COLORADO SPRINGS, CO--(Marketwire -08/09/12)- Gold Resource Corporation (GORO) today announced results for its second quarter ending June 30, 2012. Gold Resource Corporation is a low-cost gold producer with operations in the southern state of Oaxaca, Mexico.
2012 Q2 HIGHLIGHTS
- 17,211 ounces precious metal gold equivalent (AuEq) sold
- 14,488 ounces AuEq produced
- 8% AuEq production increase over prior year quarter
- $17.2 million mine gross profit generated
- $3.6 million net income, or $0.07 per share
- $8.2 million pretax income, or $0.15 per share
- $9.5 million dividend distribution, or $0.18 per share
- $5.5 million physical gold and silver treasury
- Successfully implemented physical gold and silver dividend program
- $0.8 million increase in cash and cash equivalents from first quarter
Overview of Second Quarter 2012 Results from El Aguila Project
Gold Resource Corporation's El Aguila Project sold 17,211 ounces precious metal gold equivalent (AuEq) at a total cash cost of $509 per ounce AuEq in the second quarter. Average prices realized on sales during second quarter were $1,631 per ounce gold and $27 per ounce silver. The Company produced 14,488 ounces (AuEq) before payable metal deductions. Mine gross profit generated was $17.2 million. The Company paid $9.5 million to shareholders in dividends and converted $1.3 million of its treasury into physical gold and silver. In addition, the Company successfully implemented its physical dividend program where shareholders have the option to convert their cash dividends to physical gold and/or silver.
"The second quarter was a challenge as infrastructure requirements slowed the development and stoping of high-grade ore zones at La Arista," stated Gold Resource Corporation's President, Mr. Jason Reid. "This resulted in processing diluted development ore and stoping from available lower grade ore zones. Even with mill production for the quarter below our target, it is still impressive that we were profitable, we paid $9.5 million in dividends to the owners of the Company, and we were still able to put approximately $800,000 in the bank."
Mr. Reid continued, "Our total cash cost per ounce of gold equivalent sold this quarter was high as a direct result of the lower production. Had we achieved our targeted production of 30,000 gold equivalent ounces, we believe total cash costs would have been equal to about half of the $509 per gold equivalent ounce we reported. We believe this higher total cash cost number to be temporary and will decrease with anticipated higher production in the current and future quarters."
"We expect increased production from high-grade ore zone blocks between levels 7 through 10 prepared in the second quarter, which we are now actively stoping," stated Mr. Reid.
The Company will host a conference call at 11:00 a.m. EDT on Friday, August 10th. Conference call details can be found on the Company website at www.goldresourcecorp.com.
Below is a table of the key production statistics for our El Aguila Project during the three and six months ended June 30, 2012:
Production and Sales Statistics
----------------------------------------------------------------------------
La Arista Underground La Arista Underground
Mine Mine
------------------------- -------------------------
Three months Three months Six months Six months
ended June ended June ended June ended June
30, 30, 30, 30,
------------ ------------ ------------ ------------
2012 2011 2012 2011
------------ ------------ ------------ ------------
Production Summary
Milled:
Tonnes Milled 59,928 40,194 135,006 55,217
Tonnes Milled per
Day 659 442 742 453
Grade:
Average Gold Grade
(g/t) 3.73 2.36 4.03 2.18
Average Silver Grade
(g/t) 274 386 390 388
Average Copper Grade
(%) 0.38 0.42 0.44 0.30
Average Lead Grade
(%) 1.75 1.10 1.74 1.06
Average Zinc Grade
(%) 4.01 2.39 3.78 2.26
Recoveries:
Average Gold
Recovery (%) 88 89 89 90
Average Silver
Recovery (%) 92 93 93 92
Average Copper
Recovery (%) 70 63 74 63
Average Lead
Recovery (%) 69 75 72 78
Average Zinc
Recovery (%) 78 72 76 67
Mill production
(before payable metal
deductions)
Gold (ozs.) 6,342 2,720 15,564 3,484
Silver (ozs.) 487,053 461,546 1,577,534 630,666
Copper (tonnes) 161 104 442 104
Lead (tonnes) 720 332 1,683 458
Zinc (tonnes) 1,876 688 3,862 836
Payable metal sold
Gold (ozs.) 7,119 2,384 13,613 7,614
Silver (ozs.) 603,426 460,479 1,428,799 576,489
Copper (tonnes) 186 81 393 81
Lead (tonnes) 651 340 1,365 391
Zinc (tonnes) 1,934 458 3,011 484
Average metal prices
realized
Gold (oz.) $ 1,631 $ 1,576 $ 1,708 $ 1,444
Silver (oz.) $ 27 $ 37 $ 31 $ 36
Copper ( tonne) $ 7,850 $ 8,947 $ 8,319 $ 8,947
Lead (tonne) $ 2,018 $ 2,440 $ 2,074 $ 2,474
Zinc ( tonne) $ 1,958 $ 2,183 $ 2,027 $ 2,191
Gold equivalent ounces
produced (mill
production)
Gold Ounces 6,342 2,720 15,564 3,484
Gold Equivalent
Ounces from Silver 8,146 10,737 28,890 15,812
------------ ------------ ------------ ------------
Total Gold
Equivalent Ounces 14,488 13,457 44,454 19,296
------------ ------------ ------------ ------------
Gold equivalent ounces
sold
Gold Ounces 7,119 2,384 13,614 3,697
Gold Equivalent
Ounces from Silver 10,092 10,713 26,166 14,454
------------ ------------ ------------ ------------
Total Gold
Equivalent Ounces 17,211 13,097 39,780 18,151
------------ ------------ ------------ ------------
Total Cash Cost per
Gold Equivalent
Ounce(1) $ 509 $ 303 $ 347 - -
(1) A reconciliation of this non-GAAP measure to mine cost of sales, the most comparable GAAP measure, can be found in the Non-GAAP Measures of the Company's quarterly report on Form 10-Q for the period ended June 30, 2012 filed with the SEC and available at www.sec.gov.
