Goldgroup Mining Inc 10-Q, filed Apr 25, 2023

Goldgroup Mining Inc. (GORO)

10-Q 2023-04-25 For: 2023-03-31

Added on August 02, 2026

About this 10-Q

Goldgroup Mining Inc filed this 10-Q on April 25, 2023, covering the quarter ended March 31, 2023.

Headline figures

Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $31.23M; down 31.2% from $45.42M a year earlier
Net loss: $1.04M; compared with net income of $4.02M a year earlier
Diluted EPS: -$0.01; compared with $0.05 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
	First Quarter 2023 Highlights	2

	Part I - FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Ø Condensed Consolidated Interim Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022	3
	Ø Condensed Consolidated Interim Statements of Operations for the three months ended March 31, 2023 and 2022 (unaudited)	4
	Ø Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2023 and 2022 (unaudited)	5
	Ø Condensed Consolidated Interim Statements of Cash Flows for the three months ended March 31, 2023 and 2022 (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	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	2023		2022
ASSETS
Current assets:
Cash and cash equivalents		$	21,420	$	23,675
Accounts receivable, net			5,134		5,085
Inventories, net	4		11,179		13,500
Prepaid expenses and other current assets	6		2,983		3,839
Total current assets			40,716		46,099
Property, plant and mine development, net	7		148,997		152,563
Other non-current assets	8		5,488		5,509
Total assets		$	195,201	$	204,171
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	8,616	$	13,329
Mining royalty taxes payable, net			744		3,945
Contingent consideration	12		2,215		2,211
Accrued expenses and other current liabilities	9		5,058		5,197
Total current liabilities			16,633		24,682
Reclamation and remediation liabilities	11		11,669		10,366
Gold and silver stream agreements liability	10		43,740		43,466
Deferred tax liabilities, net	5		7,719		9,224
Contingent consideration	12		2,144		2,179
Other non-current liabilities	9		2,305		2,490
Total liabilities			84,210		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 March 31, 2023 and December 31, 2022, respectively			89		89
Additional paid-in capital			111,286		111,024
Retained earnings			6,671		7,706
Treasury stock at cost, 336,398 shares			(5,884)		(5,884)
Accumulated other comprehensive loss			(1,171)		(1,171)
Total shareholders' equity			110,991		111,764
Total liabilities and shareholders' equity		$	195,201	$	204,171


		For the three months ended
		March 31,
	Note	2023		2022

Sales, net	3	$	31,228	$	45,417
Cost of sales:
Production costs			19,850		20,074
Depreciation and amortization			7,254		5,958
Reclamation and remediation			195		62
Total cost of sales			27,299		26,094
Mine gross profit			3,929		19,323
Costs and expenses:
General and administrative expenses			1,193		1,899
Mexico exploration expenses			1,389		1,237
Michigan Back Forty Project expenses			450		1,068
Stock-based compensation	16		597		774
Realized and unrealized loss on zinc zero cost collar	17		-		4,137
Other expense, net	18		1,469		838
Total costs and expenses			5,098		9,953
(Loss) income before income taxes			(1,169)		9,370
(Benefit) provision for income taxes	5		(134)		5,351
Net (loss) income		$	(1,035)	$	4,019
Net (loss) income per common share:
Basic and diluted net (loss) income per common share	19	$	(0.01)	$	0.05

Weighted average shares outstanding:
Basic	19		88,405,935		88,338,774
Diluted	19		88,405,935		88,616,868


	For the three months ended March 31, 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	-		-		160		-		-		-		160
Net stock options exercised	-		-		(331)		-		-		-		(331)
Dividends declared ⁽¹⁾	-		-		-		(883)		-		-		(883)
Net income	-		-		-		4,019		-		-		4,019
Balance, March 31, 2022	88,675,172	$	89	$	109,982	$	20,699	$	(5,884)	$	(1,171)	$	123,715

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


		For the three months ended March 31,
	Note	2023		2022
Cash flows from operating activities:
Net (loss) income		$	(1,035)	$	4,019
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Deferred income tax benefit			(715)		(827)
Depreciation and amortization, including amortization in reclamation			7,276		6,003
Stock-based compensation			597		774
Other operating adjustments	21		631		2,551
Changes in operating assets and liabilities:
Accounts receivable			(49)		(2,975)
Inventories			1,741		(2,013)
Prepaid expenses and other current assets			1,390		1,179
Other noncurrent assets			(42)		340
Accounts payable and other accrued liabilities			(4,514)		(920)
Mining royalty and income taxes payable, net			(4,256)		(3,901)
Net cash provided by operating activities			1,024		4,230

