Gold Resource Corp (NYSE MKT:GORO) has posted its preliminary production results for last year, achieving record full year output for 2012 that rose 37% over the prior year.
For 2012, the low-cost gold and silver producer with operations in Oaxaca, Mexico, produced 90,432 ounces of gold equivalent, up 37% from 2011. The latest figure included 23,783 ounces in the fourth quarter, up from 22,336 ounces in the third quarter.
“During 2012, we faced various challenges inherent in the mining business and are pleased to have produced 90,432 precious metal gold equivalent ounces, marking a new record in annual production for the company as we achieved a 37% increase over last year’s production,” said president Jason Reid, in a statement late Thursday.
Indeed, challenges last year included increasing water, increasing CO2 gas and mine development hurdles.
Looking ahead, the company set its production range for 2013 between 80,000 and 100,000 ounces of gold equivalent, which at the high end would be an increase of around 11% over 2012 figures.
Gold Resource Corp said the target range was set based on the company’s 2013 mine plan, as well as the area of the deposit scheduled to be mined during the upcoming year, and the planned mill expansion goals, with associated down time for construction.
The silver and gold producer views 2013 as a significant development year for both its mine and mill upgrades.
Its expected mine development of the Arista deposit to the southeast at its El Aguila project is projected to provide the ore for production this year, as well as to position the company to target higher grade ore shoots further southeast in 2014.
The company also plans to upgrade its El Aguila mill, as it has done over the past two years. This year, it is intending to increase the flotation mill capacity to a nominal 1,500 tonnes per day of throughput, the company said, and has already contracted an engineering firm to complete the upgrades.
Planned upgrades include the addition of an other ball mill to the grinding circuit, thickener surge tanks, and additional float cell capacity, as it targets increased production by the middle of this year and into 2014.
The miner cautioned that although it does not plan to shut the flotation mill down for extended periods of time, construction will periodically impact daily production.
“We look forward to the 2013 production year, mine development and mill upgrades and believe our new management team is well-suited to meet the challenges ahead," added Reid.
Last year, the company made a series of management appointments, including the hiring of a new VP of exploration, and a general manager of its Mexican Oaxaca mining unit, which is responsible for the El Aguila project.
Earlier this month, the company revealed high gold and silver grades at its Las Margaritas property in Mexico, saying the results confirmed mineralization at depth and bolstered the company's confidence in the mineralized trend.
The company said it believes it may be the first to ever drill the prospective high grade Las Margaritas property, which historically was mined on a small scale prior to the 1910 Mexican Revolution, and has mostly remained dormant since.
Gold Resource Corp added the property to its portfolio as it consolidated land along the structural corridor in this region. As with all six of its Oaxaca, Mexico properties, the company is targeting additional deposit discoveries at Las Margaritas where high-grade ore could be trucked to its strategically located mill at its El Aguila project.
Its strategy is to bring multiple properties within trucking distance online to feed ore to the mill, keeping capital costs to a minimum and maximizing head grades processed through the mill. The company said the Las Margaritas gold and silver mineralization could be processed through El Aguila's agitated leach circuit, which would add to its current production from the flotation circuit.
The company, which has returned over $69 million to shareholders in monthly dividends since declaring commercial production in July 2010, said full financial results for the fourth quarter and fiscal year 2012 will be available in its annual report.
Gold Resource also offers shareholders the option to convert their cash dividends into physical gold and silver.