Thursday, 18 October 2012

Gold Resource Corp appoints new GM for Oaxaca unit, reports 64% higher Q3 output

Gold Resource Corp (NYSE MKT: GORO) (AMEX:GORO) has appointed Jesus Rivera as general manager of its Mexican Oaxaca mining unit, which is responsible for its El Aguila project, the company said Thursday.  
Rivera, a mining and metallurgy engineer with a background in underground mining operations, is replacing Juan Manuel Flores, who has decided to pursue other interests, the company said. 
He joins the company from Yamana Gold, where he was operations manager for the Mercedes project in Sonora, Mexico, and has previously held positions from Farallon Mining and Genco Resources
The news follows Gold Resource Corp's announcement last night that it produced 64 per cent more gold equivalent ounces in the latest three month period than it did in the "less than optimal" previous quarter. 
The Mexico-focused gold producer reported its preliminary production results for the third quarter that ended September 30 late Wednesday, of around 22,300 ounces of precious metal gold equivalent. 
That is 64 per cent higher than the production of 14,488 gold equivalent ounces in the previous quarter, when the company saw some production challenges. 
The company, with operations in the southern state of Oaxaca, Mexico, has returned more than $63 million to shareholders in monthly dividends since declaring commercial production at its El Aguila mine in July 2010. It is also the first company, it noted, to offer shareholders the option to convert their cash dividends into physical gold or silver. 
During the third quarter, the company said a dispute arose with the buyer of its metal concentrates, regarding the resulting assays the buyer obtained from samples of concentrates. 
The buyer is now claiming net reductions to the company's provisional invoices of around 2,300 gold equivalent ounces, which is not reflected in Gold Resource's third quarter mill production of 22,300 ounces, it said. 
"We have made considerable progress regarding mine development, including ground water management, as seen by our increase in production over last quarter," said president Jason Reid in the statement. 
"Though we continued to mine some lower grade ore zones in the third quarter from splays and vein margins, our stopes between levels 7 through 10  allowed us to mine higher-grade ore zones during the quarter that we believe will further increase our production levels in future quarters.  
"We are currently focused on reducing dilution in our long hole stoping methods, implementing cut and fill mining in certain zones to minimize dilution and working to improve overall operational efficiencies."
As a result of the "near-term challenge" of dilution for the remainder of the year, the company revised its 2012 production outlook down to a range of 85,000 to 100,000 gold equivalent ounces. 
This is down from the already revised production outlook of 100,000 to 120,000 ounces announced in the second quarter, when infrastructure requirements slowed the development of high grade zones at its underground La Arista deposit.
The company has previously said that achieving 100,000 ounces of output for the year would still represent a 50 per cent increase over last year's production.
"Mr. Rivera’s extensive experience and strong background in underground mine operations makes him ideally suited for general manager of our El Aguila Project and specifically our underground Arista Deposit,” said Reid in the statement today. 
“The company will continue to build and expand its professional team at the El Aguila Project as it targets significant increases in production from its underground Arista mine in the coming quarters."
Indeed, in addition to the general manager appointment, the company has recently hired a mill manager, an underground mine manager, a maintenance manager and a safety manager - to which the company attributes the increased production in the latest quarter. 
Full financial results from the company's third quarter will be available when it files its quarterly report with the SEC. 

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