Fortitude Gold Reports Profitable First Quarter
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Fortitude Gold Reports Profitable First Quarter

Tuesday, May 11, 2021 4:30 PM
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Topic:
Earnings

Increasing Treasury by $7M

Maintains 2021 Production Outlook

COLORADO SPRINGS, CO / ACCESSWIRE / May 11, 2021 / Fortitude Gold Corp. (OTCQB:FTCO) (the "Company") reported results for the first quarter ended March 31, 2021 of 11,536 ounces of gold produced at $575 per ounce all-in sustaining cost, $20.7 million net sales, $7.4 million increase in treasury to $35.2 million, and maintains its 2021 production outlook. Fortitude Gold is a gold producer, developer, and explorer with operations in Nevada, U.S.A.

Q1 2021 FINANCIAL RESULTS AND HIGHLIGHTS

  • $7.3 million cash from operating activities
  • $35.2 million cash balance on March 31, 2021; an increase of 27%, or $7.4 million from December 31, 2020
  • $20.7 million net sales
  • 11,536 gold ounces produced
  • 5.03 grams per tonne average gold grade mined
  • $55.6 million working capital, an increase of 33% from December 31, 2020
  • $10.9 million mine gross profit
  • $575 per ounce total all-in sustaining cost
  • $2.4 million net earnings or $0.10 per share
  • Completed staffing up post spin-off

Overview of Q1 2021 Results
Fortitude Gold sold 11,572 gold equivalent ounces at a total cash cost of $534 per ounce (after by-product credits). Realized metal prices during the quarter averaged $1,804 per ounce gold*. The Company recorded net income of $2.4 million, or $0.10 per share. Cash and cash equivalents at quarter end totaled $35.2 million. The Company produced 11,536 ounces of gold during the quarter. The Company maintains its 2021 Annual Outlook, targeting 40,000 gold ounces (a range of 36,000 to 40,000 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, "We are very excited to report Fortitude Gold's first quarterly results as a standalone public company. Our cash balance grew by $7.4 million over year-end 2020, or 27%, while our all-in sustaining cash cost dropped to $575 per gold ounce. The Company successfully completed staffing up as a one hundred percent standalone entity post spin-off which required non-recurring stock-based and onboard incentive compensation. Had we not sustained these onetime quarterly expenses, our net earnings would have been substantially higher. The Isabella Pearl Mine today is generating a substantial amount of cash for the Company, with production costs projected to drop even further in subsequent years. These sizeable cash flows are expected to fund significant Company exploration and development projects as well as monthly dividend distributions to shareholders. This strong quarterly performance allowed the Company's Board of Directors to initiate a $0.02 monthly dividend in April 2021 and increase it by fifty percent in May 2021 to $0.03 per month, or $0.36 annually."

The following Production Statistics table summarizes certain information about our Isabella Pearl Mine for three months ended March 31, 2021 and 2020:

 
  Three Months Ended  
 
  March 31,  
 
  2021     2020  
Ore mined
           
Ore (tonnes)(1)
    156,222       158,754  
Gold grade (g/t)
    5.03       1.15  
Low-grade stockpile (tonnes)
               
Ore (tonnes)
    -       18,490  
Gold grade (g/t)
    -       0.57  
Pre-strip waste
    -       1,346,316  
Waste (tonnes)
    1,375,199       444,732  
Metal production (before payable metal deductions)(2)
               
Gold (ozs.)
    11,536       3,692  
Silver (ozs.)
    7,133       5,083  
                 

The following Sales Statistics table summarizes certain information about our Isabella Pearl Mine for three months ended March 31, 2021 and 2020:

 
  Three Months Ended  
 
  March 31,  
 
  2021     2020  
Metal sold
           
Gold (ozs.)
    11,472       3,755  
Silver (ozs.)
    6,895       5,579  
Average metal prices realized (1)
               
Gold ($per oz.)
    1,804       1,575  
Silver ($per oz.)
    26.23       16.63  
Precious metal gold equivalent ounces sold
               
Gold Ounces
    11,472       3,755  
Gold Equivalent Ounces from Silver
    100       59  
 
    11,572       3,814  
 
               
Total cash cost before by-product credits per gold ounce sold
  550     1,352  
Total cash cost after by-product credits per gold ounce sold
  534     1,327  
Total all-in sustaining cost per gold ounce sold
  575     1,330  
                 

See Accompanying Tables

The following information summarizes the results of operations for Fortitude Gold Corporation for the three months ended March 31, 2021 and 2020, its financial condition at March 31, 2021 and December 31, 2020, and its cash flows for the three months ended March 31, 2021 and 2020. The summary data as of March 31, 2021 and for the three months ended March 31, 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.

