Boston, MA 05/13/2014 (wallstreetpr) – Gold Resource Corporation (NYSEMKT:GORO) will continue to cut its operating costs in efforts to foster more financial savings. The company reported that it achieved significant cost savings in the latest quarter during which it also increased production amid weak prices and demand for gold.
The latest quarter showed performance improvement both on a year-over-year basis and sequentially, and the management said that signals strong execution in the company with a focus on cost management. The quarter also saw the company continue its shareholder reward with return of significant cash to shareholders in the form of dividend, a trend that the company promised to maintain.
Excited by the strong 1Q results, Gold Resource Corporation (NYSEMKT:GORO) expects to boost production throughout this year while keeping costs and expenses low. Furthermore, the CEO Jason Raid said that he intends to challenge his team to identify more and new cost saving opportunities to ensure the company operates efficiently and saves enough money that can be reinvested or returned to shareholders.
1Q at a glance
Gold Resource Corporation (NYSEMKT:GORO) reported 18 percent decrease in costs year-over-year. The gold miner also noted 38 percent decline in costs on a sequential basis. Though the company managed to keep operating costs low, its production in the quarter soared. It produced 23,734 ounces of gold equivalent, up from the production of 22,300 ounces of gold equivalent in 1Q2013. The latest production figure showed 15 percent improvement over the previous quarter.
The key highlight in the latest quarter was cost that plummeted to $422 per gold equivalent ounce, against $515 per gold equivalent ounce a year earlier.
Sales, profit down
Though Gold Resource Corporation (NYSEMKT:GORO) managed to achieve cost and production improvement, the weak gold prices impacted revenue and profit. Therefore, the company realized sales of $31.15 million, down from sales of $42.31 million. The downfall also caught up with net income that dropped to $6.7 million or 12 cents per share. The company had a net income of $7.39 million or 13 cents per share in the same period a year ago.
The impact on the net income and revenue was attributed to the more than 21 percent drop in average gold price in the quarter whereby gold was sold at $1,296 an ounce, down from $1,648 an ounce in 1Q2013.
Despite the challenge, Gold Resource Corporation (NYSEMKT:GORO) concluded 1Q2014 with cash flow of $17.4 million and returned $1.6 million in the form of dividends to shareholders during the quarter.