Gold Resource Corp (AMEX:GORO) announced late Thursday record results for its first quarter that it said set a "strong base" for the company, with gold equivalent production quadrupling year-over-year and mine gross profit more than tripling.
For the three months to March 31, the US-based gold
producer recorded net income of $16.1 million, or 29 cents per diluted
share, versus a profit of $2.03 million, or 4 cents per diluted share, a
Gross profit from the company's El Aguila mine in
Oaxaca, Mexico, which started commercial production in July 2010,
totalled $33.7 million, up 281 percent from $8.84 million in the first
quarter of 2011.
CEO Bill Reid said on a conference call this morning that the
significance of the mine gross profit is that the company can decide
where that money is allocated, like with dividends for example. The
company's aim is for a third of the mine gross profit to be distributed
through dividends by the end of 2012.
The company said it paid $7.9 million to shareholders in dividends
for the quarter, or 15 cents per share, and converted $2.9 million of
its treasury into physical gold and silver.
The gold company has declared over $47 million in dividends since starting commercial production in July 2010. In April, Gold Resource Corp
successfully launched a program where shareholders have the option to
convert their cash dividends to physical gold and/or silver.
gold producer said gold equivalent production hit a record 30,528 ounces
in the first quarter, representing an increase of 308 percent. It
milled 75,078 tonnes during the first quarter, at a grade of 4.27 grams
per tonne (g/t) of gold and 483 g/t silver, with average recoveries of
89 percent for gold and 94 percent for silver.
CEO Reed said the company is focused on ramping up its production
rate to a 900 tonnes per day average by the end of 2012, seeing 825
tonnes per day in the first quarter. It is also focused on optimizing
the mill to increase recoveries.
The company produced the gold
at a total cash cost of $191 per ounce of gold equivalent in the
quarter, including a 5 percent royalty, and realized average prices of
$1,740 per ounce of gold and $34 per ounce of silver. Excluding
royalties, total cash cost was $131 per ounce of gold equivalent.
Net sales of metals concentrate amounted to $40.62 million, up from $11.28 million a year earlier.
first quarter set a strong base for the company with record production,
record revenues and dividends of $7.9 million while focusing on
aggressive growth,” said Gold Resource Corp president Jason Reid.
“We maintain our 2012 production goal, targeting a range of 120,000 to 140,000 precious metal gold equivalent ounces.”
Total costs and expenses during the period came in at $8.34 million, versus $6.69 million in the year ago quarter.
Operating income was $25.35 million, compared to $2.15 million in the first quarter of 2011.
The company ended the quarter with $44.0 million in cash and equivalents.
Last month, Gold Resource Corp
reported preliminary results from a resource estimate compiled from
drilling data at its underground La Arista vein system at the El Aguila
Measured and indicated resources, over a 10-year mine
life, include approximately 1.4 million gold equivalent ounces at a 1
gram gold equivalent cutoff from 4.4 million tonnes grading 2.13 grams
per tonne (g/t) gold, 212 g/t silver, 0.32% copper, 1.23% lead and 4.11%
In March of last year, 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
The El Aguila project is located 120 kilometres southeast
of the capital city of Oaxaca, Mexico and is a newly discovered
high-grade gold and silver system.
While underground mine
development remains a first priority, the company has also stepped up
expansion drilling of the Arista deposit, which remains open at both
depth and along strike extensions.
Currently, three underground and two surface drill rigs continue mine development and exploration of the Arista deposit.
The company has 100 percent interest in six potential high-grade gold and silver properties in Mexico's southern state of Oaxaca