FORTITUDE GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands, except share and per share amounts)

 
  March 31,     December 31,  
 
  2021     2020  
 
  (Unaudited)        
ASSETS
           
Current assets:
           
Cash and cash equivalents
  35,171     27,774  
Accounts receivable
    1,659       145  
Inventories
    27,377       23,051  
Prepaid expenses and other current assets
    2,142       1,962  
Total current assets
    66,349       52,932  
Property, plant and mine development, net
    45,011       50,990  
Operating lease assets, net
    4,569       6,198  
Deferred tax assets
    986       959  
Other non-current assets
    1,951       1,946  
Total assets
  118,866     113,025  
LIABILITIES AND SHAREHOLDERS' EQUITY
               
Current liabilities:
               
Accounts payable
  3,254     1,715  
Loans payable, current
    461       665  
Finance lease liabilities, current
    288       398  
Operating lease liabilities, current
    4,569       6,198  
Income taxes payable
    657       -  
Mining taxes payable
    829       1,001  
Other current liabilities
    692       1,092  
Total current liabilities
    10,750       11,069  
Asset retirement obligations
    4,002       3,844  
Loans payable, long-term
    95       117  
Finance lease liabilities, long-term
    25       27  
Total liabilities
    14,872       15,057  
Shareholders' equity:
               
Preferred stock - $0.01 par value, 20,000,000 shares authorized and nil outstanding at March 31, 2021 and nil shares authorized and outstanding at December 31, 2020
    -       -  
Common stock - $0.01 par value, 200,000,000 shares authorized and 23,931,208 shares outstanding at March 31, 2021 and 21,211,208 shares outstanding at December 31, 2020
    239       212  
Additional paid-in capital
    103,280       99,682  
Retained earnings (accumulated deficit)
    475       (1,926 )
Total shareholders' equity
    103,994       97,968  
Total liabilities and shareholders' equity
  118,866     113,025  
                 

FORTITUDE GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended March 31, 2021 and 2020
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)

 
  Three months ended  
 
  March 31,  
 
  2021     2020  
Sales, net
  20,655     5,857  
Mine cost of sales:
               
Production costs
    6,086       4,927  
Depreciation and amortization
    3,647       1,385  
Reclamation and remediation
    29       (11 )
Total mine cost of sales
    9,762       6,301  
Mine gross profit (loss)
    10,893       (444 )
Costs and expenses:
               
General and administrative expenses
    6,160       594  
Exploration expenses
    1,317       177  
Other expense, net
    37       48  
Total costs and expenses
    7,514       819  
Income (loss) before income and mining taxes
    3,379       (1,263 )
Income and mining tax expense
    978       125  
Net income (loss)
  2,401     (1,388 )
Net income (loss) per common share:
               
Basic
  0.10     (139 )
Diluted
    0.10       (139 )
Weighted average shares outstanding:
               
Basic
    23,614,466       10,000  
Diluted
    23,778,014       10,000  
                 

FORTITUDE GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2021 and 2020
(U.S. dollars in thousands)
(Unaudited)

 
  Three months ended  
 
  March 31,  
 
  2021     2020  
Cash flows from operating activities:
           
Net income (loss)
  2,401     (1,388 )
Adjustments to reconcile net income (loss) to net cash from operating activities:
               
Depreciation and amortization
    3,677       1,422  
Stock-based compensation
    3,125       -  
Deferred taxes
    (27 )     -  
Other operating adjustments
    17       (11 )
Changes in operating assets and liabilities:
               
Accounts receivable
    (1,514 )     (169 )
Inventories
    (1,827 )     (603 )
Prepaid expenses and other current assets
    (180 )     82  
Other non-current assets
    (5 )     (251 )
Accounts payable and other accrued liabilities
    1,187       (1,155 )
Mining and income taxes payable
    485       125  
Net cash provided by (used in) operating activities
    7,339       (1,948 )
 
               
Cash flows from investing activities:
               
Capital expenditures
    (104 )     (3,447 )
Net cash used in investing activities
    (104 )     (3,447 )
 
               
Cash flows from financing activities:
               
Contributions from GRC
    -       5,103  
Issuance of common stock
    500       -  
Repayment of loans payable
    (226 )     (216 )
Repayment of capital leases
    (112 )     (107 )
Net cash provided by financing activities
    162       4,780  
 
               
Net increase (decrease) in cash and cash equivalents
    7,397       (615 )
Cash and cash equivalents at beginning of period
    27,774       866  
Cash and cash equivalents at end of period
  35,171     251  
 
               
Supplemental Cash Flow Information
               
Interest expense paid
  12     27  
Income and mining taxes paid
  520     -  
Non-cash investing activities:
               
Change in capital expenditures in accounts payable
  (47 )   516  
Change in estimate for asset retirement costs
  92     435  
                 

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 future 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
[email protected]
www.Fortitudegold.com

SOURCE: Fortitude Gold Corporation

Fortitude Gold Corporation
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