GORO 10-Q

Goldgroup Mining Inc. (GORO)

10-Q 2024-08-06 For: 2024-06-30

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
	Second Quarter 2024 Highlights	3

	Part I - FINANCIAL INFORMATION	4
Item 1.	Condensed Consolidated Interim Financial Statements and Notes	4
	Ø Condensed Consolidated Interim Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023	4
	Ø Condensed Consolidated Interim Statements of Operations for the three and six months ended June 30, 2024 and 2023 (unaudited)	5
	Ø Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2024 and 2023 (unaudited)	6
	Ø Condensed Consolidated Interim Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (unaudited)	8
	Ø Notes to the Condensed Consolidated Interim Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 4.	Controls and Procedures	51

	Part II - OTHER INFORMATION	51
Item 1.	Legal Proceedings	51
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3.	Defaults upon Senior Securities	52
Item 4.	Mine Safety Disclosures	52
Item 5.	Other Information	52
Item 6.	Exhibits	52
Signatures		53


		As of		As of
		June 30,		December 31,
	Note	2024		2023
ASSETS
Current assets:
Cash and cash equivalents		$	5,342	$	6,254
Accounts receivable, net			4,577		4,335
Inventories, net	4		8,979		9,294
Prepaid expenses and other current assets	6		7,703		6,612
Total current assets			26,601		26,495
Property, plant, and mine development, net	7		131,791		138,626
Deferred tax assets, net	5		269		13,301
Other non-current assets	8		4,069		5,464
Total assets		$	162,730	$	183,886
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	10,284	$	8,378
Mining royalty taxes payable, net			433		1,199
Accrued expenses and other current liabilities	9		1,550		1,748
Total current liabilities			12,267		11,325
Reclamation and remediation liabilities	11		11,212		11,795
Gold and silver stream agreements liability	10		50,028		44,932
Deferred tax liabilities, net	5		16,883		14,077
Contingent consideration	12		3,392		3,548
Other non-current liabilities	9		1,927		1,516
Total liabilities			95,709		87,193

Commitments and contingencies	12

Shareholders’ equity:
Common stock - $0.001 par value, 200,000,000 shares authorized:
92,292,848 and 88,694,038 shares outstanding at June 30, 2024 and December 31, 2023, respectively			93		89
Additional paid-in capital			114,049		111,970
Accumulated deficit			(40,066)		(8,311)
Treasury stock at cost, 336,398 shares			(5,884)		(5,884)
Accumulated other comprehensive loss			(1,171)		(1,171)
Total shareholders’ equity			67,021		96,693
Total liabilities and shareholders’ equity		$	162,730	$	183,886


		For the three months ended				For the six months ended
		June 30,				June 30,
	Note	2024		2023		2024		2023

Sales, net	3	$	20,782	$	24,807	$	39,484	$	56,035
Cost of sales:
Production costs			17,768		20,302		33,876		40,152
Depreciation and amortization			5,833		6,474		10,043		13,728
Reclamation and remediation			773		200		1,326		395
Total cost of sales			24,374		26,976		45,245		54,275
Mine gross (loss) profit			(3,592)		(2,169)		(5,761)		1,760
Costs and expenses:
General and administrative expenses			781		2,130		1,682		3,323
Mexico exploration expenses			184		1,045		1,083		2,434
Michigan Back Forty Project expenses			142		395		347		845
Stock-based compensation	16		225		7		444		604
Other expense, net	17		6,354		711		7,869		2,180
Total costs and expenses			7,686		4,288		11,425		9,386
Loss before income taxes			(11,278)		(6,457)		(17,186)		(7,626)
Income tax provision (benefit)	5		16,456		(1,873)		14,569		(2,007)
Net loss		$	(27,734)	$	(4,584)	$	(31,755)	$	(5,619)
Net loss per common share:
Basic and diluted net loss per common share	18	$	(0.30)	$	(0.05)	$	(0.35)	$	(0.06)

Weighted average shares outstanding:
Basic and diluted	18		91,004,348		88,468,542		89,855,890		88,437,413


	For the three months ended June 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, March 31, 2023	88,804,940	$	89	$	111,286	$	6,671	$	(5,884)	$	(1,171)	$	110,991
Stock-based compensation	-		-		294		-		-		-		294
Net loss	-		-		-		(4,584)		-		-		(4,584)
Balance, June 30, 2023	88,804,940	$	89	$	111,580	$	2,087	$	(5,884)	$	(1,171)	$	106,701

