SOURCE: Gold Resource Corporation

Gold Resource Corporation Reports First Quarter Results With Net Income of $0.13 per Share; Maintains 2014 Production Outlook

Gold Resource Corporation (NYSE MKT: GORO) (the "Company") reported its production results for the first quarter ended March 31, 2014 of 23,734 ounces precious metal gold equivalent (calculated at actual sales price ratio of 64:1) while decreasing its total cash cost by 18% over the first quarter of 2013. Gold Resource Corporation is a gold and silver producer with operations in the southern state of Oaxaca, Mexico. The Company has returned over $96 million to shareholders in monthly dividends since commercial production July 1, 2010, and offers shareholders the option to convert their cash dividends into physical gold and silver and take delivery.

2014 QI HIGHLIGHTS

-23,734 ounces mill production, precious metal gold equivalent
-20,600 precious metal gold equivalent ounces sold
-Total cash cost of $422 per precious metal gold equivalent ounce (including 5% royalty)
-Total cash cost decrease of 18% from Q1 2013 and 38% since Q4 2013
-$17.4 million Cash Flow from Mine Site Operations
-Net income of $7.1 million, or $0.13 per share
-Dividend distributions of $1.6 million, or $0.03 per share for quarter
-Cash and Cash Equivalents increased $4.5 million from prior quarter
-1,159 tonnes milled per day, a 28% increase from Q4 2013

Overview of Q1 2014 El Aguila Project Results

Gold Resource Corporation's El Aguila Project produced 23,734 ounces of precious metal gold equivalent at a total cash cost of $422 per ounce. Realized average metal price sales during the quarter were $1,296 per ounce gold and $20 per ounce silver. Net income totaled $7.1 million, or $0.13 per share. Cash Flow from Mine Site Operations totaled $17.4 million. The Company paid $1.6 million to shareholders in dividends or $0.03 per share during the quarter. Gold and silver prices decreased 21.4% and 35.5%, respectively, from the first quarter of 2013.

"During the first quarter, the Company delivered strong operating results with production increasing 15% over the prior quarter," stated Gold Resource Corporation's CEO and President, Mr. Jason Reid. "Equally important, we substantially drove down our total cash costs by 38% compared to the fourth quarter of 2013. In addition, we continued to distribute our monthly dividend and increased our treasury by $4.5 million over the prior quarter. With a strong first quarter, the Company is on track to meet its annual production outlook goal."

Mr. Reid continued, "In the face of volatile precious metal prices, Gold Resource Corporation has demonstrated it can generate significant profits, build its treasury, and continue to reward shareholders through dividend distributions. We will continue to challenge our team to identify additional cost savings opportunities at our operations while increasing future production."

Below is a table of the key production statistics for our El Aguila Project during the three months ended March 31, 2014 and 2013.

 

 

 

Production and Sales Statistics - La Arista Underground Mine

 

 

 

Three months ended March 31,

 

 

2014

 

2013

Production Summary

 

 

 

 

 

 

Milled:

 

 

 

 

 

 

 

Tonnes Milled

 

 

104,349

 

 

76,184

 

Tonnes Milled per Day

 

 

1,159

 

 

846

Grade:

 

 

 

 

 

 

 

Average Gold Grade (g/t)

 

 

3.25

 

 

3.67

 

Average Silver Grade (g/t)

 

 

285

 

 

345

 

Average Copper Grade (%)

 

 

0.35

 

 

0.39

 

Average Lead Grade (%)

 

 

1.23

 

 

1.10

 

Average Zinc Grade (%)

 

 

3.43

 

 

2.79

Recoveries:

 

 

 

 

 

 

 

Average Gold Recovery (%)

 

 

91

 

 

88

 

Average Silver Recovery (%)

 

 

92

 

 

92

 

Average Copper Recovery (%)

 

 

80

 

 

84

 

Average Lead Recovery (%)

 

 

72

 

 

70

 

Average Zinc Recovery (%)

 

 

82

 

 

79

Mill production (before payable metal deductions)(1)

 

 

 

 

 

 

 

Gold (ozs.)

 

 

9,958

 

 

7,898

 

Silver (ozs.)

 

 

878,958

 

 

777,671

 

Copper (tonnes)

 

 

292

 

 

248

 

Lead (tonnes)

 

 

929

 

 

586

 

Zinc (tonnes)

 

 

2,920

 

 

1,676

Payable metal sold

 

 

 

 

 

 

 

Gold (ozs.)

 

 

8,586

 

 

8,953

 

Silver (ozs.)

