Gold resource corporation reports improved year over year financial results and strong balance sheet for the second quarter 2022
Denver--(business wire)--gold resource corporation (nyse american: goro) (the “company”) sold a total of 8,746 ounces of gold and 231,622 ounces of silver in q2 2022 for a gold equivalent total of 11,475 ounces. additionally, the company sold 3,590 tonnes of zinc, 286 tonnes of copper, and 1,755 tonnes of lead. allen palmiere, president and ceo said “production remains solid at the don david gold mine in mexico with significant improvements in financial measures over the same period last year. the volume of tonnes processed during the quarter declined slightly from q1 as we continue to address ground support challenges common to our type of mineral deposit. grades and improved recoveries helped ensure we delivered another quarter of over 10 thousand gold equivalent ounces. we continue to be committed to having a disciplined focus on costs in the current inflationary market and would like to reiterate our 2022 guidance. likewise, our continued reinvestment into exploration and infrastructure improvements at the don david gold mine and progressing the feasibility study and permitting initiatives at the back forty project in michigan are focused on favorably impacting our environment, social and governance programs while creating operational efficiencies and longevity.” q2 2022 highlights additional highlights for the second quarter ended june 30, 2022, are summarized below: total cash cost for the quarter was $247 per gold equivalent (“aueq”) ounce (after co-product credits) and total all-in sustaining cost for the quarter was $799 per aueq ounce (after co-product credits). both non-gaap measures were favorably impacted by higher co-product credits for base metals sold.1 for the eighth consecutive year, the don david gold mine (“ddgm”) earned the prestigious empresa socialmente responsable (“esr”) award from the mexican center for philanthropy (cemefi). awards are given to organizations who demonstrate a commitment to supporting social and environmental protection programs within their local communities. during the quarter, the company continued to process tailings material from a nearby community in an effort to ensure the proper environmental treatment and storage of the material. the company’s annual meeting of shareholders was held in person on may 19, 2022. during the meeting, shareholders approved the current five directors to serve another annual term and ratified the appointment of bdo usa, llp as the independent auditor for the fiscal year ending december 31, 2022. $0.9 million was distributed in shareholder dividends this quarter, totaling over $121 million since 2010. working capital was $37.1 million as of june 30, 2022, $7.8 million higher than as of december 31, 2021. the increase is primarily due to a decrease in the liability related to the zinc zero cost collar. trending highlights 2021 2022 q1 q2 q3 q4 q1 q2 operating data total tonnes milled 138,980 129,590 98,010 135,398 136,844 129,099 average grade gold (g/t) 1.68 1.93 2.68 1.93 3.00 2.63 silver (g/t) 72 77 91 82 81 64 copper (%) 0.43 0.36 0.37 0.38 0.41 0.32 lead (%) 1.70 1.63 2.29 2.17 1.97 1.99 zinc (%) 4.29 3.64 4.79 4.77 4.89 4.00 metal production (before payable metal deductions) gold (ozs.) 6,097 6,555 6,933 6,853 11,187 9,317 silver (ozs.) 307,610 295,979 265,829 330,873 332,292 249,088 copper (tonnes) 441 368 284 413 431 303 lead (tonnes) 1,737 1,654 1,808 2,345 2,073 2,020 zinc (tonnes) 4,377 3,683 3,920 5,349 5,562 4,282 metal produced and sold gold (ozs.) 5,019 5,697 5,809 6,119 8,381 8,746 silver (ozs.) 253,061 270,321 255,394 287,805 265,407 231,622 copper (tonnes) 382 365 268 405 408 286 lead (tonnes) 1,176 1,214 1,550 2,059 1,639 1,755 zinc (tonnes) 3,134 3,193 3,059 4,167 4,359 3,590 average metal prices realized gold ($ per oz.) $ 1,787 $ 1,822 $ 1,762 $ 1,811 $ 1,898 $ 1,874 silver ($ per oz.) $ 26.77 $ 26.88 $ 23.19 $ 23.51 $ 23.94 $ 22.05 copper ($ per tonne) $ 8,873 $ 10,375 $ 9,092 $ 9,768 $ 10,144 $ 9,275 lead ($ per tonne) $ 2,082 $ 2,162 $ 2,397 $ 2,339 $ 2,347 $ 2,168 zinc ($ per tonne) $ 2,797 $ 2,945 $ 3,032 $ 3,466 $ 3,842 $ 4,338 precious metal gold equivalent ounces sold gold ounces 5,019 5,697 5,809 6,119 8,381 8,746 gold equivalent ounces from silver 3,791 3,999 3,356 3,736 3,348 2,729 total aueq oz 8,810 9,696 9,165 9,855 11,729 11,475 financial data ($'s in thousands except for per ounce) total sales, net $ 27,268 $ 30,836 $ 