Gold Resource Corp (NYSE MKT:GORO) has released a reserve study for its La Arista underground mine on its El Aguila project in Mexico, showing proven and probable reserves of 381,400 ounces of gold equivalent at an average grade of 8.76 grams per tonne (g/t). 

“We are pleased to not only announce our maiden reserve report demonstrating proven and probable reserves on a large portion of the Arista deposit, but very satisfied with the outcome as well,” said president and CEO Jason Reid.

“The 1,354,400 tonnes at an estimated average grade of 8.76 grams per tonne precious metal gold equivalent containing 381,400 ounces represents over three years mine life, depending on future production levels.”  

In addition to the gold equivalent ounces, which are comprised of gold and silver, the mine also includes reserves of 9.32 million pounds of copper, 35.53 million pounds of lead and 93.16 million pounds of zinc, according to the report, whose cut-off date was December 31, 2013. 

Recent high grade drill results from La Arista reported in the past two months are planned to be incorporated in a future update to the reserves report, Gold Resource Corp said Wednesday. The new Switchback discovery, which is 500 metres northeast of the Arista deposit, is also not included in the latest estimate. 

Mineralization at Switchback has been intercepted over 450 metres of strike length, and at a depth of 450 metres, and is either an expansion of the Arista system or a parallel vein system, the company said.

The company, which has been in production at El Aguila since 2010, is expecting to add additional ounces at Arista via infill, step out and exploration drilling this year.

“I see the completion of the reserve study as the evolution and progression of our company,” continued Reid.

“In an effort to achieve production at the earliest point in time we ran our own models and estimated in-house resources to justify our production decision.  This allowed the company to bypass the extra time, cost and capital expense in determining proven and probable reserves at that time.  

“By doing so, we reached production far sooner, for less expense and sustained less dilution to our capital structure than had we gone the traditional route of determining reserves prior to production.”

Indeed, the company said that as a result, it fast-tracked itself to a precious metal dividend-paying producer with only 54 million shares outstanding, “in an industry where hundreds of millions of shares outstanding is common place for producers.”

“I believe the completion of the reserve study moves the company into the mainstream and makes it more comparable with other producers that report reserves,” Reid added. 

Since beginning commercial production in July 2010, the company has returned more than $96 million to shareholders in monthly dividends. 

The chief executive said Wednesday that going forward, Gold Resource Corp is targeting a three to four year mine life ahead at any point in time, at the highest average grade possible, choosing not to lower its cut-off grade “to add additional ounces and longevity at this point, as [the company] target[s] quality high-grade ounces that make money as opposed to a larger number of lower-grade ounces that trade dollars.” 

The gold and silver miner is forecasting to produce in the range of 85,000 to 100,000 gold equivalent ounces in 2014.