 

 

766,535

 

 

863,152

 

Copper (tonnes)

 

 

259

 

 

305

 

Lead (tonnes)

 

 

812

 

 

642

 

Zinc (tonnes)

 

 

2,158

 

 

1,735

Average metal prices realized (2)

 

 

 

 

 

 

 

Gold (oz.)

 

$

1,296

 

$

1,648

 

Silver (oz.)

 

$

20

 

$

31

 

Copper (tonne)

 

$

6,939

 

$

7,996

 

Lead (tonne)

 

$

2,091

 

$

2,448

 

Zinc (tonne)

 

$

2,050

 

$

2,154

Precious metal gold equivalent ounces produced (mill production)(1)(4)

 

 

 

 

 

 

 

Gold Ounces

 

 

9,958

 

 

7,898

 

Gold Equivalent Ounces from Silver

 

 

13,776

 

 

14,432

 

Total Precious Metal Gold Equivalent Ounces

 

 

23,734

 

 

22,330

Precious metal gold equivalent ounces sold(3)(4)

 

 

 

 

 

 

 

Gold Ounces

 

 

8,586

 

 

8,953

 

Gold Equivalent Ounces from Silver

 

 

12,014

 

 

16,019

 

Total Precious Metal Gold Equivalent Ounces

 

 

20,600

 

 

24,972

 

Total cash cost (before by-product credits) per precious metal gold equivalent ounce sold (including royalties) (3)

 

$

806

 

$

825

 

Total cash costs, after by-product credits, per precious metal gold equivalent ounce sold (including royalties)(3)

 

$

422

 

$

515

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 ensure that precious metal mill production quantities are materially correct.

(2) 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 from the market average metal prices in most cases.

(3) 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".

(4) Precious metal gold equivalent mill production for the first quarter of 2014 of 23,734 ounces differs from gold equivalent ounces sold for the same period of 20,600 due principally to buyer (smelter) concentrate processing deductions of approximately 2,123 gold equivalent ounces and an increase in gold equivalent ounces contained in ending inventory of approximately 1,011 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 54,179,369 shares outstanding and no warrants. 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 months ended March 31, 2014 and 2013, its financial condition at March 31, 2014 and December 31, 2013 and its cash flows for the three months ended March 31, 2014 and 2013. The summary data for the three months ended March 31, 2014 is unaudited; the summary data for the year ended December 31, 2013 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2013, 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 10Q and Form 10-K.

OLD RESOURCE CORPORATION

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

for the three months ended March 31, 2014 and 2013

 

(U.S. dollars in thousands, except shares and per share amounts)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

2014

 

2013

 

 

 

 

 

 

 

 

 

Sales of metals concentrate, net

 

$

31,152

 

$

42,311

 

Mine cost of sales:

 

 

 

 

 

 

 

 

Production costs

 

 

14,221

 

 

16,867

 

 

Depreciation and amortization

 

 

745

 

 

536

 

 

Reclamation and remediation

 

 

-

 

 

29

 

 

 

Total mine cost of sales

 

 

14,966

 

 

17,432

 

Mine gross profit

 

 

16,186

 

 

24,879

 

Costs and expenses:

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

3,013

 

 

4,385

 

 

Exploration expenses

 

 

1,288

 

 

3,299

 

 

Facilities and mine construction

 

 

-

 

 

4,848

 

 

 

Total costs and expenses

 

 

4,301

 

 

12,532

 

Operating income

 

 

11,885

 

 

12,347

 

Other income (expense)

 

 

469

 

 

(36

)

Income before income taxes

 

 

12,354

 

 

12,311

 

 

Provision for income taxes

 

 

5,229

 

 

4,924

 

Net income

 

$

7,125

 

$

7,387

 

Other comprehensive income:

 

 

 

 

 

 

 

 

Currency translation gain

 

 

-

 

 

34

 

Comprehensive income

 

$

7,125

 

$

7,421

 

Net income per common share:

 

 

 

 

 

 

 

 

Basic:

 

$

0.13

 

$

0.14

 

 

Diluted:

 

$

0.13

 

$

0.13

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

53,934,925

 

 

52,679,369

 

 

Diluted

 

 

54,697,710

 

 

55,586,031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GOLD RESOURCE CORPORATION

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(U.S. dollars in thousands, except shares)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

2014

 

 

2013

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

19,457

 

 

$

14,973

 

 

Gold and silver bullion

 

 

3,793

 

 

 

3,801

 

 

Accounts receivable

 

 

6,442

 

 

 

2,307

 

 

Inventories

 

 

6,967

 

 

 

7,468

 

 

Income taxes receivable

 

 

1,216

 

