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Fortitude Gold Reports Third Quarter Net Income of $4.6M or $0.19 Per Share

COLORADO SPRINGS – November 2, 2021 - Fortitude Gold Corp. (OTCQB: FTCO) (the “Company”) reported production and financial results for the third quarter ended September 30, 2021 of 11,478 ounces of gold produced at $793 per ounce all-in sustaining cost, $20.4 million net sales, and a $16.6 million increase to its treasury to $44.3 million from December 31, 2020.  Fortitude Gold is a gold producer, developer, and explorer with operations in Nevada, U.S.A.

Q3 2021 FINANCIAL RESULTS AND HIGHLIGHTS

Overview of Q3 2021 Results

Fortitude Gold sold 11,454 gold ounces at a total cash cost of $624 per ounce (after by-product credits). Realized metal prices during the quarter averaged $1,789 per ounce gold*.  The Company recorded net income of $4.6 million, or $0.19 per share.  Cash and cash equivalents at quarter end totaled $44.3 million. The Company produced 11,478 ounces of gold during the quarter and maintains its 2021 upper range gold production Outlook of 45,000 gold 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 Isabella Pearl mine delivered another strong production quarter with 11,478 low-cost gold ounces keeping us on target to reach the high end of our 2021 production outlook range. Other third quarter highlights included net income of $4.6 million, a record cash balance of $44.3 million and a 16.7% dividend increase to $0.42 annually.  This solid third quarter, following an exceptional 2021 first half, allowed the Company to increase its dividend in October, for a third time this year, to $0.04 per month, or $0.48 per year.  We are pleased to be executing our strategic business strategy, outperforming our industry peers on year-to-date valuations and we are proud to be one of the few junior producers delivering substantial dividends to shareholders.”

Mr. Reid continued, “Exploration during the quarter included a positive second round of drill results at the Scarlet target located on the Isabella Pearl property, as well as the Company’s largest infill drill program to date at our Golden Mile property.  We continue to target an initial resource at Golden Mile in 2021, with the goal to move the project towards a production decision at the earliest possible time.  Column leach tests for Golden Mile mineralization were released during the third quarter estimating 85% gold recovery.  We also received our permit to expand the heap leach pad at the Isabella Pearl project in July and began construction activities during the quarter with pad completion expected early 2022.  We are excited to be a profitable gold producer in the Walker Lane Mineral Belt, with a stellar portfolio of 100% owned properties. We look forward to moving closer to building our second mine in Nevada, U.S.A, arguably the world’s premier mining jurisdiction.”

The following Production Statistics table summarizes certain information about our Isabella Pearl Mine for three and nine months ended September 30, 2021 and 2020:

                 
                       
    Three months ended September 30,    Nine months ended September 30, 
       2021      2020      2021      2020
Ore mined                    
Ore (tonnes)    139,950    188,048    454,679    490,620
Gold grade (g/t)    1.42    2.02    4.52    1.60
Low-grade stockpile                    
Ore (tonnes)    8,600    51,977    8,600    70,467
Gold grade (g/t)    0.33    0.50    0.33    0.52
Pre-strip waste    —    —    —    1,346,316
Waste (tonnes)    1,838,027    1,437,429    4,894,937    3,597,770
Metal production (before payable metal deductions)(1)                    
Gold (ozs.)    11,478    7,847    37,593    16,747
Silver (ozs.)    16,467    9,169    33,643    20,154

The following Sales Statistics table summarizes certain information about our Isabella Pearl Mine for three and nine months ended September 30, 2021 and 2020:

                         
                               
    Three months ended September 30,    Nine months ended September 30, 
       2021      2020      2021      2020
Metal sold                            
Gold (ozs.)      11,454      8,396      37,436      17,205
Silver (ozs.)      16,330      9,616      33,171      21,046
Average metal prices realized (1)                            
Gold ($per oz.)      1,789      1,901      1,796      1,773
Silver ($per oz.)      23.98      24.02      25.14      19.86
Precious metal gold equivalent ounces sold                        
Gold Ounces      11,454      8,396      37,436      17,205
Gold Equivalent Ounces from Silver      219      122      464      236
       11,673      8,518      37,900      17,441
                         
Total cash cost before by-product credits per gold ounce sold   $  658   $  963   $  596   $  1,182
Total cash cost after by-product credits per gold ounce sold   $  624   $  935   $  574   $  1,158
Total all-in sustaining cost per gold ounce sold   $  793   $  945   $  663   $  1,191
 


See Accompanying Tables

The following information summarizes the results of operations for Fortitude Gold Corporation for the three and nine months ended September 30, 2021 and 2020, its financial condition at September 30, 2021 and December 31, 2020, and its cash flows for the nine months ended September 30, 2021 and 2020. The summary data as of September 30, 2021 and for the three and nine months ended September 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)

