GORO 8-K
Goldgroup Mining Inc. (GORO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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1.01
Item 2.02 Results of Operations and Financial Condition.
On October 31 2022, Gold Resource Corporation issued a news release reporting its production and financial results for the third quarter of 2022. A copy of the news release is attached as Exhibit 99.1 to this report.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any of the Company’s filings or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are furnished with this report:
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104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) | |||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
GOLD RESOURCE CORPORATION | |||
Date: October 31, 2022 | By: | /s/ Allen Palmiere | |
Name: | Allen Palmiere | ||
Title: | Chief Executive Officer and President | ||
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Exhibit 99.1
NEWS - FOR IMMEDIATE RELEASE | NYSE American: GORO |
GOLD RESOURCE CORPORATION ANNOUNCES FINANCIAL RESULTS FOR THE THIRD QUARTER 2022 AND REITERATES 2022 PRODUCTION AND COST GUIDANCE
· | CASH BALANCE OF OVER $22 MILLION |
· | OVER $24 MILLION INVESTED IN CAPITAL AND EXPLORATION |
· | THIRD QUARTER LOSS OF $9.7 MILLION IS A RESULT OF |
| ◾ | LOWER METAL PRICES |
| ◾ | HIGHER DEPRECIATION EXPENSE DUE TO LOWER MINERAL RESERVE BASE |
| ◾ | BACK FORTY PROJECT FEASIBILITY STUDY WORK & PERMITTING EXPENSES |
Denver, Colorado – October 31, 2022 – Gold Resource Corporation (NYSE American: GORO) (the “Company”) sold a total of 5,478 ounces of gold and 225,012 ounces of silver in Q3 2022 for a gold equivalent total of 8,042 ounces. Additionally, the Company sold 2,943 tonnes of zinc, 282 tonnes of copper, and 1,056 tonnes of lead.
Allen Palmiere, President and CEO said “The implementation of safety programs has been our top priority in 2021 and 2022 to address ground support and ventilation issues. The disciplined approach had an impact on production volumes, mine development and exploration. With that said, we are still on track to meet our 2022 guidance. We are putting safety first at the temporary cost of production. During the quarter we continued to advance the feasibility study and permitting initiatives at the Back Forty Project in Michigan.”
Q3 2022 HIGHLIGHTS
Additional highlights for the third quarter ended September 30, 2022, include:
· | Our balance sheet remains strong, with $22.5 million in cash as of September 30, 2022. The decrease of $11.2 million since December 31, 2021, is after: |
o | year-to-date cash inflow of $7.9 million from operating activities, net of $16.2 million in income tax payments for tax years 2021 and 2022; |
o | $6.9 million investment in the Back Forty Project feasibility study and permitting work; |
o | investing Canadian dollar (“C$”) 2.4 million (or US dollar $1.7 million) in Maritime Resources Corp., ticker symbol “MAE.V” on the Toronto Stock Exchange—Venture Exchange (“TSX-V”), in exchange for 9.9% of the company’s issued and outstanding shares via a private placement; |
o | investing $14.1 million in capital expenditures; and |
o | distributing to shareholders $2.7 million in dividends ($0.9 million this quarter, totaling over $122 million since 2010). |
· | The Don David Gold Mine safety program aims to bolster the overall health and safety culture. |
o | There were no lost time incidents during the third quarter of 2022. |
