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Fortitude Gold Reports Second Quarter Net Income of $3.6 Million, Maintains 2023 Production Outlook

COLORADO SPRINGS – August 1, 2023 - Fortitude Gold Corporation (OTCQB: FTCO) (the “Company”) reported results for the second quarter ended June 30, 2023, including $19.2 million net sales, $3.6 million net income, or $0.15 per share, and a $46.9 million cash balance at quarter end.  The Company produced 9,684 ounces of gold during the second quarter and maintains its 2023 production outlook.  Fortitude Gold is a gold producer, developer, and explorer with operations in Nevada, U.S.A. offering investors exposure to both gold production and dividend yield.

Q2 2023 FINANCIAL RESULTS AND HIGHLIGHTS

Fortitude Gold sold 9,702 gold ounces at a total cash cost of $527 per ounce (after by-product credits) and an all-in-sustaining-cost per ounce of $680. Realized metal prices during the quarter averaged $1,990 per ounce gold*. The Company recorded net income of $3.6 million, or $0.15 per share and reported cash and cash equivalents at quarter end of $46.9 million. The Company produced 9,684 ounces of gold during the quarter, 21,171 ounces of gold year-to-date, and maintains its 2023 Annual Outlook targeting 40,000 gold ounces (a range of 36,000 to 40,000 ounces).

“The second quarter was another solid quarter of production which positions the Company at the high-end of our annual production target,” stated Mr. Jason Reid, CEO and President of Fortitude Gold.  “Additional quarter highlights include strong financial performance, low all-in production costs and over $6 million invested in exploration.  In addition to our regular instituted monthly cash dividend, we declared our first special cash dividend to shareholders.  By doing so we demonstrate our commitment to return as much cash back to shareholders as soon as possible while balancing the needs of the operations, exploration and growth, and paying taxes as a profitable mining company.”

Mr. Reid continued, “Our Plan of Operations for the County Line project was submitted to the Bureau of Land Management during the quarter.  We also expect to submit a Plan of Operations for our Golden Mile project in the coming weeks as we push both projects through the production permitting cycle as quickly as possible.”

The following Production Statistics table summarize certain information about our operations for the three and six months ended June 30, 2023 and 2022:

                 
                       
    Three months ended June 30,    Six months ended June 30, 
       2023      2022      2023      2022
Ore mined                    
Ore (tonnes)    112,834    123,810    219,309    377,653
Gold grade (g/t)    3.36    3.46    3.71    2.59
Low-grade stockpile                    
Ore (tonnes)    —    11,011    61,854    34,501
Gold grade (g/t)    —    0.42    0.47    0.43
Waste (tonnes)    312,614    241,500    530,741    1,494,024
Metal production (before payable metal deductions)(1)                    
Gold (ozs.)    9,684    10,980    21,171    20,855
Silver (ozs.)    13,611    16,027    31,260    32,550
  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 operations for three and six months ended June 30, 2023 and 2022:

                         
                               
    Three months ended June 30,    Six months ended June 30, 
       2023      2022      2023      2022
Metal sold                            
Gold (ozs.)      9,702      12,851      21,131      21,148
Silver (ozs.)      13,464      18,780      30,944      32,708
Average metal prices realized (1)                            
Gold ($per oz.)      1,990      1,876      1,935      1,871
Silver ($per oz.)      24.46      23.04      23.42      23.34
Precious metal gold equivalent ounces sold                        
Gold Ounces      9,702      12,851      21,131      21,148
Gold Equivalent Ounces from Silver      165      231      375      408
       9,867      13,082      21,506      21,556
                         
Total cash cost before by-product credits per gold ounce sold   $  561   $  680   $  546   $  706
Total cash cost after by-product credits per gold ounce sold   $  527   $  646   $  512   $  670
Total all-in sustaining cost per gold ounce sold   $  680   $  733   $  625   $  778
  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 six months ended June 30, 2023 and 2022, its financial condition at June 30, 2023 and December 31, 2022, and its cash flows for the six months ended June 30, 2023 and 2022. The summary data as of June 30, 2023 and for the three and six months ended June 30, 2023 and 2022 is unaudited; the summary data as of December 31, 2022 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2022, 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)

