Gold resource corporation announces financial results for the third quarter 2022 and reiterates 2022 production and cost guidance
Denver--(business wire)--gold resource corporation (nyse american: goro) (the “company”) sold a total of 5,478 ounces of gold and 225,012 ounces of silver in q3 2022 for a gold equivalent total of 8,042 ounces. additionally, the company sold 2,943 tonnes of zinc, 282 tonnes of copper, and 1,056 tonnes of lead. allen palmiere, president and ceo said “the implementation of safety programs has been our top priority in 2021 and 2022 to address ground support and ventilation issues. the disciplined approach had an impact on production volumes, mine development and exploration. with that said, we are still on track to meet our 2022 guidance. we are putting safety first at the temporary cost of production. during the quarter we continued to advance the feasibility study and permitting initiatives at the back forty project in michigan.” q3 2022 highlights additional highlights for the third quarter ended september 30, 2022, include: our balance sheet remains strong, with $22.5 million in cash as of september 30, 2022. the decrease of $11.2 million since december 31, 2021, is after: year-to-date cash inflow of $7.9 million from operating activities, net of $16.2 million in income tax payments for tax years 2021 and 2022; $6.9 million investment in the back forty project feasibility study and permitting work; investing canadian dollar (“c$”) 2.4 million (or us dollar $1.7 million) in maritime resources corp., ticker symbol “mae.v” on the toronto stock exchange—venture exchange (“tsx-v”), in exchange for 9.9% of the company’s issued and outstanding shares via a private placement; investing $14.1 million in capital expenditures; and distributing to shareholders $2.7 million in dividends ($0.9 million this quarter, totaling over $122 million since 2010). year-to-date cash inflow of $7.9 million from operating activities, net of $16.2 million in income tax payments for tax years 2021 and 2022; $6.9 million investment in the back forty project feasibility study and permitting work; investing canadian dollar (“c$”) 2.4 million (or us dollar $1.7 million) in maritime resources corp., ticker symbol “mae.v” on the toronto stock exchange—venture exchange (“tsx-v”), in exchange for 9.9% of the company’s issued and outstanding shares via a private placement; investing $14.1 million in capital expenditures; and distributing to shareholders $2.7 million in dividends ($0.9 million this quarter, totaling over $122 million since 2010). the don david gold mine safety program aims to bolster the overall health and safety culture. there were no lost time incidents during the third quarter of 2022. the year-to-date lost time injury frequency rate per million hours of 2.76 is substantially below the camimex (mexican chamber of mines) benchmark of 5.281. during the third quarter of 2022, production, mine development, and exploration were deliberately and temporarily slowed to improve safety specific to ground support and ventilation. there were no lost time incidents during the third quarter of 2022. the year-to-date lost time injury frequency rate per million hours of 2.76 is substantially below the camimex (mexican chamber of mines) benchmark of 5.281. during the third quarter of 2022, production, mine development, and exploration were deliberately and temporarily slowed to improve safety specific to ground support and ventilation. working capital was $28.9 million at september 30, 2022, $0.4 million lower than at december 31, 2021. the decrease is primarily due to a decrease in cash discussed above. total cash cost for the quarter was $1,103 per gold equivalent (“aueq”) ounce (after co-product credits) and total all-in sustaining cost for the quarter was $1,831 per aueq ounce (after co-product credits). both non-gaap measures were higher in the quarter due to the impact of lower co-product credits as a result of lower base metal prices 2 trending highlights 2021 2022 q1 q2 q3 q4 q1 q2 q3 operating data total tonnes milled 138,980 129,590 98,010 135,398 136,844 129,099 110,682 average grade gold (g/t) 1.68 1.93 2.68 1.93 3.00 2.63 1.98 silver (g/t) 72 77 91 82 81 64 80 copper (%) 0.43 0.36 0.37 0.38 0.41 0.32 0.37 lead (%) 1.70 1.63 2.29 2.17 1.97 1.99 1.59 zinc (%) 4.29 3.64 4.79 4.77 4.89 4.00 4.21 metal production (before payable metal deductions) gold (ozs.) 6,097 6,555 6,933 6,853 11,187 9,317 5,851 silver (ozs.) 307,610 295,979 265,829 330,873 332,292 249,088 261,256 copper (tonnes) 441 368 284 413 431 303 296 lead (tonnes) 1,737 1,654 1,808 2,345 2,073 2,020 1,249 zinc (tonnes) 4,377 3,683 3,920 5,349 5,562 4,282 3,901 metal produced and sold gold (ozs.) 5,019 5,697 5,809 6,119 8,381 8,746 5,478 silver (ozs.) 253,061 270,321 255,394 287,805 265,407 231,622 225,012 copper (tonnes) 382 365 268 405 408 286 282 lead (tonnes) 1,176 1,214 1,550 2,059 1,639 1,755 1,056 zinc (tonnes) 3,134 3,193 3,059 4,167 4,359 3,590 2,943 average metal prices realized gold ($ per oz.) $ 1,787 $ 1,822 $ 1,762 $ 1,811 $ 1,898 $ 1,874 $ 1,627 silver ($ per oz.) $ 26.77 $ 26.88 $ 23.19 $ 23.51 $ 23.94 $ 22.05 $ 18.54 copper ($ per tonne) $ 8,873 $ 10,375 $ 9,092 $ 9,768 $ 10,144 $ 9,275 $ 7,115 lead ($ per tonne) $ 2,082 $ 2,162 $ 2,397 $ 2,339 $ 2,347 $ 2,168 $ 1,882 zinc ($ per tonne) $ 2,797 $ 2,945 $ 3,032 $ 3,466 $ 3,842 $ 4,338 $ 3,186 precious metal gold equivalent ounces sold gold ounces 5,019 5,697 5,809 6,119 8,381 8,746 5,478 gold equivalent ounces from silver 3,791 3,999 3,356 3,736 3,348 2,729 2,564 total aueq oz 8,810 9,696 9,165 9,855 11,729 11,475 8,042 financial data ($'s in thousands except for per ounce) total sales, net $ 27,268 $ 30,836 $ 29,029 $ 38,063 $ 45,417 $ 37,064 $ 23,869 earnings from mining operations before depreciation and amortization 11,974 11,259 11,766 17,744 25,281 15,281 4,431 total cash cost after co-product credits per aueq oz