GORO 10-Q

Goldgroup Mining Inc. (GORO)

10-Q 2023-07-26 For: 2023-06-30

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 2023 Highlights	2

	Part I - FINANCIAL INFORMATION	3
Item 1.	Condensed Consolidated Interim Financial Statements and Notes	3
	Ø Condensed Consolidated Interim Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022	3
	Ø Condensed Consolidated Interim Statements of Operations for the three and six months ended June 30, 2023 and 2022 (unaudited)	4
	Ø Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2023 and 2022 (unaudited)	5
	Ø Condensed Consolidated Interim Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (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	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	48

	Part II - OTHER INFORMATION	48
Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3.	Defaults upon Senior Securities	49
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	49
Item 6.	Exhibits	49
Signatures		50


		As of		As of
		June 30,		December 31,
	Note	2023		2022
ASSETS
Current assets:
Cash and cash equivalents		$	17,957	$	23,675
Accounts receivable, net			4,355		5,085
Inventories, net	4		10,874		13,500
Prepaid expenses and other current assets	6		6,776		3,839
Total current assets			39,962		46,099
Property, plant and mine development, net	7		145,645		152,563
Other non-current assets	8		5,465		5,509
Total assets		$	191,072	$	204,171
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	13,114	$	13,329
Mining royalty taxes payable, net			1,130		3,945
Contingent consideration	12		2,263		2,211
Accrued expenses and other current liabilities	9		2,608		5,197
Total current liabilities			19,115		24,682
Reclamation and remediation liabilities	11		12,541		10,366
Gold and silver stream agreements liability	10		44,015		43,466
Deferred tax liabilities, net	5		4,674		9,224
Contingent consideration	12		2,191		2,179
Other non-current liabilities	9		1,835		2,490
Total liabilities			84,371		92,407
Shareholders' equity:
Common stock - $0.001 par value, 200,000,000 shares authorized:
88,468,542 and 88,398,109 shares outstanding at June 30, 2023 and December 31, 2022, respectively			89		89
Additional paid-in capital			111,580		111,024
Retained earnings			2,087		7,706
Treasury stock at cost, 336,398 shares			(5,884)		(5,884)
Accumulated other comprehensive loss			(1,171)		(1,171)
Total shareholders' equity			106,701		111,764
Total liabilities and shareholders' equity		$	191,072	$	204,171


		For the three months ended				For the six months ended
		June 30,				June 30,
	Note	2023		2022		2023		2022

Sales, net	3	$	24,807	$	37,064	$	56,035	$	82,481
Cost of sales:
Production costs			20,302		21,722		40,152		41,796
Depreciation and amortization			6,474		7,262		13,728		13,220
Reclamation and remediation			200		61		395		123
Total cost of sales			26,976		29,045		54,275		55,139
Mine gross (loss) profit			(2,169)		8,019		1,760		27,342
Costs and expenses:
General and administrative expenses			2,130		1,920		3,323		3,819
Mexico exploration expenses			1,045		810		2,434		2,047
Michigan Back Forty Project expenses			395		2,027		845		3,095
Stock-based compensation	16		7		393		604		1,167
Realized and unrealized (gain) loss on zinc zero cost collar	17		-		(3,799)		-		338
Other expense, net	18		711		214		2,180		1,052
Total costs and expenses			4,288		1,565		9,386		11,518
(Loss) income before income taxes			(6,457)		6,454		(7,626)		15,824
(Benefit) provision for income taxes	5		(1,873)		3,781		(2,007)		9,132
Net (loss) income		$	(4,584)	$	2,673	$	(5,619)	$	6,692
Net (loss) income per common share:
Basic and diluted net (loss) income per common share	19	$	(0.05)	$	0.03	$	(0.06)	$	0.08

Weighted average shares outstanding:
Basic	19		88,468,542		88,343,992		88,437,413		88,341,398
Diluted	19		88,468,542		88,791,552		88,437,413		88,646,849