o | The year-to-date lost time injury frequency rate per million hours of 2.76 is substantially below the Camimex (Mexican Chamber of Mines) benchmark of 5.281. |
1 | https://www.camimex.org.mx/index.php/estadisticas/Seguridad |
o | During the third quarter of 2022, production, mine development, and exploration were deliberately and temporarily slowed to improve safety specific to ground support and ventilation. |
· | Working capital was $28.9 million at September 30, 2022, $0.4 million lower than at December 31, 2021. The decrease is primarily due to a decrease in cash discussed above. |
· | Total cash cost for the quarter was $1,103 per gold equivalent (“AuEq”) ounce (after co-product credits) and Total all-in sustaining cost for the quarter was $1,831 per AuEq ounce (after co-product credits). Both non-GAAP measures were higher in the quarter due to the impact of lower co-product credits as a result of lower base metal prices 2 |
2 | See Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Measures below for a reconciliation of non-GAAP measures to applicable GAAP measures. |
Trending Highlights
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| | Q1 | | Q2 | | Q3 | | Q4 | | Q1 | | Q2 | | Q3 | | |||||||
Operating Data |
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Total tonnes milled | | | 138,980 | | | 129,590 | | | 98,010 | | | 135,398 | | | 136,844 | | | 129,099 | | | 110,682 | |
Average Grade | | | | | | | | | | | | | | | | | | | | | | |
Gold (g/t) | | | 1.68 | | | 1.93 | | | 2.68 | | | 1.93 | | | 3.00 | | | 2.63 | | | 1.98 | |
Silver (g/t) | | | 72 | | | 77 | | | 91 | | | 82 | | | 81 | | | 64 | | | 80 | |
Copper (%) | | | 0.43 | | | 0.36 | | | 0.37 | | | 0.38 | | | 0.41 | | | 0.32 | | | 0.37 | |
Lead (%) | | | 1.70 | | | 1.63 | | | 2.29 | | | 2.17 | | | 1.97 | | | 1.99 | | | 1.59 | |
Zinc (%) | | | 4.29 | | | 3.64 | | | 4.79 | | | 4.77 | | | 4.89 | | | 4.00 | | | 4.21 | |
Metal production (before payable metal deductions) | | | | | | | | | | | | | | | | | | | | | | |
Gold (ozs.) | | | 6,097 | | | 6,555 | | | 6,933 | | | 6,853 | | | 11,187 | | | 9,317 | | | 5,851 | |
Silver (ozs.) | | | 307,610 | | | 295,979 | | | 265,829 | | | 330,873 | | | 332,292 | | | 249,088 | | | 261,256 | |
Copper (tonnes) | | | 441 | | | 368 | | | 284 | | | 413 | | | 431 | | | 303 | | | 296 | |
Lead (tonnes) | | | 1,737 | | | 1,654 | | | 1,808 | | | 2,345 | | | 2,073 | | | 2,020 | | | 1,249 | |
Zinc (tonnes) | | | 4,377 | | | 3,683 | | | 3,920 | | | 5,349 | | | 5,562 | | | 4,282 | | | 3,901 | |
Metal produced and sold | | | | | | | | | | | | | | | | | | | | | | |
Gold (ozs.) | | | 5,019 | | | 5,697 | | | 5,809 | | | 6,119 | | | 8,381 | | | 8,746 | | | 5,478 | |
Silver (ozs.) | | | 253,061 | | | 270,321 | | | 255,394 | | | 287,805 | | | 265,407 | | | 231,622 | | | 225,012 | |
Copper (tonnes) | | | 382 | | | 365 | | | 268 | | | 405 | | | 408 | | | 286 | | | 282 | |
Lead (tonnes) | | | 1,176 | | | 1,214 | | | 1,550 | | | 2,059 | | | 1,639 | | | 1,755 | | | 1,056 | |
Zinc (tonnes) | | | 3,134 | | | 3,193 | | | 3,059 | | | 4,167 | | | 4,359 | | | 3,590 | | | 2,943 | |
Average metal prices realized | | | | | | | | | | | | | | | | | | | | | | |
Gold ($per oz.) | | $ | 1,787 | | $ | 1,822 | | $ | 1,762 | | $ | 1,811 | | $ | 1,898 | | $ | 1,874 | | $ | 1,627 | |
Silver ($per oz.) | | $ | 26.77 | | $ | 26.88 | | $ | 23.19 | | $ | 23.51 | | $ | 23.94 | | $ | 22.05 | | $ | 18.54 | |
Copper ($per tonne) | | $ | 8,873 | | $ | 10,375 | | $ | 9,092 | | $ | 9,768 | | $ | 10,144 | | $ | 9,275 | | $ | 7,115 | |
Lead ($per tonne) | | $ | 2,082 | | $ | 2,162 | | $ | 2,397 | | $ | 2,339 | | $ | 2,347 | | $ | 2,168 | | $ | 1,882 | |
