GOLD RESOURCE CORP [GORO] Filings

10-Q 1 goro-20240630x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-34857

Gold Resource Corporation

_{(Exact Name of Registrant as Specified in its charter)}

Colorado

84-1473173

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

7900 E. Union Ave, Suite 320, Denver, Colorado 80237

(Address of Principal Executive Offices) (Zip Code)

(303) 320-7708

(Registrant’s telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:


a
Title of each class	Trading Symbol	Name of each exchange where registered
Common Stock	GORO	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes⌧No◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes⌧No◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	◻	Accelerated filer	◻

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act◻

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐No⌧

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 93,523,028 shares of common stock outstanding as of August 2, 2024.

Table of Contents

GOLD RESOURCE CORPORATION

FORM 10-Q

Table of Contents

		Page
	Second Quarter 2024 Highlights	3

	Part I - FINANCIAL INFORMATION	4
Item 1.	Condensed Consolidated Interim Financial Statements and Notes	4
	Ø Condensed Consolidated Interim Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023	4
	Ø Condensed Consolidated Interim Statements of Operations for the three and six months ended June 30, 2024 and 2023 (unaudited)	5
	Ø Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2024 and 2023 (unaudited)	6
	Ø Condensed Consolidated Interim Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (unaudited)	8
	Ø Notes to the Condensed Consolidated Interim Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 4.	Controls and Procedures	51

	Part II - OTHER INFORMATION	51
Item 1.	Legal Proceedings	51
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3.	Defaults upon Senior Securities	52
Item 4.	Mine Safety Disclosures	52
Item 5.	Other Information	52
Item 6.	Exhibits	52
Signatures		53

Processing Plant

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SECOND QUARTER 2024 HIGHLIGHTS

Highlights for the three months ended June 30, 2024 are summarized below and discussed further under Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations:

Corporate and Financial

●

The Company has $5.3 million in cash and $14.3 million in working capital as of June 30, 2024.

●

Net loss was $27.7 million or $0.30 per share for the quarter, which was after a $16.5 million tax expense due to the valuation allowance recorded during the second quarter of 2024 on the DDGM deferred tax assets, $3.7 million in additional interest on streaming liabilities because of higher gold consensus prices in the second quarter, and $1.3 million of unrealized investment loss on the Company’s holdings of Green Light Metals shares.

●

Total cash cost after co-product credits for the quarter was $1,950 per gold equivalent (“AuEq”) ounce and total all-in sustaining cost (“AISC”) after co-product credits for the quarter was $2,661 per AuEq ounce. (See Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Measures for a reconciliation of non-GAAP measures to applicable GAAP measures).

●

During the three months ended June 30, 2024, an aggregate of 3,478,813 shares of the Company’s common stock were sold and settled through the At the Market (“ATM”) agreement for net proceeds to the Company of $1.8 million, after deducting $0.1 million for Agent’s commissions and other expenses.

Don David Gold Mine

●

In the second quarter of 2024, DDGM produced and sold a total of 5,625 gold equivalent ounces, comprised of 2,724 gold ounces and 234,560 silver ounces at an average sales price per ounce of $2,465 and $30.49, respectively.

●

During the second quarter, the underground diamond drilling program progressed as planned and on schedule, utilizing two drill rigs generating positive results. Infill drilling continued to upgrade Inferred resources to the Measured and Indicated resource categories, particularly focusing on the recently discovered Three Sisters and Gloria vein systems. Infill drilling during this period continued to identify and give definition to high-grade ore shoots in the Sandy 1 and Sandy 2 veins of the Three Sisters system. Additionally, grade control drilling continued to prove up economic mineralization in veins scheduled for production in both the Arista and Switchback systems.

●

There were no lost time incidents during the quarter, resulting in a “zero” year-to-date Lost Time Injury Frequency Rate (“LTIFR”) safety record. Safety at Gold Resource Corporation is paramount. Even with a good track record at DDGM, the Company continues to strive each quarter for improved safety measures, awareness, and training.