Production and Sales Statistics
----------------------------------------------------------------------------
El Aguila Open
Pit Mine
----------------
Six months ended
June 30,
----------------
2011 (1)
----------------
Production Summary
Milled:
Tonnes Milled 46,409
Tonnes Milled per Day 829
Grade:
Average Gold Grade (g/t) 3.35
Average Silver Grade (g/t) 39
Recoveries:
Average Gold Recovery (%) 81
Average Silver Recovery (%) 75
Mill production (before payable metal deductions)
Gold (ozs.) 5,559
Silver (ozs.) 58,309
Payable metal sold
Gold (ozs.) 3,917
Silver (ozs.) 43,605
Average metal prices realized
Gold (oz.) $ 1,383
Silver (oz.) $ 34
Gold equivalent ounces produced (mill production)
Gold Ounces 5,559
Gold Equivalent Ounces from Silver (2) -
----------------
Total Gold Equivalent Ounces 5,559
----------------
Gold equivalent ounces sold
Gold Ounces 3,917
Gold Equivalent Ounces from Silver (2) -
----------------
Total Gold Equivalent Ounces 3,917
----------------
(1) No activity for the three months ended June 30, 2011.
(2) Silver ounces were considered a by-product in arriving at the total cash cost per ounce equivalent.
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 in Mexico's southern state of Oaxaca. The Company has 52,828,776 shares outstanding, no warrants and no debt. Gold Resource Corporation is the only Company to offer its shareholders a dividend option to obtain physical gold or silver in addition to cash. 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 and six months ended June 30, 2012 and 2011, its financial condition at June 30, 2012 and December 31, 2011 and its cash flows for the three months and six months ended June 30, 2012 and 2011. The summary data for the three and six months ended June 30, 2012 and 2011 is unaudited; the summary data for the year ended December 31, 2011 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2011, 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.
GOLD RESOURCE CORPORATION
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and six months ended June 30, 2012 and 2011
(U.S. dollars in thousands, except shares and per share amounts)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2012 2011 2012 2011
----------- ----------- ----------- -----------
Sales of metals
concentrate, net $ 30,010 $ 20,664 $ 70,631 $ 31,944
----------- ----------- ----------- -----------
Mine cost of sales:
Production costs
applicable to sales 12,603 5,200 19,697 9,277
Depreciation and
amortization 152 79 384 143
Accretion 19 22 40 43
----------- ----------- ----------- -----------
Total mine cost of
sales 12,774 5,301 20,121 9,463
----------- ----------- ----------- -----------
Mine gross profit 17,236 15,363 50,510 22,481
Costs and expenses:
General and
administrative
expenses 3,400 1,591 5,989 2,978
Exploration expenses 2,231 1,023 3,584 1,535
Construction and
development 4,117 6,025 8,098 9,091
Production start up
expense, net - - - -
Management contract
expense - - - -
----------- ----------- ----------- -----------
Total costs and
expenses 9,748 8,639 17,671 13,604
----------- ----------- ----------- -----------
Operating income (loss) 7,488 6,724 32,839 8,877
Other income (expense) 692 (23) (1,297) (144)
----------- ----------- ----------- -----------
Income (loss) before
income taxes 8,180 6,701 31,542 8,733
Provision for income
taxes 4,576 1,806 11,818 1,806
----------- ----------- ----------- -----------
Net income (loss) before
extraordinary item 3,604 4,895 19,724 6,927
Extraordinary items:
Flood loss, net of
income tax benefit of
$750 - (1,756) - (1,756)
----------- ----------- ----------- -----------
Net income (loss) $ 3,604 $ 3,139 $ 19,724 $ 5,171
=========== =========== =========== ===========
Other comprehensive
(loss) income:
Currency translation
gain (loss) (1,689) (80) (225) 384
----------- ----------- ----------- -----------
Net comprehensive income
(loss) $ 1,915 $ 3,059 $ 19,499 $ 5,555
=========== =========== =========== ===========
Net income per common
share:
Basic:
Before extraordinary
item $ 0.07 $ 0.09 $ 0.37 $ 0.13
Extraordinary item - $ (0.03) - $ (0.03)
----------- ----------- ----------- -----------
Net income $ 0.07 $ 0.06 $ 0.37 $ 0.10
=========== =========== =========== ===========
Diluted:
Before extraordinary
item $ 0.06 $ 0.09 $ 0.35 $ 0.12
Extraordinary item - $ (0.03) - $ (0.03)
----------- ----------- ----------- -----------
