Fortitude Gold Reports Record Second Quarter Production and Net Income of $8.3m or $0.35 Per Share

COLORADO SPRINGS, CO / ACCESSWIRE / 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.

FORTITUDE 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 Corporation

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

SOURCE: Fortitude Gold Corporation

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