Gold Resource Corp. (AMEX:GORO) late Thursday reported preliminary results from a resource estimate compiled from drilling data at its underground La Arista vein system at the El Aguila project in Mexico.
Measured and indicated resources, over a 10-year mine life, include approximately 1.4 million gold equivalent ounces at a 1 gram gold equivalent cutoff from 4.4 million tonnes grading 2.13 grams per tonne (g/t) gold, 212 g/t silver, 0.32% copper, 1.23% lead and 4.11% zinc.
The US-based gold producer, which started production from its El Aguila project in Oaxaca, Mexico in July 2010, has paid 20 straight monthly dividends since, totaling more than $43 million returned to shareholders.
In March of last year, the company announced that it had begun the transition from processing lower grade, open pit ore, to processing underground ore from the high grade La Arista deposit at El Aguila.
"We are pleased with the preliminary results of this independent study of our drilling as the analysis confirms the high-grade nature of our deposit at La Arista," Gold Resource Corp.'s CEO William Reid said.
"This study was effectively performed over the same area as our original internal analysis, which was used to make our decision to proceed with construction of the underground mine and to commence mineral production.
"This independent analysis required application of certain constraints and restrictions that we believe make it a more conservative estimate than our original internal estimates.
"Though the preliminary independent estimate and our internal estimates were formulated using different parameters, each provides its own important insights while verifying our high-grade vein system."
The El Aguila project is located 120 kilometres southeast of the capital city of Oaxaca, Mexico and is a significant, newly discovered high-grade gold and silver system.
Gold Resource said that the preliminary results also appear to indicate the existence of several additional veins which need to be explored, preferably by more drilling, crosscutting and drifting and mining.
The company's exploration drilling is now focused on expansion of the Arista deposit, which remains open at both depth and along strike extensions. Currently, three underground and two surface drill rigs continue mine development and exploration of the Arista deposit.
Over a 5-year mine life, measured and indicated resources include approximately 1.2 million gold equivalent ounces at a 7 gram gold equivalent cutoff from 2.3 million tonnes grading 3.64 g/t gold, 350 g/t silver, 0.44% copper, 1.89% lead and 5.9% zinc.
Over a 4 year mine life at La Arista, measured and indicated resources include approximately 1.05 million gold equivalent ounces at a 9 gram gold equivalent cutoff from 1.7 million tonnes grading 4.49 g/t gold, 424 g/t silver, 0.5% copper, 2.16% lead and 6.08% zinc.
"The purpose of any estimate is to predict what will be mined. High-grade vein deposits can be difficult to model and to estimate as the variations of metal content between drill holes can be great and therefore may not be fully represented in the model.
"The ultimate sample of course is mining the deposit. What we have seen from 13 months of actual mining confirms our belief in this high-grade deposit."
In a conference call, Gold Resource Corp.'s CEO William Reid said the resource estimate was "not yet finalized" and that the
preliminary results would be "very close" to the final results.
"I'm very pleased with the numbers that still show we have a high-grade deposit."
Gold Resource's President Jason Reid added that there was still "potential for a secondary listing" and the company was evaluating the venue for the additional listing.
The company said that weighted average grades after 13 months of production gave a gold equivalent of 0.41 ounces per tonne from 242,014 tonnes grading 3.7 g/t gold, 457 g/t silver, 0.47% copper, 1.42% lead and 3.07% zinc.
Gold Resource's own 2009 internal estimates gave a gold equivalent of 0.53 ounces per tonne from 2.96 million tonnes grading 6.5 g/t gold, 506 g/t silver, 0.60% copper, 2.24% lead and 6.75% zinc.
"While we know that estimates have their limitations, which may be amplified for high-grade deposits, the important point is that all these estimates appear to confirm, and the mining to date substantiates our high-grade deposit," Reid said.
For the quarter that ended March 31, 2012, the gold producer made around 30,500 ounces of precious metal gold equivalent from El Aguila, an increase of 308 percent from the first quarter of 2011.
Gold Resource Corp also said earlier this month that its first quarter output was in line with its 2012 outlook for annual production of between 120,000 to 140,000 ounces of gold equivalent.
The NI 43-101 estimate for La Arista was prepared by the Denver engineering firm of Pincock, Allen & Holt. Full details of the estimate can be found at: http://www.goldresourcecorp.com