Gold Resource (US:GORO)2024-08-06 20:45Financial Position - As of June 30, 2024, the company has $5.3 million in cash and $14.3 million in working capital[3]. - The total shareholders' equity as of June 30, 2024, is $67.0 million, down from $106.7 million a year earlier[11]. - As of June 30, 2024, total inventories were $8,979,000, a slight decrease from $9,294,000 as of December 31, 2023[19]. - The total liabilities and shareholders' equity as of June 30, 2024 were $162,730,000, consistent with the previous reporting period[77]. - Total current assets as of June 30, 2024 were $26,601,000, an increase from $26,495,000 as of December 31, 2023[77]. - The company had cash and cash equivalents of $5.3 million as of June 30, 2024, down from $6.3 million as of December 31, 2023[72]. - Working capital as of June 30, 2024, was $14.3 million, a decrease of 6% from $15.2 million as of December 31, 2023[144]. Revenue and Sales Performance - For the three months ended June 30, 2024, total net sales were $20,782,000, a decrease of 16.4% compared to $24,807,000 in the same period of 2023[18]. - For the six months ended June 30, 2024, total net sales were $39,484,000, down 29.6% from $56,035,000 in the same period of 2023[18]. - Net sales for the three months ended June 30, 2024, were $20.8 million, a decrease of 16% from $24.8 million in the same period in 2023[114]. - Gold sales decreased by 36% to 2,724 ounces, and silver sales decreased by 14% to 234,560 ounces during the second quarter of 2024[103]. - The financial results were negatively impacted by a stronger Mexican peso and lower zinc and lead prices realized in 2024 compared to 2023[105]. Losses and Expenses - The net loss for the quarter was $27.7 million, or $0.30 per share, which includes a $16.5 million tax expense and $3.7 million in additional interest on streaming liabilities[4]. - The company reported a net loss of $31,755,000 for the three months ended June 30, 2024, compared to a net loss of $5,619,000 for the same period in 2023[13]. - The company recorded a net loss of $27.7 million for the three months ended June 30, 2024, compared to a net loss of $4.6 million in the same period in 2023[114]. - The company reported a net loss of $31.8 million for the six months ended June 30, 2024, compared to a net loss of $5.6 million in the same period in 2023, reflecting a $26.1 million increase in losses[125]. - Total other expenses for the three months ended June 30, 2024, amounted to $6.4 million, a substantial increase from $0.7 million in the same period of 2023[65]. Production and Costs - The company produced and sold a total of 5,625 gold equivalent ounces during the second quarter, with an average sales price of $2,465 per gold ounce and $30.49 per silver ounce[5]. - Total cash cost after co-product credits was $1,950 per gold equivalent ounce, while the all-in sustaining cost was $2,661 per AuEq ounce[4]. - The total cost of sales for the six months ended June 30, 2024, was $45.2 million, compared to $54.3 million in 2023[114]. - The total cost of sales for Q2 2024 was $24.4 million, a decrease of 10% from $27.0 million in Q2 2023, primarily due to a $2.5 million decrease in production costs[115]. - The total all-in cost after co-product credits for Q2 2024 was $15,295,000, compared to $16,888,000 in Q2 2023, showing a decrease of approximately 9.4%[142]. Tax and Regulatory Matters - The company recorded income tax provisions of $16.5 million and $14.6 million for the three and six months ended June 30, 2024, respectively[20]. - The company has a valuation allowance on Mexico Income Tax net deferred tax assets amounting to $12.8 million as of June 30, 2024[22]. - The company received a notification from the Mexican Tax Administration Services with a sanction of approximately $18 million as a result of a 2015 tax audit[25]. - The consolidated effective tax rate for the company is influenced by the tax rates in Mexico (37.5%) and Canada (26.5%) which are higher than the U.S. federal rate of 21%[21]. Operational Updates - The underground diamond drilling program is progressing as planned, focusing on upgrading Inferred resources to Measured and Indicated categories[5]. - The exploration drilling program aims to identify new mineralization and upgrade existing resources, with a resource estimate update scheduled for Q4 2024[89]. - The company has implemented cost reduction initiatives that have proven effective despite external challenges, maintaining operational stability[86]. - The company continues to evaluate strategic alternatives to enhance shareholder value and improve operations[83]. Market and Currency Risks - The company’s operations and financial condition are significantly influenced by the market prices of gold, silver, copper, lead, and zinc, which can fluctuate widely due to various external factors[154]. - Fluctuations in foreign currency exchange rates can materially affect operating results, particularly when the value of the Mexican peso changes relative to the U.S. dollar[157]. - The company does not currently utilize derivative financial instruments to manage market risks but may consider such arrangements in the future[153]. - Changes in commodity prices can lead to significant fluctuations in revenues, potentially requiring reassessment of project feasibility[155].