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Fortitude Gold Reports Third Quarter Net Income of $1.7M or $0.07 Per Share

COLORADO SPRINGS – November 1, 2022 - Fortitude Gold Corporation (OTCQB: FTCO) (the “Company”) reported production and financial results for the third quarter ended September 30, 2022 of 9,500 ounces of gold produced, $16.1 million net sales, and increase to its treasury to $42.2 million.  Fortitude Gold is a gold producer, developer, and explorer with operations in Nevada, U.S.A.

Q3 2022 FINANCIAL RESULTS AND HIGHLIGHTS

Overview of Q3 2022 Results

Fortitude Gold sold 9,419 gold ounces at a total cash cost of $613 per ounce (after by-product credits). Realized metal prices during the quarter averaged $1,719 per ounce gold*.  The Company recorded net income of $1.7 million, or $0.07 per share. Cash and cash equivalents at quarter end totaled $42.2 million. The Company produced 9,500 ounces of gold during the quarter and maintains its 2022 gold production Outlook of 40,000 gold ounces (a range of 36,000 to 40,000 ounces).

Mr. Jason Reid, CEO and President of Fortitude Gold, stated “Production results for the quarter are in line with our 2022 production Outlook range.  Financial results included net income of $1.7 million, all-in sustaining cost of $687 per gold ounce, $2.9 million in dividends to shareholders, $3.7 million deployed to exploration all while increasing our cash balance to $42.2 million. I believe we continue to execute our strategic business strategy, which has resulted in Fortitude outperforming our industry peers on year-to-date valuations during this strong market pullback in the mining equities.”

Mr. Reid continued, “Exploration drilling included continued exciting drill results from Golden Mile and exciting first drill results from County Line.  A significant number of surface samples from our Ripper property generated drill targets for a possible 2023 drill program.  Our exploration team continues to be exceptionally busy during the fourth quarter with drill programs planned along the Isabella Pearl trend, Golden Mile, County Line and East Camp Douglas properties.  We are pleased to remain a profitable gold producer in the Walker Lane Mineral Belt, with a stellar portfolio of 100% owned properties, and believe we are moving closer to building our second mine in Nevada, U.S.A, arguably the world’s premier mining jurisdiction.”

The following Production Statistics table summarizes certain information about our Isabella Pearl Mine for three and nine months ended September 30, 2022 and 2021:

                 
                       
    Three months ended September 30,    Nine months ended September 30, 
       2022      2021      2022      2021
Ore mined                    
Ore (tonnes)    113,111    139,950    490,764    454,679
Gold grade (g/t)    5.69    1.42    3.30    4.52
Low-grade stockpile                    
Ore (tonnes)    —    8,600    34,501    8,600
Gold grade (g/t)    —    0.33    0.43    0.33
Waste (tonnes)    202,201    1,838,027    1,696,225    4,894,937
Metal production (before payable metal deductions)(1)                    
Gold (ozs.)    9,500    11,478    30,355    37,593
Silver (ozs.)    12,497    16,467    45,047    33,643
  1. The difference between what we report as “metal production” and “metal sold” is attributable to the difference between the quantities of metals contained in the doré we produce versus the portion of those metals actually paid for according to the terms of our sales contracts. Differences can also arise from inventory changes incidental to shipping schedules, or variances in ore grades and recoveries which impact the amount of metals contained in doré produced and sold.

The following Sales Statistics table summarizes certain information about our Isabella Pearl Mine for three and nine months ended September 30, 2022 and 2021:

                         
                               
    Three months ended September 30,    Nine months ended September 30, 
       2022      2021      2022      2021
Metal sold                            
Gold (ozs.)      9,419      11,454      30,567      37,436
Silver (ozs.)      12,111      16,330      44,819      33,171
Average metal prices realized (1)                            
Gold ($per oz.)      1,719      1,789      1,871      1,796
Silver ($per oz.)      19.44      23.98      23.34      25.14
Precious metal gold equivalent ounces sold                        
Gold Ounces      9,419      11,454      30,567      37,436
Gold Equivalent Ounces from Silver      137      219      559      464
       9,556      11,673      31,126      37,900
                         
Total cash cost before by-product credits per gold ounce sold   $  638   $  658   $  685   $  596
Total cash cost after by-product credits per gold ounce sold   $  613   $  624   $  652   $  574
Total all-in sustaining cost per gold ounce sold   $  687   $  793   $  749   $  663
  1. Average metal prices realized vary from the market metal prices due to final settlement adjustments from our provisional invoices when they are settled. Our average metal prices realized will therefore differ from the market average metal prices in most cases.

