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Gold Resource Corporation Reports First Quarter Net Income of $5.1 Million, or $0.09 per Share; Maintains 2015 Production Outlook

May 8, 2015 4:30 PM EDT

COLORADO SPRINGS, CO -- (Marketwired) -- 05/08/15 -- Gold Resource Corporation (NYSE MKT: GORO) (the "Company") reported production results for the first quarter ended March 31, 2015 of 19,347 ounces precious metal gold equivalent (AuEq) (calculated at actual sales price ratio of 72:1), which generated $5.1 million in net income for the quarter. Gold Resource Corporation is a gold and silver producer with operations in Oaxaca, Mexico and exploration in Nevada, USA. The Company has returned over $103 million to shareholders in monthly dividends since commercial production commenced July 1, 2010, and offers shareholders the option to convert their cash dividends and take delivery in physical gold and silver.

2015 Q1 HIGHLIGHTS

  • 19,347 ounces AuEq mill production
  • 18,800 ounces AuEq sold
  • $28.4 million sales, net
  • $5.1 million net income, or $0.09 per share
  • $416 total cash cost per ounce AuEq (after by-product credits)
  • $15.8 million Cash Flow from Mine Site Operations
  • $7.6 million by-product credits, or $402 per ounce AuEq sold
  • $1.6 million dividend distributions, or $0.03 per share for quarter

Overview of Q1 2015 Aguila Project Results

Gold Resource Corporation's Aguila Project produced 19,347 ounces AuEq at a total cash cost of $416 per ounce. Realized average metal price sales during the quarter were $1,203 per ounce gold and $16.74 per ounce silver. The Company recorded net income of $5.1 million, or $0.09 per share. Cash Flow from Mine Site Operations totaled $15.8 million. The Company paid $1.6 million to shareholders in dividends, or $0.03 per share during the quarter. Cash and cash equivalents at quarter end totaled $21.4 million. Realized gold and silver prices decreased 7.2% and 17.5%, respectively, compared to the first quarter of 2014.

"The Company delivered solid results for the first quarter of 2015," stated Gold Resource Corporation's CEO and President, Mr. Jason Reid. "Even with precious metal prices down significantly year over year, operations generated net income of $5.1 million, or $0.09 per share for the quarter. The Company is still focused on cost cutting measures and the benefit of these is evident as total cash cost per ounce AuEq was $416 for the quarter. The Company remains on track to meet its annual production outlook of 80,000 to 90,000 ounces of precious metal gold equivalent at a 64.1 to 1 ratio."

The following table summarizes certain information about our mining operations for the three months ended March 31, 2015 and 2014:

Production and Sales Statistics - Arista Underground Mine


                                                        Three months ended
                                                             March 31,
                                                      ----------------------
                                                         2015        2014
                                                      ----------  ----------
Milled
  Tonnes Milled                                           92,359     104,349
  Tonnes Milled per Day                                    1,026       1,159
Grade
  Average Gold Grade (g/t)                                  3.13        3.25
  Average Silver Grade (g/t)                                 287         285
  Average Copper Grade (%)                                  0.42        0.35
  Average Lead Grade (%)                                    1.46        1.23
  Average Zinc Grade (%)                                    3.71        3.43
Recoveries
  Average Gold Recovery (%)                                   90          91
  Average Silver Recovery (%)                                 93          92
  Average Copper Recovery (%)                                 76          80
  Average Lead Recovery (%)                                   75          72
  Average Zinc Recovery (%)                                   81          82

Mill production (before payable metal deductions)(1)
  Gold (ozs.)                                              8,348       9,958
  Silver (ozs.)                                          790,300     878,958
  Copper (tonnes)                                            293         292
  Lead (tonnes)                                            1,013         929
  Zinc (tonnes)                                            2,762       2,920
Payable metal sold
  Gold (ozs.)                                              8,678       8,586
  Silver (ozs.)                                          727,315     766,535
  Copper (tonnes)                                            277         259
  Lead (tonnes)                                              920         812
  Zinc (tonnes)                                            2,205       2,158
Average metal prices realized (2)
  Gold ($ per oz.)                                    $    1,203  $    1,296
  Silver ($ per oz.)                                  $    16.74  $    20.30
  Copper ($ per tonne)                                $    5,532  $    6,939
  Lead ($ per tonne)                                  $    1,731  $    2,091
  Zinc ($ per tonne)                                  $    2,008  $    2,050
Precious metal gold equivalent ounces produced (mill
 production) (1)(3)(4)
  Gold Ounces                                              8,348       9,958
  Gold Equivalent Ounces from Silver                      10,999      13,776
                                                      ----------  ----------
  Total Precious Metal Gold Equivalent Ounces             19,347      23,734
                                                      ----------  ----------
Precious metal gold equivalent ounces sold (3)(4)
  Gold Ounces                                              8,678       8,586
  Gold Equivalent Ounces from Silver                      10,122      12,014
                                                      ----------  ----------
  Total Precious Metal Gold Equivalent Ounces             18,800      20,600
                                                      ----------  ----------
  Total cash cost (before by-product credits) per
   precious metal gold equivalent ounce sold
   (including royalties) (4)                          $      818  $      806
                                                      ==========  ==========
  Total cash costs, after by-product credits, per
   precious metal gold equivalent ounce sold
   (including royalties) (4)                          $      416  $      422
                                                      ==========  ==========

