Gold Resource Corp posts record production in Q1, up 53% sequentially

Gold Resource Corp (AMEX:GORO) said Monday it has acheived record level production in the first quarter, up 53 percent from the previous three month period.

For the quarter that ended March 31, 2012, the gold producer made around 30,500 ounces of precious metal gold equivalent, an increase of 308 percent from the first quarter of 2011.

This was achieved with an 825 tonne per day average throughput, with increased long-hole stoping.

The US-based gold producer, which started production from its El Aguila project in Oaxaca, Mexico in July 2010, has paid 20 straight monthly dividends since declaring commercial production, totaling more than $43 million returned to shareholders.

The company also launched a gold and silver dividend program last month, which gives shareholders the option to convert their cash dividends into physical gold or silver.

Gold Resource Corp said its first quarter output is in line with its 2012 outlook for annual production of between 120,000 to 140,000 ounces of gold equivalent.

“We are pleased with the record production increase and will release the full financial results for the first quarter at the time we file our quarterly report on Form 10-Q with the Securities and Exchange Commission," said president Jason Reid in a statement Monday.

“The El Aguila Project and the hard work of its team members continue to impress management each month. First quarter record production sets a firm base from which to continue our growth trajectory of producing more low cost ounces.”

In March, Gold Resource Corp reported record annual results, with 2011 marking its first full year of production from its El Aguila operations in Mexico.

The gold company posted net income of $58.37 million, or $1.10 per share in the year to December 31, 2011, versus a loss of $23.07 million, or 46 cents per share in 2010.

El Aguila is located 120 kilometres southeast of the state capital city of Oaxaca, Mexico and has yielded several strong metal samples, including 36.0 grams per tonne (g/t) gold, and 3,100 g/t silver.

Last March, the company announced that it had begun the transition from processing lower grade, open pit ore, to processing underground ore from the high grade La Arista deposit at El Aguila.

Combined open pit and underground operations in 2011 yielded 66,159 ounces of gold equivalent production. This compares to the 10,493 gold equivalent ounces produced from the six months of open pit El Aguila operations in 2010.

As underground development continues, Gold Resource management said on a conference call in early March that it expects to mine more efficiently with greater tonnages and less dilution.

Cash costs in 2011 were $136 per ounce of gold equivalent, excluding royalty expense, 37 percent lower than $217 per ounce in the six month period in 2010.

This led to record annual revenue of more than $105 million in 2011 as the company realized much higher gold and silver prices for its combined operations of $1,596 per gold ounce, and $35 per silver ounce. Revenues in 2010 stood at $14.75 million.

The company's gross profit from the mine came in at $87.2 million, way up from $9.8 million the prior year.