Gold Resource Corporation (NYSEAMERICAN:GORO) (FRA:GIH) told investors it generated free cash flow at both its mining operations in the third quarter this year despite a two-month shut-down of operations in Mexico from April.
The company is a gold and silver producer and explorer with mines in Oaxaca, Mexico and Nevada in the US. In the US, the firm posted record gold production in the three months to end September, at 7,847 gold ounces, up 51% compared to the previous quarter.
Notably, the group said the third quarter was its first full quarter where it could regularly access portions of the high-grade ‘Pearl’ zone at the Isabella Pearl mine in Nevada, while also exploiting the lower grade “Isabella” zone.
Meanwhile, over in Mexico, the firm produced 4,728 ounces of gold, 324,592 ounces of silver, 428 tonnes of copper, 2,157 tonnes of lead and 5,538 tonnes of zinc in the third quarter.
Net income for the period came in at around $5 million, up from $2.9 million in the same quarter of 2019, on revenue of $42.2 million, up from around $40 million in the same period of 2019.
“Our successful third quarter demonstrates our strength and determination,” GORO’s CEO and president Jason Reid said in a statement.
“Despite the mandatory two-month shutdown in Mexico during the second quarter, our Oaxaca Mining unit is back to generating free cash flow while putting employee and community health and safety first.
“Nevada also delivered on generating free cash flow with its record quarterly gold production, a 51% increase over the prior quarter, while continuing rigorous COVID protocols.”
Reid also noted that the period saw the group make “a deliberate strategic move” to unlock shareholder value from both its mining units, reported on October 5, by initiating the spin-off of the Nevada business to shareholders as Fortitude Gold Corporation.
The move is subject to certain conditions but the aim is for it to be completed by year-end 2020 or the first quarter of 2021.
Other highlights of the third quarter included that on July 1, it achieved 10 years of production, over $1 billion in revenue and $114 million in shareholder dividends.
As at September 30, the firm had working capital of $50 million, an increase of 120% from the end of 2019. The firm also distributed $0.7 million in dividends for the quarter, or $0.01 per share.
On August 6, the miner announced that Kim Perry would transition from director to assume the role of chief financial officer for the retiring John Labate.
Gold Resource Corp said it remained on track to achieve its annual production target of 40,000 gold ounces in 2021.
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Story by ProactiveInvestors
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