*Average realized metal prices include final settlement adjustments for previously unsettled provisional sales.  Provisional sales may remain unsettled from one quarter into the next.  Realized prices will therefore vary from average spot metal market prices upon final settlement.

See Accompanying Tables

The following information summarizes the results of operations for Fortitude Gold Corporation for the three and nine months ended September 30, 2022 and 2021, its financial condition at September 30, 2022 and December 31, 2021, and its cash flows for the nine months ended September 30, 2022 and 2021. The summary data as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 is unaudited; the summary data as of December 31, 2021 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2021, but do not include the footnotes and other information that is included in the complete financial statements. Readers are urged to review the Company’s Form 10-K in its entirety, which can be found on the SEC's website at www.sec.gov.

The calculation of its cash cost before by-product credits per gold ounce sold, total cash cost after by-product credits per gold ounce sold and total all-in sustaining cost per gold ounce sold contained in this press release are non-GAAP financial measures. Please see "Management's Discussion and Analysis and Results of Operations" contained in the Company’s most recent Form 10-K for a complete discussion and reconciliation of the non-GAAP measures.

 

FORTITUDE GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share and per share amounts)

             
    September 30,    December 31, 
       2022      2021
    (Unaudited)       
ASSETS              
Current assets:              
Cash and cash equivalents   $  42,196   $  40,017
Accounts receivable      339      238
Inventories      45,131      37,550
Prepaid taxes      875      1,289
Prepaid expenses and other current assets      959      2,228
Total current assets      89,500      81,322
Property, plant and mine development, net      34,514      37,226
Operating lease assets, net      1,027      463
Deferred tax assets      1,491      509
Other non-current assets      882      2,909
Total assets   $  127,414   $  122,429
LIABILITIES AND SHAREHOLDERS' EQUITY              
Current liabilities:              
Accounts payable   $  3,546   $  2,127
Operating lease liabilities, current      1,027      463
Mining taxes payable      1,249      1,699
Other current liabilities      1,080      1,022
Total current liabilities      6,902      5,311
Asset retirement obligations      5,694      4,725
Other non-current liabilities      5      45
Total liabilities      12,601      10,081
Shareholders' equity:              
Preferred stock - $0.01 par value, 20,000,000 shares authorized and nil outstanding at September 30, 2022 and December 31, 2021      —      —
Common stock - $0.01 par value, 200,000,000 shares authorized and 24,024,542 shares outstanding at September 30, 2022 and 23,961,208 shares outstanding at December 31, 2021      240      240
Additional paid-in capital      103,682      103,476
Retained earnings      10,891      8,632
Total shareholders' equity      114,813      112,348
Total liabilities and shareholders' equity   $  127,414   $  122,429
 

FORTITUDE GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS

For the three and nine months ended September 30, 2022 and 2021
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)

                           
       Three months ended   Nine months ended  
    September 30,    September 30,   
       2022      2021      2022      2021  
Sales, net   $  16,122   $  20,422   $  55,476   $  66,979  
Mine cost of sales:                              
Production costs      5,703      7,075      19,673      21,219  
Depreciation and amortization      3,005      3,668      9,938      11,953  
Reclamation and remediation      60      40      183      116  
Total mine cost of sales      8,768      10,783      29,794      33,288  
Mine gross profit      7,354      9,639      25,682      33,691  
Costs and expenses:                              
General and administrative expenses      1,638      1,378      3,912      8,723  
Exploration expenses      3,687      2,023      8,627      4,380  
Other expense, net      60      48      142      132  
Total costs and expenses      5,385      3,449      12,681      13,235  
Income before income and mining taxes      1,969      6,190      13,001      20,456  
Mining and income tax expense      248      1,544      2,097      5,075  
Net income   $  1,721   $  4,646   $  10,904   $  15,381  
Net income per common share:                              
Basic   $  0.07   $  0.19   $  0.45   $  0.64  
Diluted   $  0.07   $  0.19   $  0.45   $  0.64  
Weighted average shares outstanding:                              
Basic      24,024,542      23,961,208      24,014,959      23,846,686  
Diluted      24,190,375      24,211,606      24,201,239      24,078,226  
 

