Gold Resource Corporation (NYSE MKT:GORO) is a gold producer targeting projects that feature low operating costs and high returns on capital. The Company's primary focus is on cash flow, with a priority to return meaningful dividends back to the owners of the Company, its shareholders. The Company's "Oaxaca Mining Unit" consists of 100% interest in 6 potential high-grade gold and silver properties in the southern state of Oaxaca, Mexico.
Gold Resource Corp (AMEX:GORO) unveiled Monday the launch of its new gold and silver dividend program - set to start April 10, 2012.
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 declaring commercial production, totaling more than $41 million returned to shareholders.
The default company dividend will continue to be in cash, Gold Resource said, but the gold and silver dividend will allow shareholders the ability to convert their cash dividends into physical gold and/or silver.
Shareholders can establish an “individual bullion account”, whereby cash dividends are converted into Gold Resource Corp “Double Eagle” one ounce .999 fine gold and/or one ounce .999 fine silver rounds, the company said.
"A convenient and simple way of delivering precious metal dividends to shareholders has been a long-term goal of the company,” said president Jason Reid.
Gold Bullion International (GBI), a provider of institutional precious metals to individual investors and the wealth management industry, is facilitating the conversion of the company's cash dividend to physical bullion.
Gold Resource Corp will direct GBI to draw gold and silver Gold Resource Corp Double Eagles from the company’s minted physical treasury and distribute the precious metals as directed by shareholders.
"With innovative assistance from Gold Bullion International, management of Gold Resource Corporation is pleased and excited to announce the launch of the company’s gold and silver dividend program, a dividend program unlike any other known program offered of its kind," continued Reid.
The program will allow shareholders to fully manage their cash dividend conversions into gold, silver, or a desired percentage of each metal. After conversion, investors can choose to store their physical metals within GBI’s fully insured and audited storage facilities, for a nominal fee, take direct delivery of their precious metals, or direct the shipping of the metals to a vault of their choice, the company said.
The conversion date and price will be set at the London PM Fix on the company’s record date of dividend distribution, which is announced with each declaration of distribution.
Shareholders must direct their individual bullion account for desired gold and silver allocation by midnight EST the day before the record date. Once the cash to physical conversion takes place, distribution of the gold and silver occurs on the dividend pay date.
Those choosing not to participate in the program will continue to receive cash dividends as usual, the company said.
For further specifics on the new plans, please refer to this link: http://www.goldresourcecorp.com/gold-silver-dividends.php.pdf
"By offering cash to precious metal conversion at the London PM Fix, without adding a premium above the company’s own minting cost, the company strives to offer its shareholders a competitive and attractive option for direct physical gold and silver ownership," Gold Resource Corp said in Monday's statement.
Reid concluded: "Gold Resource Corporation provides premier precious metal exposure with an aggressive production growth profile of low cost ounces, growing cash and physical precious metal treasury, high-grade exploration prospects, distribution of a monthly dividend and in April 2012 another major milestone for the company is being set as we prepare to launch the option for shareholders to receive gold and silver dividends.”
Earlier this month, Gold Resource Corp reported record annual results, with 2011 marking its first full year of production from its El Aguila operations in Mexico.
The gold company posted net income of $58.37 million, or $1.10 per share in the year to December 31, 2011, versus a loss of $23.07 million, or 46 cents per share in 2010.
El Aguila is located 120 kilometres southeast of the state capital city of Oaxaca, Mexico and has yielded several strong metal samples, including 36.0 grams per tonne (g/t) gold, and 3,100 g/t silver.
Last 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 La Arista deposit at El Aguila.
Combined open pit and underground operations in 2011 yielded 66,159 ounces of gold equivalent production. This compares to the 10,493 gold equivalent ounces produced from the six months of open pit El Aguila operations in 2010.
As underground development continues, Gold Resource management said on a conference call early this month that it expects to mine more efficiently with greater tonnages and less dilution.
Cash costs in 2011 were $136 per ounce of gold equivalent, excluding royalty expense, 37 percent lower than $217 per ounce in the six month period in 2010.
This led to record annual revenue of more than $105 million in 2011 as the company realized much higher gold and silver prices for its combined operations of $1,596 per gold ounce, and $35 per silver ounce. Revenues in 2010 stood at $14.75 million.
The company's gross profit from the mine came in at $87.2 million, way up from $9.8 million the prior year.