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

Goldgroup Mining Inc. (GORO)

10-Q 2021-10-27 For: 2021-09-30

Added on August 02, 2026

About this 10-Q

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

Headline figures

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

Revenue: $29.03M; up 9.8% from $26.44M a year earlier
Net income: $1.53M; down 69.4% from net income of $5M 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
	Third Quarter 2021 Highlights	1

	Part I - FINANCIAL INFORMATION
Item 1.	Financial Statements	2
	Ø Condensed Consolidated Interim Balance Sheets at September 30, 2021 (unaudited) and December 31, 2020	2
	Ø Condensed Consolidated Interim Statements of Operations for the three and nine months ended September 30, 2021 and 2020 (unaudited)	3
	Ø Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity for the three and nine months ended June 30, 2021 and 2020 (unaudited)	4
	Ø Condensed Consolidated Interim Statements of Cash Flows for the nine months ended September 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	35
Item 4.	Controls and Procedures	36

	Part II - OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39


		As of		As of
		September 30,		December 31,
	Note	2021		2020
ASSETS
Current assets:
Cash and cash equivalents		$	29,544	$	25,405
Gold and silver rounds/bullion	5		559		671
Accounts receivable, net			4,947		4,226
Inventories, net	6		10,876		9,995
Prepaid expenses and other current assets	8		2,999		2,576
Total current assets			48,925		42,873
Property, plant and mine development, net	9		66,317		62,511
Deferred tax assets, net			434		309
Other non-current assets			505		41
Total assets		$	116,181	$	105,734
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	8,988	$	8,782
Income taxes payable, net			3,215		73
Mining royalty taxes payable, net			1,861		955
Accrued expenses and other current liabilities	10		3,888		2,275
Total current liabilities			17,952		12,085
Reclamation and remediation liabilities	11		3,121		3,098
Other non-current liabilities	10		901		13
Total liabilities			21,974		15,196
Shareholders' equity:
Common stock - $0.001 par value, 200,000,000 shares authorized:
74,581,679 and 74,376,958 shares outstanding at September 30, 2021 and December 31, 2020, respectively			75		75
Additional paid-in capital			85,429		84,865
Retained earnings			15,758		12,653
Treasury stock at cost, 336,398 shares			(5,884)		(5,884)
Accumulated other comprehensive loss			(1,171)		(1,171)
Total shareholders' equity			94,207		90,538
Total liabilities and shareholders' equity		$	116,181	$	105,734


		For the three months ended				For the nine months ended
		September 30,				September 30,
	Note	2021		2020		2021		2020
Sales, net	4	$	29,029	$	26,435	$	87,133	$	61,105
Mine cost of sales:
Production costs			17,216		16,286		51,982		42,856
Depreciation and amortization			3,521		4,340		11,299		13,537
Reclamation and remediation			47		44		152		119
Total mine cost of sales			20,784		20,670		63,433		56,512
Mine gross profit			8,245		5,765		23,700		4,593
Costs and expenses:
General and administrative expenses			2,355		2,360		6,070		5,961
Exploration expenses			1,805		1,019		3,660		2,132
Restructuring expenses			-		-		496		-
Stock-based compensation	14		30		305		711		1,175
Other expense (income), net	16		174		(599)		727		(1,043)
Total costs and expenses			4,364		3,085		11,664		8,225
Income (loss) before income taxes			3,881		2,680		12,036		(3,632)
Provision for income taxes (benefit)			2,352		2,931		6,697		(420)
Net income (loss) from continuing operations			1,529		(251)		5,339		(3,212)
Net income from discontinued operations, net of income taxes	3		-		5,252		-		3,280
Net income		$	1,529	$	5,001	$	5,339	$	68
Net income per common share:
Basic and diluted net income (loss) per common share from continuing operations	17		0.02		0.01		0.07		(0.05)
Basic and diluted net income per common share from discontinued operations	17		-		0.06		-		0.05
Basic and diluted net income per common share	17	$	0.02	$	0.07	$	0.07	$	0.00

