GORO - Earnings call transcript Q2 2019 | Gold Resource Corporation

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Operator

Thank you for joining Gold Resource Corporation's Second Quarter Earnings Conference 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. Reid. go ahead,

Jason Reid

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

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

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

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

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

first Mining The milestone, most Corporation. that from a importantly, marked good of major was Unit. Nevada gold produced for But Gold it we our XXXX second quarter quarter Resource and another

like thank who production Kimberly for Corporation for behalf June. Directors, net ounces and Gold quarter a Perry Kim's the million adds the of Mr. in in strengthens On revenue Significant of of the of Gary mining Our net Ms. Board. retired Director substantial share our ounces industry to Board Huber, would global metals end and to April. of quarter. years, XXX,XXX for income of $XX.X the I generated Board joining quarter $X.XX announcements silver, and X at experience included Directors our in with Resource gold Board-level X,XXX totaled base which along the or during per

including production groundbreaking a by gold May vein Oaxaca announced Pearl meters XXX expansion XX.XX expansion Switchback We X.XX our Arista at of in tonne from In of Pearl per quarter, ahead on achieved gold XXX grams Mining and mine. grams Isabella first up-dip months announced Nevada milestone X.XX to April this with Mining we of strike per of meters and of we tonne system gold, drill Unit's of we few tonne the Mine's our X.XX the XX.XX our the Unit, including of months the major XXX the announced meters our XX at On schedule. meters In intercepts hole Isabella meters and June, grams XX X.XX deposit including per tonne intercepts with gold. silver. step-out east with, grams per just

was a busy quarter for It Gold Corporation. and Resource solid

outlook on annual reach our annual are production track only our commercial We are on gold to in are not outlook. in Isabella production to Pearl XXXX production increase and closing but positioned

Mining Our another operating quarter. Oaxaca delivered solid Unit

lead compared and a addition quarter the and our record Oaxaca also tonnes, the copper, amount welcome record of a operating quarter, increase XX% produced XXXX. the zinc status. to milled we almost of second During second an of low-cost to during quarter, XXX,XXX margin

a additional the Our mill throughput and increasing mill. Aguila rates in job has great Oaxaca team mining done at

our process we Nevada, we In then which to off-site sell dore. continue our gold-infused carbon from

than of for the the completion. remaining which building third to long-term ADR contractor a the ADR are viable with which reach plant, plant flow to and own is target process We caused carbon to construction we our ADR now this finalizing minor the and us issues business anticipated, approach had from construction some our sooner the have ADR plant We've While cash delays portion it the of production allowed site. on completion. quarter

time frame. current rather announcing off-site We completion announcement production forward production is which a be commercial under production commercial levels, project A arrangement. future It predicated look processing can soon. the ADR is plant carbon not to the achieved on

We and place panels to leach. Pearl, continue mine more ore pad heap on leach at under ore place Isabella more the

a project ramp-up will the well that water to we production recently second gold underway. added expect in We to the currently add

As noted Isabella Pearl from our XX increased drill March in approximately by PR, Pearl X the life XX,XXX XXXX program, years. with a pushing out X.X we gold ounces to our Isabella reserves modest mine

ounces to included quarter per of meters gold, which XX.XX drilling step-out grams the Second tonne X.XX east. added

drill the currently to are to we into to ounces they Isabella also are to potential year-end additional our when expected the mine add pit's reserve could expansion optimistic report. and results Positive testing and the Pearl east are We those are north like life and life. updated see ounces mine

we the high-grade surface finished samples northeast, expansion to could to Scarlet deposit program, target located plan drill mineralized the Isabella given potential drill in we area which another Once Pearl the the old open area. represent the pit, holes historic and

this mineralized Lane belt. numerous the milestone to northwest a becoming dual mineralized discover Walker the a of metal and pits mineral this miles to look X to along We trend. had of second a plan great producer marked open over which consolidated Nevada's from trend jurisdictional have We be precious producer. We long-term quarter,

X. gold the gold on current rerating potentially company, provide market of these the the our Unit targeted approach leverage future We being monthly to a our the from X operational; company's third catalysts once dividend but profile a increase value: Mining this it's gold year Nevada the catalysts and and now targeted fully substantial our first increases. price in to near-term of second depend up XXX% could catalyst strength increase price going X Neither production the shareholder for the for being first the additional

to position time call. worked pleased for years and to for I The to like it everyone and team would I With the thank am for the coming on this, has company hard their to today many excited conference that, see fruition.