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PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

GOLD RESOURCE CORPORATION

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS

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

(Unaudited)


		As of		As of
		June 30,		December 31,
	Note	2024		2023
ASSETS
Current assets:
Cash and cash equivalents		$	5,342	$	6,254
Accounts receivable, net			4,577		4,335
Inventories, net	4		8,979		9,294
Prepaid expenses and other current assets	6		7,703		6,612
Total current assets			26,601		26,495
Property, plant, and mine development, net	7		131,791		138,626
Deferred tax assets, net	5		269		13,301
Other non-current assets	8		4,069		5,464
Total assets		$	162,730	$	183,886
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	10,284	$	8,378
Mining royalty taxes payable, net			433		1,199
Accrued expenses and other current liabilities	9		1,550		1,748
Total current liabilities			12,267		11,325
Reclamation and remediation liabilities	11		11,212		11,795
Gold and silver stream agreements liability	10		50,028		44,932
Deferred tax liabilities, net	5		16,883		14,077
Contingent consideration	12		3,392		3,548
Other non-current liabilities	9		1,927		1,516
Total liabilities			95,709		87,193

Commitments and contingencies	12

Shareholders’ equity:
Common stock - $0.001 par value, 200,000,000 shares authorized:
92,292,848 and 88,694,038 shares outstanding at June 30, 2024 and December 31, 2023, respectively			93		89
Additional paid-in capital			114,049		111,970
Accumulated deficit			(40,066)		(8,311)
Treasury stock at cost, 336,398 shares			(5,884)		(5,884)
Accumulated other comprehensive loss			(1,171)		(1,171)
Total shareholders’ equity			67,021		96,693
Total liabilities and shareholders’ equity		$	162,730	$	183,886

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

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GOLD RESOURCE CORPORATION

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS

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

(Unaudited)


		For the three months ended				For the six months ended
		June 30,				June 30,
	Note	2024		2023		2024		2023

Sales, net	3	$	20,782	$	24,807	$	39,484	$	56,035
Cost of sales:
Production costs			17,768		20,302		33,876		40,152
Depreciation and amortization			5,833		6,474		10,043		13,728
Reclamation and remediation			773		200		1,326		395
Total cost of sales			24,374		26,976		45,245		54,275
Mine gross (loss) profit			(3,592)		(2,169)		(5,761)		1,760
Costs and expenses:
General and administrative expenses			781		2,130		1,682		3,323
Mexico exploration expenses			184		1,045		1,083		2,434
Michigan Back Forty Project expenses			142		395		347		845
Stock-based compensation	16		225		7		444		604
Other expense, net	17		6,354		711		7,869		2,180
Total costs and expenses			7,686		4,288		11,425		9,386
Loss before income taxes			(11,278)		(6,457)		(17,186)		(7,626)
Income tax provision (benefit)	5		16,456		(1,873)		14,569		(2,007)
Net loss		$	(27,734)	$	(4,584)	$	(31,755)	$	(5,619)
Net loss per common share:
Basic and diluted net loss per common share	18	$	(0.30)	$	(0.05)	$	(0.35)	$	(0.06)

Weighted average shares outstanding:
Basic and diluted	18		91,004,348		88,468,542		89,855,890		88,437,413

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

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GOLD RESOURCE CORPORATION

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

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

(Unaudited)


	For the three months ended June 30, 2024 and 2023
	Number of Common Shares	Par Value of Common Shares		Additional Paid- in Capital		Retained Earnings (Accumulated Deficit)		Treasury Stock		Accumulated Other Comprehensive Loss		Total Shareholders' Equity
Balance, March 31, 2023	88,804,940	$	89	$	111,286	$	6,671	$	(5,884)	$	(1,171)	$	110,991
Stock-based compensation	-		-		294		-		-		-		294
Net loss	-		-		-		(4,584)		-		-		(4,584)
Balance, June 30, 2023	88,804,940	$	89	$	111,580	$	2,087	$	(5,884)	$	(1,171)	$	106,701

Balance, March 31, 2024	89,126,872	$	89	$	112,073	$	(12,332)	$	(5,884)	$	(1,171)	$	92,775
Stock-based compensation	-		-		151		-		-		-		151
Common stock issued for vested restricted stock units	36,255		-		-		-		-		-		-
Issuance of stock, net of issuance costs ⁽¹⁾	3,478,813		4		1,831		-		-		-		1,835
Surrender of stock for taxes due on vesting	(12,694)		-		(6)		-		-		-		(6)
Net loss	-		-		-		(27,734)		-		-		(27,734)
Balance, June 30, 2024	92,629,246	$	93	$	114,049	$	(40,066)	$	(5,884)	$	(1,171)	$	67,021

(1)

An aggregate of 3,478,813 shares of the Company’s common stock were sold through the At The Market Agreement (“ATM”) during the three months ended June 30, 2024, for net proceeds to the Company, after deducting the Agent’s commissions and other expenses, of $1.8 million. There were no ATM sales during the three months ended June 30, 2023. Please also see Note—13 Shareholder’s Equity in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information.

