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Fortitude Gold Reports Record Second Quarter Production and Net Income of $8.3M ($0.35/share)

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COLORADO SPRINGS – August 3, 2021 - Fortitude Gold Corp. (OTCQB: FTCO) (the “Company”) reported record production and financial results for the second quarter ended June 30, 2021 of 14,579 ounces of gold produced at $628 per ounce all-in sustaining cost, $25.9 million net sales, and a $13.8 million increase to its treasury to $41.5 million from December 31, 2020.  Fortitude Gold is a gold producer, developer, and explorer with operations in Nevada, U.S.A.

Q2 2021 FINANCIAL RESULTS AND HIGHLIGHTS

  • $41.5 million cash balance on June 30, 2021; an increase of 50%, or $13.8 million from December 31, 2020
  • $8.3 million net earnings or $0.35 per share
  • $25.9 million net sales
  • $16.4 million cash from year-to-date operating activities
  • 14,579 gold ounces produced
  • 6.75 grams per tonne average gold grade mined
  • $72 million working capital, an increase of 72% from December 31, 2020
  • $13.2 million mine gross profit
  • $564 per ounce cash cost after by-product credits
  • $628 per ounce total all-in sustaining cost
  • $0.24 annual cash dividend per share initiated, subsequently increased by 50% to $0.36 per share

Overview of Q2 2021 Results

Fortitude Gold sold 14,510 gold ounces at a total cash cost of $564 per ounce (after by-product credits). Realized metal prices during the quarter averaged $1,794 per ounce gold*.  The Company recorded net income of $8.3 million, or $0.35 per share.  Cash and cash equivalents at quarter end totaled $41.5 million. The Company produced 14,579 ounces of gold during the quarter and recently increased its 2021 Annual Outlook, now targeting 45,000 gold ounces (a range of 40,000 to 45,000 ounces).

*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.

Mr. Jason Reid, CEO and President of Fortitude Gold, stated, “The second quarter marked a record for production with 14,579 gold ounces, record net income of $8.3 million and a record cash balance of $41.5 million.  This record-breaking quarter, on the back of an outstanding first quarter, gave us the confidence and ability to initiate our dividend business strategy.  We declared a $0.24 annual dividend in April and a 50% increase in May to $0.36 annually.  Subsequent to the quarter we increased the dividend again by 17% to $0.42 annually.  Our Isabella Pearl mine continues to exceed expectations including the average grade mined during the quarter of 6.75 grams gold per tonne.  We had excellent exploration results during the quarter on the Isabella Pearl mineralized trend, specifically at our Scarlet target, as well as on our Golden Mile and East Camp Douglas properties. Fortitude Gold is poised to make additional deposit discoveries on our exceptional property portfolio in the best region of the Walker Lane Mineral Belt of Nevada.  We aim to be a long-term gold producer in Nevada as we look to build our second mine and as a dividend payer as we return substantial cash back to our shareholders.”

The following Production Statistics table summarizes certain information about our Isabella Pearl Mine for three and six months ended June 30, 2021 and 2020:

 

 

 

 

 

 

 

 

 

 

    

 

 

 

    

 

 

 

 

 

Three months ended June 30, 

 

Six months ended June 30, 

 

    

2021

    

2020

    

2021

    

2020

Ore mined

 

  

 

  

 

  

 

  

Ore (tonnes)

 

 158,507

 

 143,818

 

 314,729

 

 302,572

Gold grade (g/t)

 

 6.75

 

 1.54

 

 5.90

 

 1.33

Low-grade stockpile (tonnes)

 

  

 

  

 

  

 

  

Ore (tonnes)

 

 —

 

 —

 

 —

 

 18,490

Gold grade (g/t)

 

 —

 

 —

 

 —

 

 0.57

Pre-strip waste

 

 —

 

 —

 

 —

 

 1,346,316

Waste (tonnes)

 

 1,681,710

 

 1,715,609

 

 3,056,909

 

 2,160,341

Metal production (before payable metal deductions)(1)

 

  

 

  

 

  

 

  

Gold (ozs.)

 

 14,579

 

 5,208

 

 26,115

 

 8,900

Silver (ozs.)

 

 10,043

 

 5,902

 

 17,176

 

 10,985

The following Sales Statistics table summarizes certain information about our Isabella Pearl Mine for three and six months ended June 30, 2021 and 2020:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

 

 

 

    

 

 

 

 

 

 

 

Three months ended June 30, 

 

Six months ended June 30, 

 

    

2021

    

2020

    

2021

    

2020

Metal sold

 

  

 

 

  

 

 

  

 

 

  

 

Gold (ozs.)

 

 

 14,510

 

 

 5,054

 

 

 25,982

 

 

 8,809

Silver (ozs.)

 

 

 9,946

 

 

 5,851

 

 

 16,841

 

 

 11,430

Average metal prices realized (1)

 

 

  

 

 

  

 

 

  

 

 

  

Gold ($per oz.)

