Proactiveinvestors recommends
Additional Information
Market: NYSE AMEX
Sector: Gold Mining
EPIC: GORO
Gold Resource Corp
www.goldresourcecorp.com

Gold Resource Corporation is a mining company focused on production and pursuing development of select, high-grade gold and silver projects that feature low operation costs and produce high returns on capital. The Company has 100% interest in four high-grade gold and silver properties in Mexico's southern state of Oaxaca.

Full Gold Resource Corp profile here
Pdf

Gold Resource Corp posts first ever profit, improves El Aguila operations

11th May 2011, 2:45 pm by Deborah Sterescu
Gold Resource Corp posts first ever profit, improves El Aguila operations

Gold Resource Corp (AMEX:GORO) reported its first quarter results on Wednesday, posting its first ever profit and record revenue, as the company continues to ramp up operations at its El Aguila project in Oaxaca, Mexico.

For the first three months of 2011, the relatively new Denver-based gold producer, which began commercial output from El Aguila in July last year, recorded net income of $2 millon, or 4 cents per share. This compares to a net loss of $7.3 million, or 15 cents per share, in the year-ago period.

The company said the increase in earnings was a direct result of generating $11.3 million in record revenues from sales of metals concentrate.

During the quarter, the El Aguila project produced 7,479 ounces of gold equivalent at a cash cost of just $87 per ounce. This marks a significant improvement from the first six months of production, when the company generated 10,493 ounces of gold at a cash cost of $217 per ounce.

Gold was sold at a price of $1,373 per ounce in the first quarter, while silver sold at $34 per ounce, leading to a gross profit of $8.8 million from the mine.

"Our first-ever profitable quarter of $0.04 per share marks another milestone in the company's progress and underscores our potential at this early stage," said president Jason Reid.

Indeed, the company reaffirmed its target to produce 90,000 ounces of precious metal gold equivalent this year.

In 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 Arista deposit at El Aguila - well ahead of the original mid-year target.

La Arista is the company's largest deposit discovered to date at the project, and as Gold Resource continues to ramp up and improve operations, the deposit is expected to result in higher average grade ore, lower cash costs and greater output levels.

The company expects to achieve this through by-product credits in addition to gold and silver; flotation optimization is underway to produce three separate concentrates: gold-copper, a lead-silver, and a zinc concentrate.

In April, however, the Arista mine was hit by an anomalous storm that flooded lower levels, and caused some damage to equipment and to the mine, which is now undergoing repairs. Gold Resource Corp said the storm will delay development and mining by at least one month.

During the first quarter, the company's 2010 mill throughput rate from open pit mineralization averaged 829 tonnes per day, while averaging 501 tonnes per day from the underground ore.

The company said the underground ore processed came from development work, which dilutes average grade more than what is expected from the actual mining of the vein, which is due to start in the second quarter.

Since beginning production in July last year, Gold Resource Corp has paid its shareholders a $0.03 per share dividend each month using cash generated from the mine, and recently increased the dividend in April to $0.04 per share.

No investment advice

The Company is a publisher and is not registered with or authorised by the Financial Services Authority (FSA). You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.