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

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GOLD RESOURCE CORPORATION

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

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

(Unaudited)


	For the six months ended June 30, 2024 and 2023
	Number of Common Shares	Par Value of Common Shares		Additional Paid- in Capital		Retained Earnings (Accumulated Deficit)		Treasury Stock		Accumulated Other Comprehensive Loss		Total Shareholders' Equity
Balance, December 31, 2022	88,734,507	$	89	$	111,024	$	7,706	$	(5,884)	$	(1,171)	$	111,764
Stock-based compensation	-		-		567		-		-		-		567
Common stock issued for vested restricted stock units	88,570		-		-		-		-		-		-
Surrender of stock for taxes due on vesting	(18,137)		-		(11)		-		-		-		(11)
Net loss	-		-		-		(5,619)		-		-		(5,619)
Balance, June 30, 2023	88,804,940	$	89	$	111,580	$	2,087	$	(5,884)	$	(1,171)	$	106,701

Balance, December 31, 2023	89,030,436	$	89	$	111,970	$	(8,311)	$	(5,884)	$	(1,171)	$	96,693
Stock-based compensation			-		279		-		-		-		279
Common stock issued for vested restricted stock units	196,991		-				-		-		-		-
Issuance of stock, net of issuance costs ⁽¹⁾	3,478,813		4		1,831		-		-		-		1,835
Surrender of stock for taxes due on vesting	(76,994)		-		(31)		-		-		-		(31)
Net loss			-				(31,755)		-		-		(31,755)
Balance, June 30, 2024	92,629,246	$	93	$	114,049	$	(40,066)	$	(5,884)	$	(1,171)	$	67,021

(1)

An aggregate of 3,478,813 shares of the Company’s common stock were sold through the ATM during the six months ended June 30, 2024, for net proceeds to the Company, after deducting the Agent’s commissions and other expenses, of $1.8 million. There were no ATM sales during the six months ended June 30, 2023. Please also see Note—13 Shareholder’s Equity in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information.

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

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GOLD RESOURCE CORPORATION

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

(Unaudited)


		For the six months ended June 30,
	Note	2024		2023
Cash flows from operating activities:
Net loss		$	(31,755)	$	(5,619)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income tax expense (benefit)			14,045		(2,965)
Depreciation and amortization			11,010		13,772
Stock-based compensation			444		604
Interest on streaming liabilities			5,096		549
Other operating adjustments, net	20		2,841		616
Changes in operating assets and liabilities:
Accounts receivable			(242)		730
Inventories			436		1,762
Prepaid expenses and other current assets			(1,344)		(594)
Other non-current assets			(101)		(72)
Accounts payable and other accrued liabilities			1,802		(2,943)
Cash settled liability awards			(67)		-
Mining royalty and income taxes payable, net			(746)		(5,367)
Net cash provided by operating activities			1,419		473

Cash flows from investing activities:
Capital expenditures			(4,008)		(6,001)
Net cash used in investing activities			(4,008)		(6,001)

Cash flows from financing activities:
Proceeds from the ATM sales, net of issuance costs			1,835		-
Other financing activities			(33)		(16)
Net cash provided by (used in) financing activities			1,802		(16)
Effect of exchange rate changes on cash and cash equivalents			(125)		(174)

Net decrease in cash and cash equivalents			(912)		(5,718)
Cash and cash equivalents at beginning of period			6,254		23,675
Cash and cash equivalents at end of period		$	5,342	$	17,957

Supplemental Cash Flow Information
Income and mining taxes paid		$	1,072	$	6,068
Non-cash investing or financing activities:
Value of common shares issued for RSU redemption		$	49	$	62
Balance of capital expenditures in accounts payable		$	502	$	508

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

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GOLD RESOURCE CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

June 30, 2024
(Unaudited)

