Gold Resource (US:GORO)2019-05-09 02:51Financial Data and Key Metrics Changes - In Q1 2019, Gold Resource Corporation reported net revenue of $26.8 million, with a net income of $0.01 per share [4] - The company produced 6,538 ounces of gold and 364,000 ounces of silver during the quarter [4] - The cash balance increased from $7.7 million at the beginning of the period to $8.5 million at the end [29] Business Line Data and Key Metrics Changes - The Oaxaca Mining Unit saw a 16% increase in global tonnes, an 18% increase in gold ounces, and a 14% increase in silver ounces in proven and probable reserves [5] - At the Nevada Mining Unit, the Isabella Pearl Project commenced gold processing, producing its first gold shortly after the quarter ended [6][7] - The company is focused on ramping up production at Isabella Pearl and has plans for further pit expansion and discovery potential [9][10] Market Data and Key Metrics Changes - The company noted a significant increase in lead and zinc production compared to Q4 2018, although gold production saw a decrease [18] - The prices for base metals have been favorable, with zinc hitting a 10-year high recently [19] Company Strategy and Development Direction - The company is focused on completing the ADR construction and ramping up production at the Isabella Pearl Project [7][8] - Management emphasized the importance of cash flow generation and maintaining a low-cost production model [46][47] - The electrification project in Mexico is expected to save the company $1 million to $2 million annually, significantly reducing power costs [56][57] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the mining industry but expressed confidence in the company's growth trajectory and production ramp-up [11][51] - The management highlighted that the current market for miners is challenging, with many companies experiencing declines in stock prices despite positive news [54] Other Important Information - The company has implemented new lease accounting standards, which increased operating leases on the balance sheet [40][41] - The company is utilizing a third-party refining process that allows for the recovery of carbon, which is more cost-effective than previous methods [60][64] Q&A Session Summary Question: Can you provide details on the final steps and expenditures needed to complete the ADR? - Management indicated that they are targeting completion by June and are addressing final change orders [16][17] Question: What is the outlook for lead and zinc production? - Management explained that the current strength in lead and zinc is related to the mining depth and that higher grades of precious metals are expected as mining progresses [19] Question: What is the plan regarding the ATM and cash balance? - Management clarified that they utilized $4.1 million from the ATM for working capital and emphasized the importance of maintaining a low dilution rate [25][27] Question: Why was the production cost higher this quarter? - Management attributed the increase in production costs to higher throughput and lower grades being processed [46][47] Question: Can you comment on the unfavorable year-on-year comparisons? - Management noted that variations in costs and metal prices can impact quarterly results, but emphasized the company's focus on growth and ramping up production [50][52]