Roth Capital Partners repeated a Buy rating on miner Gold Resource Corporation (NYSEAMERICAN:GORO) after the company expanded mineralization at its Mirador mine in Mexico with this year's drilling.
The metals producer has operations in Oaxaca, Mexico and Nevada, and has returned $112 million to shareholders in monthly dividends since commercial production kicked off in 2010.
"....the company is successfully employing a mine-and-replace strategy at its Mexico Unit. Given this, we expect 2019 production to be replaced in the next reserve update, which we expect to be released in 1H20," said Roth analyst Jake Sekelsky in a note.
The Alta Gracia project, which hosts the Mirador mine, lies around 16 km north-west of the firm's Aguila project and processing plant.
Sekelskly highlighted that this year's exploration by GORO and the drill assays it received substantiated Roth's view that the Mexico business hosts 'significant exploration upside'.
The analyst also noted the group's commitment to returning capital to shareholders, noting that following commercial production at the Isabella Pearl mine in Nevada, it announced a 100% increase in its annualized dividend to $0.04 per share from $0.02 a share.
"Although the company has already increased its dividend by 100% this year, we believe the potential for further dividend increases remains on the back of sustained higher gold prices and Isabella Pearl reaching steady state production in 2020," said Sekelsky.
The price target is US$6.75 a share, compared to a current price of US$5.12 each.
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