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

Operator

our And first we'll go Instructions] [Operator to questioner.

Heiko Ihle

Heiko from Ihle far H.C. Wainwright. It's so have And congratulations major you frankly, guys done. everything year, achieved well for this

Jason Reid

Heiko. you, Thank

Heiko Ihle

figure. a I up? But bit my your is through $X.X And no mostly, you've year-to-date. and mean just receivables $XX.X a modeling rise more I ideas? inventories as more million are longer inventories. take any job that with offset gone Accounts phenomenal mine. given Going figure we sort just sort million you a balance lot this another added of to baselines. of $XX to Or net small But ramps the to to was done inventory base, or accounts if we term? model idea to baseline inventories a million that question you I thing year-to-date sheet. another money like it's a obviously should out payables, that. of mean Any related $XX should obviously, and expect added million mean so up, mean it's it's built on accounts surprise, by I receivable just

Jason Reid

the are I until such. I'll early production, a used shareholders further a clarity for to think to this you as let get inventory road, Look, But inventories to down announce just as in John lot build we've of here, get bit. I then I stock we aware. many continue is a as fully an this where Yes. more hold. had but to miner little And we'll state, steady weigh And have commercial days, expect our shareholders. in of may accounting that from some a question being underground us think and are

of The receivable a course piece, larger was build, though, same didn't et get shipped this of receivable. built that right concentrates the timing. up cetera. just We that a with It's accounts accounts dore. had obviously a have a before normal had function quarter, That inventory we we lot

to So next do the want in regard? John, to that that anything will add hit you quarter.

John Labate

Right.

will our higher steady means of expect taking we And you've I a summed kind well. it increases to to more get our think additional I off increases inventory. that And as rate. up obviously, production pad would higher levels. that when at some start

Heiko Ihle

wouldn't... you But it. Got

Jason Reid

on exact it's because, Heiko, you an to early again, days. such that it's answer hard give

water That's really soon. coming solution that's on under the drilled being is factor soon very too. be with ramp-up, additional cetera, et to things we second It's developed well. change now the Another going hopefully and the panels operational leach, an have pad, will

state could it new change say if steady to a try here going was out, dramatically. So that model that on things from to change that well and we is things. would Even

give would we see clarity to to be question your give And fully to want online there. so too an answer to that

Heiko Ihle

Got it.

Okay.

put you out mean Isabella drilling to pretty on Pearl, there. Moving I some impressive

XX dividend you the given us at targets drilling which regardless, just not the necessarily plans RC gold of the of walk maybe June, the know think As loud remainder site. was drilling that may mean variety in $X,XXX assets? right through we're year, payment, release, of you holes drilled the of we're at affect you And can out for but given the and at earlier, I now, gold, last for here, that thinking mentioned targets at $X,XXX mentioned sort you've even a I site. both other I north, from just

Jason Reid

Sure.

Oaxaca. Let's with start out

know it's to mine the and can gold deposit. drill is b, you from always there's mean a, focus primary Our Arista expansion where, you the of I good where it.

the that's and primary announced I has in the in that results paid quarter. have be continue off focus, and So that been of our to just some

Arista So that the Mine. the focus will as primary be

Mine, to and that production drilling to the Nevada to Unit, north. are but We U.S. in there some part Mining a expand drilling of much the deposit mine. an Mirador lesser expand profile would to there of attempt extent, well over we currently as over our are the which deposit, to the this drilling a Coming is the north be is our

high-grade great expand know. results an we Pearl, we just additional get to what proper. the mine life pit. northwest. ounces terrific I would Scarlet to the in to step-out expand a in of mentioned, elevation the samples. won't stone throws is that it add hole, reasons amount We're into deep we tremendous And and be will to several north, There's to north. it obviously it's away expanded to Scarlet. the which Scarlet Pearl east Isabella but But Pearl trying hole. if I with Isabella is think to As the But similar is the we the back, the has silver And until mentioned

another there's where pit a a So of could overburden we to without potentially remove. open find situation bunch

is have our drill weren't go they tell right mineralization is results at we which deep the confirm, know we to historic high-grade deep. holes, some know drill mineralization we surface. Now the But because we that the goes need us

obviously So to lot our and Isabella focus. it after is that with targets, take will will have years then mine. the X explore be miles the second of the Scarlet But Pearl a second focus we all. them trend of