             
    September 30,    December 31, 
       2021      2020
    (Unaudited)       
ASSETS              
Current assets:              
Cash and cash equivalents   $  44,337   $  27,774
Accounts receivable      1,628      145
Inventories      33,012      23,051
Prepaid expenses and other current assets      2,305      1,962
Total current assets      81,282      52,932
Property, plant and mine development, net      37,531      50,990
Operating lease assets, net      220      6,198
Deferred tax assets      1,099      959
Other non-current assets      2,947      1,946
Total assets   $  123,079   $  113,025
LIABILITIES AND SHAREHOLDERS' EQUITY              
Current liabilities:              
Accounts payable   $  2,982   $  1,715
Loans payable, current      101      665
Finance lease liabilities, current      78      398
Operating lease liabilities, current      220      6,198
Mining taxes payable      1,153      1,001
Other current liabilities      1,212      1,092
Total current liabilities      5,746      11,069
Asset retirement obligations      4,483      3,844
Loans payable, long-term      52      117
Finance lease liabilities, long-term      19      27
Total liabilities      10,300      15,057
Shareholders' equity:              
Preferred stock - $0.01 par value, 20,000,000 shares authorized and nil outstanding at September 30, 2021 and December 31, 2020      —      —
Common stock - $0.01 par value, 200,000,000 shares authorized and 23,961,208 shares outstanding at September 30, 2021 and 21,211,208 shares outstanding at December 31, 2020      240      212
Additional paid-in capital      103,517      99,682
Retained earnings (accumulated deficit)      9,022      (1,926)
Total shareholders' equity      112,779      97,968
Total liabilities and shareholders' equity   $  123,079   $  113,025
 

FORTITUDE GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS

For the three and nine months ended September 30, 2021 and 2020
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)

                           
       Three months ended   Nine months ended  
    September 30,    September 30,   
       2021      2020      2021      2020  
Sales, net   $  20,422   $  15,851   $  66,979   $  30,284  
Mine cost of sales:                             
Production costs      7,075      7,741      21,219      19,698  
Depreciation and amortization      3,668      2,949      11,953      6,157  
Reclamation and remediation      40      24      116      17  
Total mine cost of sales      10,783      10,714      33,288      25,872  
Mine gross profit      9,639      5,137      33,691      4,412  
Costs and expenses:                             
General and administrative expenses      1,378      593      8,723      1,781  
Exploration expenses      2,023      780      4,380      1,373  
Other expense, net      48      62      132      172  
Total costs and expenses      3,449      1,435      13,235      3,326  
Income before income and mining taxes      6,190      3,702      20,456      1,086  
Mining and income tax expense      1,544      225      5,075      675  
Net income   $  4,646   $  3,477   $  15,381   $  411  
Net income per common share:                              
Basic   $  0.19   $  348   $  0.64   $  41  
Diluted   $  0.19   $  348   $  0.64   $  41  
Weighted average shares outstanding:                              
Basic      23,961,208      10,000      23,846,686      10,000  
Diluted      24,211,606      10,000      24,078,226      10,000  
 

FORTITUDE GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine months ended September 30, 2021 and 2020
(U.S. dollars in thousands)
(Unaudited)

             
    Nine months ended
    September 30, 
       2021      2020
Cash flows from operating activities:              
Net income   $  15,381   $  411
Adjustments to reconcile net income to net cash from operating activities:              
Depreciation and amortization      12,045      6,263
Stock-based compensation      3,363      —
Deferred taxes      (140)      —
Other operating adjustments      28      16
Changes in operating assets and liabilities:              
Accounts receivable      (1,483)      (1,599)
Inventories      (6,318)      (2,662)
Prepaid expenses and other current assets      (343)      (17)
Other non-current assets      (19)      (1,304)
Accounts payable and other accrued liabilities      555      958
Income and mining taxes payable      153      675
Net cash provided by operating activities      23,222      2,741
             
Cash flows from investing activities:              
Capital expenditures      (1,753)      (6,368)
Net cash used in investing activities      (1,753)      (6,368)
             
Cash flows from financing activities:              
Contributions from GRC      —      10,567
Dividends paid      (4,433)      —
Issuance of common stock      500      —
Repayment of loans payable      (629)      (656)
Repayment of capital leases      (344)      (326)
Net cash (used in) provided by financing activities      (4,906)      9,585
             
Net increase in cash and cash equivalents      16,563      5,958
Cash and cash equivalents at beginning of period      27,774      866
Cash and cash equivalents at end of period   $  44,337   $  6,824
             
Supplemental Cash Flow Information              
Interest expense paid   $  24   $  72
Income and mining taxes paid   $  5,063   $  —
Non-cash investing and financing activities:              
Change in capital expenditures in accounts payable   $  1,132   $  (1,532)
Change in estimate for asset retirement costs   $  499   $  1,404
Stock contributed from Parent   $  —   $  100
Equipment purchased under finance lease   $  16   $  —

About Fortitude Gold Corp.:

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

 

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