Goldgroup Mining Inc 10-Q, filed Jul 27, 2021

Goldgroup Mining Inc. (GORO)

10-Q 2021-07-27 For: 2021-06-30

Added on August 02, 2026

About this 10-Q

Goldgroup Mining Inc filed this 10-Q on July 27, 2021, covering the quarter ended June 30, 2021.

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $30.84M; up 146.3% from $12.52M a year earlier
Net income: $1.28M; compared with a net loss of $1.81M a year earlier

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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
	Second Quarter 2021 Highlights	1

	Part I - FINANCIAL INFORMATION
Item 1.	Financial Statements	2
	Ø Condensed Consolidated Interim Balance Sheets at June 30, 2021 (unaudited) and December 31, 2020	2
	Ø Condensed Consolidated Interim Statements of Operations for the three and six months ended June 30, 2021 and 2020 (unaudited)	3
	Ø Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2021 and 2020 (unaudited)	4
	Ø Condensed Consolidated Interim Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited)	6
	Ø Notes to the Condensed Consolidated Interim Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	33

	Part II - OTHER INFORMATION
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	34
Item 6.	Exhibits	34
Signatures		35


		As of		As of
		June 30,		December 31,
	Note	2021		2020
ASSETS
Current assets:
Cash and cash equivalents		$	30,535	$	25,405
Gold and silver rounds/bullion	5		627		671
Accounts receivable, net			5,142		4,226
Inventories, net	6		10,485		9,995
Prepaid expenses and other current assets	8		2,916		2,576
Total current assets			49,705		42,873
Property, plant and mine development, net	9		63,868		62,511
Deferred tax assets, net			991		309
Other non-current assets			45		41
Total assets		$	114,609	$	105,734
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	9,529	$	8,782
Income taxes payable, net			2,471		73
Mining royalty taxes payable, net			1,695		955
Accrued expenses and other current liabilities	10		3,417		2,275
Total current liabilities			17,112		12,085
Reclamation and remediation liabilities	11		3,179		3,098
Other non-current liabilities	10		1,055		13
Total liabilities			21,346		15,196
Shareholders' equity:
Common stock - $0.001 par value, 200,000,000 shares authorized:
74,531,924 and 74,376,958 shares outstanding at June 30, 2021 and December 31, 2020, respectively			75		75
Additional paid-in capital			85,269		84,865
Retained earnings			14,974		12,653
Treasury stock at cost, 336,398 shares			(5,884)		(5,884)
Accumulated other comprehensive loss			(1,171)		(1,171)
Total shareholders' equity			93,263		90,538
Total liabilities and shareholders' equity		$	114,609	$	105,734


		For the three months ended				For the six months ended
		June 30,				June 30,
	Note	2021		2020		2021		2020
Sales, net	4	$	30,836	$	12,521	$	58,104	$	34,670
Mine cost of sales:
Production costs			19,523		10,611		34,766		26,570
Depreciation and amortization			4,379		3,184		7,778		9,197
Reclamation and remediation			54		26		105		75
Total mine cost of sales			23,956		13,821		42,649		35,842
Mine gross profit (loss)			6,880		(1,300)		15,455		(1,172)
Costs and expenses:
General and administrative expenses			2,134		1,796		3,715		3,601
Exploration expenses			648		135		1,855		1,113
Restructuring expenses			-		-		496		-
Stock-based compensation	14		197		400		681		870
Other expense (income), net	16		867		(1,909)		553		(444)
Total costs and expenses			3,846		422		7,300		5,140
Income (loss) before income taxes			3,034		(1,722)		8,155		(6,312)
Provision for income taxes (benefit)			1,751		(1,979)		4,345		(3,351)
Net income (loss) from continuing operations			1,283		257		3,810		(2,961)
Net loss from discontinued operations, net of income taxes	3		-		(2,069)		-		(1,972)
Net income (loss)		$	1,283	$	(1,812)	$	3,810	$	(4,933)
Net income per common share:
Basic and diluted net income (loss) per common share from continuing operations	17		0.02		-		0.05		(0.04)
Basic and diluted net loss per common share from discontinued operations	17		-		(0.03)		-		(0.03)
Basic and diluted net income (loss) per common share	17	$	0.02	$	(0.03)	$	0.05	$	(0.07)

Weighted average shares outstanding:
Basic	17		74,485,672		69,985,499		74,445,058		68,011,860
Diluted	17		74,987,559		69,985,499		74,868,187		68,011,860


