What to expect at GORO's Q4 2020 earnings announcement For those who bought GORO or are considering buying GORO.
I want you to be aware that Q4 2020 in the earnings announcement will likely ook much worse than Q1 2021 for several reasons:
a. Zinc Treatment Charges in 2020 was ~twice the amount as it will be in 2021 (resulting in 2021 savings estimated at $6MM/year in treatment charges)
b. Smelters are often closed in the latter portion of Q4 2020 for the last 10 days of the quarter due to Holidays which can result in shifting 1/9th of the sales from Q4 2020 to Q1 2021.
c. COVID still had some impact on productivity in Q4 2020 and much less so on Q1 2021.
d. Zinc, Silver and Copper prices are nearer to their highs and are much higher in Q1 2020 relative to Q4 2020 while also accounting for ~65 to 70% of revenues. Conversely, gold only accounts for ~25 to 30% of GORO's total revenues and is down only 5% in terms of current prices
So, DO NOT panick when the Q4 2020 earnings announcements come out and its not that profitable for one quarter....Q1 2021 will more than make up for it.
My own estimates peg after-tax cash flows to be around $30MM annually.
Additionally, expect a reserve increase given the more exploration activity and drilling.
Tune in for their earnings call this week at Thursday, February 25, 2021 at 10:00 a.m. Eastern Time.
Hope that makes sense and Happy Investing!