On Thursday, H.C. Wainwright adjusted its financial outlook for Gold Resource Corp (NYSE: NYSE:GORO) shares, raising the price target to $1.75 from $1.50, while maintaining a Buy rating on the stock. This revision follows the mining company's announcement of its second-quarter financial performance for 2024.
Gold Resource Corp reported a quarterly revenue of $20.8 million and a net loss of $27.7 million, or ($0.30) per share. These results contrast with the revenue of $24.8 million and net income of $4.6 million, or ($0.05) per share, from the same quarter in the previous year.
The decrease in revenue year-over-year was attributed primarily to a 27% drop in metal sales, which amounted to 5,625 gold equivalent ounces (GEOs). The decline in tonnage, coupled with fluctuations in metal grades and recoveries, were the main factors behind the reduced sales.
Despite the lower revenue, Gold Resource Corp's sales costs remained elevated at $24.5 million, compared to $27.0 million in the second quarter of 2023. Consequently, the company experienced a mine gross loss of $3.6 million, which was a deeper loss than the $2.2 million reported in the same period last year.
The significant net loss for the quarter was largely due to other expenses totaling $6.3 million, which included costs such as interest on streaming liabilities and unrealized currency exchange losses. Moreover, the company faced an income tax provision of $16.5 million related to the valuation allowance set up for deferred tax assets at the Don David Gold Mine (DDGM).
Looking forward, H.C. Wainwright anticipates that Gold Resource Corp will focus on strengthening its balance sheet. The company's management has indicated plans to restore its cash balance by the end of the year, signaling a potential improvement in financial stability. The firm's analyst reiterates the Buy rating and emphasizes the increased price target as a reflection of this outlook.
In other recent news, Gold Resource Corporation and Gold Road Resources have seen significant developments. Gold Resource Corporation has amended its bylaws to change the quorum requirement for shareholder meetings, now requiring one-third of the voting power of the outstanding shares for a quorum. This change allows for more flexibility in meeting operations.
Meanwhile, Gold Road Resources has been upgraded from Neutral to Overweight by JPMorgan (NYSE:JPM), despite a decrease in the price target from AUD1.90 to AUD1.85. This follows a period of underperformance in gold production due to persistent rainfall. However, JPMorgan has revised its operational forecast for 2024, predicting gold production between 290,000 to 305,000 ounces.
In addition, Gold Resource Corp's shareholders approved board nominees and the appointment of an auditor during their recent annual meeting. On the other hand, Gold Road Resources received an updated life-of-mine (LOM) plan for the Gruyere project from JPMorgan, reflecting slight negative revisions to strip ratios and grades.
These recent developments provide valuable insight into the operations and prospects of both Gold Resource Corporation and Gold Road Resources.
InvestingPro Insights
In light of H.C. Wainwright's updated financial outlook for Gold Resource Corp, real-time data from InvestingPro provides additional context to the company's current financial standing. According to the latest metrics, Gold Resource Corp's revenue in the last twelve months as of Q2 2024 was $81.18 million, a significant decrease of 27.7% year-over-year. This decline is echoed in the quarterly revenue growth, which saw a 16.23% drop in Q2 2024. The company's gross profit margin stands at a modest 11.83%, underscoring the challenges faced in maintaining profitability.
Two InvestingPro Tips further highlight the company's financial situation. Analysts do not anticipate Gold Resource Corp will be profitable this year, which aligns with the reported net loss and the challenges highlighted in the article.
Moreover, the stock has taken a considerable hit over the last week, with a one-week price total return of -16.26%. This could be reflective of investor sentiment following the recent financial disclosures and the broader industry trends.
For readers looking to delve deeper into Gold Resource Corp's financial health, there are additional InvestingPro Tips available, which can provide more comprehensive insights into the company's performance and future prospects. The full suite of tips can be accessed on the InvestingPro platform, offering investors a robust tool for making informed decisions.
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