Zinc ($per tonne) | | $ | 2,797 | | $ | 2,945 | | $ | 3,032 | | $ | 3,466 | | $ | 3,842 | | $ | 4,338 | | $ | 3,186 | |
Precious metal gold equivalent ounces sold | | | | | | | | | | | | | | | | | | | | | | |
Gold Ounces | | | 5,019 | | | 5,697 | | | 5,809 | | | 6,119 | | | 8,381 | | | 8,746 | | | 5,478 | |
Gold Equivalent Ounces from Silver | | | 3,791 | | | 3,999 | | | 3,356 | | | 3,736 | | | 3,348 | | | 2,729 | | | 2,564 | |
Total AuEq oz | | | 8,810 | | | 9,696 | | | 9,165 | | | 9,855 | | | 11,729 | | | 11,475 | | | 8,042 | |
Financial Data ($'s in thousands except for per ounce) | | | | | | | | | | | | | | | | | | | | | | |
Total sales, net | | $ | 27,268 | | $ | 30,836 | | $ | 29,029 | | $ | 38,063 | | $ | 45,417 | | $ | 37,064 | | $ | 23,869 | |
Earnings from mining operations before depreciation and amortization | | | 11,974 | | | 11,259 | | | 11,766 | | | 17,744 | | | 25,281 | | | 15,281 | | | 4,431 | |
Total cash cost after co-product credits per AuEq oz sold | | | 408 | | | 713 | | | 466 | | | 73 | | | (121) | | | 247 | | | 1,103 | |
Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold | | | 937 | | | 1,280 | | | 1,031 | | | 451 | | | 499 | | | 799 | | | 1,831 | |
Production Costs | | | 15,243 | | | 19,523 | | | 17,216 | | | 20,252 | | | 20,074 | | | 21,722 | | | 19,380 | |
Production Costs/Tonnes Milled | | | 110 | | | 151 | | | 176 | | | 150 | | | 147 | | | 168 | | | 175 | |
Earnings before interest, taxes, depreciation and amortization | | | 8,520 | | | 7,413 | | | 7,402 | | | 10,304 | | | 15,328 | | | 13,716 | | | (3,338) | |
Operating Cash Flows | | | 6,831 | | | 9,298 | | | 5,743 | | | 12,911 | | | 4,230 | | | 7,976 | | | (4,292) | |
Net income | | | 2,527 | | | 1,283 | | | 1,529 | | | 2,689 | | | 4,019 | | | 2,673 | | | (9,730) | |
Earnings per share - basic | | $ | 0.03 | | $ | 0.02 | | $ | 0.02 | | $ | 0.03 | | $ | 0.05 | | $ | 0.03 | | | ($0.11) | |
2022 Capital and Exploration Investment Summary
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| For the nine months ended |
| 2022 full year | | ||
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Sustaining Investments: | | | | | | | | |
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Underground Development | | Capital | | $ | 5,251 | | $ | 7.0 - 8.0 million | |
Infill Drilling and Exploration Development | | Capital | | | 5,056 | | | 7.0 - 7.5 million | |
Other Sustaining Capital | | Capital | | | 1,922 | | | 2.0 - 2.5 million | |
Subtotal of Sustaining Investments: | | | | | 12,229 | | | | |
Growth Investments: | | | | | | | | | |
DDGM growth: | | | | | | | | | |
Gold Regrind | | Capital | | | 745 | | | - | |
Dry Stack Completion | | Capital | | | 1,149 | | | - | |
Surface Exploration / Other | | Exploration | | | 1,641 | | | 2.0 - 2.5 million | |
Underground Exploration Drilling | | Exploration | | | 1,549 | | | 2.0 - 2.5 million | |
Back Forty growth: | | | | | | | | | |
Back Forty Feasibility Study & Permits | | Exploration | | | 6,925 | | | 9.0-9.5 million | |
Subtotal of Growth Investments: | | | | | 12,009 | | | | |
Total Capital and Exploration: | | | | $ | 24,238 | | $ | 29.0 - 32.5 million | |
The Company’s investment in Mexico continued in the third quarter of 2022 totaling $17.3 million year-to-date. Our investment in Mexico is focused on favorably impacting our environment, social and governance programs while creating operational efficiencies and longevity. At the Back Forty Project, $6.9 million has been invested in feasibility and permitting initiatives year-to-date.