didn't we're build time we spent because to lot the a Another much thing heard time over it Douglas. waiting me say there on up while while samples taking about us. to pattern. into is over grid it, Many for for project of a we run there drill over, money of that piling I'll you Camp of heard, We'd and home over potential allocate we're to lot our silver have is permit, and don't cash East drill bring this we talk a want here spent

a home we're for the sure We have but maybe We're too. in year, big is going of to the by that, drill swing going area, end And vectored for next It's targets. year, potential. fences. numerous and to on run this very this

be, game that could a and opinion, changer. my So, in

Just game like East can in Arista was be Nevada. Camp us the for in Mexico, changer

very exploration as exciting So potential. far as our

and we think knock really up bull we're did like, on like well looks on if the that's timing. wood, case, market, market. I X picking it did the we grow, during And properties entering looks a bear good it really

drilling. gives sense on our that of So a focus you hopefully,

Operator

our take now questioner. We'll next

Unidentified Analyst

Silver, today. looking looking; Jason, Private like Investor. as $X.XX, up and gold, silver Smith, some, I'm I'm looks Mark and $XX. gold, up up at

good. Nevada a the is about this talking Unit I'm bit. So little Mining

could taking ore the you On close And it Was out help, pit, characterize you're that the is was that, that me, hitting mining adequate? how placement do it? actual the and that your of of plan then, well, the to the plan? your find that of Are drilling you is for grade you?

Jason Reid

Sure. mining model. we We as with with found drill results. And a start, into this the it, we went as And more we started ore.

the seeing you're grade positive, is a Most a ROM of that's positive. from So it, that panels. it's or of huge much the

So and when and you're seeing and leach under is we Where is crushed panels run-of-mine. rock, a more crushed, have crushed. putting of which sweet of the that's, obviously more on gram, that's the few X.X the out, is spot we're helping this

it The long deposit and short has is disappointed. of not this

has you know drilled is what there in think. a it, there. additional and thing. you that you where some ore, fact, great not deposits upside It's think There In been have, you you which are what it's go and not you mine

it the drilling hit Ours so way. at the and in additional had more. thought we it, me It you we which the north. then which ounces opposite drilled to additionally, the to heard had turns we looked now we're we model. action. we is drilling We Well, we're say, And out east, that

it farther mine But to X. X.X, push on it even out may from a X than we're situation years, life to maybe that. So be X did we hopefully out to we now could push where

So what this for deposit has more. bit and we every that think speaks thought been volumes I

Unidentified Analyst

you you to to it Okay. just Then could characterize decide guys crush it how out? throw or it and run-of-mine

Jason Reid

That's Well, line function is it's typically of a the drawn. where grade.

whether to or And stockpile, goes ROM X.X. so it most mean a mines to which X.X. I are grades low-grade like our is we cut-off have decide to

that we're right I low-grade for aside a now, date. think, just stockpile it we're even that not future mining putting

play. into say, going with, we X.X, becomes of go a begin touch back market to to which spikes, we let's and gold now a So that sudden bull all weren't into

upside there if off. takes But So that on additional well could because don't could be upside. be count that additional

So a deposit in we in Pearl. of the Most and where function it's of and the the the are ounces just grade are deposit.

going So grade highest a going of bit the Pearl, be all when time. we it's to and the get down That the to will all in to it's be deposit. little crushed, take

Operator

Instructions] next questioner. We'll [Operator our take

Unidentified Analyst

Volin. Harvey it's Jason,

banking under over to like trying last know out yet, I a to stock were comments pressure. going the to several help marketing relationship why. that was or are the Your established least a supposedly not and firm things sounds optimistic today, the Wall if is it investment at profile very And tremendous an calls, figure Street. And I'm you so. plan, past, in according going more to this with with

have just look have any out approaching we yet this? Do Here, can't seem gold I of to get are Most the gold the stocks and of at, for GORO at $X,XXX. you seller. that zooming explanation

Jason Reid

my Let my opinion. It's opinion. give you that, it's me just

analysis, filed, afternoon, If the X you to price us day, in go Resource we after look out mean with knock quarter. were the next right volumes one the there manipulate massive if and and Gold XX%, trading usually that at done last the pummel X%, our back X to I to you share quarters, the day XX%. we've back our look, and short-term loves so even in down And after file we they XX%, and quarter in somebody go

we XXXX was quarter the was second a still of stellar hit. think it got I quarter, and

to so I is here out do get group able about of don't bent is why. some and shape And this. to

gold that is highs. mentioned new You almost hitting

you other in new highs. hitting at yuan, sterling, If look currencies, it it's

in gold another, the bull in So next is market. potentially

seen another quarter. Resource You've have profitable Gold

You've seen Gold stellar have Resource quarter. another operationally

seen produce us first You've in our gold Nevada.

