Gold Resource Corp (NYSE MKT:GORO) shares rocketed nearly 11% on Wednesday after the company announced a high grade gold and silver intercept at a new vein on its Arista deposit, which forms part of the company’s El Aguila project in Mexico.
Of the drill highlights, the company said it returned 2.67 metres of 13.9 grams per tonne (g/t) gold and 3,228 g/t silver, in one of the Arista deposit’s newest vein discoveries, called Santa Lucia. This intercept included an interval of 0.46 metres grading 65.2 g/t gold and 18,232 g/t silver.
The gold and silver producer, with operations in Oaxaca, Mexico, said it continues to drill both infill and step out holes testing the mineralized vein extensions at its producing Arista mine.
The Santa Lucia vein is a parallel vein structure located approximately 60 metres northeast of the Arista vein, with the new vein discovery remaining open on strike and at depth.
The company also reported Wednesday drill highlights from its Candelaria and Luz veins, with grades as high as 9.51 g/t gold and 2,702 g/t silver along 3.02 meters at the former vein.
Meanwhile, new drilling at the Baja vein, one of two original veins in production since 2011, returned results as high as 0.92 metres of 28.10 g/t gold and 116 g/t silver. This vein is still open along strike and at depth, Gold Resource Corp said.
The Arista system continues to deliver impressive grades and expansion potential, said company president and CEO, Jason Reid.
Our original deposit model projected two primary veins, the Baja and Arista. Drilling continues to expand the deposit at depth, along strike as well as parallel to the main structure.
“With the deposit expanding south towards the Splay 5 and Socorro veins, along with our discovery at Switchback, 500 meters to the northeast of the Arista deposit, we are very impressed with the systems continued expansion potential.”
The chief executive further said that he believes the company is in a strong position to keep adding ounces to the Arista deposit, with the aim of having three to four years of production drilled out in front of it at “any point in time”.
The U.S. based gold and silver producer in December wrapped up its El Aguila mill expansion, boosting its mill capacity to 1,500 tonnes per day. It is expecting a stronger cash position this year as a result, through increased daily tonnage and lower per tonne production costs.
Based on its preliminary operational results, the company’s full year 2013 production came in at 84,835 gold equivalent ounces, in line with its guidance for 80,000 to 100,000 ounces. The gold producer has returned more than $95 million to shareholders in monthly dividends since beginning commercial production in July 2010.
When we first started production in the Arista underground mine, we were mining the Arista and Baja veins together with just a few minor veins and splays. Now we have modeled 20 different mineralized primary veins, minor veins and splays,” added Gold Resource Corp’s VP of exploration, Barry Devlin.
Shares of the junior producer rallied 10.5% in New York, to US$5.87 on Wednesday afternoon, stretching year-to-date gains to over 30%.
