Gold Resource Corp (NYSE MKT:GORO) Q2 2020 Earnings Conference Call - Final Transcript

Aug 05, 2020 • 11:00 am ET

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Gold Resource Corp (NYSE MKT:GORO) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Gold Resource Corporation Second Quarter 2020 Earnings Call. After the presentation there will be a question-and-answer sections. [Operator Instructions]

At this time, it's my pleasure to turn the floor over to Mr. Jason Reid, CEO and President of Gold Resource. Sir, the floor is yours.

Executive
Jason Reid

Thank you. Good morning, everyone, and thank you for joining Gold Resource Corporation's 2020 second quarter conference call. I expect my comments to run approximately 10 minutes, followed by a brief question-and-answer period. Joining me on the call today for the Q&A portion will be Mr. John Labate, our Chief Financial Officer.

Let me remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements. These statements are subject to numerous risks and uncertainties as described in our annual report on Form 10-K, the current quarterly report on 10-Q and other SEC filings, which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued yesterday, along with the comments on this call are made only as of today, August 5, 2020, and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find a reconciliation of our non-GAAP financial measures referred to in our remarks in our Form 10-K filed with the SEC for the year ended December 31, 2019, as well as this current quarterly report on 10-Q.

During the second quarter, the global pandemic negatively impacted most businesses around the world to varying degrees. Our Nevada Mining Unit was less impacted, while our Oaxaca Mining Unit was shut down two of the three months of the quarter from the Mexican government's mandatory closure decree in response to the COVID-19 pandemic. We lost April and May production and associated revenue of approximately $15 million in revenues compared to the prior year, while sustaining most of the normal owners cost of a mining unit like overhead and payroll. A mining operation does not return to full production immediately upon start-up under normal circumstances. So you can imagine, when we were allowed to restart operations under our new COVID protocols that slowed the restart even more. We are happy to have kept 100% of our team on the payroll during the shutdown and also provided financial support to the local communities in which we operate to help offset the impacts of the pandemic, including food banks and children's charities.

Our overall production, cost of production and financials suffered due to the shutdown. We applied for and were given regulatory permission to restart our operations with a limited number of employees, while focusing on the health and safety of our team, contractors and communities in which we operate. By the end of June, we were able to increase our workforce to 100%. We continue to ramp up production and barring another unforeseen governmental shutdown, we expect Q3 to