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Fortitude Gold Reports Second Quarter Net Income Of $0.27 Per Share, Maintains 2022 Production Outlook

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Fortitude Gold Corporation
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COLORADO SPRINGS, CO / ACCESSWIRE August 2, 2022 / Fortitude Gold Corporation (OTCQB:FTCO) (the "Company") reported results for the second quarter ended June 30, 2022, including $24.0 million net sales, $6.6 million net income or $0.27 per share, and a $40.7 million cash balance at quarter end. The Company produced 10,980 ounces of gold and maintains its 2022 production outlook. Fortitude Gold is a gold producer, developer, and explorer with operations in Nevada, U.S.A. offering investors exposure to both gold production and dividend yield.

Q2 2022 FINANCIAL RESULTS AND HIGHLIGHTS

• $24.0 million net sales
• $6.6 million net income or $0.27 per share
• $40.7 million cash balance on June 30, 2022
• 10,980 gold ounces produced
• 3.46 grams per tonne average gold grade mined
• $76.9 million working capital at June 30, 2022
• $11.6 million mine gross profit
• $646 total cash cost after by-product credits per gold ounce sold
• $733 per ounce total all-in sustaining cost
• $2.9 million dividends paid

Overview of Q2 2022 Results

Fortitude Gold sold 12,851 gold ounces at a total cash cost of $646 per ounce (after by-product credits) and an all-in sustaining cost per ounce of $733. Realized metal prices during the quarter averaged $1,876 per ounce gold*. The Company recorded net income of $6.6 million, or $0.27 per share and maintained substantial cash and cash equivalents at quarter end of $40.7 million. The Company produced 10,980 ounces of gold during the quarter and maintains its 2022 Annual Outlook, targeting 40,000 gold ounces (a range of 36,000 to 40,000 ounces).

"Our Isabella Pearl operations delivered another solid quarter," stated Mr. Jason Reid, CEO and President of Fortitude Gold. "This included focusing on the high-grade Pearl zone during the second quarter with less of a strip ratio. We are beginning to enjoy the benefits of moving substantially less waste at the Isabella Pearl mine, which translates directly to lower mining costs. When comparing the first half of 2022 to the first half of 2021, we moved 51 percent less waste year-over-year at Isabella Pearl and expect the waste tonnes moved on an annual basis to continue to decline in the coming years."

Mr. Reid continued, "The Company increased its cash position to over $40 million at the end of the quarter, which is after investing $2.4 million into exploration and distributing over $2.9 million to shareholders in dividends. We believe this balanced approach will allow us to fund our next targeted mine build at Golden Mile, continue an aggressive exploration program on several of our properties, while continuing the distribution of monthly dividends to shareholders with an industry leading dividend yield."

The following Production Statistics table summarizes certain information about our Isabella Pearl Mine for three and six months ended June 30, 2022 and 2021:


Three months ended June 30,

Six months ended June 30,

2022

2021

2022

2021

Ore mined

Ore (tonnes)

123,810

158,507

377,653

314,729

Gold grade (g/t)

3.46

6.75

2.59

5.90

Low-grade stockpile

Ore (tonnes)

11,011

-

34,501

-

Gold grade (g/t)

0.42

-

0.43

-

Waste (tonnes)

241,500

1,681,710

1,494,024

3,056,909

Metal production (before payable metal deductions)(1)

Gold (ozs.)

10,980

14,579

20,855

26,115

Silver (ozs.)

16,027

10,043

32,550

17,176

  1. The difference between what we report as "metal production" and "metal sold" is attributable to the difference between the quantities of metals contained in the doré we produce versus the portion of those metals actually paid for according to the terms of our sales contracts. Differences can also arise from inventory changes incidental to shipping schedules, or variances in ore grades and recoveries which impact the amount of metals contained in doré produced and sold.

The following Sales Statistics table summarizes certain information about our Isabella Pearl Mine for three and six months ended June 30, 2022 and 2021:


Three months ended June 30,

Six months ended June 30,

2022

2021

2022

2021

Metal sold

Gold (ozs.)

12,851

14,510

21,148

25,982

Silver (ozs.)

18,780

9,946

32,708

16,841

Average metal prices realized (1)

Gold ($per oz.)

1,876

1,794

1,871

1,799

Silver ($per oz.)

23.04

26.30

23.34

26.27

Precious metal gold equivalent ounces sold

Gold Ounces

12,851

14,510

21,148

25,982

Gold Equivalent Ounces from Silver

231

146

408

246

13,082

14,656

21,556

26,228

Total cash cost before by-product credits per gold ounce sold

$

680

$

582

$

706

$

568

Total cash cost after by-product credits per gold ounce sold

$

646

$

564

$

670

$

551

Total all-in sustaining cost per gold ounce sold

$

733

$

628

$

778

$

605

  1. 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.

*Average realized metal prices include final settlement adjustments for previously unsettled provisional sales. Provisional sales may remain unsettled from one quarter into the next. Realized prices will therefore vary from average spot metal market prices upon final settlement.

See Accompanying Tables

The following information summarizes the results of operations for Fortitude Gold Corporation for the three and six months ended June 30, 2022 and 2021, its financial condition at June 30, 2022 and December 31, 2021, and its cash flows for the six months ended June 30, 2022 and 2021. The summary data as of June 30, 2022 and for the three and six months ended June 30, 2022 and 2021 is unaudited; the summary data as of December 31, 2021 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2021, 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 its cash cost before by-product credits per gold ounce sold, total cash cost after by-product credits per gold ounce sold and total all-in sustaining cost per gold ounce sold 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-K for a complete discussion and reconciliation of the non-GAAP measures.

