Gold Resource Corporation Reports Second Quarter Net Income of $5.6 Million, or $0.10 per Share; Maintains 2016 Production Outlook
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E-mailCOLORADO SPRINGS, CO -- (Marketwired) -- 08/02/16 -- Gold Resource Corporation (NYSE MKT: GORO) (the "Company") reported production results for the second quarter ended June 30, 2016 of 10,011 ounces of gold and 572,499 ounces of silver, which along with base metal revenue generated $26.2 million in net revenue 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 $108 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.
2016 Q2 HIGHLIGHTS
- 10,011 gold ounces produced
- 572,499 silver ounces produced
- $26.2 million net sales
- $317 total cash cost per gold equivalent ounce (after by-product credits)
- $15.5 million adjusted cash flow from mine site operations
- $9.8 million by-product credits, or $631 per ounce sold
- $0.3 million dividend distributions, or $0.005 per share for quarter
Overview of Q2 2016 Results
Gold Resource Corporation's Aguila Project produced 17,706 gold equivalent ounces at a total cash cost of $317 per ounce (after by-product credits). Realized average metal price sales during the quarter were $1,271 per ounce gold and $17.08 per ounce silver. The Company recorded net income of $5.6 million, or $0.10 per share. Adjusted cash flow from mine site operations totaled $15.5 million. The Company paid $0.3 million to shareholders in dividends, or $0.005 per share during the quarter. Cash and cash equivalents at quarter end totaled $13.3 million. Realized gold and silver prices increased 6% and 2%, respectively, compared to the second quarter of 2015.
Production for the first half of 2016 included 16,474 ounces of gold and 1,006,640 ounces of silver. The Company maintains its 2016 Annual Outlook of 26,000 gold ounces, 1,900,000 silver ounces, 1,100 tonnes of copper, 3,200 tonnes of lead and 12,900 tonnes of zinc.
The following table summarizes certain information about our mining operations for the three and six months ended June 30, 2016 and 2015:
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2016 2015 2016 2015
---------- ---------- ---------- ----------
Milled
Tonnes Milled (1) 104,333 102,522 217,478 194,881
Tonnes Milled per Day (2) 1,228 1,127 1,265 1,077
Grade
Average Gold Grade (g/t) 3.27 2.25 2.68 2.66
Average Silver Grade (g/t) 182 189 156 235
Average Copper Grade (%) 0.40 0.35 0.30 0.38
Average Lead Grade (%) 1.40 1.24 1.20 1.35
Average Zinc Grade (%) 4.40 3.59 3.90 3.65
Recoveries
Average Gold Recovery (%) 92 92 91 91
Average Silver Recovery (%) 94 93 93 93
Average Copper Recovery (%) 77 82 76 79
Average Lead Recovery (%) 71 74 71 75
Average Zinc Recovery (%) 84 82 84 82
Mill production (before payable
metal deductions) (3)
Gold (ozs.) 10,011 6,788 16,474 15,135
Silver (ozs.) 572,499 580,326 1,006,640 1,370,625
Copper (tonnes) 320 293 564 586
Lead (tonnes) 1,009 943 1,847 1,956
Zinc (tonnes) 3,813 3,038 7,074 5,800
Payable metal sold
Gold (ozs.) 8,197 7,096 14,413 15,774
Silver (ozs.) 548,537 538,848 927,331 1,266,164
Copper (tonnes) 319 268 539 546
Lead (tonnes) 974 907 1,737 1,827
Zinc (tonnes) 3,424 2,559 6,023 4,763
Average metal prices realized (4)
Gold ($ per oz.) 1,271 1,201 1,240 1,202
Silver ($ per oz.) 17.08 16.70 15.97 16.72
Copper ($ per tonne) 4,740 6,022 4,497 5,773
Lead ($ per tonne) 1,717 1,908 1,757 1,819
Zinc ($ per tonne) 1,940 2,275 1,844 2,152
Precious metal gold equivalent
ounces produced (mill
production) (3)
Gold Ounces 10,011 6,788 16,474 15,135
Gold Equivalent Ounces from
Silver 7,695 8,070 12,971 19,069
---------- ---------- ---------- ----------
Total Precious Metal Gold
Equivalent Ounces 17,706 14,858 29,445 34,204
========== ========== ========== ==========
Precious metal gold equivalent
ounces sold
Gold Ounces 8,197 7,096 14,413 15,774
Gold Equivalent Ounces from
Silver 7,373 7,493 11,949 17,616
---------- ---------- ---------- ----------
Total Precious Metal Gold
Equivalent Ounces 15,570 14,589 26,362 33,390
========== ========== ========== ==========
Total cash cost before by-
product credits per precious
metal gold equivalent ounce
sold (5) $ 948 $ 1,162 $ 1,088 $ 969
========== ========== ========== ==========
Total cash cost after by-
product credits per precious
metal gold equivalent ounce
sold (5) $ 317 $ 533 $ 459 $ 469
========== ========== ========== ==========
Total all-in sustaining cost
per precious metal gold
equivalent ounce sold (5) $ 649 $ 854 $ 916 $ 842
========== ========== ========== ==========
Total all-in cost per precious
metal gold equivalent ounce
sold (5) $ 755 $ 1,368 $ 1,035 $ 1,112
========== ========== ========== ==========
(1) For the second quarter and first half of 2016, this includes 10,608 and
27,305 tonnes, respectively of low-grade stockpile open pit ore.
(2) Based on actual days the mill operated during the year.
(3) 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.
(4) 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.