Underground and Exploration Development:
Mine development during the quarter included ramps and access to different areas of the deposit, ventilation shafts, and exploration development drifts. A total of 3,210 meters of development, at a cost of $7.5 million (864 meters at a cost of $2.2 million in the third quarter), was completed during the year through September 30, 2022. Through September 30, 2022, underground mine development was $5.3 million and exploration development was $2.2 million (included in Infill Drilling and Exploration Development in the table above). As part of ongoing safety initiatives, the Company also invested in additional ground support and improved ventilation for the mine, which deliberately but temporarily slowed underground and exploration development. We plan to invest a total of $7.0 million to $8.0 million in underground development and an additional $3.5 million to $4.0 million in exploration development in 2022.
Back Forty Feasibility and Permitting:
Work on the optimized feasibility study progressed during the third quarter of 2022. Mine planning, process plant design and site layout and infrastructure were significantly completed during the quarter. Current initiatives are focused on finalizing the financial models with operating and capital costs, which may be subject to some volatility due to the inflationary market conditions. Environmental and cultural resource considerations have been a key factor in the overall project design. On August 5, 2022, the Company was invited by Michigan’s Department of Environment, Great Lakes and Energy to participate in a Scoping Environmental Impact Assessment Meeting to present the initial site plan and other key improvements being incorporated into the Back Forty Project’s optimized feasibility study. This was an opportunity to meet with tribal representatives to promote the Back Forty Project, which is focused on favorably impacting our environment, social and governance programs, while identifying economic and operational efficiencies. The feasibility study work for the Back Forty Project progressed during the third quarter of 2022. Work related to metallurgy and the economic model is expected to continue into 2023. Permit applications will not be submitted with state agencies in Michigan until the completion of the feasibility study.
Q3 2022 Conference Call
The Company will host a conference call Tuesday, November 1, 2022 at 10:00 a.m. Eastern Time.
The conference call will be recorded and posted to the Company’s website later in the day following the conclusion of the call. Following prepared remarks, Allen Palmiere, President and Chief Executive Officer, Alberto Reyes, Chief Operating Officer and Kim Perry, Chief Financial Officer will host a live question and answer (Q&A) session. There are two ways to join the conference call.
To join the conference via webcast, please click on the following link:
https://app.webinar.net/no36p6L10ja
To join the call via telephone, please use the following dial-in details:
Participant Toll Free: | +1 (888) 886-7786 |
International: | +1 (416) 764-8658 |
Conference ID: | 96525237 |
Please connect to the conference call at least 10 minutes prior to the start time using one of the connection options listed above.
About GRC:
Gold Resource Corporation is a gold and silver producer, developer, and explorer with its operations centered on the Don David Gold Mine in Oaxaca, Mexico. Under the direction of an experienced board and senior leadership team, the company’s focus is to unlock the significant upside potential of its existing infrastructure and large land position surrounding the mine in Oaxaca, Mexico and to develop the Back Forty Project in Michigan, USA. For more information, please visit GRC’s website, located at www.goldresourcecorp.com and read the company’s Form 10-K for an understanding of the risk factors associated with its business.
Contacts:
Kim Perry
Chief Financial Officer
www.GoldResourcecorp.com