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 July 27, 2022, Gold Resource Corporation (the “Company”) issued a news release reporting its production and financial results for the second 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: July 27, 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 REPORTS IMPROVED YEAR OVER YEAR FINANCIAL RESULTS AND
STRONG BALANCE SHEET FOR THE SECOND QUARTER 2022
| ● | CASH BALANCE OF OVER $33.3 million AFTER OVER $15 MILLION INVESTED IN CAPITAL AND EXPLORATION |
| ● | OPERATING CASH FLOW OF $12.2 million AND EBITDA OF $29.0 MILLION |
| ● | REITERATE 2022 PRODUCTION AND COST GUIDANCE |
Denver, Colorado – July 27, 2022 – Gold Resource Corporation (NYSE American: GORO) (the “Company”) sold a total of 8,746 ounces of gold and 231,622 ounces of silver in Q2 2022 for a gold equivalent total of 11,475 ounces. Additionally, the Company sold 3,590 tonnes of zinc, 286 tonnes of copper, and 1,755 tonnes of lead.
Allen Palmiere, President and CEO said “Production remains solid at the Don David Gold Mine in Mexico with significant improvements in financial measures over the same period last year. The volume of tonnes processed during the quarter declined slightly from Q1 as we continue to address ground support challenges common to our type of mineral deposit. Grades and improved recoveries helped ensure we delivered another quarter of over 10 thousand gold equivalent ounces. We continue to be committed to having a disciplined focus on costs in the current inflationary market and would like to reiterate our 2022 guidance. Likewise, our continued reinvestment into exploration and infrastructure improvements at the Don David Gold Mine and progressing the feasibility study and permitting initiatives at the Back Forty Project in Michigan are focused on favorably impacting our environment, social and governance programs while creating operational efficiencies and longevity.”
Additional highlights for the second quarter ended June 30, 2022, are summarized below:
| ● | Total cash cost for the quarter was $247 per gold equivalent (“AuEq”) ounce (after co-product credits) and total all-in sustaining cost for the quarter was $799 per AuEq ounce (after co-product credits). Both non-GAAP measures were favorably impacted by higher co-product credits for base metals sold. 1 |
1 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.
| ● | For the eighth consecutive year, the Don David Gold Mine (“DDGM”) earned the prestigious Empresa Socialmente Responsable (“ESR”) award from the Mexican Center for Philanthropy (CEMEFI). Awards are given to organizations who demonstrate a commitment to supporting social and environmental protection programs within their local communities. |
| ● | During the quarter, the Company continued to process tailings material from a nearby community in an effort to ensure the proper environmental treatment and storage of the material. |
| ● | The Company’s Annual Meeting of Shareholders was held in person on May 19, 2022. During the meeting, shareholders approved the current five Directors to serve another annual term and ratified the appointment of BDO USA, LLP as the independent auditor for the fiscal year ending December 31, 2022. |
| ● | $0.9 million was distributed in shareholder dividends this quarter, totaling over $121 million since 2010. |
| ● | Working capital was $37.1 million as of June 30, 2022, $7.8 million higher than as of December 31, 2021. The increase is primarily due to a decrease in the liability related to the zinc zero cost collar. |
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Trending Highlights
| | | | | | | |
| 2021 | | 2022 | ||||
| Q1 | Q2 | Q3 | Q4 | | Q1 | Q2 |
Operating Data | | | | | | | |
Total tonnes milled | 138,980 | 129,590 | 98,010 | 135,398 | | 136,844 | 129,099 |
Average Grade | | | | | | | |
Gold (g/t) | 1.68 | 1.93 | 2.68 | 1.93 | | 3.00 | 2.63 |
Silver (g/t) | 72 | 77 | 91 | 82 | | 81 | 64 |
Copper (%) | 0.43 | 0.36 | 0.37 | 0.38 | | 0.41 | 0.32 |
Lead (%) | 1.70 | 1.63 | 2.29 | 2.17 | | 1.97 | 1.99 |
Zinc (%) | 4.29 | 3.64 | 4.79 | 4.77 | | 4.89 | 4.00 |
Metal production (before payable metal deductions) | | | | | | | |
Gold (ozs.) | 6,097 | 6,555 | 6,933 | 6,853 | | 11,187 | 9,317 |
Silver (ozs.) | 307,610 | 295,979 | 265,829 | 330,873 | | 332,292 | 249,088 |
Copper (tonnes) | 441 | 368 | 284 | 413 | | 431 | 303 |
Lead (tonnes) | 1,737 | 1,654 | 1,808 | 2,345 | | 2,073 | 2,020 |
Zinc (tonnes) | 4,377 | 3,683 | 3,920 | 5,349 | | 5,562 | 4,282 |
Metal produced and sold | | | | | | | |
Gold (ozs.) | 5,019 | 5,697 | 5,809 | 6,119 | | 8,381 | 8,746 |
Silver (ozs.) | 253,061 | 270,321 | 255,394 | 287,805 | | 265,407 | 231,622 |
Copper (tonnes) | 382 | 365 | 268 | 405 | | 408 | 286 |
Lead (tonnes) | 1,176 | 1,214 | 1,550 | 2,059 | | 1,639 | 1,755 |
Zinc (tonnes) | 3,134 | 3,193 | 3,059 | 4,167 | | 4,359 | 3,590 |
Average metal prices realized | | | | | | | |
Gold ($ per oz.) | $ 1,787 | $ 1,822 | $ 1,762 | $ 1,811 | | $ 1,898 | $ 1,874 |
Silver ($ per oz.) | $ 26.77 | $ 26.88 | $ 23.19 | $ 23.51 | | $ 23.94 | $ 22.05 |
Copper ($ per tonne) | $ 8,873 | $ 10,375 | $ 9,092 | $ 9,768 | | $ 10,144 | $ 9,275 |
Lead ($ per tonne) | $ 2,082 | $ 2,162 | $ 2,397 | $ 2,339 | | $ 2,347 | $ 2,168 |
Zinc ($ per tonne) | $ 2,797 | $ 2,945 | $ 3,032 | $ 3,466 | | $ 3,842 | $ 4,338 |
Precious metal gold equivalent ounces sold | | | | | | | |