dividends. XXX% increase gold us outlook, our production. looking to We're near-term ramping jurisdictional seen XXXX catalysts commercial increase We're at a producer. increasing become and You've production up a production profile second of toward our

like a Does gold highs? pushing a doesn't. down it that day sound a No, in new warrants where is market risk that

So a repeat this is pattern.

forever, it's around. not It's pushing okay to provides for Somebody opportunity last but buyers. that our going an stock because is

quarters, they to look have and back what See it. And so they've go what's buy the because they, see what's go done happened. and at back

in be anomalous of kind for stock. and it's quarters, that first stock in this all million It has and waits X these for this our around who's assume short. Let's to is totally because all of That our blasting the out they're time, have shares hour. news, we

it So to as there as push the But clearly, and after quarters, use they do point around an shareholders, groups the that there see out some as can opportunity. it. long-term quarter us pivot are

they're to doing are the care going if don't do because And short, well. going I if to buy back. it they this the in we're have long-term, on short-term, they're to

is. dividend, of next push I into So your market, there's it feel top as harder what can I we're it, dividends. group be if going we us start the have our our going some it around on clearly up. pain. go mean And margins bull luck. good to basis. to paying but They the and I be harder more is may increasing that as that, short-term understand some on But it's

where it. but will or than pain, your feel be I different is and that's bounce it a days, nothing Again, X the So this quarters. this Give of stand a I on back. X couple last

see it opportunity out of like shaken as I the or, for again, get So a an bad this. feel situation people who

Unidentified Analyst

not sure. timing you explain. shares the less X market's Well, course, out it's Yes. And than of to I It's hard that's today, I'm very the shaken X.X what this. just an about hear anomaly opened hours. than for million of already

to as So has your price have hung between we for kind as And roughly only not $X.XX, stocks has gold, this today, moved area $X silver of gold have long this time. has of very stock may a something reacted. as It the even well. other But theory. not $X.XX gold before just in

course, producer. guys a mostly of are at silver and you So, this stage

that direction the thrust over my in way the fundamentals puzzling in fundamentals is the will why Obviously, of than market fundamentals push question. the suggest. happening. it's action Hopefully, the the that's the time, way, this And more the market. So stock a matter

Jason Reid

to called lesion curve. add the There's let thing a Yes, me this.

made our where you'll to has share mining decision price won't it rise. production A and being again fall until in price production is then this, there. been commercial continues the plateaus, made price rise You it's, share evolution That see can about a discovery and the will it, is stabilized. falls. share We're and Google and and the

a curve, put in our you study are, and mining we this fall is to known So into with line that. happens we case if that curve, which production, projects apply it with companies

We was stable basically see give there additional that in. groups ago. road great we're we've color. I to coming several want on production in burned show And months Now a were few and a before. been to look London totally commercial production, on

with So that too. fits curve, that right

where All don't it focused expect be I are. I also it's always we execution. to So on like this. we,

the peers, fully rest and there'll intend execute, Everything the We do market beaten day, we're I times up end time premium. outrun all I so. others. of and we have But like to thus will my which care set be will out get far, itself. the Yes, to we'll into substantial the dividend. take to do next I what work we a of out, do, continue did go we bull expect the at to back more by when paying last and than

everybody guys on you focus And at are so wow, they'll this wow, nobody, and forget go that point, will phase, overvalued.

Okay, let's go into that phase.

that's production this to a that commercial actual again, exploration, evolution So discovery, Harvey, production. decision a in curve are from an known additional color, just we an

Operator

next go now We'll to our question.

Unidentified Analyst

Maloney, I'm Chris Investor. is This an

couple So of questions. have I a

you... the earnings per the don't the shelf of the, notes terms been have here, stock but you've and my with share, In distribution, diluting I

Jason Reid

The ATM?

Unidentified Analyst

I the information did And included you brought don't the quarter? in the, me. in shares more, I But saw share have are the for ATM. you front the new per included Yes, is quarter. that that of it. more in earnings those in this

Jason Reid

to I are, refer but I'll that believe they John.