 

 

 1,794

 

 

 1,708

 

 

 1,799

 

 

 1,651

Silver ($per oz.)

 

 

 26.30

 

 

 16.10

 

 

 26.27

 

 

 16.36

Precious metal gold equivalent ounces sold

 

 

 

 

 

 

 

 

 

 

 

 

Gold Ounces

 

 

 14,510

 

 

 5,054

 

 

 25,982

 

 

 8,809

Gold Equivalent Ounces from Silver

 

 

 146

 

 

 55

 

 

 246

 

 

 113

 

 

 

 14,656

 

 

 5,109

 

 

 26,228

 

 

 8,922

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash cost before by-product credits per gold ounce sold

 

$

 582

 

$

 1,420

 

$

 568

 

$

 1,391

Total cash cost after by-product credits per gold ounce sold

 

$

 564

 

$

 1,401

 

$

 551

 

$

 1,370

Total all-in sustaining cost per gold ounce sold

 

$

 628

 

$

 1,455

 

$

 605

 

$

 1,402

 
See Accompanying Tables

The following information summarizes the results of operations for Fortitude Gold Corporation for the three and six months ended June 30, 2021 and 2020, its financial condition at June 30, 2021 and December 31, 2020, and its cash flows for the six months ended June 30, 2021 and 2020. The summary data as of June 30, 2021 and for the three and six months ended June 30, 2021 and 2020 is unaudited; the summary data as of December 31, 2020 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2020, 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.RTITUDE GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

June 30, 

 

December 31, 

 

    

2021

    

2020

 

 

(Unaudited)

 

  

 

ASSETS

 

 

  

 

 

  

Current assets:

 

 

  

 

 

  

Cash and cash equivalents

 

$

 41,529

 

$

 27,774

Accounts receivable

 

 

 3,257

 

 

 145

Inventories

 

 

 31,588

 

 

 23,051

Prepaid expenses and other current assets

 

 

 2,591

 

 

 1,962

Total current assets

 

 

 78,965

 

 

 52,932

Property, plant and mine development, net

 

 

 38,337

 

 

 50,990

Operating lease assets, net

 

 

 2,624

 

 

 6,198

Deferred tax assets

 

 

 114

 

 

 959

Other non-current assets

 

 

 1,950

 

 

 1,946

Total assets

 

$

 121,990

 

$

 113,025

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

  

 

 

  

Current liabilities:

 

 

  

 

 

  

Accounts payable

 

$

 2,433

 

$

 1,715

Loans payable, current

 

 

 255

 

 

 665

Finance lease liabilities, current

 

 

 176

 

 

 398

Operating lease liabilities, current

 

 

 2,624

 

 

 6,198

Income taxes payable

 

 

 121

 

 

 —

Mining taxes payable

 

 

 423

 

 

 1,001

Other current liabilities

 

 

 934

 

 

 1,092

Total current liabilities

 

 

 6,966

 

 

 11,069

Asset retirement obligations

 

 

 4,326

 

 

 3,844

Loans payable, long-term

 

 

 73

 

 

 117

Finance lease liabilities, long-term

 

 

 22

 

 

 27

Total liabilities

 

 

 11,387

 

 

 15,057

Shareholders' equity:

 

 

  

 

 

  

Preferred stock - $0.01 par value, 20,000,000 shares authorized and nil outstanding at June 30, 2021 and nil shares authorized and outstanding at December 31, 2020

 

 

 —

 

 

 —

Common stock - $0.01 par value, 200,000,000 shares authorized and 23,961,208 shares outstanding at June 30, 2021 and 21,211,208 shares outstanding at December 31, 2020

 

 

 240

 

 

 212

Additional paid-in capital

 

 

 103,471

 

 

 99,682

Retained earnings (accumulated deficit)

 

 

 6,892

 

 

 (1,926)

Total shareholders' equity

 

 

 110,603

 

 

 97,968

Total liabilities and shareholders' equity

 

$

 121,990

 

$

 113,025

 

FORTITUDE GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS

For the three and six months ended June 30, 2021 and 2020
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Three months ended

 

Six months ended

 

 

 

June 30, 

 

June 30, 

 

 

    

2021

    

2020

    

2021

    

2020

 

Sales, net

 

$

 25,903

 

$

 8,576

 

$

 46,557

 

$

 14,433

 

Mine cost of sales:

 

 

  

 

 

  

 

 

  

 

 

  

 

Production costs

 

 

 8,059

 

 

 7,030

 

 

 14,144

 

 

 11,957

 

Depreciation and amortization

 

 

 4,638

 

 

 1,823

 

 

 8,285

 

 

 3,208

 

Reclamation and remediation

 

 

 47

 

 

 4

 

 

 76

 

 

 (7)

 

Total mine cost of sales

 

 

 12,744

 

 