(1) Mill production represents metal contained in concentrates produced at
    the mill, which is before payable metal deductions are levied by the
    buyer of our concentrates. Payable metal deduction quantities are
    defined in our contracts with the buyer of our concentrates and
    represent an estimate of metal contained in the concentrates produced at
    our mill which the buyer cannot recover through the smelting process.
    There are inherent limitations and differences in the sampling method
    and assaying of estimated metal contained in concentrates that are
    shipped, and those contained metal estimates are derived from sampling
    methods and assaying throughout the mill production process. The Company
    monitors these differences to ensure that precious metal mill production
    quantities are materially correct.

(2) Average metal prices realized vary from the market metal prices due to
    final settlement adjustments from our provisional invoices when they are
    settled. Our average metal prices realized will therefore differ from
    the market average metal prices in most cases.

(3) Precious metal gold equivalent mill production for the three months
    ended March 31, 2015 of 19,347 ounces differs from gold equivalent
    ounces sold for the same period of 18,880 due principally to buyer
    (smelter) concentrate processing and other deductions of approximately
    1,487 gold equivalent ounces and a decrease in gold equivalent ounces
    contained in ending inventory of approximately 941 ounces.

(4) Non-GAAP measure to total mine cost of sales reconciliation, which is
    the most comparable United States generally accepted accounting
    principles ("U.S. GAAP") measure.

About GRC:

Gold Resource Corporation is a mining company focused on production and pursuing development of gold and silver projects that feature low operating costs and produce high returns on capital. The Company has 100% interest in six potential high-grade gold and silver properties at its producing Oaxaca, Mexico Mining Unit and exploration properties at its Nevada, USA, Mining Unit. The Company has 54,179,369 shares outstanding, no warrants and no debt. Gold Resource Corporation offers shareholders the option to convert their cash dividends into physical gold and silver and take delivery. For more information, please visit GRC's website, located at www.Goldresourcecorp.com and read the Company's 10-K for an understanding of the risk factors involved.

Cautionary Statements:

This press release contains forward-looking statements that involve risks and uncertainties. The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. When used in this press release, the words "plan", "target", "anticipate," "believe," "estimate," "intend" and "expect" and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, without limitation, the statements regarding Gold Resource Corporation's strategy, future plans for production, future expenses and costs, future liquidity and capital resources, and estimates of mineralized material. All forward-looking statements in this press release are based upon information available to Gold Resource Corporation on the date of this press release, and the company assumes no obligation to update any such forward-looking statements. Forward looking statements involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. The Company's actual results could differ materially from those discussed in this press release. In particular, there can be no assurance that production will continue at any specific rate. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the Company's 10-K filed with the SEC.

See Accompanying Tables

The following information summarizes the results of operations for Gold Resource Corporation for the three months ended March 31, 2015 and 2014, its financial condition at March 31, 2015 and December 31, 2014 and its cash flows for the three months ended March 31, 2015 and 2014. The summary data for the three months ended March 31, 2015 is unaudited; the summary data for the year ended December 31, 2014 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2014, but do not include the footnotes and other information that is included in the complete financial statements. Readers are urged to review the Company's Form 10-K in its entirety, which can be found on the SEC's website at www.sec.gov.

The calculation of our cash cost per ounce contained in this press release is a non-GAAP financial measure. Please see "Management's Discussion and Analysis and Results of Operation" contained in the Company's most recent Form 10-Q and Form 10-K for a complete discussion and reconciliation of the non-GAAP measures.


                         GOLD RESOURCE CORPORATION
                   CONDENSED CONSOLIDATED BALANCE SHEETS
      (U.S. dollars in thousands, except share and per share amounts)

                                                   March 31,   December 31,
                                                     2015          2014
                                                  (Unaudited)
                                                 ------------  ------------
                      ASSETS
Current assets:
  Cash and cash equivalents                      $     21,444  $     27,541
  Gold and silver bullion                               3,440         3,447
  Accounts receivable                                   7,459         1,416
  Inventories                                           8,019         7,295
  IVA taxes receivable                                    661           575
  Deferred tax assets                                   3,891         3,891
  Prepaid expenses and other current assets             2,308         2,935
                                                 ------------  ------------
    Total current assets                               47,222        47,100
Property, plant and mine development, net              36,885        32,348
Deferred tax assets                                    25,519        25,519
Investments                                             1,901         2,620
Other non-current assets                                4,725         4,078
                                                 ------------  ------------
    Total assets                                 $    116,252  $    111,665
                                                 ============  ============
       LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable                               $      6,306  $      3,892
  Accrued expenses and other current liabilities        3,694         3,923
  Capital lease obligations, current portion            1,543         1,498
  Income taxes payable                                  6,342         7,907
  Dividends payable                                       542           542
                                                 ------------  ------------
    Total current liabilities                          18,427        17,762
  Capital lease obligations                               415           834
  Deferred tax liability                                    6             -
  Reclamation and remediation liabilities               2,834         2,993
                                                 ------------  ------------
    Total liabilities                                  21,682        21,589
Shareholders' equity:
  Preferred stock - $0.001 par value, 5,000,000
   shares authorized:
    no shares issued and outstanding                        -             -
  Common stock - $0.001 par value, 100,000,000
   shares authorized:
    54,515,767 and 54,515,767 shares issued and
     outstanding, respectively                             55            55
  Additional paid-in capital                           94,159        93,094
  Retained earnings                                     7,411         3,982
  Treasury stock at cost, 336,398 shares               (5,884)       (5,884)
  Accumulated other comprehensive loss                 (1,171)       (1,171)
                                                 ------------  ------------
    Total shareholders' equity                         94,570        90,076
                                                 ------------  ------------
    Total liabilities and shareholders' equity   $    116,252  $    111,665
                                                 ============  ============



