Thursday, 28 June 2012

Gold Resource Corp says total dividends declared since July 2010 surpass IPO price

Gold Resource Corp (AMEX:GORO) declared Thursday what it called a "milestone" monthly dividend for June of 6 cents per common share.

The June dividend, which will be payable on July 23 to shareholders of record as of July 10, brings the total dividends declared since the company's start of commercial production in July 2010 to $1.01 per share.

This exceeds Gold Resource's IPO price of $1.00 per share, when the Mexico-focused gold producer went public in September 2006.

“As a shareholder focused precious metal producer, we are pleased to now have declared dividends exceeding our Initial Public Offering price,” said president Jason Reid.

"Those original shareholders still holding Gold Resource Corporation stock will have recouped their  original investment after the July 23rd pay date, underscoring the company’s ability to be both a growth equity and income equity."

In April, the company started to offer shareholders the option to convert their monthly cash dividends into physical gold and/or silver.

Gold Resource in May announced 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 year earlier.

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 per cent from $8.84 million in the first quarter of 2011.

CEO Bill Reid said on a conference call at the time 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 was for a third of the mine gross profit to be distributed through dividends by the end of 2012.

The company 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 producer said gold equivalent production hit a record 30,528 ounces in the first quarter, representing an increase of 308 per cent. 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 per cent for gold and 94 per cent for silver.

Net sales of metals concentrate amounted to $40.62 million, up from $11.28 million a year earlier.

The company stood by its 2012 production goal, targeting a range of 120,000 to 140,000 precious metal gold equivalent ounces.

The miner has a 100 per cent interest in six potential high-grade gold and silver properties in Mexico’s southern state of Oaxaca.

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