GORO - Earnings call transcript Q2 2018 | Gold Resource Corporation

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Operator

Thank you for joining Gold Resource Corporation’s Second Quarter Call. Mr. Jason Reid, President and Chief Executive Officer, will be hosting today’s call.

Following Mr. Reid’s opening remarks, there will be a question-and-answer period.

call recorded. today’s reminder, a is being As Please Mr. go ahead, Reid.

Jason Reid

comments morning, and you. conference for eight my period. joining a Thank followed call. run you by minutes, expect quarter Gold everyone second thank Good question-and-answer approximately XXXX Resource I to Corporation’s

Joining for Q&A be call portion Financial Officer. today our John Labate, Chief the me will on the Mr.

subject and considered Let differ in or not expressed historical are as me this implied forward-looking These our on on statements. call Annual remind risks results which those everyone other Form made that cause to statements in our described XX-K to by are and our from actual uncertainties SEC certain are numerous could statements Report materially facts filings, and comments.

release with events as yesterday, earning publicly obligation are be statements update X, today, call, this no of in the statements on only and these that along actual as made of to unfold. any XXXX, August the issued will undertake comments we Forward-looking forward-looking

a the remarks for in You can XX-K our to XXXX. SEC Form the reconsideration referred measures find with filed December our in XX, year-ended financial non-GAAP of

just benefit highlights, more calls updates for much give reports, As still in questions, noted not over available calls then to far conference to streamline efficient. on take on hopefully, the read address while and just the regurgitate the conference quarterly by shorter to or to an This, going that conference different the may color can turn quarterly cover the questions. attending them in numbers I call, shareholder issues need addressed approach or a anyone I’m effort I’m and will be I’m taking to going to being year-end call. making quarterly the problems XX-K and that everyone call

get that XX, of in important in and not marked mining permits our Nevada of June was the industry construction Project final company XXXX. unit, Resource second We mine. on project It for for The build Gold milestone the it’s a mining every to quarter obtained another the an day you Corporation. for strong XXXX Pearl the quarter also commenced Isabella as

is production in than that be goal in XX months date. from Our to less

projects company a website, look posted providing project on gold to already build quarter, two of XXX% and updates photos Having we site one we during construction fact exciting annual we this profile. as as construction our aspects continued the This is I our has forward Corporation time shareholders, several be position industry. to pleased to the tranches most the of have of mine that the progresses. am to been in very target be gold on next production convey Gold the Resource increase times thrilling We a the Nevada and for producer,

a phase. The XX% second corresponding quarter of XXXX. Resource Gold of into quarter for Highlights XXXX the from the included build-and-grow second quarter launched increases in sales

share of net totaled Our $XX.X for maintained our $X.X net ounces the per or million We at million. sales before ounces $XX.X million, and had a We position and gold deductions. was solid profit XXX,XXX mine gross income cash payable X,XXX $X.XX quarter. produced metal silver We $X.X million.

ounce a ounce metal cash base at calculation equivalent Our totaled after Gold $XX of XX,XXX credits. Institute gold cost precious metal per sold strong

equivalent total precious $XXX. ounce sold metal gold Our sustaining cost all-in was for

throughput we into per higher Switchback developing totaled at elevations headroom and a have over we we X,XXX on day for Although as mine are mining. previous combined additional second basis and and This quarter over and total This day, this further in tonnes future time. agitated tonnes X,XXX flotation than impacts milled laterally time, demonstrates positive milled leach both area and to deep, XXX,XXX currently circuit mine throughputs, compares continued increased tonnes increase success Oaxaca our began on operations have as additional the to the at Switchback Mining Unit’s base-metal-rich in mill quarter. metal throughput efforts entered or milling optimize ore per we a to Remember where that areas grade Exploration we the circuits. higher-grade upwards. upwards shoots could precious indicate processing and drilling mill

vein infield gold X.XX per Our tonne step-out and northwest cherry meters announced X,XXX XX per we grams of Intercepts system X.XX mine tonne holes. high-grade expansion tonne opposed per Mine’s long-term plan to release of included grams view and X.XX April gold X.XX the and at meters the Switchback of as per the XXX drill press silver grams additional and tonne X, of grams takes a a picking Arista area. Arista with silver.

