Fortitude Gold delivers $2.4M profit on $20.7M in sales in its first quarter as a standalone company

Fortitude Gold Corp (OTCQB:FTCO) reported its first results as a standalone public company showing sales of $20.7 million and a net profit of $2.4 million from its Nevada gold operations. 

The revenue came thanks to an increase in production from its Isabella Pearl mine, which produced 11,572 gold equivalent ounces during the three-month period ended March 31, 2021, compared to the 3,814 ounces it produced in the same year-ago period when it was part of Gold Resource Corporation (NYSEAMERICAN:GORO) (FRA:GIH). 

Fortitude was spun out of Gold Resource at the end of 2020. 

READ: Fortitude Gold increases its monthly dividend by 50% to $0.03 per common share, or $0.36 annually

Other highlights from the new company’s balance sheet included $7.3 million cash from operating activities and a $35.3 million cash balance. The firm had $55.6 million in working capital.

Isabella Pearl continued to be a low-cost operation, producing gold at a cash cost of $534 per ounce after by-product credits. Realized metal prices during the quarter averaged $1,804 per gold ounce.

Fortitude said it is maintaining its 2021 outlook, targeting 40,000 ounces of gold production.

Low costs, high margins

“We are very excited to report Fortitude Gold’s first quarterly results as a standalone public company,” CEO Jason Reid said in a statement accompanying the numbers.

“Our cash balance grew by $7.4 million over year-end 2020, or 27%, while our all-in sustaining cash cost dropped to $575 per gold ounce. The company successfully completed staffing up as a one hundred percent standalone entity post spin-off, which required non-recurring stock-based and onboard incentive compensation. Had we not sustained these one-time quarterly expenses, our net earnings would have been substantially higher.”

Isabella Pearl is generating a “substantial” amount of cash, with production costs projected to drop even further in subsequent years, according to Reid. “These sizeable cash flows are expected to fund significant company exploration and development projects, as well as monthly dividend distributions to shareholders.”

Fortitude’s board of directors has initiated a $0.02 monthly dividend in April, which will increase to $0.03 per month in May or $0.36 annually.

Colorado Springs-based Fortitude’s Nevada Mining Unit consists of five high-grade gold properties located in the Walker Lane Mineral Belt, with the Isabella Pearl gold mine in current production.

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Story by ProactiveInvestors