COLORADO SPRINGS, CO–(Marketwired – Feb 28, 2017) – Gold Resource Corporation (NYSE MKT: GORO) (the “Company” or “GRC”) today announced a sixth consecutive year of profitability reporting $4.4 million in net income or $0.08 per share. The Company also confirmed its previously announced 2016 annual mill production of 27,628 gold ounces and 1,857,658 silver ounces for 53,023 precious metal gold equivalent ounces (at a realized 73.1:1 silver-to-gold ratio). The Company announced its 2017 precious metal Outlook targeting a plus or minus 5 percent production range consisting of 27,500 ounces gold and 1,850,000 ounces silver. Gold Resource Corporation is a gold and silver producer, developer and explorer with operations in Oaxaca, Mexico and Nevada, USA. The Company has returned $109 million to its shareholders in monthly dividends since commercial production commenced July 1, 2010, and offers its shareholders the option to convert their cash dividends into physical gold and silver and take delivery.

2016 ANNUAL HIGHLIGHTS

• 6^th consecutive year of profitability
• $4.4 million net income, or $0.08 per share
• $83.2 million net sales
• 27,628 gold ounces produced; 1,857,658 silver ounces produced
• 53,023 precious metal gold equivalent ounces produced (73.1:1 realized silver-to-gold ratio)
• 48,725 precious metal gold equivalent ounces sold
• 1,035 tonnes copper, 4,049 tonnes lead and 14,302 tonnes zinc production
• $548 total cash cost per precious metal gold equivalent ounce
• $970 all in annual sustaining cash cost per ounce (“AISC”)
• $14.2 million cash and cash equivalents
• $3.3 million physical gold and silver bullion treasury
• $1.7 million annual dividends paid, or $0.03 per share, including $0.01 per share special dividend
• $109 million total dividends paid over 77 consecutive monthly distributions
• Expanded Arista deposit, Aguila Project, Oaxaca, Mexico
• Significantly expanded size of the Switchback vein system, Arista deposit, Oaxaca Mexico
• Ramp development cross-cut Switchback vein system, Aguila Project, Oaxaca, Mexico
• Received final mine permit and commenced development at the “Mirador Mine”, Alta Gracia Project, Oaxaca, Mexico
• Acquired high-grade Isabella Pearl project, Nevada, U.S.A.
• Acquired high-grade Mina Gold exploration property, Nevada, U.S.A.
• 2016 Proven & Probable gold and silver Reserves increased by 31% and 17% respectively

2016 Aguila Project Overview

“I am very proud to announce that 2016 delivered Gold Resource Corporation’s sixth consecutive year of profitability, four years of which were in a difficult bear market,” stated Gold Resource Corporation CEO and President, Mr. Jason Reid. “Our Company posted annual net income of $4.4 million or $0.08 per share, returned $1.7 million back to our shareholders through dividends, and continued to invest in the Company’s future growth in both Mexico and Nevada while adding cash from operations to our bank account. Our numerous successes during 2016 were accomplished without raising money, without diluting shareholders through equity sales and without going into debt.”

For the year ended December 31, 2016, the Company sold 48,725 precious metal gold equivalent ounces at a total cash cost of $548 per gold equivalent ounce. Realized 2016 average sales prices were $1,256 per ounce gold and $17.18 per ounce silver. The Company recorded revenues of $83.2 million, mine gross profit of $22.4 million, and net income of $4.4 million, or $0.08 per share. Base metal production generated $37.8 million in revenue for 2016.

The calculation of our cash cost per ounce contained in this press release is a non-GAAP financial measure. Please see “Management’s Discussion and Analysis and Results of Operations” contained in the Company’s most recent Form 10-K for a complete discussion and reconciliation of the non-GAAP measures.

The following Production and Sales Statistics table summarizes certain information about our mining operations for the three and twelve months ended December 31, 2016 and 2015:

2017 Production Outlook

The Company is targeting 2017 annual production (with ranges based on plus or minus 5%) of 27,500 ounces gold and 1,850,000 ounces silver. The target range was estimated based on the Company’s 2017 mine plan, the area of the deposit scheduled to be mined during the upcoming year, planned development during 2017 of the Switchback vein system and estimated grade fluctuations.

In 2017, the Company remains focused on mining tonnes based on net smelter return (“NSR”) values per tonne of all metals to maximize cash flow. The Company will continue to focus on its overall margin from both precious and base metal production. Base metal production results in lower production costs per tonne and per ounce when used as a credit against production costs. The Company targets sufficient precious and base metal production in 2017 to support its plans for capital expenditures, exploration, dividends, taxes and future growth.