(5) For a reconciliation of this non-GAAP measure to total mine cost of
sales, which is the most comparable U.S. GAAP measure, please see Non-
GAAP Measures
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 54,266,706 shares outstanding, no warrants, no long term debt and has returned $108 million back to shareholders since commercial production commenced July 1, 2010. 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 and six months ended June 30, 2016 and 2015, its financial condition at June 30, 2016 and December 31, 2015 and its cash flows for the six months ended June 30, 2016 and 2015. The summary data for the six months ended June 30, 2016 is unaudited; the summary data for the year ended December 31, 2015 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2015, 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 precious metal gold equivalent per ounce, total all-in sustaining cost per precious metal gold equivalent per ounce and total all-in cost per precious metal gold equivalent per ounce contained in this press release are non-GAAP financial measures. Please see "Management's Discussion and Analysis and Results of Operations" 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)
June 30, December 31,
2016 2015
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 13,264 $ 12,822
Gold and silver rounds/bullion 3,785 2,988
Accounts receivable 2,045 321
Inventories 10,055 8,753
IVA taxes receivable 780 1,332
Income tax receivable 2,074 3,794
Prepaid expenses and other current assets 2,334 2,608
------------ ------------
Total current assets 34,337 32,618
Property, plant and mine development, net 52,523 51,637
Deferred tax assets 19,433 21,064
Investments in equity securities 231 231
Other non-current assets 902 985
------------ ------------
Total assets $ 107,426 $ 106,535
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,730 $ 11,600
Accrued expenses and other current liabilities 2,086 2,140
Capital lease obligations - 842
Mining royalty taxes payable 771 230
Dividends payable 90 90
------------ ------------
Total current liabilities 9,677 14,902
Reclamation and remediation liabilities 2,583 2,815
------------ ------------
Total liabilities 12,260 17,717
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: 54,603,104 and 54,266,706
shares issued and outstanding at June 30,
2016 and December 31, 2015 55 55
Additional paid-in capital 96,980 96,766
Accumulated retained earnings / (deficit) 5,186 (948)
Treasury stock at cost, 336,398 shares (5,884) (5,884)
Accumulated other comprehensive loss (1,171) (1,171)
------------ ------------
Total shareholders' equity 95,166 88,818
------------ ------------
Total liabilities and shareholders' equity $ 107,426 $ 106,535
============ ============
GOLD RESOURCE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
----------------------- -----------------------
2016 2015 2016 2015
----------- ----------- ----------- -----------
Sales, net $ 26,198 $ 23,273 $ 43,601 $ 51,645
Mine cost of sales:
Production costs 10,707 14,117 21,803 27,051
Depreciation and
amortization 3,054 2,224 5,860 3,616
Reclamation and
remediation 44 7 91 30
----------- ----------- ----------- -----------
Total mine cost of
sales 13,805 16,348 27,754 30,697
----------- ----------- ----------- -----------
Mine gross profit 12,393 6,925 15,847 20,948
Costs and expenses:
General and
administrative expenses 1,670 2,388 3,848 5,119
Exploration expenses 642 2,894 1,146 4,606
----------- ----------- ----------- -----------
Total costs and
expenses 2,312 5,282 4,994 9,725
----------- ----------- ----------- -----------
Operating income 10,081 1,643 10,853 11,223
Other income (expense), net 538 (543) 1,244 (1,047)
----------- ----------- ----------- -----------
Income before income taxes 10,619 1,100 12,097 10,176
Provision for income
taxes 5,011 288 5,692 4,311
----------- ----------- ----------- -----------
Net income $ 5,608 $ 812 $ 6,405 $ 5,865
=========== =========== =========== ===========
Net income per common
share:
Basic and diluted $ 0.10 $ 0.01 $ 0.12 $ 0.11
Weighted average shares
outstanding:
Basic 54,266,706 54,179,369 54,266,706 54,179,369
=========== =========== =========== ===========
Diluted 54,670,594 54,179,369 54,372,705 54,179,369
=========== =========== =========== ===========
GOLD RESOURCE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
(Unaudited)
Six months ended June 30,
--------------------------
2016 2015
------------ ------------
Cash flows from operating activities:
Net income $ 6,405 $ 5,865
------------ ------------
Adjustments to reconcile net income to net
cash from operating activities:
Deferred income taxes 1,623 1,602
Depreciation, depletion and amortization 6,029 3,748
Stock-based compensation 486 1,913
Other operating adjustments (815) 977
Changes in operating assets and liabilities:
Accounts receivable (1,724) 728
Inventories (1,302) (1,195)
Prepaid expenses and other current assets 122 424
Accounts payable and other accrued
liabilities (1,571) 703
Mining and income taxes payable/receivable 2,256 (5,263)
Other noncurrent assets 41 (37)
------------ ------------
Net cash provided by operating activities 11,550 9,465
------------ ------------
Cash flows from investing activities:
Capital expenditures (10,276) (11,943)
Proceeds from the sale of equity investments 324 -
Other investing activities 3 28
------------ ------------
Net cash used in investing activities (9,949) (11,915)
------------ ------------
Cash flows from financing activities:
Dividends paid (543) (3,251)
Repayment of capital leases (606) (745)
------------ ------------
Net cash used in financing activities (1,149) (3,996)
------------ ------------
Effect of exchange rate changes on cash and cash
equivalents (10) (72)
------------ ------------
Net increase (decrease) in cash and cash
equivalents 442 (6,518)
Cash and cash equivalents at beginning of period 12,822 27,541
------------ ------------
Cash and cash equivalents at end of period $ 13,264 $ 21,023
============ ============
Supplemental Cash Flow Information
Interest expense paid $ 13 $ 48
============ ============
Income and mining taxes paid $ 256 $ 7,321
============ ============
Contacts: Corporate Development Greg Patterson 303-320-7708 www.Goldresourcecorp.com
Source: Gold Resource Corporation
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