Gold Resources Corp.

Gold Resource Corp (NYSE American: GORO) is a company that produces, develops, and explores for gold and silver. It has operations in Oaxaca, Mexico, and Nevada, USA. The company targets projects with low capital expenditure and high potential returns. It also offers its shareholders the option to convert their cash dividends into physical gold and silver.

Recent Financial and Business Updates:

• Income Statement Analysis for the Second Quarter:
  • During the second quarter of 2023, the company incurred a net loss of USD 4.6 million, equating to USD 0.05 per share on a year-over-year basis.
  • The total sales for Q2 2023 amounted to USD 24.8 million, a decrease from the USD 37.06 million recorded in Q2 2022.
  • Basic and diluted net loss per common share in Q2 2023 was USD 0.05, compared to USD 0.03 in Q2 2022.
• Balance Sheet Examination:
  • As of June 30, 2023, the company held USD 18 million in cash and had no outstanding debt.
  • The company's working capital as of June 30, 2023, was USD 20.8 million.
  • In the second quarter, the company's total cash cost per gold equivalent ounce was USD 1,333, while the total all-in sustaining cost per gold equivalent ounce was USD 1,990.
  • The company renewed its At the Market Offering Agreement (ATM Agreement) with H.C. Wainwright & Co., LLC in June 2023. This agreement enables the company to offer its common stock to investors through H.C. Wainwright & Co., LLC, with a maximum aggregate gross sales price of USD 75 million.
  • The company's total assets for the quarter reached USD 191.07 million as of June 30, 2023.
• Corporate Developments:
  • Gold Resource Corporation has announced the departure of Kimberly Perry from her role as Chief Financial Officer (CFO), a position she held since August 10, 2020.
  • Chet Holyoak, who has been serving as the Corporate Controller since July 2022 and is a certified public accountant, has been appointed as the Interim CFO.
  • The company reported ongoing positive drill results at the Don David Gold Mine.

Technical Observation (on the daily chart)

Presently, the stock has corrected by approximately 77.32% since reaching its highest point in the past 52 weeks, which occurred on January 26, 2023. The Relative Strength Index (RSI) over a 14-day period stands at 45.06, upward trending and recovering from oversold zone, with expectations of an upside movement. 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, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a “SPECULATIVE BUY” rating is recommended for Gold Resources Corp. (NYSE ARCA: GORO) at its current market price of USD 0.41 as on November 03, 2023, at 08:30 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 with 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 November 03, 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.

Disclaimer

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