	For the three months ended June 30, 2023 and 2022
	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, 2022	88,675,172	$	89	$	109,982	$	20,699	$	(5,884)	$	(1,171)	$	123,715
Stock-based compensation	-		-		507		-		-		-		507
Common stock issued for vested restricted stock units	38,503		-		-		-		-		-		-
Dividends declared ⁽¹⁾	-		-		-		(884)		-		-		(884)
Surrender of stock for taxes due on vesting	(4,585)		-		(9)		-		-		-		(9)
Net income	-		-		-		2,673		-		-		2,673
Balance, June 30, 2022	88,709,090	$	89	$	110,480	$	22,488	$	(5,884)	$	(1,171)	$	126,002

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


	For the six months ended June 30, 2023 and 2022
	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, 2021	88,675,172	$	89	$	110,153	$	17,563	$	(5,884)	$	(1,171)	$	120,750
Stock-based compensation	-		-		667		-		-		-		667
Net stock options exercised	-		-		(331)		-		-		-		(331)
Common stock issued for vested restricted stock units	38,503		-		-		-		-		-		-
Dividends declared ⁽¹⁾	-		-		-		(1,767)		-		-		(1,767)
Surrender of stock for taxes due on vesting	(4,585)		-		(9)		-		-		-		(9)
Net income	-		-		-		6,692		-		-		6,692
Balance, June 30, 2022	88,709,090	$	89	$	110,480	$	22,488	$	(5,884)	$	(1,171)	$	126,002

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


		For the six months ended June 30,
	Note	2023		2022
Cash flows from operating activities:
Net (loss) income		$	(5,619)	$	6,692
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Deferred income tax benefit			(2,965)		(1,198)
Depreciation and amortization, including accretion in reclamation			13,772		13,294
Stock-based compensation			604		1,167
Other operating adjustments	21		616		(1,827)
Changes in operating assets and liabilities:
Accounts receivable			730		2,395
Inventories			1,762		(1,688)
Prepaid expenses and other current assets			(594)		(1,829)
Other noncurrent assets			(72)		-
Accounts payable and other accrued liabilities			(2,394)		(943)
Mining royalty and income taxes payable, net			(5,367)		(3,857)
Net cash provided by operating activities			473		12,206

Cash flows from investing activities:
Capital expenditures			(6,001)		(10,518)
Proceeds from the sale of gold and silver rounds			-		533
Net cash used in investing activities			(6,001)		(9,985)

Cash flows from financing activities:
Cash settlement of options exercise			-		(376)
Dividends paid			-		(1,767)
Other financing activities			(16)		-
Net cash used in financing activities			(16)		(2,143)
Effect of exchange rate changes on cash and cash equivalents			(174)		(455)

Net decrease in cash and cash equivalents			(5,718)		(377)
Cash and cash equivalents at beginning of period			23,675		33,712
Cash and cash equivalents at end of period		$	17,957	$	33,335

Supplemental Cash Flow Information
Income and mining taxes paid		$	6,068	$	15,972
Non-cash investing or financing activities
Change in capital expenditures in accounts payable		$	(795)	$	(1,094)


	For the three months ended June 30,				For the six months ended June 30,
	2023		2022		2023		2022

	(in thousands)				(in thousands)
Doré sales, net
Gold	$	543	$	2,484	$	2,268	$	3,728
Silver		32		57		101		77
Less: Refining charges		(17)		(10)		(42)		(17)
Total doré sales, net		558		2,531		2,327		3,788
Concentrate sales
Gold		7,949		13,850		18,571		28,391
Silver		6,609		5,146		13,182		11,231
Copper		2,749		2,708		5,743		6,805
Lead		2,782		3,768		5,747		7,595
Zinc		7,928		14,352		17,479		30,669
Less: Treatment and refining charges		(3,311)		(3,127)		(6,470)		(5,868)
Total concentrate sales, net		24,706		36,697		54,252		78,823
Realized gain - embedded derivative, net ⁽¹⁾		248		1,160		882		2,026
Unrealized (loss) - embedded derivative, net		(705)		(3,324)		(1,426)		(2,156)
Total sales, net	$	24,807	$	37,064	$	56,035	$	82,481


