Gold Resource Corporation (NYSEMKT:GORO) shares raced 6% higher on Tuesday after the company announced level 460 ramp development has reached the Switchback vein system at the Aguila Project’s Arista mine.
Arista Mine ramp development has advanced over 680 meters to reach the Switchback vein system’s Susana vein on the 460 level. The Susana vein is the first of at least six veins the Company expects to crosscut with continued development. This primary 460 level Switchback ramp bifurcated approximately 100 meters from the Switchback vein system with an inclining secondary ramp to access the veins on the 480 level, 20 meters higher in elevation.
This secondary ramp is targeted to reach additional mineralization on the 480 level in November 2016. A 3.1-meter diameter raise bore is being drilled to connect the 460 level ramp with the previously constructed 600 level ramp, around 140 meters higher up in the deposit for mine safety and ventilation. The Company expects to pull development ore from Switchback during the fourth quarter 2016 and will either process or stockpile the mineralization for 2017.
The Company targets long-term production from Switchback by developing and preparing multiple levels and ore blocks over the next year for future bulk tonnage mining.
The Switchback vein system adds to the Arista Mine’s longevity with high-grade, polymetallic mineralization. 2016 exploration drilling has expanded the overall size of the Switchback vein system, including expansions to the strike length of the Soledad vein by ~170 meters from 200 to 370 meters and the Sagrario vein by ~100 meters from 180 to 280 meters in length.
The additional exploration drilling conducted at Switchback in 2016, as announced in numerous previous Switchback drill result press releases, is targeted to be included in future reserve reports. Reserve additions are dependent in large part on achieving tight enough drill hole spacing together with channel sampling in development headings adequate to classify the mineralized material as Proven and Probable reserves. The Switchback vein system remains open in all directions.
“With well over a year of allocating Company resources to extend decline ramps to the Arista Mine’s Switchback vein system, we are pleased and excited to now be developing the Switchback veins,” said Jason Reid, CEO and President of Gold Resource Corporation.
“Using cash flow from operations, we have gained access to this exciting new area of the mine and can begin to see the much awaited return on our invested capital. I am optimistic the Arista Mine’s Switchback vein system could one day be as large as, or perhaps larger than, the Arista Mine’s Arista vein system, and that we may in the future find additional parallel vein systems like Arista and Switchback. It will require time and additional capital to fully determine the size of Switchback, but now cash flow from Switchback production can be leveraged in our endeavor to continue to expand this large epithermal system,” he added.
Gold Resource Corporation is a gold and silver producer, developer and explorer with operations in Oaxaca, Mexico and Nevada, USA. The Company has returned $108ml to shareholders in monthly dividends since commercial production commenced July 1, 2010, and offers shareholders the option to convert their cash dividends into physical gold and silver and take delivery.
Gold Resource shares were up 6.1% at $5.77 on Tuesday.
Story by ProactiveInvestors