DENVER, CO
-- (MARKET WIRE)
-- 03/15/11
Gold Resource Corporation (GORO) (NYSE Amex: GORO)
today announced financial results for the fourth quarter and year ended
December 31, 2010. CEO conference call is scheduled March 16, 2011. Gold
Resource Corporation is a low-cost gold producer with operations in the
southern state of Oaxaca, Mexico.
Overview of Full Year 2010 Results from El Aguila Project
Gold Resource Corporation declared commercial production July 1, 2010. In
the first six months of commercial production, Q3 and Q4 of 2010, the El
Aguila Project produced 10,493 ounces of gold at a cash cost of $217 per
ounce, net of by-product credits, and sold its gold at an average price of
$1,201/ounce. The mine generated a gross profit of $9.8 million.
For the year 2010 the Company had a net comprehensive loss of $23 million
or ($0.46/share) due primarily to expensing continued Project construction
and development costs and to non-cash items.
The Company's 2010 mill production throughput rate averaged 755 tonnes/day
and mill head grade averaged 3.7 grams per tonne gold. Extensive and
unusually heavy rains during the third quarter and first half of the fourth
quarter of 2010 complicated production as lower grade stockpiles with less
clay materials were better suited to run during that time. Mill recoveries
were 81% in the third quarter and 74% in the fourth quarter, primarily
because of the lower head grade run during the fourth quarter. Mill
recoveries averaged 77% for the year ended December 31, 2010.
In November, 2010 the Company commenced underground mining and stockpiling
of the La Arista high-grade, polymetallic mineralization at the El Aguila
Project. The Company announced March 14, 2011 making the transition from
processing open pit ore to processing Arista underground ore, in the mill's
flotation circuit, ahead of the Company's mid-2011 target. Ore stockpiles
remaining from the open pit mine will eventually be processed in the mill's
agitated leach circuit. Mill optimization and ramp-up of the Arista
polymetallic ore continues.
Gold Resource Corporation's President, Mr. Jason Reid, stated, "2010 was an
important year for Gold Resource Corporation as we emerged as a low cost
gold producer, an accomplishment achieved by few. We commenced commercial
production from our open pit in Q3, continued to optimize operations in Q4
and are developing the Arista underground mine. Even with the challenges of
early production and inclement weather we are pleased as the Project
continued to demonstrate its low production costs of less than $800,000 per
month for the six months of commercial production and produced a mine gross
profit of $9.8 million dollars."
"We expect continued reduction of unit cash cost per ounce of gold by using
industry standard base metal by-product credits from the Arista deposit
which, in addition to gold and silver mineralization, also contains base
metal mineralization of copper, lead and zinc. As we continue mill
optimization, ramp up and production from the Company's largest deposit
discovered to date, La Arista, we look forward to 2011 as a
transformational year for Gold Resource Corporation as we target processing
higher average grade ore, lower cash costs and greater production levels in
2011," stated Mr. Jason Reid.
Mr. Jason Reid continued, "We remain consistent in our long term objective
to return money back to the owners of the Company, its shareholders. Using
cash flow generated from mine operations, the Company declared and paid its
shareholders a $0.03 per share dividend each month since commencing
commercial production July 1, 2010."
2010 Q3 & Q4 HIGHLIGHTS
-- Achieved commercial production July 1, 2010
-- Produced 10,493 ounces of gold at a cash cost of $217 per ounce
-- Generated $9.8 million mine gross profit
-- Dividend distributions of $0.18 per share for the six months of
commercial production
-- Cash and cash equivalents of $47.5 million on hand at December 31, 2010
-- Mining, stockpiling ore and continued Arista underground mine
development
Conference Call
Gold Resource Corporation's CEO, Mr. William W. Reid, will host a 45 minute
conference call Wednesday, March 16, 2011 at 11:00 a.m. EST. Mr. William
Reid will update shareholders on year end results followed by a Question &
Answer period. The conference call will be recorded and posted to the
Company's website in 3 to 5 business days from recording.
Date: Wednesday, March 16, 2011
Time: 11:00AM EST (9:00 AM Mountain)
Attendee Access Information:
Title: Gold Resource Corporation 2010 Year End Conference Call
Host Name: William W. Reid
Company Name: Gold Resource Corporation
US/CAN Toll free: 1-877-681-3373
Int'l Toll: 1-719-325-4811
Passcode: 1720397
Please dial-in to the meeting at least 5 minutes prior to the start time
using the attendee phone number and passcode.
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
five potential high-grade gold and silver properties in Mexico's southern
state of Oaxaca. The Company has 52,998,303 shares outstanding, no warrants
and no debt. 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 Securities and Exchange Commission
See Accompanying Tables
The following information summarizes the results of operation for Gold
Resource Corporation for the 3 months and years ended December 31, 2010 and
2009, its financial condition at December 31, 2010 and 2009 and its cash
flows for the years ended December 31, 2010 and 2009. The summary data for
the 3 months ended December 31, 2010 and 2009 is unaudited; the summary
data for the years ended December 31, 2010 and 2009 is taken from our
audited financial statements contained in our annual report on Form 10-K
for the year ended December 31, 2010, but do not include the footnotes and
other information that is included in the complete financial statements.