29,029 $ 38,063 $ 45,417 $ 37,064 earnings from mining operations before depreciation and amortization 11,974 11,259 11,766 17,744 25,281 15,281 total cash cost after co-product credits per aueq oz sold 408 713 466 73 (121) 247 total consolidated all-in sustaining cost after co-product credits per aueq oz sold 937 1,280 1,031 451 499 799 production costs 15,243 19,523 17,216 20,252 20,074 21,722 production costs/tonnes milled 110 151 176 150 147 168 earnings before interest, taxes, depreciation and amortization 8,520 7,413 7,402 10,304 15,328 13,716 operating cash flows 6,831 9,298 5,743 12,911 4,230 7,976 net income 2,527 1,283 1,529 2,689 4,019 2,626 earnings per share - basic $ 0.03 $ 0.02 $ 0.02 $ 0.03 $ 0.05 $ 0.03 2022 capital and exploration investment summary for the six months ended june 30, 2022 2022 full year guidance (in thousands) sustaining investments: underground development capital $ 3,168 $ 8.5 - 9.5 million infill drilling and exploration development capital 4,040 7.0 - 7.5 million other sustaining capital capital 1,416 4.0 - 4.5 million subtotal of sustaining investments: 8,624 growth investments: ddgm growth: gold regrind capital 745 - dry stack completion capital 1,149 - surface exploration / other exploration 935 2.5 - 3.0 million underground exploration drilling exploration 1,112 3.0 - 3.5 million back forty growth: back forty feasibility study & permits exploration 3,095 8.0-9.0 million subtotal of growth investments: 7,036 total capital and exploration: $ 15,660 $ 33.0 - 37.0 million the company’s investment in mexico continued in q2 2022 totaling $12.6 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. year-to-date at the back forty project, $3.1 million has been invested in feasibility and permitting initiatives. gold regrind project: zinc tailings are being reground and leached to produce dorÉ bars. gold recovery is expected to continue to increase, and we have seen an approximate 5% increase in the gold recovery since the same period in 2021. completion and commissioning were finalized in q2 2022. a total of $1.8 million was invested in this project, $1.1 million in 2021. dry stack tailings project: construction of the tailings filtration plant and dry stack facility were completed in 2021. during the first half of 2022, work continued to optimize the operations of the filtration plant. currently 85% of the tails are sent to the dry stack facility, and the remaining 15% is sent to the underground operations in the form of paste fill for ground support. the dry stack facilities will conserve and recirculate water, eliminate risks related to traditional tailings facilities, accelerate reclamation of certain areas of the open pit mine, and extend the life of the operations. as of june 30, 2022, a total of $15.1 million has been invested in this project, $14.0 million through 2021. underground and exploration development: mine development during the quarter included ramps and accesses to different areas of the deposit, vertical shafts, and exploration development drifts. a total of 2,346 meters of development, at a cost of $5.3 million (1,252 meters at a cost of $2.9 million in q2), was completed during the first half of 2022. for the first half of 2022, underground mine development was $3.2 million and exploration development was $2.1 million (included in infill drilling and exploration development in the table above). we plan to invest a total of $8.5 million to $9.5 million in underground development and an additional $4.0 million to $4.5 million in exploration development in 2022. back forty feasibility and permitting: work on the optimized feasibility study progressed during q2 2022. current initiatives are focused on mine planning and process plant design. environmental considerations are a key factor in the overall site layout and infrastructure decisions being made. the feasibility study work for the back forty project in michigan, usa progressed during q2 2022 with completion expected in the second half of this year, followed by permit applications being submitted with state agencies in michigan. q2 2022 conference call the company will host a conference call tomorrow, thursday, july 28, 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/agbardezebk to join the call via telephone, please use the following dial-in details: participant toll free: (888) 440-2094 international: (438) 803-0544 conference id: 1047419 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 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.