Barry swell again press to out form it pinch exploration. down adding our do again previously width, then stated previously VP this agree demonstrates Exploration, in As have along with known to that become were these fact see the good veins continued A area in to ore I release, that additional for in veins the Devlin, lesson of veins, to ore that them and is and with pinched shoots and begin shoots, unknown. new swell Barry, exciting. new

and addition build projects, moved forward. In other expanding to Unit Oaxaca [indiscernible] the deposit, including program the grid, Arista expansion power pace tailing Mining all

the grams tonne testing of The tonnes of and unit, per April report recovery. maiden mine X.X by XX% XX% our increased reserves proven we Nevada Metallurgical XX probable ounces. Turning run ore reserve Gold gold indicates crushed Pearl consists reserve rock recovery the and announced containing in million almost mining XXX,XXX gold of during XXX%. press release Project. quarter for Isabella company-wide mineral our We gold to our X.XX

from In from program grams of X.XX A gold meters to and meters tonne Subsequent high-grade tonne planned further grams delineate X.XX feasibility it announced second we is surface, known our and We downhole. meters to Gold the Mina our third XX.XX the announced results July our finalized that the X.XX gold the four per Gold mineralization. Project chose on mineralization prospective release, of analysis per near-surface including study latest X.X We XX, other on of we capital drill uploaded associated terminated we of Mesa potential property quarter, press to and claims. Mina expansion report intercepts, same limited owned our Gold and the drill Gold Mesa as build. the following XXX% have option purchase Pearl and on Isabella website. focus gold to our patented properties resources our as well being the

XX received comment during build conference quarter to Finding letter we quarter, period Mine. of in XX the Project mentioned first permit we were of environmental ground Pearl of Isabella approvals the excited for the the months. During June Significant Impact permit Well, was process, official and assessment the I No stage our final to receive call, that and approval final the the second less Isabella soon. the Pearl production broke very target than We [indiscernible]

of with paid project the final cash. are last move and paid to ready once allow. payment sits foundations ADR full Since planned, ahead we We moving $X.X for site, with the to construction. call, the the million speed The ADR complete

ADR The by process construction Final is ADR and heap weeks, poured. location. vast earthworks plant’s being cleared and are have leach electrical inspection been and begin shortly. followed a underway. site barren installation plant concrete site, cement and and then wrap been foundation leach We electrified. and crushing commence contractor office up conveyers to a pad, and pregnant coming is scheduled been pad for grubbed the and Liner very has heat the is The The a great the the passed It the The constructed. well. under Fences is switch barren solution and will quarter, the in It site our to has on at cost. the being to location pregnant just To have liners pond complete. low numbers liner foundation building pad the majority due active pond leach, moved and being and being the are installation on mine gears that solution call, is we building office heap site, transported going second installed. of hitting thereafter. crushing is shortly remain production construction exciting had the

hold to solid $X.XX. per a of bank earnings account. posted continue We We share

We Mining continue deposit the Unit. to Oaxaca Arista at expand

construction drilling, on that, our I begin consecutive Pearl success well. everyone more announced XXth It Nevada Gold quarter. to We We continue Isabella recently call. we Gold With was mining would as Project. Mina dividend exploration thank successful with unit monthly exploration today the at and time a and like their the busy very for conference

efficiently the on portion screen, up to next our move if address the And the distracting calls an lines the question-and-answer time limit wasting move call of in, we question. don’t any and will one. Operator, Q&A, to anyone’s if terminated, simply the effort is to antagonistic portion can without call Q&A can will who first and you filter the call. open Let’s or since in or I of productive caller’s for question, there take be the on

Operator

Thank sir. Thank [Operator you, Instructions] you.

question… first Our

Jason Reid

Hello, can you your name? state

Unidentified Analyst

[Indiscernible] hit noticed getting why? price Do private this I’m is investor. your hard I stock a you know morning.

