Earnings call transcript: Gold Resource Q2 2025 sees EPS miss, stock drops

Gold Resource Corporation (GORO), with a market capitalization of $69.42 million, reported its second-quarter 2025 earnings, revealing a challenging financial landscape. The company posted an earnings per share (EPS) of -$0.09, missing expectations. This news contributed to a significant drop in the company’s stock price, which fell by 8.5% during regular trading hours and an additional 19.21% in premarket trading. According to InvestingPro analysis, the stock shows mixed momentum signals, with a remarkable 83.91% gain over the past six months despite recent volatility.

Key Takeaways

• Gold Resource reported an EPS of -$0.09, missing forecasts.
• The stock price dropped by 8.5% during regular trading and 19.21% premarket.
• The company is shifting mining methods to improve efficiency.
• Production constraints are being addressed with equipment upgrades.
• The company remains optimistic about future cash generation.

Company Performance

Gold Resource Corporation has faced a challenging period, with declining production levels in the first half of 2025. The company has been securing funding through various means, including private placements and loans, to stabilize its financial position. Despite these challenges, the company is optimistic about its strategic initiatives aimed at improving operational efficiency.

Financial Highlights

• Revenue: Not specified in the report.
• Earnings per share: -$0.09, a miss from expectations.
• Production levels have declined in the first half of 2025.

Earnings vs. Forecast

The reported EPS of -$0.09 fell short of expectations. This miss highlights the ongoing financial challenges faced by the company, which has been struggling with declining production and operational constraints.

Market Reaction

Gold Resource’s stock reacted negatively to the earnings report, falling by 8.5% during regular trading hours. In premarket trading, the stock plummeted an additional 19.21%, reflecting investor concerns about the company’s performance and future prospects. The stock is currently trading near its 52-week low, indicating significant market skepticism.

Outlook & Guidance

Looking ahead, Gold Resource is focusing on improving metal recovery and payability while gradually replacing its aging equipment fleet. The company expects positive momentum in the second half of 2025, with a goal of generating significant cash flow from its Don David mine. Analysts maintain a consensus Hold rating with a price target of $1.25, suggesting significant upside potential. InvestingPro data indicates the stock is currently undervalued based on its proprietary Fair Value model, though investors should note the company’s Weak overall financial health score of 1.53 out of 5.

Executive Commentary

CEO Alan Palmier expressed confidence in the company’s strategic direction, stating, "By year end, we expect fully 50% of our production to be coming from the 3 Sisters." He also emphasized the potential of the Don David mine, saying, "We firmly believe that the Don David mine will once again become a significant cash generator."

Risks and Challenges

• Production constraints due to aging equipment.
• Limited mining phases affecting output.
• Market skepticism reflected in stock performance.
• Ongoing need for funding to support operations.
• Potential volatility in precious metal prices.

Q&A

There were no questions asked during the earnings call, indicating either a lack of investor engagement or clarity in the presentation provided by the management.

The company’s strategic focus on operational improvements and selective mining is aimed at overcoming current challenges and positioning itself for a more profitable future. However, the immediate market reaction underscores the need for tangible results to rebuild investor confidence.

Full transcript - Gold Resource Corp (GORO) Q2 2025:

Conference Operator: Good afternoon, ladies and gentlemen, and welcome to the Gold Resource Q2 twenty twenty five Earnings Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Wednesday, 08/06/2025. And I would now like to turn the conference over to mister Chad Holyoke.

Thank you. Please go ahead.

Chad Holyoke, Likely Investor Relations/Financial Officer, Gold Resource Corporation: Thank you, Ina, and good morning to everyone. On behalf of the Gold Resource team, I would like to welcome you to our conference call covering our second quarter twenty twenty five results. Before we begin the call, there are a couple of housekeeping matters I would like to address. Please note that certain statements to be made today are forward looking in nature and as such are subject to numerous risks and uncertainties as described in our annual report on Form 10 ks and other SEC filings. Please note all amounts referenced during this presentation are in U.

S. Dollars unless otherwise stated. Joining me on the call today is Alan Palmier, our President and CEO. Following our prepared remarks, we will be available to answer questions. This conference call is being webcast and will be available for replay on our website later today.

Yesterday’s news release that was issued following the close of the market and the accompanying Form 10 Q have been filed with the SEC on EDGAR and are available on our website at www.goldresourcecorp.com. I will now turn the call over to Alan.

Alan Palmier, President and CEO, Gold Resource Corporation: Good morning, everyone, and thank you, Chuck. I’d like to welcome all of you to the second quarter conference call. I’ll be making a few prepared remarks, followed by an opportunity for questions and answers. I’d like to begin by addressing a few key points regarding our performance and outlook. As discussed previously, 2024 presented several challenges for us and many of those issues persisted into the 2025 as demonstrated unfortunately by our financial performance.

Specifically, we continue to experience production constraints stemming from limited availability within our aging, mobile mine equipment fleet compounded by a lack of sufficient mining phases. These factors led to production levels declining for the first half of the year. While the situation has certainly been difficult, it was anticipated. Accordingly, we were and are very focused on cash management, and I’m proud of our team has rose to the occasion. Thanks to a private placement and the significant income tax refund in Q1, ATM sales in Q1 and Q2, and our securing of a loan in Q2, we have obtained sufficient funding to execute the plans that we have previously discussed.