 8,857

 

 

 22,505

 

 

 15,158

 

Mine gross profit (loss)

 

 

 13,159

 

 

 (281)

 

 

 24,052

 

 

 (725)

 

Costs and expenses:

 

 

  

 

 

  

 

 

  

 

 

  

 

General and administrative expenses

 

 

 1,186

 

 

 594

 

 

 7,345

 

 

 1,188

 

Exploration expenses

 

 

 1,039

 

 

 416

 

 

 2,357

 

 

 593

 

Other expense, net

 

 

 47

 

 

 62

 

 

 84

 

 

 110

 

Total costs and expenses

 

 

 2,272

 

 

 1,072

 

 

 9,786

 

 

 1,891

 

Income (loss) before income and mining taxes

 

 

 10,887

 

 

 (1,353)

 

 

 14,266

 

 

 (2,616)

 

Mining and income tax expense

 

 

 2,553

 

 

 325

 

 

 3,531

 

 

 450

 

Net income (loss)

 

$

 8,334

 

$

 (1,678)

 

$

 10,735

 

$

 (3,066)

 

Net income (loss) per common share:

 

 

  

 

 

  

 

 

  

 

 

  

 

Basic

 

$

 0.35

 

$

 (168)

 

$

 0.45

 

$

 (307)

 

Diluted

 

$

 0.34

 

$

 (168)

 

$

 0.45

 

$

 (307)

 

Weighted average shares outstanding:

 

 

  

 

 

  

 

 

  

 

 

  

 

Basic

 

 

 23,958,319

 

 

 10,000

 

 

 23,788,152

 

 

 10,000

 

Diluted

 

 

 24,189,989

 

 

 10,000

 

 

 24,007,557

 

 

 10,000

 

 

FORTITUDE GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended June 30, 2021 and 2020
(U.S. dollars in thousands)
(Unaudited)

 

 

 

 

 

 

 

 

 

Six months ended

 

 

June 30, 

 

    

2021

    

2020

Cash flows from operating activities:

 

 

  

 

 

  

Net income (loss)

 

$

 10,735

 

$

 (3,066)

Adjustments to reconcile net income (loss) to net cash from operating activities:

 

 

  

 

 

  

Depreciation and amortization

 

 

 8,344

 

 

 3,282

Stock-based compensation

 

 

 3,317

 

 

 —

Deferred taxes

 

 

 845

 

 

 —

Other operating adjustments

 

 

 31

 

 

 (6)

Changes in operating assets and liabilities:

 

 

  

 

 

  

Accounts receivable

 

 

 (3,112)

 

 

 (99)

Inventories

 

 

 (2,922)

 

 

 (2,816)

Prepaid expenses and other current assets

 

 

 (629)

 

 

 (11)

Other non-current assets

 

 

 (4)

 

 

 (256)

Accounts payable and other accrued liabilities

 

 

 301

 

 

 (946)

Income and mining taxes payable

 

 

 (457)

 

 

 450

Net cash provided by (used in) operating activities

 

 

 16,449

 

 

 (3,468)

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

  

 

 

  

Capital expenditures

 

 

 (596)

 

 

 (6,195)

Net cash used in investing activities

 

 

 (596)

 

 

 (6,195)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

  

 

 

  

Contributions from GRC

 

 

 —

 

 

 9,680

Dividends paid

 

 

 (1,917)

 

 

 —

Issuance of common stock

 

 

 500

 

 

 —

Repayment of loans payable

 

 

 (454)

 

 

 (435)

Repayment of capital leases

 

 

 (227)

 

 

 (217)

Net cash (used in) provided by financing activities

 

 

 (2,098)

 

 

 9,028

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

 13,755

 

 

 (635)

Cash and cash equivalents at beginning of period

 

 

 27,774

 

 

 866

Cash and cash equivalents at end of period

 

$

 41,529

 

$

 231

 

 

 

 

 

 

 

Supplemental Cash Flow Information

 

 

  

 

 

  

Interest expense paid

 

$

 20

 

$

 50

Income and mining taxes paid

 

$

 3,143

 

$

 —

Non-cash investing and financing activities:

 

 

  

 

 

  

Change in capital expenditures in accounts payable

 

$

 561

 

$

 (1,517)

Change in estimate for asset retirement costs

 

$

 372

 

$

 1,097

Stock contributed from Parent

 

$

 —

 

$

 100

 

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, with the Isabella Pearl gold mine in current 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.  In particular, the scope, duration, and impact of the COVID-19 pandemic on mining operations, Company employees, and supply chains as well as the scope, duration and impact of government action aimed at mitigating the pandemic may cause future actual results to differ materially from those expressed or implied by any forward-looking statements.  Also, there can be no assurance that production will continue at any specific rate.

Contact:

Greg Patterson

719-717-9825

greg.patterson@fortitudegold.com

www.Fortitudegold.com

 

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