FORTITUDE GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine months ended September 30, 2022 and 2021
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)

             
    Nine months ended
    September 30, 
       2022      2021
Cash flows from operating activities:              
Net income   $  10,904   $  15,381
Adjustments to reconcile net income to net cash from operating activities:              
Depreciation and amortization      10,052      12,045
Stock-based compensation      143      3,363
Deferred taxes      (982)      (140)
Reclamation and remediation accretion      183      116
Other operating adjustments      (38)      (88)
Changes in operating assets and liabilities:              
Accounts receivable      (101)      (1,483)
Inventories      (2,199)      (6,318)
Prepaid expenses and other current assets      1,269      (343)
Other non-current assets      (31)      (19)
Accounts payable and other accrued liabilities      1,866      555
Income and mining taxes payable      (36)      153
Net cash provided by operating activities      21,030      23,222
             
Cash flows from investing activities:              
Capital expenditures      (10,184)      (1,753)
Net cash used in investing activities      (10,184)      (1,753)
             
Cash flows from financing activities:              
Dividends paid      (8,645)      (4,433)
Issuance of common stock      —      500
Proceeds from exercise of stock options      63      —
Repayment of loans payable      (65)      (629)
Repayment of capital leases      (20)      (344)
Net cash used in financing activities      (8,667)      (4,906)
             
Net increase in cash and cash equivalents      2,179      16,563
Cash and cash equivalents at beginning of period      40,017      27,774
Cash and cash equivalents at end of period   $  42,196   $  44,337
             
Supplemental Cash Flow Information              
Income and mining taxes paid   $  3,149   $  5,063
Non-cash investing and financing activities:              
Change in capital expenditures in accounts payable   $  (343)   $  1,132
Change in estimate for asset retirement costs   $  710   $  499
Equipment purchased under finance lease   $  —   $  16
Right-of-Use assets acquired through operating lease   $  3,899   $  —

About Fortitude Gold Corp.:

Fortitude Gold is a U.S. based gold producer targeting projects with low operating costs, high margins, and strong returns on capital. The Company’s strategy is to grow organically, remain debt-free and distribute substantial dividends. The Company’s Nevada Mining Unit consists of five high-grade gold properties located in the Walker Lane Mineral Belt and a sixth high-grade gold property in west central Nevada. The Isabella Pearl gold mine, located on the Isabella Pearl mineralized trend, is currently in production. Nevada, U.S.A. is among the world’s premier mining friendly jurisdictions.

Cautionary Statements:  This press release contains forward-looking statements that involve risks and uncertainties. If you are risk-averse you should NOT buy shares in Fortitude Gold Corp.  The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this press release, the words “plan”, “target”, "anticipate," "believe," "estimate," "intend" and "expect" and similar expressions are intended to identify such forward-looking statements.  Such forward-looking statements include, without limitation, the statements regarding the Company’s strategy, future plans for production, future expenses and costs, future liquidity and capital resources, and estimates of mineralized material are forward-looking statements.  All forward-looking statements in this press release are based upon information available to the Company on the date of this press release, and the Company assumes no obligation to update any such forward-looking statements.

Forward looking statements involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate.  The Company's actual results could differ materially from those discussed in this press release.  In particular, the scope, duration, and impact of the COVID-19 pandemic on mining operations, Company employees, and supply chains as well as the scope, duration and impact of government action aimed at mitigating the pandemic may cause future actual results to differ materially from those expressed or implied by any forward-looking statements.  Also, there can be no assurance that production will continue at any specific rate.

Contact:

Greg Patterson

719-717-9825

greg.patterson@fortitudegold.com

www.Fortitudegold.com

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