John Labate

calculate basis, additional share we average as all weighted shares, they're per a but mean yes, yes. I Yes. earnings on considered

Unidentified Analyst

count. a of first or compared comparisons in earnings, quarters, since terms it's it quarter diluted, last, to are of you you the in X So quarters, the there to are been have year the a is fourth last of previous where higher terms and share there, comparing

Jason Reid

the yes, dilution some a is last Yes, quarters. again, over X count. share higher it there that's And compared quarter-over-quarter. is But

Unidentified Analyst

Right.

more saw And it's to, it's like in missed by harder shares. if terms whatnot. so just on harder Seeking that's don't figured get I shares, you know hard, comparisons, to fact, or the and there. in additional Alpha, $X.XX I so they the But one of had just

Jason Reid

I know say XX% don't know cusp of are on which let we I that's is you. some at And dilution dilution, to this dilution. commercial important. But working about we the that. And Yes. you in this, Chris perspective, construction capital don't That's currently want very where to assume all-in, We are put I production. to me that's are. want

XX% put effectively, a for That phenomenal So for industry. mine is production we've dilution. the into

basically XXX% dilution. production yes, trying our to you're is shareholders the to increase the compare Resource The doesn't my whatever. in So industry. just our a for really mind earnings position picture dilution, Gold to happen for of well done have bigger versus ourselves That XX% we've in in in a put gold

than earnings So that's more per important me share. to

Unidentified Analyst

it that complaining, a, use reaction They see money a a of remember not I I'm great of mine. the raising to it build No, as see to people's just share to have share. per count. way of, a yes, in But earnings as diluted I it the terms is

shares So I'm whether frankly. per to been just this wanted But additional those quarter's earnings have I to share. incorporated impressed, know

Jason Reid

been. have they Yes,

Unidentified Analyst

Okay.

shareholder and through back, is, been for your I've a a mean second so. The But, know I or question history. just I year went I I know,

wise those bull here Nevada obsession be years as market production time dividends think wonder the the whenever seems be because attracted the and getting tried also it that if around that to so with so up, in maybe get just this And you're Isabella price fast. properties with And Douglas gold I a the into bull, would stock again. were, by the to when in dividend went your East former could back Camp I you those dividend.

that the and you may to dividend. I'm this current get time than past circumstances huge do other sure see a gold. out of I working these if But you much that applies you be use not I when into can If mean of better so a dividend, that? mean some around got drilled I capital properties don't, the of some what, of yes. just production,

Jason Reid

done. Chris, sorry, Go thought ahead. I you're

Unidentified Analyst

in just more was a be Well, more use it of opportunity better seems faster. online past, like the than sort It bring might now capital the the gold, gold dividend. with of just just it's silver. to it the But

Jason Reid

we a just production And go Board the allocate the Yes. be find something driver. warrants conversation we it have so mine different on that that allocate flow If meeting. we dividend the in because Camp hold could again. every That's production. may that that do more this at capital bull to to Everybody ultimately And we into over a to witnessed cash into it has East may putting next this may market, that a our be. large of may putting that same, do is we

can So also, time walked by the by that's maximize I outrun paying dividend. And job a where outran And that, this paying path it's it's and I'd too. best point. peers we to we'll huge if my last to we've value. peers it, But job, way a a substantial shareholder do the valid our dividend my management's do

Scarlet still said, the where something capital or production? might So where be a really also dividend, like allocating or Absolutely. to middle, into somewhere, you big you it we're else are in solid paying put

one based forward, way a is going done. to I'm we've hypothetical speak. saying that so there's at it forward not So what yes, this looking all a, and our only past today It's is, not, there's on not something

Unidentified Analyst

[indiscernible] your I'm and Well it. debating time glad great. Right, shareholder. you're Take

Jason Reid

talk in hopefully it you, next you we'll thank I appreciate Well and quarter.

Jason Reid

so run have our call We the time, on I'll over close allotted there.

free you the are me me. on you to to in queue ask If a can call question, my call office, cell. please I'm in or feel the

any me, may to additional to I'm meet You'll have. get you to field and directly questions happy

thanks quarter. With the time to everybody's for on you next and talk we'll you. that, call, Thank

Operator

This concludes call. participation. Thank your today's you for

disconnect. You may now

Gold Resource (GORO) 13 Aug 192019 Q2 Earnings call transcript