Gold Resource Corporation Reports Second Quarter Results; Maintains 2013 Production Outlook

Marketwired

COLORADO SPRINGS, CO--(Marketwired - Aug 8, 2013) - Gold Resource Corporation (NYSE MKT: GORO) (the "Company") reported its production results for the second quarter ended June 30, 2013 of 20,574 ounces precious metal gold equivalent ("AuEq," calculated at actual sales price ratio of 60:1). Gold Resource Corporation is a low-cost gold producer with operations in the southern state of Oaxaca, Mexico. The Company has returned over $86 million to shareholders in monthly dividends since production July 1, 2010, and offers shareholders the option to convert their cash dividends into physical gold and silver and take delivery.

2013 Q2 HIGHLIGHTS

  • 20,574 ounces mill production, precious metal gold equivalent (AuEq)
  • 19,992 precious metal AuEq ounces sold
  • $12.5 million Cash Flow from Mine Site Operations
  • Total cash cost of $645 per ounce AuEq (including 5% royalty)
  • Dividend distributions of $6.4 million, or $0.12 per share for quarter
  • Mill expansion scheduled for year-end delivery

Overview of Q2 2013 Results from El Aguila Project

Gold Resource Corporation's El Aguila Project produced 20,574 ounces of precious metal gold equivalent (AuEq) at a total cash cost of $645 per AuEq ounce and realized average prices of $1,386 per ounce gold and $23 per ounce silver for its sales during the second quarter. Gold and silver prices decreased 13.5% and 14.8%, respectively, from the second quarter of 2012. Cash Flow from Mine Site Operations was $12.5 million. The Company paid $6.4 million to shareholders in dividends.

"Half-way through the 2013 production year, the Company remains on track with its annual production goal, targeting a range of 80,000 to 100,000 precious metal gold equivalent ounces," stated Gold Resource Corporation's President, Mr. Jason Reid. "With the decrease in precious metal market prices, and the gold-to-silver ratio working against us this quarter, our team was still able to deliver respectable production results. We look forward to the completion of our mill construction so we can focus our efforts on the Arista mine and increasing production tonnages to match the enhanced Aguila mill capacity. We expect a decrease in per ounce and per tonne production costs with higher mill throughput."

Mr. Reid continued, "In response to the metal price fall during the quarter, we cut our dividend by half but are pleased to have distributed to our shareholders a meaningful monthly dividend."

Below is a table of the key production statistics for our El Aguila Project during the three and six months ended June 30, 2013 and 2012.

 
 
Production and Sales Statistics - La Arista Underground Mine
 
      Three months ended June 30,   Six months ended June 30,
    2013   2012   2013   2012
Production Summary                        
Milled:                        
  Tonnes Milled     72,740     59,928     148,924     135,006
  Tonnes Milled per Day     808     659     823     742
Grade:                        
  Average Gold Grade (g/t)     3.83     3.73     3.75     4.03
  Average Silver Grade (g/t)     349     274     347     390
  Average Copper Grade (%)     0.38     0.38     0.39     0.44
  Average Lead Grade (%)     1.12     1.75     1.11     1.74
  Average Zinc Grade (%)     2.61     4.01     2.70     3.78
Recoveries:                        
  Average Gold Recovery (%)     90     88     89     89
  Average Silver Recovery (%)     92     92     92     93
  Average Copper Recovery (%)     72     70     78     74
  Average Lead Recovery (%)     70     69     70     72
  Average Zinc Recovery (%)     74     78     77     76
Mill production (before payable metal deductions)(1)                        
  Gold (ozs.)     8,015     6,342     15,913     15,564
  Silver (ozs.)     747,646     487,053     1,525,317     1,577,534
  Copper (tonnes)     202     161     450     442
  Lead (tonnes)     573     720     1,159     1,683
  Zinc (tonnes)     1,405     1,876     3,081     3,862
Payable metal sold                        
  Gold (ozs.)     7,297     7,292     16,250     13,029
  Silver (ozs.)     755,746     606,429     1,618,898     1,383,367
  Copper (tonnes)     194     192     499     388
  Lead (tonnes)     496     674     1,139     1,385
  Zinc (tonnes)     1,180     1,999     2,915     3,075
Average metal prices realized                        
  Gold (oz.)   $ 1,386   $ 1,603   $ 1,530   $ 1,672
  Silver (oz.)   $ 23   $ 27   $ 27   $ 30
  Copper (tonne)   $ 7,114   $ 7,688   $ 7,652   $ 8,155
  Lead (tonne)   $ 2,127   $ 1,973   $ 2,308   $ 2,060
  Zinc (tonne)   $ 1,848   $ 1,912   $ 2,030   $ 1,992
Precious metal gold equivalent ounces produced (mill production)(1)(3)(4)                        
  Gold Ounces     8,015     6,342     15,913     15,564
  Gold Equivalent Ounces from Silver     12,559     8,146     27,086     28,903
  Total Precious Metal Gold Equivalent Ounces     20,574     14,488     42,999     44,467
Precious metal gold equivalent ounces sold(2)(3)(4)                        
  Gold Ounces     7,297     7,292     16,250     13,029
  Gold Equivalent Ounces from Silver     12,695     10,142     28,748     25,342
  Total Precious Metal Gold Equivalent Ounces     19,992     17,434     44,998     38,370
  Total Cash Cost per Precious Metal Gold Equivalent Ounce Sold(2)   $ 645   $ 497   $ 547   $ 352
                           