Weighted average shares outstanding:
Basic	17		74,552,545		70,641,938		74,481,281		68,896,059
Diluted	17		74,898,520		71,044,528		74,842,095		69,289,349


	For the three months ended September 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, June 30, 2020	70,397,497	$	70	$	160,937	$	10,570	$	(5,884)	$	(1,171)	$	164,522
Stock-based compensation	-		-		305		-		-		-		305
Common stock issued for vested restricted stock units	58,133		-		-		-		-		-		-
Dividends declared	-		-		-		(708)		-		-		(708)
Issuance of stock, net of issuance costs	1,731,433		2		6,872		-		-		-		6,874
Net income	-		-		-		5,001		-		-		5,001
Balance, September 30, 2020	72,187,063	$	72	$	168,114	$	14,863	$	(5,884)	$	(1,171)	$	175,994

Balance, June 30, 2021	74,868,322	$	75	$	85,269	$	14,974	$	(5,884)	$	(1,171)	$	93,263
Stock-based compensation	-		-		160		-		-		-		160
Common stock issued for vested restricted stock units	50,183		-		-		-		-		-		-
Dividends declared	-		-		-		(745)		-		-		(745)
Surrender of stock for taxes due on vesting	(428)		-		-		-		-		-		-
Net income	-		-		-		1,529		-		-		1,529
Balance, September 30, 2021	74,918,077	$	75	$	85,429	$	15,758	$	(5,884)	$	(1,171)	$	94,207


	For the nine months ended September 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	-		-		1,175		-		-		-		1,175
Common stock issued for vested restricted stock units	93,205		-		-		-		-		-		-
Dividends declared	-		-		-		(2,081)		-		-		(2,081)
Issuance of stock, net of issuance costs	6,065,933		6		18,768		-		-		-		18,774
Net income	-		-		-		68		-		-		68
Balance, September 30, 2020	72,187,063	$	72	$	168,114	$	14,863	$	(5,884)	$	(1,171)	$	175,994

Balance, December 31, 2020	74,713,356	$	75	$	84,865	$	12,653	$	(5,884)	$	(1,171)	$	90,538
Stock-based compensation	-		-		506		-		-		-		506
Net stock options exercised	217,718		-		263		-		-		-		263
Common stock issued for vested restricted stock units	52,797		-		-		-		-		-		-
Dividends declared	-		-		-		(2,234)		-		-		(2,234)
Surrender of stock for taxes due on vesting	(65,794)		-		(205)		-		-		-		(205)
Net income	-		-		-		5,339		-		-		5,339
Balance, September 30, 2021	74,918,077	$	75	$	85,429	$	15,758	$	(5,884)	$	(1,171)	$	94,207


	As of September 30, 2021					As of December 31, 2020
	(Unaudited)
	Ounces	Per Ounce		Amount		Ounces	Per Ounce		Amount
				(in thousands)					(in thousands)
Gold	176	$	1,743	$	307	189	$	1,888	$	357
Silver	11,715	$	21.53		252	11,842	$	26.49		314
Total holdings				$	559				$	671


	Gold		Silver		Copper		Lead		Zinc			Total
	(ounces)		(ounces)		(tonnes)		(tonnes)		(tonnes)
Under contract		2,579		118,576		146		740		3,148
Average forward price (per ounce or tonne)	$	1,770	$	23.07	$	9,324	$	2,261	$	2,988
Unsettled sales contracts value (in thousands)	$	4,565	$	2,736	$	1,361	$	1,673	$	9,406	$	19,741


		For the three months ended September 30,				For the nine months ended September 30,				Statement of Operations Classification
		2021		2020		2021		2020

	Note	(in thousands)
Realized and unrealized derivative (loss) gain, net	14	$	(478)	$	550	$	156	$	18	Sales, net
Unrealized gold and silver rounds/bullion (loss) gain	16	$	(55)	$	716	$	(86)	$	1,175	Other expense, net
Realized (loss) on zinc zero cost collar, net	16	$	(40)	$	-	$	(40)	$	-	Other expense, net