 

 

6,488

 

 

Deferred tax assets

 

 

3,973

 

 

 

3,973

 

 

Prepaid expenses and other assets

 

 

4,687

 

 

 

5,808

 

 

 

Total current assets

 

 

46,535

 

 

 

44,818

 

Land and mineral rights

 

 

227

 

 

 

227

 

Property, equipment and mine development - net

 

 

21,506

 

 

 

18,127

 

Inventories

 

 

903

 

 

 

903

 

Deferred tax assets

 

 

27,663

 

 

 

27,663

 

Investments (including $2,512 and nil, respectively, measured at fair value)

 

 

2,743

 

 

 

231

 

 

 

Total assets

 

$

99,577

 

 

$

91,969

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

4,223

 

 

$

2,873

 

 

Accrued expenses

 

 

5,011

 

 

 

5,613

 

 

Capital lease obligations

 

 

1,476

 

 

 

1,469

 

 

IVA taxes payable

 

 

1,762

 

 

 

925

 

 

Dividends payable

 

 

542

 

 

 

538

 

 

 

Total current liabilities

 

 

13,014

 

 

 

11,418

 

Capital lease obligations

 

 

2,015

 

 

 

2,387

 

Reclamation and remediation liabilities

 

 

2,883

 

 

 

2,887

 

 

 

Total liabilities

 

 

17,912

 

 

 

16,692

 

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:

 

 

 

 

 

 

 

 

 

 

54,515,767 and 54,115,767 shares issued and outstanding, respectively

 

 

55

 

 

 

54

 

Additional paid-in capital

 

 

88,685

 

 

 

88,044

 

Accumulated (deficit)

 

 

-

 

 

 

(5,766

)

Treasury stock at cost, 336,398 shares

 

 

(5,884

)

 

 

(5,884

)

Accumulated other comprehensive (loss)

 

 

(1,171

)

 

 

(1,171

)

 

 

Total shareholders' equity

 

 

81,665

 

 

 

75,277

 

 

 

Total liabilities and shareholders' equity

 

$

99,577

 

 

$

91,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GOLD RESOURCE CORPORATION

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

for the three months ended March 31, 2014 and 2013

 

(U.S. dollars in thousands)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

2014

 

 

2013

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

7,125

 

 

$

7,387

 

 

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

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

810

 

 

 

653

 

 

Reclamation and remediation

 

 

-

 

 

 

29

 

 

Stock-based compensation

 

 

783

 

 

 

1,512

 

 

Unrealized foreign currency exchange loss (gain)

 

 

137

 

 

 

(119

)

 

Impairment loss on gold and silver bullion

 

 

-

 

 

 

178

 

 

Unrealized gain due to changes in fair value of investments

 

 

(702

)

 

 

-

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(4,176

)

 

 

(4,887

)

 

Inventories

 

 

496

 

 

 

942

 

 

Prepaid expenses and other assets

 

 

1,110

 

 

 

(1,677

)

 

Accounts payable

 

 

1,331

 

 

 

1,910

 

 

Accrued expenses

 

 

(608

)

 

 

1,469

 

 

IVA taxes payable/receivable

 

 

828

 

 

 

(1,216

)

 

Income taxes payable/receivable

 

 

5,219

 

 

 

263

 

 

Net cash provided by operating activities

 

 

12,353

 

 

 

6,444

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(4,190

)

 

 

(3,682

)

Purchases of gold and silver bullion

 

 

-

 

 

 

(485

)

 

Proceeds from conversion of gold and silver bullion

 

 

8

 

 

 

664

 

 

Investments

 

 

(1,805

)

 

 

(231

)

 

Net cash used in investing activities

 

 

(5,987

)

 

 

(3,734

)

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

100

 

 

 

-

 

Dividends paid

 

 

(1,617

)

 

 

(9,482

)

 

Repayment of capital leases

 

 

(365

)

 

 

-

 

 

Net cash used in financing activities

 

 

(1,882

)

 

 

(9,482

)

 

Effect of exchange rates on cash and equivalents

 

 

-

 

 

 

18

 

 

Net increase (decrease) in cash and cash equivalents

 

 

4,484

 

 

 

(6,754

)

Cash and equivalents at beginning of period

 

 

14,973

 

 

 

35,780

 

Cash and equivalents at end of period

 

$

19,457

 

 

$

29,026

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information

 

 

 

 

 

 

 

 

Interest paid

 

$

85

 

 

$

-

 

Income taxes paid

 

$

-

 

 

$

3,496

 

 

 

 

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

 

 

SOURCE: Gold Resource Corporation