Gold Resource Corporation Reports Significant Financial Challenges in Q3 and Nine Months of 2024

Gold Resource Corporation (GRC) reported significant challenges in its financial performance for the third quarter and the first nine months of 2024, compared to the same periods in 2023. The company recorded a net loss of $10.5 million, or $0.11 per share, for Q3 2024, an increase from a net loss of $7.3 million in Q3 2023. For the nine months ended September 30, 2024, the net loss escalated to $42.3 million, compared to $13.0 million for the same period in the previous year.

Total net sales for Q3 2024 were $13.3 million, a 35% decline from $20.6 million in Q3 2023. For the nine-month period, net sales decreased by 31% to $52.8 million from $76.6 million in 2023. The decrease in revenue was attributed to lower production volumes and unfavorable market conditions, including equipment availability issues and adverse weather impacting operations at the Don David Gold Mine (DDGM).

Production figures reflected a substantial downturn, with gold production dropping 79% to 944 ounces in Q3 2024 from 4,443 ounces in Q3 2023. Silver production also fell by 21%, totaling 194,525 ounces compared to 247,159 ounces in the prior year. For the nine months, gold production decreased by 47% to 8,648 ounces, while silver production declined by 17% to 709,255 ounces.

The company faced increased costs, with total cash costs after co-product credits rising to $3,560 per gold equivalent ounce in Q3 2024, up from $1,839 in Q3 2023. The all-in sustaining cost also increased significantly to $5,072 per ounce from $2,669 in the prior year. These rising costs were primarily due to lower production levels and increased operational challenges.

As of September 30, 2024, GRC's total assets decreased to $155.4 million from $183.9 million at the end of 2023, while total liabilities increased to $98.1 million from $87.2 million. The company's working capital was reported at $6.1 million, a significant drop from $15.2 million at the end of 2023.

Strategically, GRC has suspended infill drilling to conserve cash while continuing grade control drilling. The company anticipates needing approximately $7 million for equipment upgrades and mill improvements, as well as an additional $8 million in working capital for development projects. However, due to ongoing production challenges, GRC may not generate sufficient cash flow to fund these improvements, raising concerns about its ability to continue operations beyond November 2024.