Measure	Original 2021 Guidance		Updated 2021 Guidance
Payable Production	19,500 to 21,500 Gold Ounces		21,000 to 23,000 Gold Ounces
		1,700,000 to 1,800,000 Silver Ounces		1,100,000 to 1,300,000 Silver Ounces
Cash Costs⁽¹⁾ after co-products credits⁽²⁾ per gold equivalent (“AuEq”) ounce	$210 to $225		$250 to $290 Primary due to lower co-product credits due to lower base metal tonnages produced and sold.
All-in Sustaining Costs⁽¹⁾ after co-product credits⁽²⁾ per AuEq ounce	$800 to $900		Guidance maintained Lower co-product credits largely offset by less underground development.
Capital Investment	$22.0 million to include:		$16 million
		- Gold Regrind	$1.9 million	Primary due to lower underground development than originally anticipated, noted in our 10Q for Q2
		- Dry Stack Completion	$6.2 million
		- Underground Development	$9.8 million
		- Other Sustaining	$4.1 million
Exploration Commitment	$7.2 million to include:		Guidance maintained
		- Surface Exploration	$3.0 million
		- Underground Drilling	$2.6 million
		- Exploration Development	$1.6 million
G & A⁽³⁾	$6.0 million to $6.5 million, excluding Stock-based Compensation & Restructuring		$6.5 million to $6.9 million, excluding Stock-based Compensation & Restructuring


		For the nine months ended September 30,		2021 full year guidance
		(in thousands)
Sustaining Investments:
Underground Development	Capital	$	3,498	$	5,000
Infill Drilling	Capital		1,453		1,600
Other Sustaining Capital	Capital		3,617		4,100
Growth Investments:
Surface Exploration Expense	Exploration		2,757		3,000
Underground Exploration Drilling	Exploration		903		1,000
Surface Exploration & Other	Capital		1,037		1,600
Gold Regrind	Capital		507		700
Dry Stack Completion	Capital		5,105		6,200
Total		$	18,877	$	23,200





