GORO 10-Q

Goldgroup Mining Inc. (GORO)

10-Q 2024-05-02 For: 2024-03-31

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Added on August 02, 2026

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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
	First 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 March 31, 2024 (unaudited) and December 31, 2023	4
	Ø Condensed Consolidated Interim Statements of Operations for the three months ended March 31, 2024 and 2023 (unaudited)	5
	Ø Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2024 and 2023 (unaudited)	6
	Ø Condensed Consolidated Interim Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (unaudited)	7
	Ø Notes to the Condensed Consolidated Interim Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	44

	Part II - OTHER INFORMATION	44
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	45
Signatures		46


		As of		As of
		March 31,		December 31,
	Note	2024		2023
ASSETS
Current assets:
Cash and cash equivalents		$	5,662	$	6,254
Accounts receivable, net			4,161		4,335
Inventories, net	4		9,849		9,294
Prepaid expenses and other current assets	6		6,033		6,612
Total current assets			25,705		26,495
Property, plant, and mine development, net	7		135,775		138,626
Deferred tax assets, net	5		15,569		13,301
Other non-current assets	8		5,669		5,464
Total assets		$	182,718	$	183,886
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	9,082	$	8,378
Mining royalty taxes payable, net			1,462		1,199
Accrued expenses and other current liabilities	9		1,555		1,748
Total current liabilities			12,099		11,325
Reclamation and remediation liabilities	11		12,128		11,795
Gold and silver stream agreements liability	10		46,341		44,932
Deferred tax liabilities, net	5		13,926		14,077
Contingent consideration	12		3,598		3,548
Other non-current liabilities	9		1,851		1,516
Total liabilities			89,943		87,193

Commitments and contingencies	12

Shareholders’ equity:
Common stock - $0.001 par value, 200,000,000 shares authorized:
88,790,474 and 88,694,038 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively			89		89
Additional paid-in capital			112,073		111,970
Accumulated deficit			(12,332)		(8,311)
Treasury stock at cost, 336,398 shares			(5,884)		(5,884)
Accumulated other comprehensive loss			(1,171)		(1,171)
Total shareholders’ equity			92,775		96,693
Total liabilities and shareholders’ equity		$	182,718	$	183,886


		For the three months ended
		March 31,
	Note	2024		2023

Sales, net	3	$	18,702	$	31,228
Cost of sales:
Production costs			16,108		19,850
Depreciation and amortization			4,210		7,254
Reclamation and remediation			553		195
Total cost of sales			20,871		27,299
Mine gross (loss) profit			(2,169)		3,929
Costs and expenses:
General and administrative expenses			901		1,193
Mexico exploration expenses			899		1,389
Michigan Back Forty Project expenses			205		450
Stock-based compensation	16		219		597
Other expense, net	17		1,515		1,469
Total costs and expenses			3,739		5,098
Loss before income taxes			(5,908)		(1,169)
Income taxes benefits	5		(1,887)		(134)
Net loss		$	(4,021)	$	(1,035)
Net loss per common share:
Basic and diluted net loss per common share	18	$	(0.05)	$	(0.01)

Weighted average shares outstanding:
Basic and diluted	18		88,707,430		88,405,935


	For the three months ended March 31, 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	-		-		273		-		-		-		273
Common stock issued for vested restricted stock units	88,570		-		-		-		-		-		-
Surrender of stock for taxes due on vesting	(18,137)		-		(11)		-		-		-		(11)
Net loss	-		-		-		(1,035)		-		-		(1,035)
Balance, March 31, 2023	88,804,940	$	89	$	111,286	$	6,671	$	(5,884)	$	(1,171)	$	110,991

Balance, December 31, 2023	89,030,436	$	89	$	111,970	$	(8,311)	$	(5,884)	$	(1,171)	$	96,693
Stock-based compensation			-		128		-		-		-		128
Common stock issued for vested restricted stock units	160,736		-		-		-		-		-		-
Surrender of stock for taxes due on vesting	(64,300)		-		(25)		-		-		-		(25)
Net loss			-		-		(4,021)		-		-		(4,021)
Balance, March 31, 2024	89,126,872	$	89	$	112,073	$	(12,332)	$	(5,884)	$	(1,171)	$	92,775


