Artikel über GORO auf mineweb von Lawrence Williams
Gold Resource Corp's El Aguilar mine to pay back capital in six months
An ultra low cost gold producer which proposes to expand through utilisation of its own cashflow has four good potential high grade properties in southern Mexico.
Sitting in the audience at the inaugural Global Capital Forum, focusing on gold and silver in London it was encouraging to hear a speaker opening his presentation with the expression of his strong belief (and Mineweb's own frequently expressed viewpoint) that gold primarily moves in inverse ratio to the dollar in a period of controlled (or perhaps even uncontrolled) decline. This view was expressed by Bill Reid, CEO of Gold Resource Corporation a junior gold miner with a bit of a different take on gold mining, and managed by people who have done it all before - very successfully.
Gold Resource Corporation is an OTC bulletin board and Frankfurt Stock Exchange quoted operator with four potential high grade gold properties in the southern Mexican state of Oaxaca and the first of these, El Aguilar, is being brought into production with first output planned for the end of the current year.
Nothing unusual about that, but this milestone is likely to be achieved inside a year, and the resultant mine and plant is geared towards producing up to 100,000 ounces of gold a year at a cost of only $100 an ounce.
The company's philosophy is, in fact, pretty simple. It aims only for small high grade properties with the expressed view that "Not all ounces are created equal" - or rather that the market pays a premium for low cost ounces. With a very disciplined capital structure, the intention is to grow the company utilising its own cashflow to explore and expand its operations.
And yes, they have done it before. Bill Reid was founder and CEO of US Gold Corporation which he ran for 28 years before he sold out to yet another low cost gold believer, Rob McEwen, which enabled Bill and his team to start afresh with Gold Resource Corporation. In that time with USGC the team was involvedin the development of four gold properties on their own account and two more in conjunction with jv partners.
So where is the company now? It is bringing the El Aguilar mine to production and is constructing a 300,000 tons a year mill at the mine site. Once El Aguilar is fully up and running, the cmpany plans to use the cashflow to develop its other high grade properties in the area with the plan of trucking ore to the new El Aguilar concentrator, thus keeping capital costs, and shareholder dilution to a minimum.
Perhaps figures like ore reserves and resources are sketchy at the moment- and indeed the El Aguilar mine is being opened up on the basis of a scoping study only - no full feasibility study is deemed necessary by the management on a small scale operation of this type. The company philosophy is to build mines with a payback of capital inside one year. For El Aguilar this is reckoned to be achievable in 6 months - and the exploration along the property suggests that there is likely to be more than enough high grade material to keep it running for 10 years or more - although it is only being developed with enough of a resource for a 3-year life. But Bill is confident that the mine will be running well beyond this time.
Lest potential investors feel they may be being sucked in to a rather dubious proposition here, they may also be encouraged in that if they are, then so are some of the best gold funds in the business! The well known Tocqueville Gold Fund is a bg holder of equity as are a number of other highly respected funds.
To achieve its aims, Gold Resource Corp effectively works back from its target of the 1-year capital payback - or a 100% IRR - and only would go ahead with opening a mine if it feels it can achieve this. It considers that operating in Mexico gives it great geological potential to manage this and is working in an epithermal gold belt which also has strong silver and base metals potential too. Indeed at El Aguilar, Reid can see that there's a good chance of producing its gold at a negative cost per ounce because of the strong silver, copper, lead and zinc byproduct credits from the complex ores to be mined.