	Gold		Silver		Copper		Lead		Zinc			Total
	(ounces)		(ounces)		(tonnes)		(tonnes)		(tonnes)
Under contract		4,681		334,989		326		2,371		4,681
Average forward price (per ounce or tonne)	$	1,954	$	23.65	$	8,434	$	2,110		2,719
Unsettled sales contracts value (in thousands)	$	9,147	$	7,922	$	2,749	$	5,003	$	12,728	$	37,549


		For the three months ended June 30,				For the six months ended June 30,				Statements of Operations Classification
		2023		2022		2023		2022

	Note	(in thousands)
Realized and unrealized derivative loss, net	14	$	(457)	$	(2,164)	$	(544)	$	(130)	Sales, net
Realized loss on zinc zero cost collar	17	$	-	$	(829)	$	-	$	(2,457)	Realized and unrealized loss on zinc zero cost collar
Unrealized gain on zinc zero cost collar	17	$	-	$	4,628	$	-	$	2,119	Realized and unrealized loss on zinc zero cost collar


	Oaxaca, Mexico		Michigan, USA		Corporate and Other		Consolidated
As of June 30, 2023
Total current assets	$	34,487	$	150	$	5,325	$	39,962
Total non-current assets		56,445		92,948		1,717		151,110
Total assets	$	90,932	$	93,098	$	7,042	$	191,072
Total current liabilities	$	14,601		2,502		2,012	$	19,115
Total non-current liabilities		3,446		60,823		987		65,256
Total shareholders' equity		72,885		29,773		4,043		106,701
Total liabilities and shareholders' equity	$	90,932	$	93,098	$	7,042	$	191,072

As of December 31, 2022
Total current assets	$	38,032	$	272	$	7,795	$	46,099
Total non-current assets		63,342		92,927		1,803		158,072
Total assets	$	101,374	$	93,199	$	9,598	$	204,171
Total current liabilities	$	20,035	$	3,352	$	1,295	$	24,682
Total non-current liabilities		5,533		60,648		1,544		67,725
Total shareholders' equity		75,806		29,199		6,759		111,764
Total liabilities and shareholders' equity	$	101,374	$	93,199	$	9,598	$	204,171


		For the six months ended June 30, 2023				2023 full year guidance
		(in thousands)
Sustaining Investments:
Underground Development	Capital	$	2,362
Infill Drilling	Capitalized Exploration		1,785
Other Sustaining Capital	Capital		628
Surface and Underground Exploration Development & Other	Capitalized Exploration		1,079
Subtotal of Sustaining Investments:			5,854	$	9 - 11 million
Growth Investments:
DDGM growth:
Surface Exploration / Other	Exploration		1,139
Underground Exploration Drilling	Exploration		1,295
Underground Exploration Development	Capitalized Exploration		147
Back Forty growth:
Back Forty Project Optimization & Permitting	Exploration		845
Subtotal of Growth Investments:			3,426	$	6 - 7 million
Total Capital and Exploration:		$	9,280	$	15 - 18 million