		For the three months ended March 31,
	Note	2024		2023
Cash flows from operating activities:
Net loss		$	(4,021)	$	(1,035)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Deferred income tax benefit			(2,132)		(715)
Depreciation and amortization			4,582		7,276
Stock-based compensation			219		597
Other operating adjustments, net	20		(230)		631
Changes in operating assets and liabilities:
Accounts receivable			174		(49)
Inventories			(211)		1,741
Prepaid expenses and other current assets			596		1,390
Other non-current assets			104		(42)
Accounts payable and other accrued liabilities			2,229		(4,514)
Cash settled liability awards			(67)		-
Mining royalty and income taxes payable, net			239		(4,256)
Net cash provided by operating activities			1,482		1,024

Cash flows from investing activities:
Capital expenditures			(1,994)		(3,136)
Net cash used in investing activities			(1,994)		(3,136)

Cash flows from financing activities:
Other financing activities			(25)		(16)
Net cash used in financing activities			(25)		(16)
Effect of exchange rate changes on cash and cash equivalents			(55)		(127)

Net decrease in cash and cash equivalents			(592)		(2,255)
Cash and cash equivalents at beginning of period			6,254		23,675
Cash and cash equivalents at end of period		$	5,662	$	21,420

Supplemental Cash Flow Information
Income and mining taxes paid		$	66	$	4,501
Non-cash investing or financing activities
Value of Common Shares issued for RSU Redemption		$	37	$	-
Balance of capital expenditures in accounts payable		$	295	$	1,303


	2024		2023

	(in thousands)
Reclamation liabilities – balance at beginning of period	$	2,233	$	1,949
Foreign currency exchange loss		29		284
Reclamation liabilities – balance at end of period		2,262		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		181		689
Foreign currency exchange loss		123		1,273
Asset retirement obligation – balance at end of period		9,866		9,562
Total period end balance	$	12,128	$	11,795


	Gold		Silver		Copper		Lead		Zinc			Total
	(ounces)		(ounces)		(tonnes)		(tonnes)		(tonnes)
Under contract		3,947		276,297		263		1,425		1,771
Average forward price (per ounce or tonne)	$	2,070	$	23.37	$	8,518	$	2,069	$	2,453
Unsettled sales contracts value (in thousands)	$	8,170	$	6,457	$	2,240	$	2,948	$	4,344	$	24,159


		For the three months ended March 31,				Statements of Operations Classification
		2024		2023
	Note
Realized and unrealized derivative gain (loss), net	14	$	66	$	(87)	Sales, net


	Oaxaca, Mexico		Michigan, USA		Corporate and Other		Consolidated
As of March 31, 2024
Total current assets	$	25,079	$	71	$	555	$	25,705
Total non-current assets ⁽¹⁾		61,813		93,178		2,022		157,013
Total assets	$	86,892	$	93,249	$	2,577	$	182,718
Total current liabilities	$	10,712	$	52	$	1,335	$	12,099
Total non-current liabilities		13,229		64,096		519		77,844
Total shareholders’ equity		62,951		29,101		723		92,775
Total liabilities and shareholders’ equity	$	86,892	$	93,249	$	2,577	$	182,718

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 three months ended March 31, 2024		2024 full year guidance
			(in thousands)
Sustaining Investments:
Underground Development	Capital	$	1,350
Other Sustaining Capital	Capital		282
Infill Drilling	Capitalized Exploration		441
Surface and Underground Exploration Development & Other	Capitalized Exploration		2
Subtotal of Sustaining Investments:			2,075	$	8.8 - 11.0 million
Growth Investments:
DDGM growth:
Surface Exploration / Other	Exploration		899
Back Forty growth:
Back Forty Project Optimization & Permitting	Exploration		205
Subtotal of Growth Investments:			1,104	$	3.2 - 5.2 million
Total Capital and Exploration:		$	3,179	$	12.0 - 16.2 million



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


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 months ended March 31, 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: May 2, 2024		/s/ Allen Palmiere
	By:	Allen Palmiere,
		Chief Executive Officer, President and Director




Dated: May 2, 2024		/s/ Chet Holyoak
	By:	Chet Holyoak,
		Chief Financial Officer


	As of		As of
	March 31,		December 31,
	2024		2023

	(in thousands)
Asset retirement costs (“ARO asset”)	$	6,227	$	6,227
Construction-in-progress		429		243
Furniture and office equipment		1,783		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		42,981		42,887
Mill facilities and infrastructure		36,396		36,396
Mine development		117,023		115,230
Software and licenses		1,554		1,554
Subtotal		297,087		295,020
Accumulated depreciation and amortization		(161,312)		(156,394)
Total	$	135,775	$	138,626


	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		50		1,369

Ending Balance of contingent consideration:
Current contingent consideration	$	-	$	-
Non-current contingent consideration		3,598		3,548
	$	3,598	$	3,548