 30.49	$ 30.61
Copper ($ per tonne)	$ 9,172	$ 8,397	$ 8,185	$ 8,205	$ 8,546	$ 10,428	$ 8,832
Lead ($ per tonne)	$ 2,158	$ 2,153	$ 2,196	$ 2,122	$ 1,977	$ 2,235	$ 2,065
Zinc ($ per tonne)	$ 3,195	$ 2,485	$ 2,195	$ 2,516	$ 2,483	$ 2,871	$ 2,854
Gold equivalent ounces sold
Gold Ounces	6,508	4,287	3,982	3,757	3,557	2,724	1,357
Gold Equivalent Ounces from Silver	3,547	3,402	2,550	3,011	2,408	2,901	2,169
Total AuEq oz	10,055	7,689	6,532	6,768	5,965	5,625	3,526
Financial Data
Total sales, net (in thousands)	$ 31,228	$ 24,807	$ 20,552	$ 21,141	$ 18,702	$ 20,782	$ 13,272
Production Costs (in thousands)	$ 19,850	$ 20,302	$ 18,957	$ 17,034	$ 16,108	$ 17,768	$ 17,198
Production Costs/Tonnes Milled	$ 169	$ 179	$ 163	$ 153	$ 163	$ 190	$ 205
Operating Cash Flows (in thousands)	$ 1,024	($ 551)	($ 7,475)	$ 1,783	$ 1,482	($ 63)	($ 3,372)
Net loss (in thousands)	($ 1,035)	($ 4,584)	($ 7,341)	($ 3,057)	($ 4,021)	($ 27,734)	($ 10,495)
Loss per share - basic	($ 0.01)	($ 0.05)	($ 0.08)	($ 0.03)	($ 0.05)	($ 0.30)	($ 0.11)


Exhibit Number		Descriptions
31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Allen Palmiere.
31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Chet Holyoak.
32*		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Allen Palmiere and Chet Holyoak.
101		Financial statements from the Quarterly Report on Form 10-Q of Gold Resource Corporation as of or for the three and nine months ended September 30, 2024, formatted in inline XBRL: (i) the Condensed Consolidated Interim Balance Sheets, (ii) the Condensed Consolidated Interim Statements of Operations, (iii) the Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity, (iv) the Condensed Consolidated Interim Statements of Cash Flows, and (v) the Notes to the Condensed Consolidated Interim Financial Statements.
104		Cover Page Interactive Data File (embedded within the XBRL document)


	GOLD RESOURCE CORPORATION

Dated: November 5, 2024		/s/ Allen Palmiere
	By:	Allen Palmiere,
		Chief Executive Officer, President and Director




Dated: November 5, 2024		/s/ Chet Holyoak
	By:	Chet Holyoak,
		Chief Financial Officer