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

Marketwired

COLORADO SPRINGS, CO--(Marketwired - Nov 7, 2013) - Gold Resource Corporation (NYSE MKT: GORO) (the "Company") reported its production results for the third quarter ended September 30, 2013 of 21,244 ounces precious metal gold equivalent ("AuEq", calculated at actual sales price ratio of 65:1). Gold Resource Corporation is a gold and silver producer with operations in the southern state of Oaxaca, Mexico. The Company has returned over $90 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 Q3 HIGHLIGHTS

  • 21,244 ounces mill production, precious metal gold equivalent (AuEq)
  • 19,033 precious metal AuEq ounces sold
  • $12.8 million Cash Flow from Mine Site Operations
  • On track for year-end 2013 production target
  • Dividend distributions of $4.8 million, or $0.09 per share for quarter
  • Mill expansion on schedule for year-end delivery

Overview of Q3 2013 Results from El Aguila Project

Gold Resource Corporation's El Aguila Project produced 21,244 ounces of precious metal gold equivalent (AuEq) at a total cash cost of $756 per AuEq ounce and realized average prices of $1,240 per ounce gold and $19 per ounce silver for its sales during the third quarter. Gold and silver prices decreased 29.9% and 40.6%, respectively, from the third quarter of 2012. Cash Flow from Mine Site Operations totaled $12.8 million. The Company paid $4.8 million to shareholders in dividends. Mill expansion is expected to be delivered by year-end.

"Three quarters of the 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 CEO and President, Mr. Jason Reid. "Our project team continues to deliver on target results even in the midst of ongoing mill expansion construction and an increasing silver-to-gold ratio. We announced earlier this week the commissioning of the flotation circuit's second ball mill, the commissioning of our new 10 megawatt diesel generated power plant, and we are excited to wrap up construction activities these next several weeks with the commissioning of the new flotation cells." 

Mr. Reid continued, "Expectations for early 2014 include an increased cash position as mill expansion capital expenditures come to an end, increased daily tonnage through the expanded El Aguila mill and increased production with lower per tonne production costs."

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

                 
Production and Sales Statistics - La Arista Underground Mine
 
    Three months ended
September 30,
  Nine months ended
September 30,
    2013   2012   2013   2012
Production Summary                        
Milled:                        
  Tonnes Milled     84,017     76,786     232,940     211,792
  Tonnes Milled per Day     913     835     853     773
Grade:                        
  Average Gold Grade (g/t)     3.67     4.17     3.72     4.08
  Average Silver Grade (g/t)     321     320     338     365
  Average Copper Grade (%)     0.38     0.43     0.39     0.44
  Average Lead Grade (%)     1.09     2.14     1.10     1.88
  Average Zinc Grade (%)     2.73     4.43     2.71     4.01
Recoveries:                        
  Average Gold Recovery (%)     91     88     90     89
  Average Silver Recovery (%)     92     94     92     93
  Average Copper Recovery (%)     78     75     78     74
  Average Lead Recovery (%)     68     64     69     69
  Average Zinc Recovery (%)     81     80     78     77
Mill production (before payable metal deductions)(1)                        
  Gold (ozs.)     9,063     9,047     24,976     24,611
  Silver (ozs.)     796,028     739,576     2,321,345     2,317,110
  Copper (tonnes)     252     245     702     687
  Lead (tonnes)     627     1,051     1,786     2,734
  Zinc (tonnes)     1,851     2,705     4,932     6,567
Payable metal sold                        
  Gold (ozs.)     7,683     7,287     23,934     20,317
  Silver (ozs.)     741,757     599,501     2,360,655     1,982,868
  Copper (tonnes)     229     214     728     596
  Lead (tonnes)     585     869     1,724     2,231
  Zinc (tonnes)     1,552     1,993     4,467     5,003
Average metal prices realized (5)                        
  Gold (oz.)   $ 1,240   $ 1,769   $ 1,437   $ 1,690
  Silver (oz.)   $ 19   $ 32   $ 25   $ 31
  Copper (tonne)   $ 6,879   $ 8,161   $ 7,409   $ 8,162
  Lead (tonne)   $ 2,111   $ 2,107   $ 2,241   $ 2,080
  Zinc (tonne)   $ 1,848   $ 1,999   $ 1,967   $ 1,997
Precious metal gold equivalent ounces produced (mill production)(1)(3)(4)                        
  Gold Ounces     9,063     9,047     24,976     24,611
  Gold Equivalent Ounces from Silver     12,181     13,289     39,172     42,038
  Total Precious Metal Gold Equivalent Ounces     21,244     22,336     64,148     66,649
Precious metal gold equivalent ounces sold(2)(3)(4)                        
  Gold Ounces     7,683     7,287     23,934     20,317
  Gold Equivalent Ounces from Silver     11,350     10,772     40,064     35,974
  Total Precious Metal Gold Equivalent Ounces     19,033     18,059     63,998     56,291
  Total cash costs, after by-product credits, per precious metal gold equivalent ounce sold (including royalties) (2)   $ 756   $ 467   $ 609   $ 396
                           
