Gold Resource Corp (NYSE MKT: GORO) announced Thursday third quarter results, reporting a 54 per cent increase in gold equivalent production over the prior quarter, when the company saw some production challenges.
“Our 54% increase in third quarter production was the result of overcoming many challenges including increasing water, increasing CO2 gas and mine development hurdles,” said Gold Resource president, Jason Reid.
“We continued to upgrade our management team which I believe was in large part the reason behind the increase in production."
Indeed, earlier this week, the company hired Barry Devlin as its new VP of exploration, who has 31 years of professional experience in managerial phases of exploration and mine geology, with responsibilities including reserve calculations, mine development planning and grade control.
It also appointed Jesus Rivera as general manager of its Mexican Oaxaca mining unit, which is responsible for its El Aguila project, in October.
"The positive takeaway from the quarter should include increased production, continued profitability, lowered total cash costs, and returning $9.5 million in dividends to the owners of the company," continued Reid.
The Mexico-focused gold producer said that for the third quarter that ended September 30 it produced 22,336 ounces of precious metal gold equivalent, up from 14,488 ounces in the previous quarter.
Production was down year-over-year, however, from 25,289 ounces a year ago.
The company said it sold 18,059 ounces of gold equivalent at a higher year-over-year total cash cost of $459 per gold equivalent ounce, and generated $23.8 million in gross profit from its mine, down from $29.9 million a year ago.
Net income was $7.3 million, or 13 cents per diluted share, compared to $15.2 million, or 27 cents per share a year earlier. Revenues totalled $36.5 million, versus $37.78 million in the third quarter last year.
The company realized higher average gold prices at $1,769 an ounce, compared to $1,702 an ounce in the same period last year, offsetting the decline in year-over-year production.
Gold Resource Corp noted it has returned more than $63 million to shareholders in monthly dividends since starting commercial production at its El Aguila mine in July 2010, and is the first company to offer stakeholders the option to convert their cash dividends into physical gold or silver.
Last week, the company reached a settlement in a dispute with its concentrate buyer. In October, it said that a dispute arose with the buyer of its metal concentrates, regarding the resulting assays the buyer obtained from samples of concentrates.
To mitigate any potential future issues concerning the sampling and assaying process of its shipments, Gold Resource has instituted additional security, including using its own representatives to accompany and remain with all shipments until samples of the concentrates have been obtained at the buyer’s concentrate yard to ensure chain of custody and proper sampling.
The gold producer has a 2012 production outlook of a range of 85,000 to 100,000 gold equivalent ounces, with $6.6 million of physical gold and silver in its treasury.
Gold Resource Corp. has 100-per-cent interest in four high-grade gold and silver properties in Mexico's southern state of Oaxaca.
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