Jason Reid

can year-to-date with up all a XX% and the that great you idea such I no news. why, good year. quarter especially tell have the over I last and we’re XX%

we’ll only But a imagine to rapidly. with in now the our be we’re production target. moved gold We be but of where year, color multiples all today. can is to In going less why of don’t. is I we no, not up have we’re think getting hard. reach going that But have than I and that we twice hit So have the outcome. I whoever to as I quite pleased be That’s are no target, amount produced. selling

Unidentified Analyst

the going it months seems need. XX construction looks being optimistic done in mine Thank and It that Yes. you. that online,

welcome. You’re

Operator

question… Our Instructions next [Operator

Unidentified Analyst

do a the a want It’s was that, to been long-time one, very is over I Harvey conservative Volen but management I good [ph]. my quarter say And you agree been really sense as that that not stockholder, know. your only has I’ve years. the

debt. avoided You’ve

You’ve done carefully. and things methodically very

think up understand and the metals, basically I cognizant risk. hopefully, you’re of Unfortunately, minimal reckoning. day are companies compliment price been you come and there flyers, a that good market you’ve the And around, are I seem and recognize I’d of with a very really of out lot burn that, don’t run doesn’t that. there’ll to that in a company And like job. there the quickly. of about the but doing You’ve say that changes to still why,

Jason Reid

was time to blow after these over coming there mean, the knows don’t we you for long with XXX,XXX a It’s talk he’d that of a That’s who and somebody shareholder were let years. you’re here at always like that and knows out by I it. up XX% on fast. Stock pretty over pullback." $X-something. compliments. then had the what that made was always waiting – do in but the company. in, us last missed quarter waiting filling for all that we’re of great. long-term This waiting the XX% what shares at I a ago. that pullback, team some for And the out great we in. flooring he to ran that And we’re out "Boy, watching the who is have opportunity. We to Thank against. possible the shares year. bunch the have March. said, fact was excellent you’re has blow in. if that I That’s is he at, Maybe The reason back were reason that only this a up pullback, good morning that, conference the doing I Very who time. few we’re to for was money you somebody for year-to-date, But us, XX fill sold

production. huge. as we So that the don’t I taint see weeks opportunity, trading. We or we’re now, of A from even market had year days of are great an to fall but be a have our quarter, increase the remember gold to couple doing and positioning hours things. ourselves good will fact this XXX% of of nobody let it a That’ll

Unidentified Analyst

I Yes. agree.

But how me think a build options Jason Let Reid much how At for do before to about you table. far wondering D. on there production I’m you is I last that? there’s to Resource get to the how go conference - talked Gold Nevada. of – call, about financing for number starts? expect to And my out questions. more the pay

Jason Reid

to debt capital CapEx. financing an to is with with Right. it our our agreed doing $XX sell we less. it. conference million the the which, far, mine with $XX on do of have a question back finished of paying the we conference mentioned We to with made have to by, next or doing some with continue payment, final to cash. be not of I Every cash put this. the all and Be now that million table, we’re that $XX spent expect do much The along, cash. million goal about the easy. coming forward equity nice But up your cash. target call, along, committed fund finished $XX Gracia to ADR in with just do cash we so the of but we’ve on Alta we we equipment goes flow. $X.X to – stated cash. are leaves said call, last equity, which board I allocate if million either how million we today, with it to cash, in We it do cash. move about CapEx, The have mentioned or Like production left, been million. But we to But of I and/or I’ve this $XX even debt all I’ll It’s all those. combination all with options state again it’s of take month our

try there, do to been a large prices do it of a internally, where can it. go, If that hang happen. and the they’ve There are driving the prices but this what that’ll and to the lot to So will with ultimately soft. degree. in depends drive things of the be we’ll metal cash, bus And on metal do can we force has we

Unidentified Analyst

it. Got

Nevada to And you Mexico? do there to are management need you ask about have And – allocating time you Let in added How its versus Nevada. is me staff? to? management

