Gold Resource Corp reports strong year-to-date operating cash flow of $16.1M

Gold Resource Corporation, a gold and silver producer and explorer with operations in Oaxaca, Mexico, reported strong year-to-date operating cash flow of $16.1 million, coupled with surging revenue.  The company said it earned a net income of $1.3 million, or $0.02 per share, reflecting the adoption of the new Mexican labor reform from June 2021. “We onboarded all employees from the outsourced third-party provider to our wholly-owned subsidiary, Don David Gold Mexico, resulting in a $1.9 million impact on net income,” said the company.  Gold Resource noted that revenues “were strong at $30.8 million and greater” than the same period in 2020, which had “an interruption in production” due to the coronavirus (COVID-19) pandemic. It was also higher than the same period in 2019, which was “a more normal year” for mining, according to the company. READ: Gold Resource Corporation reports preliminary 3Q gold production results “Cash flow from operating activities was $9.3 million in the second quarter of 2021, bringing our cash on June 30, 2021, to $30.5 million, an increase of $5.1 million for the first six months,” said the company.   Gold Resource produced and sold 9,685 gold equivalent ounces, comprising 5,697 gold ounces and 270,321 silver ounces at an average price per ounce of $1,822 and $26.88, respectively resulting in a total cash cost of $713 per ounce of gold equivalent and an all-in sustaining cost of $1,280 per ounce of gold equivalent. In a statement accompanying the numbers, Gold Resource CEO Allen Palmiere said: "Our operations team continues to demonstrate their ability to be nimble and adaptive operators all while focusing on excellent environmental, social and governance practices. Notwithstanding an excellent work culture, there were two lost time incidents at the Don David Gold Mine during Q2 2021, which were investigated, and measures were taken to reinforce adherence to safety protocols.” “While there were no serious injuries, accidents like these are unacceptable and the company recognized the need to modify and reinforce the safety program. Accordingly, a series of programs are underway to improve the overall safety culture.” Palmiere noted that gold production in the second quarter was “as expected” while silver and base metal production were “modestly behind forecast” as the team continues to address challenging ground conditions. “Accordingly, our all-in sustaining cost per ounce was higher than our guidance at $1,280 per ounce of gold equivalent. Notwithstanding this, we reinvested $11.2 million into exploration and infrastructure improvements at the Don David Gold Mine and ended the quarter with a cash balance of $30.5 million effective June 30, 2021," added Palmiere. "Our strong free cash flow per share and dividend yield puts us among the top of our peer group which is not reflected in our share price." For its second quarter ended June 30, 2021, the company highlighted the following developments: A sum of $1 million distributed in shareholder dividends this quarter, totaling $117.8 million since 2010; Construction of the water filtration plant and dry stack tailings facilities progressed with an expected completion in the third quarter. The dry stack facilities will conserve water, accelerate reclamation of certain areas of the open pit mine as well as extend the life of tailings storage facilities; The exploration program progressed with the development of 156 meters (m) of development drifts and 3,421m of diamond drilling with 12 drill holes underground at its Arista and Switchback vein systems and 2,069m drilled with two surface drill holes at the Aguila project; and In addition, there is a renewed emphasis on satellite areas, including Cerro Colorado and the area around the Aguila project with drilling planned for the second half of 2021. Contact the author Uttara Choudhury at uttara@proactiveinvestors.com Follow her on Twitter: @UttaraProactive