1. Basis of Preparation of Financial Statements

The Condensed Consolidated Interim Financial Statements (“interim financial statements”) of Gold Resource Corporation and its subsidiaries (collectively, the “Company”) are unaudited and have been prepared in accordance with the rules of the Securities and Exchange Commission (“SEC”) for interim statements. Certain information and footnote disclosures required by United States Generally Accepted Accounting Principles (“U.S. GAAP”) have been condensed or omitted as permitted by such rules. However, the Company believes that the disclosures included are adequate to make the information presented not misleading. In the opinion of management, all adjustments (including normal recurring adjustments) and disclosures necessary for a fair presentation of these interim financial statements have been included. The results reported in these interim financial statements do not necessarily indicate the results that may be reported for the entire year. These interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023 included in the Company’s annual report on Form 10-K (the “2023 Annual Report”). The year-end balance sheet data was derived from the audited financial statements. Unless otherwise noted, there have been no material changes to the footnotes from those accompanying the audited consolidated financial statements contained in the 2023 Annual Report.

In the presentation of certain operating cashflows in the statement of cashflows for 2023 have been reclassified to conform with current year presentation. This had no impact on total operating cashflows previously presented.

2. New Accounting Pronouncements

The FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures in November 2023, amending reportable segment disclosure requirements to include disclosure of incremental segment information on an annual and interim basis. Among the disclosure enhancements are new disclosures regarding significant segment expenses that are regularly provided to the chief operating decision-maker and included within each reported measure of segment profit or loss, as well as other segment items bridging segment revenue to each reported measure of segment profit or loss. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, and are applied retrospectively. Early adoption is permitted. We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.

The FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures in December 2023, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.

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3. Revenue

The Company derives its revenue mainly from the sale of concentrates. The following table presents the Company’s net sales for each period presented, disaggregated by source:


	For the three months ended June 30,				For the six months ended June 30,
	2024		2023		2024		2023

	(in thousands)				(in thousands)
Doré sales, net
Gold	$	-	$	543	$	24	$	2,268
Silver		-		32		1		101
Less: Refining charges		-		(17)		(6)		(42)
Total doré sales, net		-		558		19		2,327
Concentrate sales
Gold		6,358		7,949		13,757		18,571
Silver		6,840		6,609		11,908		13,182
Copper		1,941		2,749		4,182		5,743
Lead		1,060		2,782		2,424		5,747
Zinc		4,941		7,928		9,063		17,479
Less: Treatment and refining charges		(1,439)		(3,311)		(3,016)		(6,470)
Total concentrate sales, net		19,701		24,706		38,318		54,252
Realized gain - embedded derivative, net ⁽¹⁾		966		248		989		882
Unrealized gain (loss) - embedded derivative, net		115		(705)		158		(1,426)
Total sales, net	$	20,782	$	24,807	$	39,484	$	56,035

(1)

Copper, lead, and zinc are co-products. In the Realized gain - embedded derivative, net, there is $0.3 million gain related to these co-products for both the three and six months ended June 30, 2024. There is $0.1 million loss and $0.3 million gain, respectively, in the Realized gain - embedded derivative, net, related to the co-products for the three and six months ended June 30, 2023.

4. Inventories, net

At June 30, 2024 and December 31, 2023, inventories, net, consisted of the following:


	As of		As of
	June 30,		December 31,
	2024		2023

	(in thousands)
Stockpiles - underground mine	$	941	$	534
Concentrates		1,494		1,768
Doré, net		169		169
Subtotal - product inventories		2,604		2,471
Materials and supplies ⁽¹⁾		6,375		6,823
Total	$	8,979	$	9,294

(1)	Net of reserve for obsolescence of $0.5 million as of both June 30, 2024 and December 31, 2023.

5. Income Taxes

The Company recorded income tax provisions of $16.5 and $14.6 million, respectively, for the three and six months ended June 30, 2024. For the three and six months ended June 30, 2023, the Company recorded an income tax benefit of $1.9 million and $2.0 million, respectively. In accordance with applicable accounting rules, the interim provision for taxes is calculated using the estimated consolidated annual effective tax rate. The consolidated effective tax rate is a function of the combined effective tax rates for the jurisdictions in which the Company operates. Variations in the relative proportions of jurisdictional income could result in fluctuations to the Company’s consolidated effective tax rate. At the federal level, the Company’s income in the U.S. is taxed at 21%, and a 5% withholding tax applies to dividends received from Mexico.