	2022				2023
	Q1	Q2	Q3	Q4	Q1	Q2
Operating Data
Total tonnes milled	136,844	129,099	110,682	116,616	117,781	113,510
Average Grade					-
Gold (g/t)	3.00	2.63	1.98	2.51	2.33	1.59
Silver (g/t)	81	64	80	109	94	86
Copper (%)	0.41	0.32	0.37	0.45	0.37	0.37
Lead (%)	1.97	1.99	1.59	1.58	1.73	1.64
Zinc (%)	4.89	4.00	4.21	4.27	3.88	3.72
Metal production (before payable metal deductions)
Gold (ozs.)	11,187	9,317	5,851	7,767	7,171	4,637
Silver (ozs.)	332,292	249,088	261,256	370,768	322,676	289,816
Copper (tonnes)	431	303	296	406	336	334
Lead (tonnes)	2,073	2,020	1,249	1,323	1,559	1,389
Zinc (tonnes)	5,562	4,282	3,901	4,198	3,837	3,569
Metal produced and sold
Gold (ozs.)	8,381	8,746	5,478	7,514	6,508	4,287
Silver (ozs.)	265,407	231,622	225,012	335,168	294,815	274,257
Copper (tonnes)	408	286	282	372	332	327
Lead (tonnes)	1,639	1,755	1,056	941	1,417	1,317
Zinc (tonnes)	4,359	3,590	2,943	3,265	3,060	3,141
Average metal prices realized
Gold ($ per oz.)	$ 1,898	$ 1,874	$ 1,627	$ 1,734	$ 1,915	$ 2,010
Silver ($ per oz.)	$ 23.94	$ 22.05	$ 18.54	$ 21.25	$ 23.04	$ 24.93
Copper ($ per tonne)	$ 10,144	$ 9,275	$ 7,115	$ 8,221	$ 9,172	$ 8,397
Lead ($ per tonne)	$ 2,347	$ 2,168	$ 1,882	$ 1,954	$ 2,158	$ 2,153
Zinc ($ per tonne)	$ 3,842	$ 4,338	$ 3,186	$ 2,577	$ 3,195	$ 2,485
Gold equivalent ounces sold
Gold Ounces	8,381	8,746	5,478	7,514	6,508	4,287
Gold Equivalent Ounces from Silver	3,348	2,729	2,564	4,107	3,547	3,402
Total AuEq oz	11,729	11,475	8,042	11,621	10,055	7,689
Financial Data ($'s in thousands except for per ounce)
Total sales, net	$ 45,417	$ 37,064	$ 23,869	$ 32,374	$ 31,228	$ 24,807
Total cash cost after co-product credits per AuEq oz sold⁽¹⁾	($ 163)	$ 247	$ 1,103	$ 842	$ 711	$ 1,333
Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold⁽¹⁾	$ 462	$ 799	$ 1,831	$ 1,226	$ 1,221	$ 1,990
Production Costs	$ 20,074	$ 21,722	$ 19,380	$ 19,773	$ 19,850	$ 20,302
Production Costs/Tonnes Milled	$ 147	$ 168	$ 175	$ 170	$ 169	$ 179
Operating Cash Flows	$ 4,230	$ 7,976	($ 4,292)	$ 6,243	$ 1,024	($ 551)
Net income (loss)	$ 4,019	$ 2,673	($ 9,730)	($ 3,283)	($ 1,035)	($ 4,584)
Earnings (loss) per share - basic	$ 0.05	$ 0.03	($ 0.11)	($ 0.04)	($ 0.01)	($ 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 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 as of or for the three and six months ended June 30, 2023, 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)


	As of		As of
	June 30,		December 31,
	2023		2022

	(in thousands)
Asset retirement costs	$	7,449	$	7,449
Construction-in-progress		208		351
Furniture and office equipment		1,827		1,732
Land		9,033		9,033
Mineral interest		79,543		79,543
Light vehicles and other mobile equipment		2,151		2,327
Machinery and equipment		41,774		41,343
Mill facilities and infrastructure		35,915		35,917
Mine Development		110,625		105,263
Software and licenses		1,554		1,552
Subtotal ⁽¹⁾		290,079		284,510
Accumulated depreciation and amortization		(144,434)		(131,947)
Total	$	145,645	$	152,563


	2023		2022

	(in thousands)
Reclamation liabilities – balance at beginning of period	$	1,949	$	1,833
Foreign currency exchange loss		260		116
Reclamation liabilities – balance at end of period		2,209		1,949

Asset retirement obligation – balance at beginning of period ⁽¹⁾		8,417		1,279
Changes in estimate ⁽¹⁾		-		6,384
Liability for Aquila drillhole capping ⁽²⁾		514		-
Accretion		354		668
Foreign currency exchange loss		1,157		86
Asset retirement obligation – balance at end of period		10,442		8,417
Total period end balance	$	12,651	$	10,366


	GOLD RESOURCE CORPORATION

Dated: July 26, 2023		/s/ Allen Palmiere
	By:	Allen Palmiere,
		Chief Executive Officer, President and Director




Dated: July 26, 2023		/s/ Kimberly C. Perry
	By:	Kimberly C. Perry,
		Chief Financial Officer