Gold Resource Corporation

Gold Resource Corporation (NYSE: GORO) is a gold and silver producer, developer, and explorer with its operations centred on the Don David Gold Mine in Oaxaca, Mexico. The Company is focused on its existing infrastructure and land position surrounding the mine in Oaxaca, Mexico, and to develop the Back Forty Project in Michigan, United States.

Recent Financial and Business Updates:

Operational Highlights for the Second Quarter

Don David Gold Mine

• A notable absence of lost time incidents was maintained throughout the quarter. Our year-to-date LTIFR safety record stands at 0.22, contrasting favorably with the Mexican average of 0.88 (converted to US equivalent). Safety remains a paramount concern at Gold Resource Corporation. While maintaining a commendable track record at the Don David Gold Mine, the Company continuously seeks enhancement in safety measures, awareness, and training.
• The DDGM diamond drilling program advanced as planned during the second quarter, yielding promising outcomes. Drilling activities at DDGM are progressing on two fronts: (1) Infill drilling with the aim of upgrading categorized Inferred resources to the Indicated category; and (2) Exploration drilling intended to identify additional Inferred resources through step-out drilling along vein systems including South Soledad, Sagrario, Marena, Three Sisters, and the recently identified Gloria vein system.
  

Back Forty Project

• Optimization endeavors relating to metallurgy and the economic model for the Back Forty Project in Michigan, USA, are nearing completion. An updated report with these results is slated for release during the third quarter.
• Site layout designs have been revised with a distinct focus on minimal impact on wetlands and thorough environmental preservation. A landmark U.S. Supreme Court ruling (Sackett v. Environmental Protection Agency) has constrained federal authority over wetlands, possibly obviating the need for a "dredge and fill" wetland permit. Regulatory oversight of wetlands "drawdown" will be the jurisdiction of Michigan State authorities.
  

Financial Highlights:

• The total cash cost after co-product credits for the quarter stood at USD 1,333 per gold equivalent ounce, while the total all-in sustaining cost after co-product credits was USD 1,990 per AuEq ounce. Although the year-to-date total cash cost after co-product credits of USD 979 and total AISC after co-product credits of USD 1,551 align with our guidance, the peso's strengthening, and diminished zinc prices might necessitate a revision of the full-year guidance later in the year.
• The Company renewed its At the Market Offering Agreement with H.C. Wainwright & Co., LLC, which was initially established in November 2019. The agreement designates the Agent to act as the Company's sales agent for the potential offer and sale of common stock, amounting to a gross sales price of up to USD 75.0 million, and was reaffirmed in June 2023.

Technical Observation (on the daily chart)

The price of GORO stock has shown a consistent downward trend since making its 52-week high on September 12, 2022, with a correction of approximately 73.50%. Currently, the stock is near an important support zone of USD 0.45-USD 0.50, from where price has taken support in the past. The RSI (14 period) momentum indicator is in an upward trend recovering from oversold levels, with currently at a value of 41.49, with expectations of a short-term upward momentum. Moreover, the price is currently positioned below both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term resistance levels.­­­

As per the above-mentioned price action, key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given Gold Resource Corporation (NYSE: GORO) at the current market price of USD 0.51 as of August 30, 2023, at 08:35 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is August 30, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.