I’m pleased to share that we now have momentum on our side and begun executing on many of the initiatives we’ve been discussing over the past several months. We continue to prioritize infill and exploration drilling near the known resources and as the press release last week disclosed, we’re having significant success. The three sisters remains a focus. The mineralization is open along strike and down dip and recent drill holes show the grade continues to be attractive and the veins are wide enough for productive selective mine. Additionally, we are drilling the down dip extensions of both Arista and Switchback with very encouraging results.

We have engaged Cominte Servizos, an experienced underground mining contractor, to accelerate the development into and production from the Three Sisters vein system. To refresh everyone’s memory, the Three Sisters is a new vein swarm that was first discovered a couple of years ago. It is between the two original swarms or mines known as Arista and Switchback. It is higher in elevation than Switchback and is closer to the portal or the entrance to the mine, thus reducing the cost of haulage and importantly, ventilation. Most importantly, it’s higher up on the geological column, which results in higher precious metal grades.

The higher grades will have a significant impact on the mine’s profitability. By using a contractor, we will be able to access this area more quickly than originally anticipated, allowing us to bring forward high grade zones earlier in the mine plan. Accelerating access to this area is expected to have a positive impact on profitability. I’m very happy to be able to tell you that last week I was underground in the mine and saw the first production stope from the Three Sisters being pulled. This is a major inflection point for the Don David Mine as this area represents the future.

By year end, we expect fully 50% of our production to be coming from the 3 Sisters. We have also changed our mining methods for most of the mine. Historically, the Don David Mine has been a long hole mine as the width of the veins lent themselves to this mining method. Over time, the width of the veins has decreased. And accordingly, we’re in the process of transitioning to a mining method known as cut and fill.

This method is more selective and results in much lower dilution in narrow veins. Specifically, we have been averaging about 40% dilution with long hole mining in narrow veins and with cut and fill, this has been reduced to 17% in July. This translates into less tonnes mined while recovering the same metal. Less tonnes implies lower mining costs and milling costs for the same amount of metal recovered. The changeover takes time and continues, but by the end of the third quarter, we will be seeing the benefits.

We’ve begun acquiring used equipment to begin replacing our aging mobile mining fleet. The current equipment is old and requires substantial maintenance, which in turn reduces its availability and efficiency. Our approach to upgrading the fleet is measured and deliberate. We are focusing on acquiring gently used, hopefully, readily available and appropriately sized that aligns with the needs of our operation. We’re starting with the most critical replacements and will expand purchases gradually based on operational priorities and necessity.

This approach is justified by the long lead time for new equipment and by the change in mining method. Mining more selectively requires smaller equipment. For instance, long hole mining utilizes six yard scoops. Scoops are basically an underground loader with a big bucket. Six yards, we’re going to be utilizing two and a half yard scoops going forward, which allows us to mine selectively narrower openings, less dilution and higher recovery of metal.

We’ve placed an order for a third dry stack filter press to expand our processing capacity. Currently, our throughput is constrained by the limitations of the two existing filters. Adding a third unit will eliminate this bottleneck, allowing us to process more ore, but critically maintain a constant feed rate, which is a prerequisite for good metal recovery. This increase in capacity and recovery is expected to drive higher payable metal and improved profitability. The company has also initiated a comprehensive analysis of reagent usage and process flow within the processing plant.

This review has already led to changes in reagents, resulting in improved metal recovery and payability. Payability is the term that is used to describe the quality of the concentrate produced and by increasing payability, we minimize the inappropriate metals reporting to various concentrates, I. E, we reduce the amount of lead reporting to the copper concentrate and vice versa, thus improving the amount of payable metal because we only get paid for copper in the copper con and we only get paid for lead in the lead con. Early results have been very encouraging. And as the analysis continues, we expect to see further enhancements in both recovery rates and overall metal payability.

Thank you all once again for joining the call and for your continuing support during these challenging times. The good news is that we’re beginning to see positive momentum. Our plan is being implemented as intended. Everything we’re doing is part of a deliberate and controlled strategy, and we’re confident in our ability to execute it successfully. While the turnaround will take time, key developments such as the acceleration of these three sisters, the arrival of newer equipment, ongoing enhancements to the processing facility and continued exploration success are positioning us very strongly for the future.

We firmly believe that the Don David mine will once again become a significant cash generator. Now with that, I’ll turn the call over to the operator

Conference Operator: for If you are using your speakerphone, please leave the handset before pressing any keys. One moment, please, for your first question. There are no questions at this time. Mr.

Alan Palmier, please proceed.

Alan Palmier, President and CEO, Gold Resource Corporation: Thank you, operator. Thank you again for joining this call. I would like to believe that explanations were so concise that no questions arose. But if you have any follow-up questions, I think you all know how to contact us. I’d be happy to answer them in person or online.

That being said, thank you very much, and we will be talking to everyone at the end of Q3. Thank you, operator.

Conference Operator: This concludes today’s call. Thank you for participating. You may all disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.