Balance, March 31, 2024	89,126,872	$	89	$	112,073	$	(12,332)	$	(5,884)	$	(1,171)	$	92,775
Stock-based compensation	-		-		151		-		-		-		151
Common stock issued for vested restricted stock units	36,255		-		-		-		-		-		-
Issuance of stock, net of issuance costs ⁽¹⁾	3,478,813		4		1,831		-		-		-		1,835
Surrender of stock for taxes due on vesting	(12,694)		-		(6)		-		-		-		(6)
Net loss	-		-		-		(27,734)		-		-		(27,734)
Balance, June 30, 2024	92,629,246	$	93	$	114,049	$	(40,066)	$	(5,884)	$	(1,171)	$	67,021


	For the six months ended June 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	-		-		567		-		-		-		567
Common stock issued for vested restricted stock units	88,570		-		-		-		-		-		-
Surrender of stock for taxes due on vesting	(18,137)		-		(11)		-		-		-		(11)
Net loss	-		-		-		(5,619)		-		-		(5,619)
Balance, June 30, 2023	88,804,940	$	89	$	111,580	$	2,087	$	(5,884)	$	(1,171)	$	106,701

Balance, December 31, 2023	89,030,436	$	89	$	111,970	$	(8,311)	$	(5,884)	$	(1,171)	$	96,693
Stock-based compensation			-		279		-		-		-		279
Common stock issued for vested restricted stock units	196,991		-				-		-		-		-
Issuance of stock, net of issuance costs ⁽¹⁾	3,478,813		4		1,831		-		-		-		1,835
Surrender of stock for taxes due on vesting	(76,994)		-		(31)		-		-		-		(31)
Net loss			-				(31,755)		-		-		(31,755)
Balance, June 30, 2024	92,629,246	$	93	$	114,049	$	(40,066)	$	(5,884)	$	(1,171)	$	67,021


		For the six months ended June 30,
	Note	2024		2023
Cash flows from operating activities:
Net loss		$	(31,755)	$	(5,619)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income tax expense (benefit)			14,045		(2,965)
Depreciation and amortization			11,010		13,772
Stock-based compensation			444		604
Interest on streaming liabilities			5,096		549
Other operating adjustments, net	20		2,841		616
Changes in operating assets and liabilities:
Accounts receivable			(242)		730
Inventories			436		1,762
Prepaid expenses and other current assets			(1,344)		(594)
Other non-current assets			(101)		(72)
Accounts payable and other accrued liabilities			1,802		(2,943)
Cash settled liability awards			(67)		-
Mining royalty and income taxes payable, net			(746)		(5,367)
Net cash provided by operating activities			1,419		473

Cash flows from investing activities:
Capital expenditures			(4,008)		(6,001)
Net cash used in investing activities			(4,008)		(6,001)

Cash flows from financing activities:
Proceeds from the ATM sales, net of issuance costs			1,835		-
Other financing activities			(33)		(16)
Net cash provided by (used in) financing activities			1,802		(16)
Effect of exchange rate changes on cash and cash equivalents			(125)		(174)

Net decrease in cash and cash equivalents			(912)		(5,718)
Cash and cash equivalents at beginning of period			6,254		23,675
Cash and cash equivalents at end of period		$	5,342	$	17,957

Supplemental Cash Flow Information
Income and mining taxes paid		$	1,072	$	6,068
Non-cash investing or financing activities:
Value of common shares issued for RSU redemption		$	49	$	62
Balance of capital expenditures in accounts payable		$	502	$	508


	For the three months ended June 30,				For the six months ended June 30,
	2024		2023		2024		2023

	(in thousands)				(in thousands)
Doré sales, net
Gold	$	-	$	543	$	24	$	2,268
Silver		-		32		1		101
Less: Refining charges		-		(17)		(6)		(42)
Total doré sales, net		-		558		19		2,327
Concentrate sales
Gold		6,358		7,949		13,757		18,571
Silver		6,840		6,609		11,908		13,182
Copper		1,941		2,749		4,182		5,743
Lead		1,060		2,782		2,424		5,747
Zinc		4,941		7,928		9,063		17,479
Less: Treatment and refining charges		(1,439)		(3,311)		(3,016)		(6,470)
Total concentrate sales, net		19,701		24,706		38,318		54,252
Realized gain - embedded derivative, net ⁽¹⁾		966		248		989		882
Unrealized gain (loss) - embedded derivative, net		115		(705)		158		(1,426)
Total sales, net	$	20,782	$	24,807	$	39,484	$	56,035


	Gold		Silver		Copper		Lead		Zinc			Total
	(ounces)		(ounces)		(tonnes)		(tonnes)		(tonnes)
Under contract		1,866		223,427		103		918		1,847
Average forward price (per ounce or tonne)	$	2,321	$	28.68	$	9,838	$	2,114	$	2,791
Unsettled sales contracts value (in thousands)	$	4,331	$	6,408	$	1,013	$	1,941	$	5,155	$	18,848


	Stock Options	Weighted Average Exercise Price (per share)
Outstanding as of December 31, 2022	1,475,316	$	2.90
Expired or Forfeited	(10,000)		6.24
Outstanding as of June 30, 2023	1,465,316	$	2.88