	For the three months ended June 30, 2021 and 2020
	Number of Common Shares	Par Value of Common Shares		Additional Paid- in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total Shareholders' Equity
Balance, March 31, 2020	69,877,925	$	70	$	158,987	$	13,090	$	(5,884)	$	(1,171)	$	165,092
Stock-based compensation	-		-		400		-		-		-		400
Common stock issued for vested restricted stock units	35,072		-		-		-		-		-		-
Dividends declared	-		-		-		(708)		-		-		(708)
Issuance of stock, net of issuance costs	484,500		-		1,550		-		-		-		1,550
Net loss	-		-		-		(1,812)		-		-		(1,812)
Balance, June 30, 2020	70,397,497	$	70	$	160,937	$	10,570	$	(5,884)	$	(1,171)	$	164,522

Balance, March 31, 2021	74,775,604	$	75	$	84,966	$	14,436	$	(5,884)	$	(1,171)	$	92,422
Stock-based compensation	-		-		205		-		-		-		205
Net stock options exercised	92,718		-		98		-		-		-		98
Dividends declared	-		-		-		(745)		-		-		(745)
Net income	-		-		-		1,283		-		-		1,283
Balance, June 30, 2021	74,868,322	$	75	$	85,269	$	14,974	$	(5,884)	$	(1,171)	$	93,263


	For the six months ended June 30, 2021 and 2020
	Number of Common Shares	Par Value of Common Shares		Additional Paid- in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total Shareholders' Equity
Balance, December 31, 2019	66,027,925	$	66	$	148,171	$	16,876	$	(5,884)	$	(1,171)	$	158,058
Stock-based compensation	-		-		870		-		-		-		870
Common stock issued for vested restricted stock units	35,072		-		-		-		-		-		-
Dividends declared	-		-		-		(1,373)		-		-		(1,373)
Issuance of stock, net of issuance costs	4,334,500		4		11,896		-		-		-		11,900
Net loss	-		-		-		(4,933)		-		-		(4,933)
Balance, June 30, 2020	70,397,497	$	70	$	160,937	$	10,570	$	(5,884)	$	(1,171)	$	164,522

Balance, December 31, 2020	74,713,356	$	75	$	84,865	$	12,653	$	(5,884)	$	(1,171)	$	90,538
Stock-based compensation	-		-		346		-		-		-		346
Common stock issued for vested restricted stock units	2,614		-		-		-		-		-		-
Net stock options exercised	217,718		-		263		-		-		-		263
Dividends declared	-		-		-		(1,489)		-		-		(1,489)
Surrender of stock for taxes due on vesting	(65,366)		-		(205)		-		-		-		(205)
Net income	-		-		-		3,810		-		-		3,810
Balance, June 30, 2021	74,868,322	$	75	$	85,269	$	14,974	$	(5,884)	$	(1,171)	$	93,263


	For the six months ended June 30,
	2021		2020
Cash flows from operating activities:
Net income (loss)	$	3,810	$	(4,933)
Net loss from discontinuing operations		-		(1,972)
Net income (loss) from continuing operations	$	3,810	$	(2,961)
Adjustments to reconcile net income from continuing operations to net cash from operating activities:
Deferred income taxes		(699)		(4,597)
Depreciation and amortization		7,855		9,315
Stock-based compensation		681		870
Other operating adjustments		441		(359)
Changes in operating assets and liabilities:
Accounts receivable		(916)		5,098
Inventories		(391)		542
Prepaid expenses and other current assets		(1,015)		(426)
Accounts payable and other accrued liabilities		3,254		(1,949)
Mining royalty and income taxes payable, net		3,109		159
Net cash provided by operating activities from continuing operations		16,129		5,692

Cash flows from investing activities:
Capital expenditures		(9,333)		(4,404)
Net cash used in investing activities from continuing operations		(9,333)		(4,404)

Cash flows from financing activities:
Proceeds from the exercise of stock options		263		-
Proceeds from issuance of stock		-		11,900
Dividends paid		(1,737)		(1,357)
Cash related to the Spin-off		-		(269)
Other financing activities		3		-
Net cash (used in) provided by financing activities from continuing operations		(1,471)		10,274
Effect of exchange rate changes on cash and cash equivalents from continuing operations		(195)		(155)

Cash flows from discontinued operations:
Net cash used in operating activities		-		(2,031)
Net cash used in investing activities		-		(6,195)

Net increase in cash and cash equivalents		5,130		3,181
Cash and cash equivalents of continuing operations at beginning of period		25,405		10,210
Cash and cash equivalents of continuing operations at end of period	$	30,535	$	13,391

Supplemental Cash Flow Information Continuing Operations
Interest expense paid	$	-	$	13
Income and mining taxes paid	$	2,233	$	1,066
Non-cash investing activities:
Change in capital expenditures in accounts payable	$	502	$	(1,602)
Change in estimate for asset retirement costs	$	7	$	-


