Gold Resource Corporation (NYSE American: GORO) (the “Company”) announces its preliminary third quarter results, which includes the sale of 1,357 ounces of gold and 181,434 ounces of silver, resulting in total gold equivalent (“AuEq”) ounces of 3,526. Additionally, the Company sold 1,473 tonnes of zinc, 98 tonnes of copper, and 467 tonnes of lead. During the nine months ending September 30, 2024, the Company sold 15,325 AuEq ounces, 4,926 tonnes of zinc, 559 tonnes of copper, and 1,625 tonnes of lead.
Sales Statistics
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||
Metal produced and sold | ||||||||||||
Gold (ozs.) | 1,357 | 3,982 | 7,638 | 14,777 | ||||||||
Silver (ozs.) | 181,434 | 208,905 | 632,529 | 777,977 | ||||||||
Copper (tonnes) | 98 | 245 | 559 | 904 | ||||||||
Lead (tonnes) | 467 | 947 | 1,625 | 3,681 | ||||||||
Zinc (tonnes) | 1,473 | 2,571 | 4,926 | 8,772 | ||||||||
Average metal prices realized (1) | ||||||||||||
Gold ($ per oz.) | $ | 2,561 | $ | 1,934 | $ | 2,309 | $ | 1,948 | ||||
Silver ($ per oz.) | $ | 30.61 | $ | 23.61 | $ | 28.06 | $ | 23.86 | ||||
Copper ($ per tonne) | $ | 8,832 | $ | 8,185 | $ | 9,260 | $ | 8,624 | ||||
Lead ($ per tonne) | $ | 2,065 | $ | 2,196 | $ | 2,080 | $ | 2,166 | ||||
Zinc ($ per tonne) | $ | 2,854 | $ | 2,195 | $ | 2,733 | $ | 2,648 | ||||
Gold equivalent ounces sold | ||||||||||||
Gold Ounces | 1,357 | 3,982 | 7,638 | 14,777 | ||||||||
Gold Equivalent Ounces from Silver | 2,169 | 2,550 | 7,687 | 9,529 | ||||||||
Total AuEq oz | 3,526 | 6,532 | 15,325 | 24,306 | ||||||||
(1) | Average metal prices realized vary from the market metal prices due to final settlement adjustments from our provisional invoices. Our average metal prices realized will therefore differ from the average market metal prices in most cases. |
Trending Production Statistics
2023 | 2024 | |||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | ||
Total tonnes milled | 117,781 | 113,510 | 116,626 | 111,254 | 98,889 | 93,687 | 83,690 | |
Average Grade | – | |||||||
Gold (g/t) | 2.33 | 1.59 | 1.52 | 1.44 | 1.89 | 1.27 | 0.54 | |
Silver (g/t) | 94 | 86 | 73 | 85 | 88 | 102 | 83 | |
Copper (%) | 0.37 | 0.37 | 0.32 | 0.39 | 0.37 | 0.26 | 0.19 | |
Lead (%) | 1.73 | 1.64 | 1.29 | 1.39 | 1.25 | 1.00 | 1.01 | |
Zinc (%) | 3.88 | 3.72 | 3.24 | 2.95 | 2.82 | 2.59 | 2.63 | |
Metal production (before payable metal deductions) | ||||||||
Gold (ozs.) | 7,171 | 4,637 | 4,443 | 4,077 | 4,757 | 2,947 | 944 | |
Silver (ozs.) | 322,676 | 289,816 | 247,159 | 282,487 | 251,707 | 263,023 | 194,525 | |
Copper (tonnes) | 336 | 334 | 276 | 341 | 280 | 181 | 93 | |
Lead (tonnes) | 1,559 | 1,389 | 1,048 | 1,072 | 812 | 616 | 576 | |
Zinc (tonnes) | 3,837 | 3,569 | 3,223 | 2,884 | 2,310 | 2,020 | 1,741 | |
Liquidity Update
As shown in the tables above, tonnes and grade have declined during 2024 and are below budget, especially in the third quarter. There are several factors that caused these declines. We have encountered significant issues with equipment availability due to the age and condition of some of the critical mining equipment in use at the mine. Due to the continued challenges with equipment availability and the decreased cash flow due to prior production shortfalls, the Company has not been able to maintain its projected timeline for development of future production zones. As a result, the Company is currently mining only one face at a time in areas that are accessible. The current lack of other available production zones has placed additional pressure on the Company’s ability to achieve its production estimates, as any problems encountered at the current production zone cannot be offset by producing elsewhere in the mine. In addition, the mill also experienced some mechanical issues and wet ore handling difficulties due to unusually high rain fall that resulted in lower throughput and a production shortfall. To minimize the mechanical issues and return the mine to a cash positive position, capital is necessary to replace some of the mining fleet and upgrade the mill.
The Don David Gold Mine (“DDGM”) in Mexico has significant potential to generate positive cash flow based on the information to date from the new areas of The Three Sisters as well as other areas that have been discovered near the existing mining zones. In order to develop access and better define these new areas, an investment must be made in the equipment and mine plan. Without the addition of these areas to the life-of-mine plan, we do not believe that DDGM will generate sufficient free cash flow in the near term.
The Company’s inability to achieve its production estimates have created a short-term liquidity concern. We currently anticipate that we will require approximately $7 million to obtain additional mining equipment and mill upgrades and approximately $8 million in working capital in order to fund the initial development to access the Three Sisters and Splay 31 systems. Due to the 2024 production challenges described above, the Company does not believe that the mine will generate sufficient cashflow to fund these improvements. The Company is evaluating various financing options in order to fund this development in the near term.
If the Company is unable to obtain this additional capital and successfully develop these new mining areas, the continued operation of the mine may not be possible beyond November 2024. If continued operation of the mine is not possible, the Company may be compelled to place the mine on “care and maintenance” status, which would likely trigger significant severance and other costs which the Company may not be able to pay.
Q3 2024 Conference Call
The Company has elected to forego hosting a Q3 2024 conference call.
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.