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

Vested and exercisable as of June 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	(70,433)
Vested and forfeited for net settlement	(18,137)
Forfeited	(74,084)
Nonvested as of June 30, 2023	1,085,131	$	684

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	(50,435)
Nonvested as of June 30, 2024	1,935,592	$	716


	Performance Share Units		Liability Balance (in thousands)
Outstanding as of December 31, 2022	695,041	$	332
Granted	534,890
Forfeited	(98,483)
Outstanding as of June 30, 2023	1,131,448	$	301

Outstanding as of December 31, 2023	880,926	$	164
Granted	682,367
Forfeited	(33,113)
Redeemed	(201,258)
Outstanding as of June 30, 2024	1,328,922	$	225



	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	31,301
Granted in lieu of executive bonus	212,407
Redeemed	(323,900)
Outstanding as of June 30, 2023	559,170	$	352

Outstanding as of December 31, 2023	586,291	$	223
Granted in lieu of board fees	116,472
Outstanding as of June 30, 2024	702,763	$	260


		For the three months ended June 30,				For the six months ended June 30,				Statements of Operations Classification
		2024		2023		2024		2023

	Note	(in thousands)
Realized and unrealized derivative gain (loss), net	14	$	1,081	$	(457)	$	1,147	$	(544)	Sales, net


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

	(in thousands)
Stockpiles - underground mine	$	941	$	534
Concentrates		1,494		1,768
Doré, net		169		169
Subtotal - product inventories		2,604		2,471
Materials and supplies ⁽¹⁾		6,375		6,823
Total	$	8,979	$	9,294


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

	(in thousands)
Asset retirement costs (“ARO asset”)	$	6,227	$	6,227
Construction-in-progress		865		243
Furniture and office equipment		1,791		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		43,106		42,887
Mill facilities and infrastructure		36,395		36,396
Mine development		118,676		115,230
Software and licenses		1,554		1,554
Subtotal		299,308		295,020
Accumulated depreciation and amortization		(167,517)		(156,394)
Total	$	131,791	$	138,626


	2024		2023

	(in thousands)
Reclamation liabilities – balance at beginning of period	$	2,233	$	1,949
Foreign currency exchange loss		(180)		284
Reclamation liabilities – balance at end of period		2,053		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		361		689
Foreign currency exchange loss		(764)		1,273
Asset retirement obligation – balance at end of period		9,159		9,562
Total period end balance	$	11,212	$	11,795


	2024		2023

	(in thousands)
Beginning Balance of contingent consideration:
Current contingent consideration	$	-	$	2,211
Non-current contingent consideration		3,548		2,179
	$	3,548	$	4,390

Change in valueof contingent consideration - Current	$	-	$	(2,211)
Change in valueof contingent consideration - Non-current		(156)		1,369

Ending Balance of contingent consideration:
Current contingent consideration	$	-	$	-
Non-current contingent consideration		3,392		3,548
	$	3,392	$	3,548


	Oaxaca, Mexico		Michigan, USA		Corporate and Other		Consolidated
As of June 30, 2024
Total current assets	$	25,403	$	70	$	1,128	$	26,601
Total non-current assets ⁽¹⁾		42,281		91,772		2,076		136,129
Total assets	$	67,684	$	91,842	$	3,204	$	162,730
Total current liabilities	$	11,213	$	22	$	1,032	$	12,267
Total non-current liabilities		14,678		68,312		452		83,442
Total shareholders’ equity		41,793		23,508		1,720		67,021
Total liabilities and shareholders’ equity	$	67,684	$	91,842	$	3,204	$	162,730

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 six months ended June 30, 2024				2024 full year guidance
	2024		2023

Sustaining Investments:
Underground Development	$	2,657	$	2,362
Other Sustaining Capital		851		628
Infill Drilling		786		1,785
Surface and Underground Exploration Development & Other		2		1,079
Subtotal of Sustaining Investments:		4,296		5,854	$	8.8 - 11.0 million
Growth Investments:
DDGM growth:
Surface Exploration / Other		1,045		1,139
Underground Exploration Drilling		38		1,295
Underground Exploration Development		-		147
Back Forty growth:
Back Forty Project Optimization & Permitting		347		845
Subtotal of Growth Investments:		1,430		3,426	$	3.2 - 5.2 million
Total Capital and Exploration:	$	5,726	$	9,280	$	12.0 - 16.2 million



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


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 six months ended June 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: August 6, 2024		/s/ Allen Palmiere
	By:	Allen Palmiere,
		Chief Executive Officer, President and Director




Dated: August 6, 2024		/s/ Chet Holyoak
	By:	Chet Holyoak,
		Chief Financial Officer