Cash flows from investing activities:
Capital expenditures			(3,136)		(5,949)
Proceeds from the sale of gold and silver rounds			-		533
Net cash used in investing activities			(3,136)		(5,416)

Cash flows from financing activities:
Cash settlement of options exercise			-		(246)
Dividends paid			-		(883)
Other financing activities			(16)		-
Net cash used in financing activities			(16)		(1,129)
Effect of exchange rate changes on cash and cash equivalents			(127)		(222)

Net decrease in cash and cash equivalents			(2,255)		(2,537)
Cash and cash equivalents at beginning of period			23,675		33,712
Cash and cash equivalents at end of period		$	21,420	$	31,175

Supplemental Cash Flow Information
Income and mining taxes paid		$	4,501	$	13,857
Non-cash investing or financing activities :
Change in capital expenditures in accounts payable		$	(983)	$	(927)


	2023		2022

	(in thousands)
Reclamation liabilities – balance at beginning of period	$	1,949	$	1,833
Foreign currency exchange loss		135		116
Reclamation liabilities – balance at end of period		2,084		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		173		668
Foreign currency exchange loss		591		86
Asset retirement obligation – balance at end of period		9,695		8,417
Total period end balance	$	11,779	$	10,366


	Gold		Silver		Copper		Lead		Zinc			Total
	(ounces)		(ounces)		(tonnes)		(tonnes)		(tonnes)
Under contract		4,390		256,430		207		1,720		2,183
Average forward price (per ounce or tonne)	$	1,885	$	22.08	$	8,880	$	2,092	$	3,078
Unsettled sales contracts value (in thousands)	$	8,275	$	5,662	$	1,838	$	3,598	$	6,719	$	26,092


		For the three months ended March 31,				Statements of Operations Classification
		2023		2022
	Note
Realized and unrealized derivative (loss) gain, net	14	$	(87)	$	2,034	Sales, net
Realized loss on zinc zero cost collar	17	$	-	$	(1,628)	Realized and unrealized loss on zinc zero cost collar
Unrealized loss on zinc zero cost collar	17	$	-	$	(2,509)	Realized and unrealized loss on zinc zero cost collar


	Oaxaca, Mexico		Michigan, USA		Corporate and Other		Consolidated
As of March 31, 2023
Total current assets	$	35,626	$	144	$	4,946	$	40,716
Total non-current assets		59,759		92,908		1,818		154,485
Total assets	$	95,385	$	93,052	$	6,764	$	195,201
Total current liabilities	$	12,904		2,649		1,080	$	16,633
Total non-current liabilities		5,142		60,717		1,718		67,577
Total shareholders' equity		77,339		29,686		3,966		110,991
Total liabilities and shareholders' equity	$	95,385	$	93,052	$	6,764	$	195,201

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 three months ended March 31, 2023				2023 full year guidance
		(in thousands)
Sustaining Investments:
Underground Development	Capital	$	1,296
Infill Drilling	Capitalized Exploration		817
Other Sustaining Capital	Capital		475
Surface and Underground Exploration Development & Other	Capitalized Exploration		548
Subtotal of Sustaining Investments:			3,136	$	9 - 11 million
Growth Investments:
DDGM growth:
Surface Exploration / Other	Exploration		766
Underground Exploration Drilling	Exploration		477
Underground Exploration Development	Exploration		146
Back Forty growth:
Back Forty Feasibility Study & Permits	Exploration		450
Subtotal of Growth Investments:			1,839	$	6 - 7 million
Total Capital and Exploration:		$	4,975	$	15 - 18 million