Net income $ 0.06 $ 0.06 $ 0.35 $ 0.09
=========== =========== =========== ===========
Weighted average shares
outstanding:
Basic 52,909,756 52,998,303 52,904,370 52,998,303
=========== =========== =========== ===========
Diluted 56,443,419 56,545,865 56,400,692 56,530,421
=========== =========== =========== ===========
GOLD RESOURCE CORPORATION
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except shares)
(unaudited)
June 30, December 31,
2012 2011
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 44,778 $ 51,960
Gold and silver bullion 5,517 2,549
Accounts receivable 8,307 14,281
Inventories 5,287 4,243
Deferred tax assets 11,118 11,118
Prepaid expenses 869 957
-------------- --------------
Total current assets 75,876 85,108
Land and mineral rights 227 227
Property and equipment - net 12,751 10,318
Deferred tax assets 19,517 19,517
-------------- --------------
Total assets $ 108,371 $ 115,170
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 586 $ 1,691
Accrued expenses 4,212 4,879
IVA taxes payable 3,676 559
Income taxes payable 490 15,987
Dividends payable 3,175 2,645
-------------- --------------
Total current liabilities 12,139 25,761
Asset retirement obligation 2,405 2,281
-------------- --------------
Total liabilities 14,544 28,042
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:
53,015,767 and 52,998,303 shares issued
and outstanding, respectively 53 53
Additional paid-in capital 119,729 132,529
(Deficit) accumulated during the
exploration stage (19,798) (39,522)
Treasury stock at cost, 104,251 shares (1,954) (1,954)
Other comprehensive income - currency
translation adjustment (4,203) (3,978)
-------------- --------------
Total shareholders' equity 93,827 87,128
-------------- --------------
Total liabilities and shareholders'
equity $ 108,371 $ 115,170
============== ==============
GOLD RESOURCE CORPORATION
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the three and six months ended June 30, 2012 and 2011
(U.S. dollars in thousands)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2012 2011 2012 2011
---------- ---------- ---------- ----------
Cash flows from operating
activities:
Net income $ 3,604 $ 3,139 $ 19,724 $ 5,171
---------- ---------- ---------- ----------
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities:
Depreciation and
amortization 221 186 518 330
Accretion 19 22 40 43
Stock-based compensation 2,603 1,521 4,659 2,898
Currency translation
gain (loss) (1,689) (80) (225) 384
Unrealized loss from
gold and silver bullion
held 528 - 329 -
Realized loss from gold
and silver bullion
converted 90 - 90 -
Changes in operating
assets and liabilities:
Accounts receivable 9,594 1,798 5,974 (1,411)
Inventories 2,165 2,177 (1,044) (2,511)
Prepaid expenses - (376) 88 (385)
Accounts payable (574) 752 (1,105) 1,201
Accrued expenses (310) (292) (667) (521)
IVA taxes payable 1,634 1,753 3,117 1,830
Income taxes payable (6,830) 1,056 (15,497) 1,056
Dividends payable 530 530 530 530
---------- ---------- ---------- ----------
Total adjustments 7,981 9,047 (3,193) 3,444
---------- ---------- ---------- ----------
Net cash provided by
operating activities 11,585 12,186 16,531 8,615
---------- ---------- ---------- ----------
Cash flows from investing
activities:
Capital expenditures (649) (1,664) (2,951) (3,089)
Purchases of gold and
silver bullion (1,304) - (4,183) -
Conversion of gold and
silver bullion 796 - 796 -
---------- ---------- ---------- ----------
Net cash used in
investing activities (1,157) (1,664) (6,338) (3,089)
---------- ---------- ---------- ----------
Cash flows from financing
activities:
Dividends paid (9,524) (6,360) (17,459) (11,130)
---------- ---------- ---------- ----------
Net cash used in
financing activities (9,524) (6,360) (17,459) (11,130)
---------- ---------- ---------- ----------
Effect of exchange rates on
cash and equivalents (129) 32 84 120
---------- ---------- ---------- ----------
Net increase (decrease) in
cash and equivalents 775 4,194 (7,182) (5,484)
Cash and equivalents at
beginning of period 44,003 37,904 51,960 47,582
---------- ---------- ---------- ----------
Cash and equivalents at end
of period $ 44,778 $ 42,098 $ 44,778 $ 42,098
========== ========== ========== ==========
Supplemental Cash Flow
Information
Income taxes paid $ 11,087 $ - $ 28,392 $ -
========== ========== ========== ==========
