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Gold Resource withstands coronavirus-imposed shutdown, delivers on gold production in 2Q results

The company operates a mining unit in Oaxaca, Mexico, which was placed on care and maintenance when the government suspended non-essential businesses at the beginning of the quarter

Gold Resource Corporation project
Gold Resource produced a total of 7,649 ounces of gold and 191,232 ounces of silver

Gold Resource Corporation (NYSEAMERICAN:GORO) posted second-quarter 2020 results after the bell on Tuesday, reporting $21.1 million in revenue despite withstanding mandatory closures due to the coronavirus (COVID-19) pandemic in the period.

The company operates a mining unit in Oaxaca, Mexico, which was placed on care and maintenance when the government suspended non-essential businesses at the beginning of the quarter for nearly eight weeks to slow the spread of the virus. 

Operations restarted on May 27, and under a strict employee illness protocol, Gold Resources was able to produce 2,441 ounces of gold, 185,330 ounces of silver, 246 tonnes of copper, 1,140 tonnes of lead and 3,004 tonnes of zinc in Oaxaca.

READ: Gold Resource posts 2Q production numbers for Mexican and US operations, logs 41% jump in Nevada gold production

Adding in its other operations, namely its Nevada mining unit, the company produced a total of 7,649 ounces of gold and 191,232 ounces of silver. Overall, Gold Resources lost $1.8 million, $0.03 per share, which it attributed largely to the pandemic.

“While it is never positive to see a mandated business suspension at any point in time, I am optimistic the shutdown was positive for Mexico in its fight to combat the COVID-19 virus,” Gold Resources CEO Jason Reid said in a statement. “Company management both in Mexico and Nevada have implemented strong protocols and procedures to help mitigate any potential impact from the coronavirus.”

Notably, the company reported gold production up 41% from the first quarter at its Isabella Pearl project in Nevada.

Reid said. “We were also pleased to have reached the first bench levels in the Pearl zone during the quarter. As we continue through the ramp up phase and expose more Pearl benches, we expect an increase in mineralized tonnes at higher grade coupled with less waste removal for this phase one of the Pearl mine plan sequence.”

Despite the difficult global reality, Gold Resource hit some major milestones, he added.

“Subsequent to quarter-end, we announced reaching company milestones of a decade of production, over $1 billion generated in revenue and over $114 million in dividends distributed to shareholders,” Reid said. “We are very proud to have reached these milestones.”

Cash on hand also increased to $13.3 million on June 30, 2020, from $11.1 million on December 31, 2019

Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com

Follow him on Twitter @andrew_kessel

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Price: 3.68 USD

NYSEMKT:GORO
Market: NYSEMKT
Market Cap: $257.88 m
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