Goldgroup Mining Inc.

Gold Resource reported nearly $44 million in net sales in Q1 2026, mining gross profit of $19 million, net income of $4.7 million, and EPS of $0.03. Cash ended the quarter at $31 million. Cash cost was $2,164 per gold equivalent ounce and all-in sustaining costs were $3,476 per gold equivalent ounce, both above long-term targets but trending lower, according to management. On operations, management said Don David was running roughly 70% cut-and-fill stopes, dilution fell to about 12% from as high as 45% under long-hole mining, and Alta Gracia was restarted with output currently around 1,500 tonnes per month, expected to rise to 3,000 tonnes per month in Q3 and 5,000 tonnes per month by year-end. For the merger, Allen Palmiere said Gold Resource and Gold Group together could reach a pro forma run rate of greater than 100,000 ounces of gold equivalent within 12 months, with more than 50,000 meters of drilling planned this year.

Allen Palmiere framed the quarter as a turning point, saying the company achieved positive net income for the first time since 2021 and calling it a milestone built on operational improvement and a strong commodity backdrop. He focused on operational changes, especially the shift to cut-and-fill mining to reduce dilution and support better grades, and said infrastructure and development work is being done to sustain production and recoveries. He was also highly constructive on the Gold Group transaction, describing it as a way to build a larger, more diversified company with more scale, more flexibility, and less dependence on a single operation.

Chet Holyoak highlighted the financial progress: $31 million in cash at quarter-end, nearly $44 million in net sales, $19 million in mining gross profit, and $4.7 million of net income, or $0.03 per share. He said cash costs of $2,164 per gold equivalent ounce and AISC of $3,476 were still above long-term targets but moving down as management’s actions take effect. He also pointed to continued spending on underground development and exploration, including about $3.8 million in underground development, more than $600,000 in infill drilling, and nearly $900,000 in underground exploration development.

Analysts focused on why AISC rose, whether grades could continue improving, the scope of the planned 50,000 meters of drilling, and whether the 100,000-ounce target was corporate-wide. Management said the AISC increase was mainly due to about two weeks of lost production from a union-related blockade and safety-related portal work, plus heavy development spending at Don David and Alta Gracia. On drilling, Allen said the 70,000-meter total he referenced includes 50,000 meters of exploration and 20,000 meters of definition drilling at Don David, split across Cerro Prieto, San Francisco, and Don David. Questions also centered on equipment condition and Mexican security risk; management said it is replacing and refurbishing equipment, adding a third filter press, and believes Sonora remains relatively stable with strong local relationships, including a long-tenured Mexican team.