(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 nine months ended September 30, 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 total 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 third quarter of 2013 of 21,244 ounces differs from gold equivalent ounces sold for the same period of 19,033 due principally to buyer (smelter) concentrate processing deductions of approximately 2,675 gold equivalent ounces and an increase in gold equivalent ounces contained in ending inventory of approximately 465 ounces.
(4)   Precious metal gold equivalent mill production for the nine months ended September 30, 2013 of 64,148 ounces differs from gold equivalent ounces sold for the same period of 63,998 principally due to buyer (smelter) concentrate processing deductions of approximately 6,759 gold equivalent ounces and an increase in gold equivalent ounces contained in ending inventory of approximately 6,609 ounces.
(5)   Average metal prices realized vary from the market metal prices due to out of period settlement adjustments from our provisional invoices when they are settled. Our average metal prices realized will therefore differ to the market average metal prices in most cases.
     

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 53,779,369 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 nine months ended September 30, 2013 and 2012, its financial condition at September 30, 2013 and December 31, 2012 and its cash flows for the nine months ended September 30, 2013 and 2012. The summary data for the three and nine months ended September 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 nine months ended September 30, 2013 and 2012  
(U.S. dollars in thousands, except shares and per share amounts)  
(Unaudited)  
                         
                         
    Three months ended September 30,     Nine months ended September 30,  
    2013     2012     2013     2012  
                                 
Sales of metals concentrate, net   $ 29,405     $ 36,035     $ 98,375     $ 103,399  
Mine cost of sales:                                
  Production costs     17,284       12,293       47,926       31,838  
  Depreciation and amortization     717       556       1,810       940  
  Accretion     27       20       84       60  
    Total mine cost of sales     18,028       12,869       49,820       32,838  
Mine gross profit     11,377       23,166       48,555       70,561  
Costs and expenses:                                
  General and administrative expenses     5,478       2,933       13,319       8,922  
  Exploration expenses     2,062       1,882       8,167       5,466  
  Facilities and mine construction     5,721       5,394       17,375       13,492  
    Total costs and expenses     13,261       10,209       38,861       27,880  
Operating (loss) income     (1,884 )     12,957       9,694       42,681  
Other expense     (660 )     (485 )     (2,558 )     (1,782 )
(Loss) income before income taxes     (2,544 )     12,472       7,136       40,899  
  Provision for income taxes (benefit)     (714 )     5,600       2,953       16,398  
Net (loss) income   $ (1,830 )   $ 6,872     $ 4,183     $ 24,501  
Other comprehensive income:                                
  Currency translation (loss) gain     (22 )     2,168       (33 )     1,943  
Comprehensive (loss) income   $ (1,852 )   $ 9,040     $ 4,150     $ 26,444  
Net (loss) income per common share:                                
  Basic:   $ (0.03 )   $ 0.13     $ 0.08     $ 0.46  
  Diluted:   $ (0.03 )   $ 0.12     $ 0.08     $ 0.43  
                                 
Weighted average shares outstanding:                                
  Basic     53,320,673       52,848,586       53,093,288       52,885,640  
  Diluted     53,320,673       56,254,632       55,364,417       56,365,316  
                                   
