Mexico-focused Gold Resource Corp (AMEX:GORO) confirmed Wednesday that it saw record mineral production in its second quarter, with full results anticipated shortly.
"I am pleased and proud to report that the company’s second quarter will reflect record mineral production, revenue and earnings after achieving its first profitable quarter as a mining company during the first quarter of 2011," said president Jason Reid.
Indeed, in early May, the relatively new gold producer posted its first ever profit and record revenue, as it continues to ramp up operations at its El Aguila project in Oaxaca, Mexico, which began commercial production in July last year.
For the first three months of 2011, the Denver-based company 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. It also made a gross profit of $8.8 million directly from the mine.
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.
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.
Impacts from a severe storm back in April, which affected the underground La Arista mine, have now been mitigated and cleaned up, the company said late last month.
Since beginning production at El Aguila 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. The total dividends declared since production now stands at $0.39 per share.
Last month, the gold producer added a sixth property of over 100 square miles to its Oaxaca mining unit, which includes El Aguila, as well as other exploration assets.