Readers are urged to review the 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 Form 10-K.
Gold Resource Corporation and Subsidiaries
(An Exploration Stage Company)
Consolidated Statements of Operations
(amounts in thousands, except per share amounts)
--------------------- ---------------------
Three Months Year
Ended December 31, Ended, December 31,
--------------------- ---------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
Sales of metals concentrate $ 4,779 $ - $ 14,754 $ -
---------- ---------- ---------- ----------
Production costs applicable
to sales 1,884 - 4,721 -
Depreciation, depletion and
amortization 103 - 166 -
Accretion 17 - 68 -
---------- ---------- ---------- ----------
Total mine cost of sales 2,004 - 4,955 -
Mine gross profit 2,775 - 9,799 -
Costs and Expenses
General and administrative 4,624 1,051 9,302 5,378
Exploration expenses 726 3,939 4,692 7,811
Construction and development 6,323 2,106 18,435 20,995
Production start-up expense,
net - - 209 -
---------- ---------- ---------- ----------
Total costs and expenses 11,673 7,096 32,638 34,184
---------- ---------- ---------- ----------
Operating (loss) (8,898) (7,096) (22,839) (34,184)
Other income (expense)
Currency exchange (loss) (242) - (330) -
Loss on sale of assets (4) - (4) -
Interest income 23 30 99 55
---------- ---------- ---------- ----------
Total other income
(expense) (223) 30 (235) 55
(Loss) before income taxes (9,121) (7,066) (23,074) (34,129)
Provision for income taxes - - - -
---------- ---------- ---------- ----------
Net (loss) $ (9,121)$ (7,066)$ (23,074)$ (34,129)
---------- ---------- ---------- ----------
Other comprehensive income:
Currency translation gain (468) (1,383) 215 (968)
---------- ---------- ---------- ----------
Net comprehensive (loss) $ (9,589)$ (8,449)$ (22,859)$ (35,097)
========== ========== ========== ==========
Net (loss) per common share:
Basic and Diluted $ (0.19)$ (0.16)$ (0.46)$ (0.78)
========== ========== ========== ==========
Weighted average shares
outstanding:
Basic and Diluted 49,060,466 43,764,703 50,042,471 43,764,703
========== ========== ========== ==========
Gold Resource Corporation and Subsidiaries
(An Exploration Stage Company)
Consolidated Balance Sheets
(amounts in thousands, except share amounts)
December 31,
---------------------
2010 2009
-------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 47,582 $ 6,752
Restricted Cash - 11,436
Accounts receivable 1,185 -
Inventories 3,063 225
Prepaid and refundable taxes 5,848 2,132
Other current assets 9 156
-------- -----------
Total current assets 57,687 20,701
-------- -----------
Land and mineral rights 227 227
Property and equipment, net 4,849 1,726
Other assets 34 11
-------- -----------
Total assets $ 62,797 $ 22,665
-------- -----------
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses $ 4,866 $ 725
Dividends payable 1,590 -
-------- -----------
Total current liabilities 6,456 725
-------- -----------
Asset retirement obligation 2,495 1,992
SHAREHOLDERS' EQUITY
Preferred stock - -
Common stock 53 48
Additional paid-in capital 152,444 95,692
(Deficit) accumulated during exploration
stage (97,891) (74,818)
Other comprehensive income
Currency Translation Adjustment (760) (974)
-------- -----------
Total shareholders' equity 53,846 19,948
-------- -----------
-------- -----------
Total liabilities and shareholders' equity $ 62,797 $ 22,665
======== ===========
Gold Resource Corporation and Subsidiaries
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(amounts in thousands, except per share amounts)
December 31,
2010 2009
--------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (23,074) $ (34,129)
--------- ------------
Adjustments to reconcile net (loss) to net cash
(used in) operating activities:
Depreciation 324 167
Accretion expense 68 -
Stock compensation 2,694 2,844
Asset retirement costs 315 1,992
Foreign currency translation adjustment 215 (968)
Loss on sale of assets 4 -
Change in operating assets and liabilities:
Accounts receivable (1,185) -
Prepaid and refundable taxes (3,716) (2,132)
Other current assets 146 47
Inventories (2,838) (225)
Accounts payable and accrued liabilities 4,142 (1,029)
Other (24) (6)
--------- ------------
Total adjustments 145 (690)
--------- ------------
Net cash (used in) operating activities $ (22,929) $ (33,439)
--------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (3,560) (1,204)
Restricted cash 11,436 (11,436)
--------- ------------
Net cash provided (used in) by investing
activities $ 7,876 $ (12,640)
--------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of stock 63,393 48,990
Proceeds from exercise of options - 184
Dividends paid (7,740) -
--------- ------------
Net cash provided by financing activities $ 55,653 $ 49,174
--------- ------------
Effect of exchange rate on cash and equivalents 230 123
Net increase in cash and equivalents 40,830 3,218
Cash and equivalents at beginning of period 6,752 3,534
--------- ------------
Cash and equivalents at end of period $ 47,582 $ 6,752
========= ============
Contacts:
Corporate Development
Greg Patterson
303-320-7708
www.Goldresourcecorp.com
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