HardAssetsInvestor

Written by Drew Voros  |

December 20, 2011

Gold Resource Plans To Offer Dividends Using Gold & Silver Coins

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President of Colorado-based junior miner says its monthly dividend plan separates it from the pack.

Colorado-based Gold Resource Corp. (GORO) went public in the fall of 2006 and today has a market capitalization of more than $1 billion. The junior gold miner has remained debt free, maintained a monthly dividend and will soon offer a dividend-payment option in the form of gold and silver coins. HAI Managing Editor Drew Voros recently caught up with Gold Resource President Jason Reid to discuss where the company is headed at a time of peak gold prices.

Hard Assets Investor: Could you give a quick overview of Gold Resource’s major projects and top revenue generators?

Jason Reid: We have six potential high-grade gold and silver properties, all within the southern state of Oaxaca, Mexico. Five of the properties are along an important mineralized trend that’s more than 48 kilometers. We have a very large land position. The El Aguila Project is our flagship project. It’s primarily gold and silver. We’re fortunate that we do have base metals that we use as industry-standard-byproduct credits to offset our precious metals production. We began production mid-2010 on the El Aguila Project. That’s our top revenue generator at this point.

El Rey is our second-most-advanced property. It’s a gold-vein system. We’re moving forward and advancing the project. Hopefully it will be the next one to come online. Alta Gracia and Las Margaritas are on the 48 kilometer mineralized trends trend I mentioned. They have gold and silver potential as well. El Chamizo is a new land position of more than 100 square miles. And Solaga is the sixth property, which has silver potential.

HAI: When did you begin work in this area?

Reid: We went public in September 2006 and we weren't going to take this public until we knew we had something. We have spent several years prior drilling El Aguila and justifying putting an open pit into production. Subsequent to that, we discovered our largest deposit, Arista.

HAI: I imagine by the time you started actually bringing metal to market, prices were pretty good, weren't they?

Reid: Yes. We’re very fortunate that we’re a producer now.

HAI: Why haven’t peak gold prices brought peak gold production?

Reid: No one has a crystal ball, but I don’t think we’ve reached peak gold and silver prices yet. I think we have a long way to run. I think that as long as governments around the globe continue to debase the currencies and try to inflate their way out of massive and unprecedented debt, gold and silver is the place to be invested.

HAI: How high do you see prices going?

Reid: I don’t want to give a specific price, but it could be multiples of where we are today, depending on how bad the debt continues to grow, and what the powers that be do in response to that. It’s not my place to give a gold target or silver target.

HAI: What do you see as the biggest influence on gold prices right now?

Reid: It’s definitely the uncertainty around the world. Again, coming back to the debt that I mentioned, we have governments that are pushing buttons to create money. They're just putting ink on paper to create money. If it were that easy to be prosperous, all the countries in the world would be. But that’s the beauty of gold — you can't just create it out of thin air like you can with the fiat currencies. That’s part of why, in my opinion, gold is the place to be.