Jason Reid

up we Yes, in are Nevada. staffing

on Unit. brought our have XXXX. we Nevada He for Now our manager in project Mining came actually on

and we’re much of our him since so get we Cassinelli, His reasons, us with various XXXX. on he’s is going Bob name sooner. been were belief For we sooner, the to permit brought

and the speak. companies, not other positions into maybe XX from that. many hire X/X are quite We poached up have – different to we we about staffing since And people mining targeting need. of as staff we’re we But or

a sent roof. and would’ve using and ourselves, mine the lifting it want obviously with the the We core, equipment. buying doing We’re didn’t the CapEx their to it heavy contractor-led because undertake they’re doing equipment through

So them staffing now. we’re utilizing there. up we’re we’re using – right But

Isabella But production hill – to this just it go know well. going we’ll going construction, look be a and out I’ll see. really so sandbox. to gets target at we’re obviously, on thing. on stand forward well. or exciting. out a just our there beautiful it months until say. putting As is continues If Nevada running. as But That’s time, management’s a Its of you at it’s less. deposit, far into allocating and a XX busy. lot, and I all going thing up ultimate you can I a things I it’s out was be adult down Been it couple are less, and lot, mean, and But far this there wait just weeks it’ll ago, the well,

Unidentified Analyst

you’re like And that you’re really website and the fact fact the updates that with good That’s posting I stuff. pictures. along good. to – Sound

Jason Reid

be continue this I’ll You’re this and It’s that. do welcome. them up I’m about two to putting part weeks, out there keep best taking and going and industry. to pictures on in the is the – website. I’ll

true You’re creation. creating the something. is This

We’re mine. creating a

going we’re pull to our going make We’re to gold, and going It’s be fun. to money.

Unidentified Analyst

for the ride. happy to I’m along be

Jason Reid

Harvey. Thanks, Great.

Operator

Thank you.

Your next question.

Unidentified Analyst

about [ph], going? My on going name electrical that ask was is and Mexico, a how’s Doug mine your in Smith to I your hookup question

Jason Reid

some progress. the of the to on such. to been It some – have route. and stations the have put They purchased electrical of is going. the transformer and our It started the All along site, materials continues staged

is having progressing. said we’ve on that, working for this it five years. been But So

the – because, we So under giving we’re Power frame I’m the not you CFE, thumb time any the Commission. of Federal

that’s it’s work frustrating just are a us, do? It’s little going they a exciting. frame. happening, what So But time at and different for to but you what’s

hooked we once look additional we savings cost for there. get power the up grid, So to

Unidentified Analyst

do Yes. to think? you ask bottom going about of you line, fall How I much is the was to that. going that

Jason Reid

of and now, diesel know pull credit’s stance elected, did we anytime going president just to going what’s the on there. But lot in they credit, diesel that credit could that helps. new what with don’t a happen variables a they to, which really diesel Right There’s they to be. was his want

So percentage cost electric could versus on diesel, XX% wise, and be we electric. being full plus energy saving to going our

one the We to reasons the cost, So is getting it. expanding – being the that one third a a We Switchback this quarter. being the the this time, is go, be mine lot bigger. electric there’s big going expanded vein we’re second we growing. Arista of to Arista keep quarter, really The In going big Over mine, Mine to second hookup so… expanded and in is the system. need

Unidentified Analyst

Okay.

question Now that the mine get with I about raise operational, Maybe your is dividend. finish our in next that shouldn’t – [indiscernible] going Nevada, until you

Jason Reid

Yes, lot are call building the quarters. Well, When to you on say, your various dividend. of hey, a going serious. keep cash you and shareholders increase we’re

trying with do, to if paying you’re going hard We’re you that, thing build can’t dividend. to more cash this It’s flow. to and be

a cost nominal. that Our us doesn’t year pretty is $X.XX It $X much. per It year. about million cost

So dividend. the in could online. company, But – Nevada, it I’m gold could happen not could happen, kick we’re Nevada additional in guarantee going But previous our going Because and regardless, can get back to been a Mexico that potentially days increase a up then looking if expenditure’s done Mexico the we’re the our Nevada. more old. until our is not or dividend to Nevada funding will more potentially will what what Maybe know at this. We and monthly be don’t capital we history do But less. comes we to driver its once for could anything. as maybe to of and price. levels dividend back I until increase right. point, of share to can money this go have pulling of

Unidentified Analyst

Nice. Yes, good.