(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, for 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 derived from sampling methods and assaying throughout the mill production process. The Company monitors these differences to insure that precious metal mill production quantities are materially correct. In addition, mill production quantities for the three months and six months ended March 31, 2012 do not reflect any deduction for 583 gold ounces and 45,432 silver ounces, respectively, (approximately 1,400 gold equivalent ounces) resulting from a settlement agreement with the buyer of our concentrates.
(2)   A reconciliation of this Non-GAAP measure to mine cost of sales, the most comparable U.S. GAAP measure, can be found below in "Non-GAAP Measures".
(3)   Precious metal gold equivalent mill production for the second quarter of 2013 of 20,574 ounces differs from gold equivalent ounces sold for 2013 of 19,992 due principally to buyer (smelter) concentrate processing deductions of approximately 1,775 gold equivalent ounces and an increase in gold equivalent ounces contained in ending inventory of approximately 1,193 ounces.
(4)   Precious metal gold equivalent mill production for the six months ended June 30, 2013 of 42,999 ounces differs from gold equivalent ounces sold for 2013 of 44,998 principally due to buyer (smelter) concentrate processing deductions of approximately 4,033 gold equivalent ounces and an increase in gold equivalent ounces contained in ending inventory of approximately 6,032 ounces.
     
     

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 53,279,369 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 and six months ended June 30, 2013 and 2012, its financial condition at June 30, 2013 and December 31, 2012 and its cash flows for the three and six months ended June 30, 2013 and 2012. The summary data for the three and six months ended June 30, 2013 and 2012 is unaudited; the summary data for the year ended December 31, 2012 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2012, 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)  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
for the three and six months ended June 30, 2013 and 2012  
(U.S. dollars in thousands, except shares and per share amounts)  
(Unaudited)  
   
    Three months ended June 30,     Six months ended June 30,  
    2013     2012     2013     2012  
Sales of metals concentrate, net   $ 26,660     $ 30,700     $ 68,971     $ 67,364  
Mine cost of sales:                                
  Production costs     14,931       12,603       30,642       19,545  
  Depreciation and amortization     557       152       1,093       384  
  Accretion     28       19       57       40  
    Total mine cost of sales     15,516       12,774       31,792       19,969  
Mine gross profit     11,144       17,926       37,179       47,395  
Costs and expenses:                                
  General and administrative expenses     3,457       3,400       7,842       5,989  
  Exploration expenses     2,806       2,231       6,105       3,584  
  Construction and development     5,649       4,117       11,654       8,098  
    Total costs and expenses     11,912       9,748       25,601       17,671  
Operating (loss) income     (768 )     8,178       11,578       29,724  
Other (expense) income     (1,862 )     692       (1,898 )     (1,297 )
(Loss) income before income taxes     (2,630 )     8,870       9,680       28,427  
  Provision for income taxes (benefit)     (1,257 )     4,742       3,667       10,798  
Net (loss) income   $ (1,373 )   $ 4,128     $ 6,013     $ 17,629  
Other comprehensive income:                                
  Currency translation (loss)     (45 )     (1,689 )     (11 )     (225 )
Comprehensive (loss) income   $ (1,418 )   $ 2,439     $ 6,002     $ 17,404  
Net (loss) income per common share:                                
  Basic:   $ (0.03 )   $ 0.08     $ 0.11     $ 0.33  
  Diluted:   $ (0.03 )   $ 0.07     $ 0.11     $ 0.31  
                                 
Weighted average shares outstanding:                                
  Basic     53,272,776       52,909,756       52,977,712       52,904,370  
  Diluted     53,272,776       56,443,419       55,434,474       56,400,692  
                                   
   
   
