Gold Resource announces $20 million share buyback program

Gold Resource Corp (AMEX:GORO) announced Tuesday its board of directors has approved a $20 million share repurchase program.
The plan, to be effective immediately, is an attempt to improve the company's share price, which it claims is undervalued. Shares of Gold Resource hiked 7.04% as of 1:58 pm EDT to $20.07 on the Amex Exchange.
Gold Resource said it can repurchase the shares in open market transactions at prevailing market prices. The amount of repurchase and timing of the buy back is to be determined by management based on its evaluation of market conditions, among other factors, it added.
The company also said the program has no pre-established closing date, and may be suspended or discontinued at any time.
"Management believes that at current price levels the company's stock is undervalued and represents an attractive investment opportunity . . . in addition to an opportunity to further reduce its already tight capital structure," said president Jason Reid.
"With only fifty-three million shares outstanding as a producer, in an industry where most producers have hundreds of millions of shares outstanding, this share buyback may further leverage our ability to distribute out meaningful monthly future dividends."
Since declaring commercial production in July 2010 at its El Aguila project in Mexico, Gold Resource has returned over $25 million to shareholders via monthly dividends.