	2022				2023
	Q1	Q2	Q3	Q4	Q1
Operating Data
Total tonnes milled	136,844	129,099	110,682	116,616	117,781
Average Grade
Gold (g/t)	3.00	2.63	1.98	2.51	2.33
Silver (g/t)	81	64	80	109	94
Copper (%)	0.41	0.32	0.37	0.45	0.37
Lead (%)	1.97	1.99	1.59	1.58	1.73
Zinc (%)	4.89	4.00	4.21	4.27	3.88
Metal production (before payable metal deductions)
Gold (ozs.)	11,187	9,317	5,851	7,767	7,171
Silver (ozs.)	332,292	249,088	261,256	370,768	322,676
Copper (tonnes)	431	303	296	406	336
Lead (tonnes)	2,073	2,020	1,249	1,323	1,559
Zinc (tonnes)	5,562	4,282	3,901	4,198	3,837
Metal produced and sold
Gold (ozs.)	8,381	8,746	5,478	7,514	6,508
Silver (ozs.)	265,407	231,622	225,012	335,168	294,815
Copper (tonnes)	408	286	282	372	332
Lead (tonnes)	1,639	1,755	1,056	941	1,417
Zinc (tonnes)	4,359	3,590	2,943	3,265	3,060
Average metal prices realized
Gold ($ per oz.)	$ 1,898	$ 1,874	$ 1,627	$ 1,734	$ 1,915
Silver ($ per oz.)	$ 23.94	$ 22.05	$ 18.54	$ 21.25	$ 23.04
Copper ($ per tonne)	$ 10,144	$ 9,275	$ 7,115	$ 8,221	$ 9,172
Lead ($ per tonne)	$ 2,347	$ 2,168	$ 1,882	$ 1,954	$ 2,158
Zinc ($ per tonne)	$ 3,842	$ 4,338	$ 3,186	$ 2,577	$ 3,195
Gold equivalent ounces sold
Gold Ounces	8,381	8,746	5,478	7,514	6,508
Gold Equivalent Ounces from Silver	3,348	2,729	2,564	4,107	3,547
Total AuEq oz	11,729	11,475	8,042	11,621	10,055
Financial Data ($'s in thousands except for per ounce)
Total sales, net	$ 45,417	$ 37,064	$ 23,869	$ 32,374	$ 31,228
Earnings from mining operations before depreciation and amortization	$ 25,281	$ 15,281	$ 4,431	$ 11,981	$ 11,183
Total cash cost after co-product credits per AuEq oz sold	($ 163)	$ 247	$ 1,103	$ 842	$ 711
Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold	$ 462	$ 799	$ 1,831	$ 1,226	$ 1,221
Production Costs	$ 20,074	$ 21,722	$ 19,380	$ 19,773	$ 19,850
Production Costs/Tonnes Milled	$ 147	$ 168	$ 175	$ 170	$ 169
Earnings before interest, taxes, depreciation, depletion, and amortization	$ 15,328	$ 13,716	($ 3,338)	$ 3,758	$ 6,085
Operating Cash Flows	$ 4,230	$ 7,976	($ 4,292)	$ 6,243	$ 1,024
Net income (loss)	$ 4,019	$ 2,673	($ 9,730)	($ 3,283)	($ 1,035)
Earnings (loss) per share - basic	$ 0.05	$ 0.03	($ 0.11)	($ 0.04)	($ 0.01)


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 months ended March 31, 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)


	GOLD RESOURCE CORPORATION

Dated: April 25, 2023		/s/ Allen Palmiere
	By:	Allen Palmiere,
		Chief Executive Officer, President and Director




Dated: April 25, 2023		/s/ Kimberly C. Perry
	By:	Kimberly C. Perry,
		Chief Financial Officer


	For the three months ended March 31,
	2023		2022

	(in thousands)
Doré sales, net
Gold	$	1,725	$	1,244
Silver		69		20
Less: Refining charges		(25)		(7)
Total doré sales, net		1,769		1,257
Concentrate sales
Gold		10,622		14,541
Silver		6,573		6,085
Copper		2,994		4,097
Lead		2,965		3,827
Zinc		9,551		16,317
Less: Treatment and refining charges		(3,159)		(2,741)
Total concentrate sales, net		29,546		42,126
Realized gain - embedded derivative, net (1)		634		866
Unrealized (loss) gain - embedded derivative, net		(721)		1,168
Total sales, net	$	31,228	$	45,417


	As of		As of
	March 31,		December 31,
	2023		2022

	(in thousands)
Asset retirement costs	$	7,449	$	7,449
Construction-in-progress		250		351
Furniture and office equipment		1,776		1,732
Land		9,033		9,033
Mineral interest		79,543		79,543
Light vehicles and other mobile equipment		2,144		2,327
Machinery and equipment		41,729		41,343
Mill facilities and infrastructure		35,924		35,917
Mine Development		107,916		105,263
Software and licenses		1,554		1,552
Subtotal (1)		287,318		284,510
Accumulated depreciation and amortization		(138,321)		(131,947)
Total	$	148,997	$	152,563