Gold Resource's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Any business, particularly an underground mine is a long term endeavor. We have demonstrated our ability to build and to execute. We have aggressively built the La Arista underground mine and have a strong cash flow to show for it. Even with half our targeted mill production this quarter, we achieved a great deal. We were profitable for the second quarter. We produced more gold than Q2 of '12 than we did in Q2 of '11. We paid for significant and increased development underground. We bought 1.3 million with gold and silver bullion to diversify our treasury. We paid the Mexican government, $8 million in estimated taxes. We paid the owners of the company, the shareholders 9.5 million in dividends. We accomplished all this and still added about 775,000 to our bank account this quarter over the cash we had in the bank at the end of last quarter.

Now, if we can do this with a quarter that is less than half our targeted mill production, consider the cash we will accumulate with achievements of our targeted quarter. This speaks to the cash generating power of this deposit and this project and with increasing cash; this management has certainly demonstrated its bias for distributions to the owners. The company has distributed dividends to the owners, the past 25 consecutive months and thus far, this year, had distributed about 33% of our cash flow from mine site operations. The company remains fully committed to dividends.

I had consistently stated on our conference calls and elsewhere that production is and will always be dependent on the development of the mine. An underground mine is by definition a challenge of constant development as you constantly mine. We have carried out these grueling demands since the beginning, they are not new and they will be with us till the end of the mine.

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