   
GOLD RESOURCE CORPORATION  
(An Exploration Stage Company)  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(U.S. dollars in thousands, except shares)  
   
    June 30,     December 31,  
    2013     2012  
    (unaudited)        
ASSETS            
Current assets:                
  Cash and cash equivalents   $ 30,414     $ 35,780  
  Gold and silver bullion     3,825       5,809  
  Accounts receivable     2,714       6,349  
  Inventories     7,116       7,533  
  Income tax receivable     6,922       419  
  Deferred tax assets     2,121       2,121  
  Prepaid expenses and other assets     3,751       973  
    Total current assets     56,863       58,984  
Land and mineral rights     227       227  
Property and equipment - net     17,973       14,050  
Inventories     797       809  
Deferred tax assets     31,559       31,559  
  Total assets   $ 107,419     $ 105,629  
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities:                
  Accounts payable   $ 5,070     $ 3,013  
  Accrued expenses     5,802       4,178  
  Capital lease obligations     1,376       -  
  IVA taxes payable     2,244       2,673  
  Dividends payable     1,598       3,161  
    Total current liabilities     16,090       13,025  
Capital lease obligations     3,125       -  
Asset retirement obligation     2,861       2,790  
    Total liabilities     22,076       15,815  
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: 53,615,767 and 53,015,767 shares issued and outstanding, respectively     54       53  
Additional paid-in capital     92,362       102,674  
(Deficit) accumulated during the exploration stage     -       (5,851 )
Treasury stock at cost, 336,398 shares     (5,884 )     (5,884 )
Accumulated other comprehensive (loss) - currency translation adjustment     (1,189 )     (1,178 )
    Total shareholders' equity     85,343       89,814  
    Total liabilities and shareholders' equity   $ 107,419     $ 105,629  
                     
   
   
   
GOLD RESOURCE CORPORATION  
(An Exploration Stage Company)  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
for the three and six months ended June 30, 2013 and 2012  
(U.S. dollars in thousands)  
(Unaudited)  
   
    Three months ended June 30,     Six months ended June 30,  
    2013     2012     2013     2012  
                         
Cash flows from operating activities:                                
  Net income   $ (1,374 )   $ 4,128     $ 6,013     $ 17,629  
  Adjustments to reconcile net income to net cash from (used in) operating activities:                                
  Depreciation and amortization     535       222       1,188       518  
  Accretion     28       20       57       40  
  Stock-based compensation     2,178       2,603       3,690       4,659  
  Unrealized foreign currency exchange loss (gain)     336       (1,278 )     217       705  
  Impairment loss on gold and silver bullion     1,565       527       1,743       329  
  Other     2       -       2       -  
  Changes in operating assets and liabilities:                                
  Accounts receivable     7,973       8,831       3,086       9,673  
  Inventories     (579 )     1,857       363       (912 )
  Prepaid expenses and other assets     (575 )     (190 )     (2,483 )     (58 )
  Accounts payable     (268 )     (495 )     1,642       (3,655 )
  Accrued expenses     213       (161 )     1,682       2,973  
  IVA taxes payable/receivable     846       (1,095 )     (370 )     89  
  Income taxes payable/receivable     (6,344 )     (3,472 )     (6,081 )     (16,128 )
  Net cash provided by (used in) operating activities     4,536       11,497       10,749       15,862  
Cash flows from (used in) investing activities:                                
  Capital expenditures     (1,431 )     (1,254 )     (5,113 )     (2,863 )
  Purchases of gold and silver bullion     (321 )     (1,304 )     (806 )     (4,183 )
  Proceeds from conversion of gold and silver bullion     384       885       1,048       885  
  Net cash used in investing activities     (1,368 )     (1,673 )     (4,871 )     (6,161 )
Cash flows from (used in) financing activities:                                
  Proceeds from exercise of stock options     150       -       150       -  
  Dividends paid     (6,394 )     (8,994 )     (15,876 )     (16,929 )
  Proceeds from capital leases     4,501       -       4,501       -  
  Net cash (used in) provided by financing activities     (1,743 )     (8,994 )     (11,225 )     (16,929 )
Effect of exchange rates on cash and equivalents     (37 )     (56 )     (19 )     46  
Net (decrease) increase in cash and cash equivalents     1,388       774       (5,366 )     (7,182 )
Cash and equivalents at beginning of period     -       51,960       35,780       51,960  
Cash and equivalents at end of period   $ 1,388     $ 52,734     $ 30,414     $ 44,778  
                                 
Supplemental Cash Flow Information                                
Income taxes paid   $ 6,327     $ 11,087     $ 9,823     $ 28,392  
                                 
                                 
Contact:

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