   
   
GOLD RESOURCE CORPORATION  
(An Exploration Stage Company)  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(U.S. dollars in thousands, except shares)  
                 
      September 30,       December 31,  
      2013       2012  
      (unaudited)          
ASSETS                
Current assets:                
  Cash and cash equivalents   $ 17,634     $ 35,780  
  Gold and silver bullion     3,821       5,809  
  Accounts receivable     5,212       6,349  
  Inventories     8,897       7,533  
  Income taxes receivable     8,602       419  
  Deferred tax assets     2,207       2,121  
  Prepaid expenses and other assets     4,544       973  
    Total current assets     50,917       58,984  
Land and mineral rights     227       227  
Property and equipment - net     18,051       14,050  
Inventories     797       809  
Deferred tax assets     31,748       31,559  
    Total assets   $ 101,740     $ 105,629  
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities:                
  Accounts payable   $ 3,051     $ 3,013  
  Accrued expenses     7,976       4,178  
  Capital lease obligations     1,462       -  
  IVA taxes payable     658       2,673  
  Dividends payable     1,601       3,161  
    Total current liabilities     14,748       13,025  
Capital lease obligations     2,757       -  
Asset retirement obligation     2,844       2,790  
    Total liabilities     20,349       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: 53,715,767 and 53,015,767 shares issued and outstanding, respectively     54       53  
Additional paid-in capital     90,100       102,674  
Accumulated (deficit)     (1,668 )     (5,851 )
Treasury stock at cost, 336,398 shares     (5,884 )     (5,884 )
Accumulated other comprehensive (loss) - currency translation adjustment     (1,211 )     (1,178 )
    Total shareholders' equity     81,391       89,814  
    Total liabilities and shareholders' equity   $ 101,740     $ 105,629  
                     
   
   
GOLD RESOURCE CORPORATION  
(An Exploration Stage Company)  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
for the nine months ended September 30, 2013 and 2012  
(U.S. dollars in thousands)  
(Unaudited)  
                 
                 
      Nine months ended September 30,  
      2013       2012  
                 
Cash flows from operating activities:                
  Net income   $ 4,183     $ 24,501  
  Adjustments to reconcile net income to net cash                
  from operating activities:                
  Depreciation and amortization     1,891       1,117  
  Accretion     84       60  
  Stock-based compensation     5,996       6,640  
  Unrealized foreign currency exchange loss     711       1,496  
  Impairment loss on gold and silver bullion     1,743       -  
  Deferred tax assets     (275 )     -  
  Other     -       -  
  Changes in operating assets and liabilities:                
  Accounts receivable     1,267       (1,371 )
  Inventories     (1,506 )     (1,342 )
  Prepaid expenses and other assets     (3,958 )     (408 )
  Accounts payable     46       (1,679 )
  Accrued expenses     3,970       3,049  
  IVA taxes payable/receivable     (2,263 )     (267 )
  Income taxes payable/receivable     (8,456 )     (13,490 )
  Net cash (used in) provided by operating activities     3,433       18,306  
Cash flows from (used in) investing activities:                
  Capital expenditures     (5,891 )     (3,091 )
  Purchases of gold and silver bullion     (1,002 )     (4,707 )
  Proceeds from conversion of gold and silver bullion     1,247       1,440  
  Net cash used in investing activities     (5,646 )     (6,358 )
Cash flows from (used in) financing activities:                
  Proceeds from exercise of stock options     545       -  
  Dividends paid     (20,674 )     (26,444 )
  Treasury stock purchases     -       (1,495 )
  Proceeds from capital leases     4,219       -  
  Net cash used in financing activities     (15,910 )     (27,939 )
Effect of exchange rates on cash and equivalents     (23 )     273  
Net (decrease) in cash and cash equivalents     (18,146 )     (15,718 )
Cash and equivalents at beginning of period     35,780       51,960  
Cash and equivalents at end of period   $ 17,634     $ 36,242  
                 
Supplemental Cash Flow Information                
Interest paid   $ 48     $ -  
Income taxes paid   $ 11,166     $ 30,395  
                 
Contact:

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