The company sent out two announcements. The general manager has decided to "pursue other interests" and has been replaced by a former operations manager at Yamana, and the processor has disputed the amount of gold delivered. The alleged discrepancy is about 10%. In addition, because of additional maintenance work on the mine, they've reduced the forecast by a little. Sudden departures upset the market. So do disagreements.
From the announcement:
"The Company’s third quarter mill production of approximately 22,300 AuEq ounces represents a 64% increase over the previous quarter’s less than optimal production of 14,488 AuEq ounces. A dispute arose during the third quarter with the buyer of the Company’s metal concentrates that involves the buyer’s handling, control and sampling of those concentrates at the buyer’s warehouse, and the resulting assays the buyer obtained from those samples. The buyer is claiming net adjustments (reductions) to the Company’s provisional invoices of approximately 2,300 AuEq ounces. The Company’s third quarter mill production of approximately 22,300 AuEq ounces does not reflect any potential deduction for all or part of the 2,300 disputed AuEq ounces.
"Gold Resource Corporation’s President, Jason Reid, stated, “We have made considerable progress regarding mine development, including ground water management, as seen by our increase in production over last quarter. Though we continued to mine some lower grade ore zones in the third quarter from splays and vein margins, our stopes between levels 7 through 10 allowed us to mine higher-grade ore zones during the quarter that we believe will further increase our production levels in future quarters. We are currently focused on reducing dilution in our long hole stoping methods, implementing cut and fill mining in certain zones to minimize dilution and working to improve overall operational efficiencies.”
"In consideration of the near-term challenge of dilution for the remainder of 2012, the Company revises its 2012 annual production Outlook down to a range of 85,000 to 100,000 AuEq ounces."
This too shall pass.
Dino