Gold Ounces | 5,019 | 5,697 | 5,809 | 6,119 | | 8,381 | 8,746 |
Gold Equivalent Ounces from Silver | 3,791 | 3,999 | 3,356 | 3,736 | | 3,348 | 2,729 |
Total AuEq oz | 8,810 | 9,696 | 9,165 | 9,855 | | 11,729 | 11,475 |
Financial Data ($'s in thousands except for per ounce) | | | | | | | |
Total sales, net | $ 27,268 | $ 30,836 | $ 29,029 | $ 38,063 | | $ 45,417 | $ 37,064 |
Earnings from mining operations before depreciation and amortization | 11,974 | 11,259 | 11,766 | 17,744 | | 25,281 | 15,281 |
Total cash cost after co-product credits per AuEq oz sold | 408 | 713 | 466 | 73 | | (121) | 247 |
Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold | 937 | 1,280 | 1,031 | 451 | | 499 | 799 |
Production Costs | 15,243 | 19,523 | 17,216 | 20,252 | | 20,074 | 21,722 |
Production Costs/Tonnes Milled | 110 | 151 | 176 | 150 | | 147 | 168 |
Earnings before interest, taxes, depreciation and amortization | 8,520 | 7,413 | 7,402 | 10,304 | | 15,328 | 13,716 |
Operating Cash Flows | 6,831 | 9,298 | 5,743 | 12,911 | | 4,230 | 7,976 |
Net income | 2,527 | 1,283 | 1,529 | 2,689 | | 4,019 | 2,626 |
Earnings per share - basic | $ 0.03 | $ 0.02 | $ 0.02 | $ 0.03 | | $ 0.05 | $ 0.03 |
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2022 Capital and Exploration Investment Summary
| | For the six months ended June 30, 2022 | | 2022 full year guidance | ||
| | (in thousands) | ||||
Sustaining Investments: | | | | | | |
Underground Development | Capital | $ | 3,168 | | $ | 8.5 - 9.5 million |
Infill Drilling and Exploration Development | Capital | | 4,040 | | | 7.0 - 7.5 million |
Other Sustaining Capital | Capital | | 1,416 | | | 4.0 - 4.5 million |
Subtotal of Sustaining Investments: | | | 8,624 | | | |
Growth Investments: | | | | | | |
DDGM growth: | | | | | | |
Gold Regrind | Capital | | 745 | | | - |
Dry Stack Completion | Capital | | 1,149 | | | - |
Surface Exploration / Other | Exploration | | 935 | | | 2.5 - 3.0 million |
Underground Exploration Drilling | Exploration | | 1,112 | | | 3.0 - 3.5 million |
Back Forty growth: | | | | | | |
Back Forty Feasibility Study & Permits | Exploration | | 3,095 | | | 8.0-9.0 million |
Subtotal of Growth Investments: | | | 7,036 | | | |
Total Capital and Exploration: | | $ | 15,660 | | $ | 33.0 - 37.0 million |
The Company’s investment in Mexico continued in Q2 2022 totaling $12.6 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. Year-to-date at the Back Forty Project, $3.1 million has been invested in feasibility and permitting initiatives.
Gold Regrind Project: Zinc tailings are being reground and leached to produce doré bars. Gold recovery is expected to continue to increase, and we have seen an approximate 5% increase in the gold recovery since the same period in 2021. Completion and commissioning were finalized in Q2 2022. A total of $1.8 million was invested in this project, $1.1 million in 2021.
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Dry Stack Tailings Project: Construction of the tailings filtration plant and dry stack facility were completed in 2021. During the first half of 2022, work continued to optimize the operations of the filtration plant. Currently 85% of the tails are sent to the dry stack facility, and the remaining 15% is sent to the underground operations in the form of paste fill for ground support. The dry stack facilities will conserve and recirculate water, eliminate risks related to traditional tailings facilities, accelerate reclamation of certain areas of the open pit mine, and extend the life of the operations. As of June 30, 2022, a total of $15.1 million has been invested in this project, $14.0 million through 2021.
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Dry Stack Area |
Underground and Exploration Development: Mine development during the quarter included ramps and accesses to different areas of the deposit, vertical shafts, and exploration development drifts. A total of 2,346 meters of development, at a cost of $5.3 million (1,252 meters at a cost of $2.9 million in Q2), was completed during the first half of 2022. For the first half of 2022, underground mine development was $3.2 million and exploration development was $2.1 million (included in Infill Drilling and Exploration Development in the table above). We plan to invest a total of $8.5 million to $9.5 million in underground development and an additional $4.0 million to $4.5 million in exploration development in 2022.
Back Forty Feasibility and Permitting: Work on the optimized feasibility study progressed during Q2 2022. Current initiatives are focused on mine planning and process plant design. Environmental considerations are a key factor in the overall site layout and infrastructure decisions being made. The feasibility study work for the Back Forty Project in
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Michigan, USA progressed during Q2 2022 with completion expected in the second half of this year, followed by permit applications being submitted with state agencies in Michigan.
Q2 2022 Conference Call
The Company will host a conference call tomorrow, Thursday, July 28, 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/AgbarDeZeBK
To join the call via telephone, please use the following dial-in details:
Participant Toll Free: (888) 440-2094
International: (438) 803-0544
Conference ID: 1047419
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
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