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

June 30,

December 31,

2022

2021

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

40,730

$

40,017

Accounts receivable

1,810

238

Inventories

39,397

37,550

Prepaid taxes

18

1,289

Prepaid expenses and other current assets

1,141

2,228

Total current assets

83,096

81,322

Property, plant and mine development, net

37,806

37,226

Operating lease assets, net

1,917

463

Deferred tax assets

1,159

509

Other non-current assets

3,536

2,909

Total assets

$

127,514

$

122,429

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

2,536

$

2,127

Operating lease liabilities, current

1,917

463

Mining taxes payable

622

1,699

Other current liabilities

1,091

1,022

Total current liabilities

6,166

5,311

Asset retirement obligations

5,411

4,725

Other non-current liabilities

9

45

Total liabilities

11,586

10,081

Shareholders' equity:

Preferred stock - $0.01 par value, 20,000,000 shares authorized and nil outstanding at June 30, 2022 and December 31, 2021

-

-

Common stock - $0.01 par value, 200,000,000 shares authorized and 24,024,542 shares outstanding at June 30, 2022 and 23,961,208 shares outstanding at December 31, 2021

240

240

Additional paid-in capital

103,636

103,476

Retained earnings

12,052

8,632

Total shareholders' equity

115,928

112,348

Total liabilities and shareholders' equity

$

127,514

$

122,429

FORTITUDE GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and six months ended June 30, 2022 and 2021
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)

Three months ended

Six months ended

June 30,

June 30,

2022

2021

2022

2021

Sales, net

$

23,993

$

25,903

$

39,354

$

46,557

Mine cost of sales:

Production costs

8,189

8,059

13,970

14,144

Depreciation and amortization

4,155

4,638

6,933

8,285

Reclamation and remediation

76

47

123

76

Total mine cost of sales

12,420

12,744

21,026

22,505

Mine gross profit

11,573

13,159

18,328

24,052

Costs and expenses:

General and administrative expenses

1,094

1,186

2,274

7,345

Exploration expenses

2,426

1,039

4,940

2,357

Other expense, net

65

47

82

84

Total costs and expenses

3,585

2,272

7,296

9,786

Income before income and mining taxes

7,988

10,887

11,032

14,266

Mining and income tax expense

1,423

2,553

1,849

3,531

Net income

$

6,565

$

8,334

$

9,183

$

10,735

Net income per common share:

Basic

$

0.27

$

0.35

$

0.38

$

0.45

Diluted

$

0.27

$

0.34

$

0.38

$

0.45

Weighted average shares outstanding:

Basic

24,024,542

23,958,319

24,010,061

23,788,152

Diluted

24,207,185

24,189,989

24,204,660

24,007,557

FORTITUDE GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2022 and 2021
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)

Six months ended

June 30,

2022

2021

Cash flows from operating activities:

Net income

$

9,183

$

10,735

Adjustments to reconcile net income to net cash from operating activities:

Depreciation and amortization

7,011

8,344

Stock-based compensation

97

3,317

Deferred taxes

(650

)

845

Reclamation and remediation accretion

123

76

Other operating adjustments

(29

)

(45

)

Changes in operating assets and liabilities:

Accounts receivable

(1,572

)

(3,112

)

Inventories

(1,068

)

(2,922

)

Prepaid expenses and other current assets

1,087

(629

)

Other non-current assets

(31

)

(4

)

Accounts payable and other accrued liabilities

176

301

Income and mining taxes payable

194

(457

)

Net cash provided by operating activities

14,521

16,449

Cash flows from investing activities:

Capital expenditures

(8,052

)

(596

)

Net cash used in investing activities

(8,052

)

(596

)

Cash flows from financing activities:

Dividends paid

(5,763

)

(1,917

)

Issuance of common stock

-

500

Proceeds from exercise of stock options

63

-

Repayment of loans payable

(43

)

(454

)

Repayment of capital leases

(13

)

(227

)

Net cash used in financing activities

(5,756

)

(2,098

)

Net increase in cash and cash equivalents

713

13,755

Cash and cash equivalents at beginning of period

40,017

27,774

Cash and cash equivalents at end of period

$

40,730

$

41,529

Supplemental Cash Flow Information

Income and mining taxes paid

$

2,339

$

3,143

Non-cash investing and financing activities:

Change in capital expenditures in accounts payable

$

322

$

561

Change in estimate for asset retirement costs

$

517

$

372

Right-of-Use assets acquired through operating lease

$

3,899

$

-

About Fortitude Gold Corp.:

Fortitude Gold is a U.S. based gold producer targeting projects with low operating costs, high margins, and strong returns on capital. The Company's strategy is to grow organically, remain debt-free and distribute substantial dividends. The Company's Nevada Mining Unit consists of five high-grade gold properties located in the Walker Lane Mineral Belt and a sixth high-grade gold property in west central Nevada. The Isabella Pearl gold mine, located on the Isabella Pearl mineralized trend, is currently in production. Nevada, U.S.A. is among the world's premier mining friendly jurisdictions.

Cautionary Statements: This press release contains forward-looking statements that involve risks and uncertainties. If you are risk-averse you should NOT buy shares in Fortitude Gold Corp. 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 of 1933 and Section 21E of the Securities Exchange Act of 1934. 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 the Company's strategy, future plans for production, future expenses and costs, future liquidity and capital resources, and estimates of mineralized material are forward-looking statements. All forward-looking statements in this press release are based upon information available to the Company 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, the scope, duration, and impact of the COVID-19 pandemic on mining operations, Company employees, and supply chains as well as the scope, duration and impact of government action aimed at mitigating the pandemic may cause future actual results to differ materially from those expressed or implied by any forward-looking statements. Also, there can be no assurance that production will continue at any specific rate.

Contact:

Greg Patterson
719-717-9825
greg.patterson@fortitudegold.com
www.Fortitudegold.com

SOURCE: Fortitude Gold Corporation



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