                          GOLD RESOURCE CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
             for the three months ended March 31, 2015 and 2014
       (U.S. dollars in thousands, except share and per share amounts)
                                 (Unaudited)


                                                      2015          2014
                                                  ------------  ------------

Sales, net                                        $     28,372  $     31,152
Mine cost of sales:
  Production costs                                      12,934        14,221
  Depreciation and amortization                          1,392           745
  Reclamation and remediation                               23             -
                                                  ------------  ------------
    Total mine cost of sales                            14,349        14,966
                                                  ------------  ------------
Mine gross profit                                       14,023        16,186
Costs and expenses:
  General and administrative expenses                    2,731         3,013
  Exploration expenses                                   1,712         1,288
                                                  ------------  ------------
    Total costs and expenses                             4,443         4,301
                                                  ------------  ------------
Operating income                                         9,580        11,885
Other (expense) income, net                               (504)          469
                                                  ------------  ------------
Income before income taxes                               9,076        12,354
  Provision for income taxes                             4,023         5,229
                                                  ------------  ------------
Net income                                        $      5,053  $      7,125
                                                  ============  ============
Net income per common share:
  Basic                                           $       0.09  $       0.13
                                                  ============  ============
  Diluted                                         $       0.09  $       0.13
                                                  ============  ============
Weighted average shares outstanding:
  Basic                                             54,179,369    53,934,925
                                                  ============  ============
  Diluted                                           54,179,369    54,697,710
                                                  ============  ============



                         GOLD RESOURCE CORPORATION
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
             for the three months ended March 31, 2015 and 2014
                        (U.S. dollars in thousands)
                                (Unaudited)


                                                     2015          2014
                                                 ------------  ------------

Cash flows from operating activities:
  Net income                                     $      5,053  $      7,125
                                                 ------------  ------------
  Adjustments to reconcile net income to net cash
   from operating activities:
    Depreciation, depletion and amortization            1,457           810
    Stock-based compensation                            1,066           783
    Deferred income taxes                                   6             -
    Currency exchange (gain) loss                        (545)          137
    Unrealized loss (gain) on investments                 719          (702)
    Other operating adjustments                           112             -
  Changes in operating assets and liabilities:
    Accounts receivable                                (6,043)       (4,176)
    Inventories                                          (724)          496
    Prepaid expenses and other current assets             (24)        1,110
    Accounts payable and other accrued
     liabilities                                        1,046         1,551
    Income taxes payable/receivable                    (1,255)        5,219
                                                 ------------  ------------
Total adjustments                                      (4,185)        5,228
                                                 ------------  ------------
  Net cash provided by operating activities               868        12,353
                                                 ------------  ------------
Cash flows from investing activities:
    Capital expenditures                               (4,937)       (4,190)
    Proceeds from conversion of gold and silver
     bullion                                                7             8
    Investments                                             -        (1,805)
                                                 ------------  ------------
  Net cash used in investing activities                (4,930)       (5,987)
                                                 ------------  ------------
Cash flows from financing activities:
    Proceeds from exercise of stock options                 -           100
    Dividends paid                                     (1,625)       (1,617)
    Repayment of capital leases                          (372)         (365)
                                                 ------------  ------------
  Net cash used in financing activities                (1,997)       (1,882)
                                                 ------------  ------------
Effect of exchange rate changes on cash and cash
 equivalents                                              (38)            -
                                                 ------------  ------------
Net (decrease) increase in cash and cash
 equivalents                                           (6,097)        4,484
Cash and equivalents at beginning of period            27,541        14,973
                                                 ------------  ------------
Cash and equivalents at end of period            $     21,444  $     19,457
                                                 ============  ============
Supplemental Cash Flow Information
  Interest expense paid                          $         24  $         85
                                                 ============  ============
  Income and mining taxes paid                   $      5,239  $          -
                                                 ============  ============

Contacts:

Corporate Development
Greg Patterson
303-320-7708
www.Goldresourcecorp.com

Source: Gold Resource Corporation



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