Dry Stack Tailings Filtration Plant and Dry Stack Area	Filtration Plant Press



	2020		2021
	Q3	Q4	Q1	Q2	Q3	YTD
Operating Data
Total tonnes milled	153,531	149,762	138,980	129,590	98,010	366,580
Average Grade
Gold (g/t)	1.26	1.79	1.68	1.93	2.68	2.03
Silver (g/t)	68	59	72	77	91	79
Copper (%)	0.40	0.40	0.43	0.36	0.37	0.39
Lead (%)	1.93	1.93	1.70	1.63	2.29	1.84
Zinc (%)	5.02	4.93	4.29	3.64	4.79	4.20
Metal production (before payable metal deductions)
Gold (ozs.)	4,728	6,854	6,097	6,555	6,933	19,585
Silver (ozs.)	324,592	276,902	307,610	295,979	265,829	869,418
Copper (tonnes)	428	431	441	368	284	1,093
Lead (tonnes)	2,157	1,914	1,737	1,654	1,808	5,199
Zinc (tonnes)	5,538	5,310	4,377	3,683	3,920	11,980
Metal produced and sold
Gold (ozs.)	3,619	6,314	5,019	5,697	5,809	16,525
Silver (ozs.)	316,993	255,945	253,061	270,321	255,394	778,776
Copper (tonnes)	447	398	382	365	268	1,015
Lead (tonnes)	1,849	1,755	1,176	1,214	1,550	3,940
Zinc (tonnes)	4,586	4,281	3,134	3,193	3,059	9,386
Average metal prices realized
Gold ($ per oz.)	1,887	1,867	1,787	1,822	1,762	1,790
Silver ($ per oz.)	25.47	24.18	26.77	26.88	23.19	25.63
Copper ($ per tonne)	6,711	7,360	8,873	10,375	9,092	9,466
Lead ($ per tonne)	1,902	1,870	2,082	2,162	2,397	2,231
Zinc ($ per tonne)	2,392	2,650	2,797	2,945	3,032	2,924
Precious metal gold equivalent ounces sold
Gold Ounces	3,619	6,314	5,019	5,697	5,809	16,525
Gold Equivalent Ounces from Silver	4,279	3,315	3,791	3,999	3,361	11,151
Total AuEq oz	7,898	9,629	8,810	9,696	9,170	27,676
Financial Data ($'s in thousands except for per ounce)
Total sales, net	$ 26,435	$ 29,587	$ 27,268	$ 30,836	$ 29,029	$ 87,133
Earnings from mining operations before depreciation and amortization	10,105	11,770	11,974	11,259	11,766	34,999
Total cash cost after co-product credits per AuEq oz sold	612	647	408	713	466	535
Total all-in sustaining cost after co-product credits per AuEq oz sold	1,109	1,357	937	1,280	1,031	1,090
Production Costs	16,286	17,770	15,243	19,523	17,216	51,982
Production Costs/Tonnes Milled	106	119	110	151	176	142
Earnings before interest, taxes, depreciation and amortization (from continuing operations)	7,020	6,750	8,520	7,413	7,402	23,335
Operating Cash Flows	6,396	9,125	6,831	9,298	5,743	21,872
Net income (loss)	(251)	(3,119)	2,527	1,283	1,529	5,339
Earnings per share - basic (from continuing operations)	($ 0.00)	($ 0.04)	$ 0.03	$ 0.02	$ 0.02	$ 0.07


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 nine months ended September 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)


	For the three months ended September 30,				For the nine months ended September 30,
	2021		2020		2021		2020

	(in thousands)				(in thousands)
Doré sales, net
Gold	$	1,634	$	1,495	$	6,816	$	5,155
Silver		38		878		643		2,232
Less: Refining charges		(21)		(67)		(112)		(212)
Total doré sales, net		1,651		2,306		7,347		7,175
Concentrate sales
Gold		8,709		5,211		22,904		13,894
Silver		6,179		6,857		19,443		14,638
Copper		2,447		2,911		9,547		6,470
Lead		3,641		3,501		8,641		8,730
Zinc		9,187		10,894		27,193		25,110
Less: Treatment and refining charges		(2,307)		(5,795)		(8,098)		(14,930)
Total concentrate sales, net		27,856		23,579		79,630		53,912
Realized (loss) gain embedded derivative, net		(246)		653		204		250
Unrealized (loss) gain embedded derivative, net		(232)		(103)		(48)		(232)
Total sales, net	$	29,029	$	26,435	$	87,133	$	61,105


	As of		As of
	September 30,		December 31,
	2021		2020
	(Unaudited)
	(in thousands)
Stockpiles - underground mine	$	796	$	648
Stockpiles - open pit mine		-		41
Concentrates		1,745		1,919
Doré, net ⁽¹⁾		602		459
Subtotal - product inventories		3,143		3,067
Materials and supplies ⁽²⁾		7,733		6,928
Total	$	10,876	$	9,995


	As of		As of
	September 30,		December 31,
	2021		2020
	(Unaudited)
	(in thousands)
Asset retirement costs	$	1,071	$	1,064
Construction-in-progress⁽¹⁾		13,265		7,158
Furniture and office equipment		1,896		1,839
Land		230		230
Light vehicles and other mobile equipment		2,236		2,192
Machinery and equipment		33,083		31,227
Mill facilities and infrastructure		24,455		24,407
Mine Development		89,760		83,859
Software and licenses		1,636		1,619
Subtotal		167,632		153,595
Accumulated depreciation and amortization		(101,315)		(91,084)
Total	$	66,317	$	62,511


	GOLD RESOURCE CORPORATION

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




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