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Income in Mexico is taxed at 37.5% (30% income tax and 7.5% mining tax), and Canada’s income is taxed at 26.5%, which results in a consolidated effective tax rate above statutory U.S. Federal rates. The U.S. and certain Canadian jurisdictions do not currently generate taxable income.

Mexico Valuation Allowance

The Company recorded a valuation allowance on the Mexico Income Tax net deferred tax assets as of June 30, 2024 in the amount of $12.8 million. In accordance with applicable accounting rules, a valuation allowance is recorded when it is more likely than not that some portion of the deferred tax assets will not be realized, after considering all available evidence, both positive and negative. The Company determined a valuation allowance on Mexico Income Tax deferred tax assets was necessary due primarily to the recent losses at the Mexico mine.

Mexico Mining Taxation

Mining entities in Mexico are subject to two mining duties, in addition to the 30% Mexico corporate income tax: (i) a “special” mining duty of 7.5% of taxable income as defined under Mexican tax law (also referred to as “mining royalty tax”) on extraction activities performed by concession holders, and (ii) the “extraordinary” mining duty of 0.5% on gross revenue from the sale of gold, silver, and platinum. The mining royalty tax generally applies to earnings before income tax, depreciation, depletion, amortization, and interest. In calculating the mining royalty tax, there are no corporate deductions related to depreciable costs from operational fixed assets. However, prospecting and exploration expenses are amortized using a 10% rate in a 10-year straight line. Both duties are tax deductible for income tax purposes. As a result, our effective tax rate applicable to the Company’s Mexican operations is higher than Mexico’s statutory rate.

The Company periodically transfers funds from its Mexican wholly owned subsidiary to the U.S. as dividends, which are subject to a 10% Mexico withholding tax, unless otherwise provided per a tax treaty. The current U.S.-Mexico tax treaty limits the dividend withholding tax between these countries to 5%, as long as specific requirements are met. Based on the Company’s understanding that it meets these requirements, the Company pays a 5% withholding tax on dividends paid from Mexico. The estimated annual effective tax rate reflects the impact of the planned annual transfers for 2024.

In October 2023, the Company received a notification from the Mexican Tax Administration Services (“SAT”) with a sanction of 331 million pesos (approximately $18 million as of June 30, 2024) as the result of a 2015 tax audit that began in 2021. The 2015 tax audit performed by SAT encompassed various tax aspects, including but not limited to intercompany transactions, mining royalty tax, and extraordinary mining tax. Management is in process of disputing this tax notification and sent a letter of protest to the tax authorities along with providing all requested documentation. Management intends to pursue legal avenues of protest, including filing a lawsuit with the Mexico court system, if necessary, to ensure that these adjustments are removed. Management believes the position taken on the 2015 income tax return meets the more likely than not threshold and that as of June 30, 2024 and December 31, 2023, the Company has no liability for uncertain tax positions. If the Company were to determine there was an unrecognized tax benefit, the Company would recognize the liability and related interest and penalties within income tax (benefit) provision.

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6. Prepaid Expenses and Other Current Assets

At June 30, 2024 and December 31, 2023, prepaid expenses and other current assets consisted of the following:


	As of		As of
	June 30,		December 31,
	2024		2023

	(in thousands)
Advances to suppliers	$	80	$	266
Prepaid insurance		2,333		1,103
Prepaid income tax		4,229		4,589
Other current assets		1,061		654
Total	$	7,703	$	6,612

Prepaid income tax

Mexican tax statutes specify that the current year tax prepayments be calculated based on a coefficient for prior year earnings, regardless of current year results. Starting in the third quarter of each year, these same statutes allow companies to request a reduction of the coefficient, which adjusts for losses experienced in the current year. During 2023, DDGM had to prepay approximately $76 million pesos ($4 million) despite of the losses for the year. In 2024, these overpayments can be used to offset the required 2024 tax prepayments, and as a result, no income tax payments are expected in 2024.

Other current assets

A value added (“IVA”) tax in Mexico is assessed on the sales of products and purchases of materials and services. Businesses owe IVA taxes as the business sells a product and collects IVA taxes from its customers. Likewise, businesses are generally entitled to recover the taxes they have paid related to purchases of materials and services, either as a refund or credit to IVA tax payable. Amounts recorded as IVA taxes in the consolidated financial statements represent the net estimated IVA tax payable or receivable, since there is a legal right of offset of IVA taxes. As of June 30, 2024 and December 31,2023, this resulted in an asset balance of $0.6 million and $0.4 million, respectively, included in Other current assets.

