Gold Resource Corporation (NYSEAMERICAN:GORO) (FRA:GIH) posted net income of $4.4 million in the year to end-December 2020, having produced 30,508 gold equivalent ounces from its Don David mine in Mexico.
Allen Palmiere, the CEO of the Mexico-focused precious metals miner, said output had been 'solid' despite it being a 'demanding' year amid the pandemic, which is expected to remain a challenge in the short to medium term.
READ: Gold Resource Corp further bolsters Mexico aims by adding Ron Little to its board
"I recently had the opportunity to visit the Don David Gold mine and see first-hand the operations, including the construction of the dry stack tailings filtration plant and facilities, which will allow for the efficient storage of tailings, and the completed electrification project, which connected us to the power grid, allowing us to reduce diesel fuel consumption by 69%, providing significant cost savings for us while providing access for the first time to electricity to approximately 25,000 homes in the communities in which we operate," he said.
He added: "The company finished the year with a strong balance sheet, including $25.4 million in cash, which provides us with flexibility as we move to reinvest capital in Mexico to increase the productivity and the life of the operations."
The miner generated 20,473 gold ounces, 1,189,366 silver ounces, 1,593 copper tonnes, 7,725 lead tonnes and 19,696 zinc tonnes, it said, which led to revenue for the year of $90.7 million and mine gross profit of $12.5 million from continuing operations.
Cash from operating activities was $21.2 million, while working capital from continuing operations as at year-end was $30.6 million - a 22% increase on the end of 2019.
For 2021, metal production is expected to increase slightly over 2020 as GORO improves operations and margins reflected in a reduced cash cost per ounce after by-product credits.
For 2021, the miner expects to make a $22 million capital investment in Mexico and spend $7.2 million on exploration.
Payable production guidance is for between 19,500 and 21,500 ounces of gold and 1.7million to 1.8 million ounces of silver.
All-in-sustaining-costs (AISC) after by-product credits per gold equivalent ounce are expected to be between $800 and $900, it added.
Gold Resource Corp underwent a shift in focus recently. Having been a company with producing operations in Nevada and Mexico, it spun out its Nevada unit into a separate public company and is now focused solely on Mexico. Allen Palmiere is its new chief executive.
In January this year, there was positive news from its flagship Mexico asset, when it reported drilling hit further mineralization above areas that are currently being exploited.
Underground drilling at the Don David mine, in the footwall development ramp of the mine's Switchback vein system, and to the northeast of the Arista vein system, saw 12 holes confirming the northern strike and up-dip extensions of the mineralized system.
Contact the author at giles@proactiveinvestors.com