Gold Resource Corporation (NYSEAMERICAN:GORO), the precious metals miner, has reached commercial production at its Isabella Pearl gold mine in Nevada, just 16 months after breaking ground at the site.
Gold output has been ramping up at the mine since the first dore bar was produced in late April this year, while September production totaled more than 2,000 ounces of the yellow metal, the firm said, which means it reached positive operational cash flow during the month.
READ: Gold Resource Corp looking to shine this year as Isabella Pearl poised to add near term production
"I am very excited that during the month of September the Isabella Pearl mine moved into a phase where mining and processing rates and ore placement are now expected to generate positive cash flow on a consistent basis," noted Jason Reid, the chief executive and president of Gold Resource Corp.
"This is a milestone for any mining project and should have a significant impact on the company’s overall revenues and net income moving forward."
It is still early in Isabella Pearl's ramp-up phase, but 2,000 ounces of monthly gold production is expected to continue generating positive cash flow by covering operational costs at the project, assuming a gold price of $1,450 per ounce.
GORO said it plans to update its 2019 global gold production outlook in the upcoming third-quarter announcement to include estimated gold ounces targeted from Isabella Pearl for the fourth quarter, while its annual production outlook for 2020 for both Mexico and Nevada will be released early next year.
Construction of the Nevada mine's ADR (adsorption, desorption,regeneration) process facility is complete with final commissioning taking place over the next several weeks to enable on-site dore production, GORO said in the statement, while off-site processing of the gold infused carbon into dore will continue until the on-site facility is optimized.
Pleased with progress
Reid highlighted how pleased he was with progress at the Isabella Pearl mine and said with the positive cash flow development, he believes the company was "very close" to potentially lifting the shareholder dividend.
He added that the miner's “at-the-market” ATM facility used to help finance the project’s completion was still in place and is expected to remain in place to give options to GORO if and when needed.
"I am pleased to report the company has not used the ATM since July 30, 2019. While the company reserves the right to further utilize the ATM, we currently do not foresee the need to do so," he said.
GORO has returned US$112 million back to its shareholders in consecutive monthly dividends since July 2010 and offers shareholders the option to convert cash dividends into physical gold and silver.
Shares surged 8.70% in early New York trade to stand at US$3.50 each.
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