	For the three months ended June 30,		For the six months ended June 30,
	2020		2020
	(Unaudited)		(Unaudited)
Sales, net	$	8,576	$	14,433
Mine cost of sales		8,858		15,158
Mine gross loss		(282)		(725)
Exploration expenses		416		593
Other expense, net		62		110
Loss before income taxes		(760)		(1,428)
Income tax expense		1,309		544
Net loss from discontinued operations	$	(2,069)	$	(1,972)


	As of June 30, 2021					As of December 31, 2020
	(Unaudited)
	Ounces	Per Ounce		Amount		Ounces	Per Ounce		Amount
				(in thousands)					(in thousands)
Gold	184	$	1,763	$	325	189	$	1,888	$	357
Silver	11,725	$	25.77		302	11,842	$	26.49		314
Total holdings				$	627				$	671


	Gold		Silver		Copper		Lead		Zinc			Total
	(ounces)		(ounces)		(tonnes)		(tonnes)		(tonnes)
Under contract		2,800		144,611		228		851		3,021
Average forward price (per ounce or tonne)	$	1,852	$	27.1	$	9,813	$	2,176	$	2,910
Unsettled sales contracts value (in thousands)	$	5,186	$	3,919	$	2,237	$	1,852	$	8,791	$	21,985


	For the six months ended June 30,		2021 full year guidance
	(in thousands)
Capital Investments:
Gold Regrind	$	45	$	1,900
Dry Stack Completion		3,509		6,200
Underground Development		2,505		9,800
Other Sustaining Capital		1,707		4,100
Exploration Investment:
Surface Exploration Expense		1,837		3,000
Underground Drilling		740		2,600
Exploration Development		817		1,600
Total	$	11,160	$	29,200



Dry stack tailings filtration plant	New access road at the open pit


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 Kimberly C. Perry.
32*		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Allen Palmiere and Kimberly C. Perry.
101		Financial statements from the Quarterly Report on Form 10-Q of Gold Resource Corporation for the three and six months ended June 30, 2021, formatted in inline XBRL: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Changes in Shareholders’ Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) the Notes to the Condensed Consolidated Financial Statements.
104		Cover Page Interactive Data File (embedded within the XBRL document)


	GOLD RESOURCE CORPORATION

Dated: July 27, 2021		/s/ Allen Palmiere
	By:	Allen Palmiere,
		Chief Executive Officer, President and Director




Dated: July 27, 2021		/s/ Kimberly C. Perry
	By:	Kimberly C. Perry,
		Chief Financial Officer


	For the three months ended June 30,				For the six months ended June 30,
	2021		2020		2021		2020

	(in thousands)				(in thousands)
Doré sales, net
Gold	$	2,695	$	1,891	$	5,182	$	3,660
Silver		228		678		605		1,354
Less: Refining charges		(20)		(110)		(91)		(145)
Total doré sales, net		2,903		2,459		5,696		4,869
Concentrate sales
Gold		7,671		2,467		14,195		8,683
Silver		6,951		2,566		13,264		7,781
Copper		3,714		1,198		7,100		3,559
Lead		2,595		1,750		5,000		5,229
Zinc		9,240		5,176		18,006		14,216
Less: Treatment and refining charges		(2,907)		(3,301)		(5,791)		(9,135)
Total concentrate sales, net		27,264		9,856		51,774		30,333
Realized/unrealized gain (loss) embedded derivative, net		669		206		634		(532)
Total sales, net	$	30,836	$	12,521	$	58,104	$	34,670


	As of		As of
	June 30,		December 31,
	2021		2020
	(Unaudited)
	(in thousands)
Asset retirement costs	$	1,071	$	1,064
Construction-in-progress⁽¹⁾		10,494		7,158
Furniture and office equipment		1,892		1,839
Land		230		230
Light vehicles and other mobile equipment		2,104		2,192
Machinery and equipment		32,289		31,227
Mill facilities and infrastructure		24,407		24,407
Mine Development		87,842		83,859
Software and licenses		1,619		1,619
Subtotal ⁽²⁾		161,948		153,595
Accumulated depreciation and amortization		(98,080)		(91,084)
Total	$	63,868	$	62,511


	2021		2020
	(Unaudited)
	(in thousands)
Reclamation liabilities – balance at beginning of period	$	1,890	$	2,003
Foreign currency exchange loss (gain)		15		(113)
Reclamation liabilities – balance at end of period		1,905		1,890

Asset retirement obligation – balance at beginning of period		1,208		1,105
Changes in estimate		7		82
Accretion		48		79
Foreign currency exchange loss (gain)		11		(58)
Asset retirement obligation – balance at end of period		1,274		1,208
Total period end balance	$	3,179	$	3,098