Okay. know. That’s what I to want

Jason Reid

appreciate Thanks, call. your Doug. I

Operator

you. Thank

Our next question.

Unidentified Analyst

This I is [ph]. Bill Pace on? Yes, Am

Jason Reid

How You you? are. are

Unidentified Analyst

And Tucson, couple I’m Yes. points. Fine, of thanks. a in Arizona.

results, First, second quarter we the commend at upon But excellent outlook. stock great. today. the and the you perplexed movement good I’m That’s

to strange. knows. to seems that no I’ll That have that. there. spoken very Apparently You’ve leave one

your believe. a is quiet having you other Is pushing so incentive support it? there The dead? on or months. – York on it’s plan, question very action or I the few last do firm for been year suit class the any was wealth with information that ago, a New Is know there to Do

Jason Reid

Dead as heard far as I anything. haven’t we know,

those And class-action one. payments. such If they’re to take and push So groups that leeches. we’ll are lawsuit around hostage hostage whatever, going to going just to task, And They’re looking us, I’ll I’m not running to going them to go and a another pay on was win. we’re payment. for court

So I’m about them. whatever. not

I’m much. that. them from leave have certain heard it’s any go. – And questions? I let dead. more and haven’t We yes, I’ll that whatever, you secondly Do

Unidentified Analyst

No. me. Not for

Jason Reid

have a day. good You welcome Bill,

Operator

you. Thank

Our next question.

Unidentified Analyst

I’m Congratulations is long-term on everyone. finally [indiscernible] This the electric. investor. Hello, forward on a moving private

that guys and in years, to are be been on I’ve I to you competent basically For And that. you methodical commenting on a plan, it congratulate a you manner. look implementing want XX-year and

Jason Reid

Thank you.

Unidentified Analyst

and be. metal two concerned things. gold about the Is acceptable a little – I silver, the They’re am didn’t concerned – documents silver quarter lower numbers. I a the I see financial they’re bit two about precious they fine. the Switchback. concerns. anything in about used I gold but Congratulations is, than ounce grading to equivalent have quarter. I’m One thought But was little on

acceptable financial be And at Switchback haven’t a grading Mirador, basically. they – I’m why confused Arista. but I X Switchback. I numbers I would maybe around Aguila see And anything see is I stuck obviously. I’m the and X.X better, where in see the little docs. as for see wondering because but and So really that’s to climbed don’t all

Jason Reid

was question. That good a

area delineating this. we this We is low – higher It as do in conference lowest known Switchback, came were reiterate call, had thing This discovered the Or up. at in could In know in When a and the the mineralized Switchback, a that first a in Let somewhere may is I mentioned a from come else, quick of high This develop mine about. important elevation. and bottom happy the could Switchback get doing of we’re pop, – we’re the of choice: as and me thing address the we we but – the which point. and very this elevation I’m elevation. and all, be so, we higher-grade particular Switchback, far the into lower up right to some planning areas very this we grade.

made, choice particular mine So we and metal to, That’s a to grades race view and stock. the area just in really we that that, develop not this into up. it’s grades. about. Well, get higher lower high precious hey, in in is but metal long-term over grade we’re a That’s going known to let’s that well, opposed as then and pop what base a we’re

up. grade as fun doing. metal get We’re the precious base and and epithermal but the to precious top system your thing what that’s up. go we’re in go system. seen, Switchback comports precious we down mine so, base The our why there, the grades out our metal go epithermal that’s bottom of the way, up. But metal and higher thing see and you grades go grades down, also is third grades you with are metal top the this start to half, that develop about an That have still an right and at doing The are metal going

going to be over in economically and up, could’ve wasn’t So the our into higher but over bottom of wish higher time, I higher future to our future, see grades. Arista time. come and quarter. to grades going that I It’s we possible. not But a we’re happen mined expect

seeing you’re grades. in the what that’s So

They’re don’t system the your where in is, we Mine. visually as because far Switchback As vein Arista they’re it out system Arista not mine. and same seeing the break in vein

the earnings a yesterday. the there’s and table, Mine, release announced we release the on that it’s on the the same we announced production we vein or Arista page second Switchback And and that, Arista system XX-Q, out and yesterday, earnings is system. call vein It’s in statistics the mine. the on So that

been it’s put So together.