7. Property, Plant, and Mine Development, net

At June 30, 2024 and December 31, 2023, property, plant, and mine development, net consisted of the following:


	As of		As of
	June 30,		December 31,
	2024		2023

	(in thousands)
Asset retirement costs (“ARO asset”)	$	6,227	$	6,227
Construction-in-progress		865		243
Furniture and office equipment		1,791		1,781
Land		9,033		9,033
Mineral interest		79,543		79,543
Light vehicles and other mobile equipment		2,118		2,126
Machinery and equipment		43,106		42,887
Mill facilities and infrastructure		36,395		36,396
Mine development		118,676		115,230
Software and licenses		1,554		1,554
Subtotal		299,308		295,020
Accumulated depreciation and amortization		(167,517)		(156,394)
Total	$	131,791	$	138,626

The Company recorded depreciation and amortization expense of $5.8 million and $10.0 million for the three and

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six months ended June 30, 2024, respectively, and $6.5 million and $13.7 million, for the three and six months ended June 30, 2023, respectively.

8. Other Non-current Assets

At June 30, 2024 and December 31, 2023, other non-current assets consisted of the following:


	As of		As of
	June 30,		December 31,
	2024		2023

	(in thousands)
Investment in Maritime	$	1,718	$	1,596
Investment in Green Light Metals		2,239		3,698
Other non-current assets		112		170
Total	$	4,069	$	5,464

Investment in Maritime

On September 22, 2022, the Company invested 2.4 million Canadian Dollar (“C$”) (or $1.7 million) in 47 million common shares of Maritime Resources Corp; the shares purchased represented 9.9% of the issued and outstanding shares of Maritime at the time. As of June 30, 2024 and December 31, 2023, the fair value of the investment was $1.7 and $1.6 million, respectively.

Investment in Green Light Metals

On December 28, 2022, Gold Resource Corporation received 12.25 million common shares of Green Light Metals as a settlement for a promissory note receivable acquired with the Aquila Resources Inc. (“Aquila”) acquisition. This represented approximately 28.5% ownership in Green Light Metals at the time. As of June 30, 2024 and December 31, 2023, the fair value of this equity investment was $2.2 million and $3.7 million, respectively.

9. Accrued Expenses and Other Liabilities

At June 30, 2024 and December 31, 2023, accrued expenses and other liabilities consisted of the following:


	As of		As of
	June 30,		December 31,
	2024		2023

	(in thousands)
Accrued royalty payments	$	715	$	726
Share-based compensation liability - current		102		67
Employee profit sharing obligation		6		67
Other payables		727		888
Total accrued expenses and other current liabilities	$	1,550	$	1,748

Accrued non-current labor obligation	$	1,537	$	1,167
Share-based compensation liability		383		320
Other long-term liabilities		7		29
Total other non-current liabilities	$	1,927	$	1,516

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10. Gold and Silver Stream Agreements

The following table presents the Company’s liabilities related to the Company’s Gold and Silver Stream Agreements with Osisko Bermuda Limited (“OBL”), a wholly owned subsidiary of Osisko Gold Royalties Ltd (TSX & NYSE: OR), as of June 30, 2024 and December 31, 2023:


	As of		As of
	June 30,		December 31,
	2024		2023

	(in thousands)
Liability related to the Gold Stream Agreement	$	23,329	$	21,002
Liability related to the Silver Stream Agreement		26,699		23,930
Total liability	$	50,028	$	44,932

Periodic interest expense is incurred based on an implied interest rate. The implied interest rate is determined based on the timing and probability of future production and a 6% discount rate. Interest expense is recorded to the Condensed Consolidated Interim Statements of Operations and the gold and silver stream agreement liability on the Condensed Consolidated Interim Balance Sheets.

The stream agreements contain customary provisions regarding default and security. In the event that our subsidiary defaults under the stream agreements, including by failing to achieve commercial production by an agreed upon date, it may be required to repay the deposit plus accumulated interest at a rate agreed with OBL. If the Company fails to do so, OBL