sold 408 713 466 73 (121 ) 247 1,103 total consolidated all-in sustaining cost after co-product credits per aueq oz sold 937 1,280 1,031 451 499 799 1,831 production costs 15,243 19,523 17,216 20,252 20,074 21,722 19,380 production costs/tonnes milled 110 151 176 150 147 168 175 earnings before interest, taxes, depreciation and amortization 8,520 7,413 7,402 10,304 15,328 13,716 (3,338 ) operating cash flows 6,831 9,298 5,743 12,911 4,230 7,976 (4,292 ) net income 2,527 1,283 1,529 2,689 4,019 2,673 (9,730 ) earnings per share - basic $ 0.03 $ 0.02 $ 0.02 $ 0.03 $ 0.05 $ 0.03 ($ 0.11 ) 2022 capital and exploration investment summary for the nine months ended september 30, 2022 2022 full year projection (in thousands) sustaining investments: underground development capital $ 5,251 $ 7.0 - 8.0 million infill drilling and exploration development capital 5,056 7.0 - 7.5 million other sustaining capital capital 1,922 2.0 - 2.5 million subtotal of sustaining investments: 12,229 growth investments: ddgm growth: gold regrind capital 745 - dry stack completion capital 1,149 - surface exploration / other exploration 1,641 2.0 - 2.5 million underground exploration drilling exploration 1,549 2.0 - 2.5 million back forty growth: back forty feasibility study & permits exploration 6,925 9.0-9.5 million subtotal of growth investments: 12,009 total capital and exploration: $ 24,238 $ 29.0 - 32.5 million the company’s investment in mexico continued in the third quarter of 2022 totaling $17.3 million year-to-date. our investment in mexico is focused on favorably impacting our environment, social and governance programs while creating operational efficiencies and longevity. at the back forty project, $6.9 million has been invested in feasibility and permitting initiatives year-to-date. underground and exploration development: mine development during the quarter included ramps and access to different areas of the deposit, ventilation shafts, and exploration development drifts. a total of 3,210 meters of development, at a cost of $7.5 million (864 meters at a cost of $2.2 million in the third quarter), was completed during the year through september 30, 2022. through september 30, 2022, underground mine development was $5.3 million and exploration development was $2.2 million (included in infill drilling and exploration development in the table above). as part of ongoing safety initiatives, the company also invested in additional ground support and improved ventilation for the mine, which deliberately but temporarily slowed underground and exploration development. we plan to invest a total of $7.0 million to $8.0 million in underground development and an additional $3.5 million to $4.0 million in exploration development in 2022. back forty feasibility and permitting: work on the optimized feasibility study progressed during the third quarter of 2022. mine planning, process plant design and site layout and infrastructure were significantly completed during the quarter. current initiatives are focused on finalizing the financial models with operating and capital costs, which may be subject to some volatility due to the inflationary market conditions. environmental and cultural resource considerations have been a key factor in the overall project design. on august 5, 2022, the company was invited by michigan’s department of environment, great lakes and energy to participate in a scoping environmental impact assessment meeting to present the initial site plan and other key improvements being incorporated into the back forty project’s optimized feasibility study. this was an opportunity to meet with tribal representatives to promote the back forty project, which is focused on favorably impacting our environment, social and governance programs, while identifying economic and operational efficiencies. the feasibility study work for the back forty project progressed during the third quarter of 2022. work related to metallurgy and the economic model is expected to continue into 2023. permit applications will not be submitted with state agencies in michigan until the completion of the feasibility study. q3 2022 conference call the company will host a conference call tuesday, november 1, 2022 at 10:00 a.m. eastern time. the conference call will be recorded and posted to the company’s website later in the day following the conclusion of the call. following prepared remarks, allen palmiere, president and chief executive officer, alberto reyes, chief operating officer and kim perry, chief financial officer will host a live question and answer (q&a) session. there are two ways to join the conference call. to join the conference via webcast, please click on the following link: https://app.webinar.net/no36p6l10ja to join the call via telephone, please use the following dial-in details: participant toll free: +1 (888) 886-7786 international: +1 (416) 764-8658 conference id: 96525237 please connect to the conference call at least 10 minutes prior to the start time using one of the connection options listed above. about grc: gold resource corporation is a gold and silver producer, developer, and explorer with its operations centered on the don david gold mine in oaxaca, mexico. under the direction of an experienced board and senior leadership team, the company’s focus is to unlock the significant upside potential of its existing infrastructure and large land position surrounding the mine in oaxaca, mexico and to develop the back forty project in michigan, usa. for more information, please visit grc’s website, located at www.goldresourcecorp.com and read the company’s form 10-k for an understanding of the risk factors associated with its business. 1 https://www.camimex.org.mx/index.php/estadisticas/seguridad 2 see management’s discussion and analysis of financial condition and results of operations – non-gaap measures below for a reconciliation of non-gaap measures to applicable gaap measures.