But you’re see to not out. where We’re that’s going breaking them them.

was the grade. the Now What that part question? second was your of

Unidentified Analyst

was to good That’s assumed. I answer that the But what didn’t not precious – while. I you’re metals. Is areas so a that That’s going sure. while in higher-grade though. for hit I but a Switchback see understand basically, a not I’m to know a year?

Jason Reid

Well, it depends. but deposits a your sheet It And sheet the The blueberries it. is these to great. blueberries depends, think ore big shoots. in taste cake of good some it’s as that’s with high-grade cake eat, that

get not – we’ll it’s Arista it’ll did. vein be system just from the smoot varies, to area, So hey, there. as No, not and like this sailing they’re it uniform,

high-grade adequate. are higher, be Switchback long is, to So have going quarters on metals long and we’re for exploration. so we of term mine But we than But years, up of how seven go short We’ll system I has very more the is vertically precious some is see predominantly profitable that allowed the into the not is. in is it the grade ore higher get these that laterally, think lower. areas shoots. That’s to to in but powerful this the some where only system consecutive our out higher-grade us and a based that

situation. So it’s good a

this mine view. to a situation long-term ideal an it’s with fact, In

Unidentified Analyst

appreciate Again, congratulations progress. steady it. on good. Sounds the I

Operator

the this time, further in showing am at questions queue. no I Reid, Mr.

Jason Reid

your do the [ph]. have one Joe I question, final ago. from from this recognize Nordgard one. be It’s Perfect. name I e-mail Hi, Joe, and will years

have tonnage and of you have point. You the that this being of full kind last grades stokes the two at discuss and been development addressed the and mining please I operation questions. Could believe I in question. Switchback developed? in Switchback

we the the On stats in tonnages. point we’re at We’ve the we both But Look were it I mentioned conference already, I grade. call more the got X,XXX as something Q, tonnes. table – last that. can see the see want and up I to the were X,XXX to last release well. And We were less. of and on year, earnings can’t like out Anyway, in you very and tonnes. tonnes or important, that’s second page – year the production X,XXX

doing well. So we’re

Coming could what be? Now possible back impact your the question. question to this last and

help additional we into this grades, of we’re additional going ounces could tonnes, higher being get with recovered. potential throughput X,XXX that As to have

far situation good as the of mill. the optimizations as So

Now I for The XX% year-to-date. percentage of mill you. Switchback do have a all represents feed

So for XX% Mine you much Switchback that place, and development Arista gives of how the in sense the a is general. of that’s taking

its mine still And to vein have Arista same less question part out working are And Gracia, I’ll Joe, how which stats. we’re to and it from And doing. the That’ll quite thing. started Switchback. system, multiple multiple Alta second you of development, part your lot or asked we could’ve tonnes a mining you XX-XX. of with a pull to which well ore and So little things mining levels, has and at didn’t, production Alta do give bases broken more sense, develop that’s slide in we in the Switchback. towards going a from. year we bit that large your but the from because took on Gracia’s of one

with progress making we’re previous production. We’re ground. doing Alta complicated in had at Gracia. We’ve I’ve worked it into we’ve bootstrap we as But this. that, and some there. around quarters, challenges, we fine got Remember, mentioned And

going are things well. So

everyone their time the So We’d we like to I hopefully With And Thanks. to thank out for question. call. today. to forward your look that close answers Joe, you we’ll that, talking hope, next quarter.

Operator

teleconference. gentlemen, Thank you. this today’s and Ladies concludes

now disconnect. may You

Gold Resource (GORO) 1 Aug 182018 Q2 Earnings call transcript