             
    June 30,    December 31, 
       2023      2022
    (Unaudited)       
ASSETS              
Current assets:              
Cash and cash equivalents   $  46,913   $  45,054
Gold and silver rounds/bullion      225      —
Inventories      50,709      47,155
Prepaid taxes      966      710
Prepaid expenses and other current assets      1,261      730
Total current assets      100,074      93,649
Property, plant and mine development, net      28,618      30,581
Operating lease assets, net      2,078      3,826
Deferred tax assets      2,300      1,282
Other non-current assets      341      1,818
Total assets   $  133,411   $  131,156
LIABILITIES AND SHAREHOLDERS' EQUITY              
Current liabilities:              
Accounts payable   $  3,619   $  2,524
Operating lease liabilities, current      2,078      3,826
Mining taxes payable      1,512      1,857
Other current liabilities      947      1,324
Total current liabilities      8,156      9,531
Asset retirement obligations      6,102      5,863
Other non-current liabilities      —      3
Total liabilities      14,258      15,397
Shareholders' equity:              
Preferred stock - $0.01 par value, 20,000,000 shares authorized and nil outstanding at June 30, 2023 and December 31, 2022      —      —
Common stock - $0.01 par value, 200,000,000 shares authorized and 24,084,542 shares outstanding at June 30, 2023 and 24,024,542 shares outstanding at December 31, 2022      241      240
Additional paid-in capital      103,893      103,731
Retained earnings      15,019      11,788
Total shareholders' equity      119,153      115,759
Total liabilities and shareholders' equity   $  133,411   $  131,156
 

FORTITUDE GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS

For the three and six months ended June 30, 2023 and 2022
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)

                           
       Three months ended   Six months ended  
    June 30,    June 30,   
       2023      2022      2023      2022  
Sales, net   $  19,219   $  23,993   $  40,759   $  39,354  
Mine cost of sales:                              
Production costs      5,020      8,189      10,673      13,970  
Depreciation and amortization      2,905      4,155      6,384      6,933  
Reclamation and remediation      68      76      140      123  
Total mine cost of sales      7,993      12,420      17,197      21,026  
Mine gross profit      11,226      11,573      23,562      18,328  
Costs and expenses:                              
General and administrative expenses      1,087      1,094      2,146      2,274  
Exploration expenses      6,061      2,426      9,749      4,940  
Other (income) expense, net      (434)      65      (761)      82  
Total costs and expenses      6,714      3,585      11,134      7,296  
Income before income and mining taxes      4,512      7,988      12,428      11,032  
Mining and income tax expense      908      1,423      2,456      1,849  
Net income   $  3,604   $  6,565   $  9,972   $  9,183  
Net income per common share:                              
Basic   $  0.15   $  0.27   $  0.41   $  0.38  
Diluted   $  0.15   $  0.27   $  0.41   $  0.38  
Weighted average shares outstanding:                              
Basic      24,084,542      24,024,542      24,074,312      24,010,061  
Diluted      24,225,953      24,207,185      24,219,270      24,204,660  
 

FORTITUDE GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended June 30, 2023 and 2022
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)

             
    Six months ended
    June 30, 
       2023      2022
Cash flows from operating activities:              
Net income   $  9,972   $  9,183
Adjustments to reconcile net income to net cash from operating activities:              
Depreciation and amortization      6,430      7,011
Stock-based compensation      103      97
Deferred taxes      (1,018)      (650)
Reclamation and remediation accretion      140      123
Other operating adjustments      (58)      (29)
Changes in operating assets and liabilities:              
Accounts receivable      —      (1,572)
Inventories      (2,167)      (1,068)
Prepaid expenses and other current assets      (531)      1,087
Other non-current assets      —      (31)
Accounts payable and other accrued liabilities      519      176
Income and mining taxes payable      (601)      194
Net cash provided by operating activities      12,789      14,521
             
Cash flows from investing activities:              
Capital expenditures      (3,974)      (8,052)
Other investing activities      (239)      —
Net cash used in investing activities      (4,213)      (8,052)
             
Cash flows from financing activities:              
Dividends paid      (6,741)      (5,763)
Proceeds from exercise of stock options      60      63
Repayment of loans payable      (30)      (43)
Repayment of capital leases      (6)      (13)
Net cash used in financing activities      (6,717)      (5,756)
             
Net increase in cash and cash equivalents      1,859      713
Cash and cash equivalents at beginning of period      45,054      40,017
Cash and cash equivalents at end of period   $  46,913   $  40,730
             
Supplemental Cash Flow Information              
Income and mining taxes paid   $  4,074   $  2,339
Non-cash investing and financing activities:              
Change in capital expenditures in accounts payable   $  231   $  322
Change in estimate for asset retirement costs   $  —   $  517
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.

Contact:

Greg Patterson

719-717-9825

greg.patterson@fortitudegold.com

www.Fortitudegold.com

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