Year-End 2016 Oaxaca Mining Unit Proven & Probable Reserve Update

The Company recently updated its 2016 Oaxaca Mining Unit Proven and Probable (“P&P”) Reserve Report as of December 31, 2016 in which it not only replaced the tonnes mined during 2016, but increased reserve tonnage by 15% to 1,891,500 tonnes grading 2.75 grams per tonne (“g/t”) gold and 165 g/t silver. The updated report shows gold grades increased by 14%, gold ounces increased by 31%, silver grades increased by 2% and silver ounces increased by 17%. Mine life based on P&P at the Company’s Oaxaca Mining Unit has been increased from approximately three to more than four years, assuming 2016 annual processing levels. For historical reference, the Company was in production for three and one half years prior to completing its first P&P reserve report in 2014 and has consistently replaced reserve tonnes year over year in reserve reports since. Not included in the four-year mine life calculation based on P&P is the report’s over 2 million tonnes of mineralized material, of which the Company targets to convert into proven and probable reserves over time and with further delineation drilling. For additional details on the updated reserve report, please view the P&P press release dated February 21, 2017. The updated full reserve report will be available on the Company’s website in the near future. Third party Proven and Probable gold ounces from the Company’s Isabella Pearl development Project in Nevada, U.S.A. are not included in this December 31, 2016 reserve report.

Project Update

In 2016 mine production was centered in the Arista vein system between levels 16 and 20 with additional mill feed coming from the Aguila pit. Mine development accessed the Switchback vein system during the fourth quarter of 2016, and significant underground infrastructure including power, ventilation and pumping has been established for this new section of the Arista mine. In 2016, the Company averaged 1,295 tonnes per day milled or 450,221 tonnes for the year, a 9% increase over 2015 tonnages of 1,220 tonnes per day or 413,626 tonnes per year. The nominal design capacity at the Aguila mill is 1,500 tonnes per day.

The Arista vein system’s primary decline ramp development has reached level 23 with continued stope development on multiple levels. Infill and step-out drilling continues to expand the mineralized horizon of the Arista deposit with continued plans to drill vein extensions along strike, at depth and parallel to the deposit.

During the fourth quarter of 2016, Arista Mine ramp development advanced to crosscut the Switchback vein system on level 24. In 2017 the Company plans to develop the Switchback vein system between levels 23 and 27 in preparation for mining in 2018. The Company targets long-term production from Switchback by developing and preparing numerous ore blocks over the next year for future bulk tonnage mining targeted for 2018. A modest amount of Switchback development ore is scheduled to be processed in the mill during 2017.

In October 2016, the Company announced it had received the final mine permit to begin development and production from the Mirador Mine, located at the Oaxaca Mining Unit’s Alta Gracia Project. Development is underway and first production is expected from this new mine by the end of the first quarter 2017.

The Company’s Nevada Mining Unit acquired 100% interest in two properties located in Mineral County, Nevada, U.S.A. in August 2016. The Isabella Pearl gold project, which contains a third party Proven and Probable Reserve of over 191,000 gold ounces grading 2.18 g/t gold, is in advanced engineering, design and mine permitting. The Company targets first Nevada gold production from Isabella Pearl at the earliest possible point in time subject to receiving a final mine permit, construction timing and funding. The Company also acquired the Mina Gold exploration property with a historic mineralized material estimate of 1,606,000 tonnes grading 1.88 g/t gold.

Exploration Program

The highlight of 2016’s Oaxaca Mining Unit’s exploration program was the continued expansion and delineation of the Arista Mine’s Switchback vein system. Infill drilling at the Switchback vein system was successful in upgrading a significant portion of mineralized material into the proven and probable category. Step-out drilling at Switchback was also successful in expanding the vein system along strike as well. 

A total of two exploration drills are currently in operation at the Company’s Oaxaca Mining Unit, one underground at the Arista deposit and the other on surface at the Alta Gracia Project. The main exploration focus for 2017 continues to be the extensions of the Arista Mine’s Arista vein system and the Switchback vein system, both polymetallic epithermal vein systems which remain open along strike and at depth. Exploration drilling at the Alta Gracia Project is being conducted in and around the Mirador Mine. The Company has budgeted approximately $4.3 million for exploration at its Oaxaca Mining Unit for 2017.

In 2016, the Company completed three successful phases of drilling at its Nevada Mining Unit’s Gold Mesa property. High-grade gold was intercepted at or near surface in multiple drill holes at Gold Mesa. The Company plans a fourth phase of drilling at Gold Mesa for spring 2017 with a goal of expanding known mineralization. The Company also completed its first exploration and delineation drill program at the Mina Gold property in December 2016. A phase two drill program is planned at Mina Gold for spring 2017. The Company anticipates spending approximately $2.2 million on exploration in Nevada during 2017, primarily for surface drilling at its Gold Mesa and Mina Gold properties.

Dividends

The Company maintained its instituted $0.02 per share annual dividend during the 2016 year, with dividends being distributed on a monthly basis. In November 2016, the Company’s Board of Directors approved a “special” one time dividend of $0.01 per share, which was paid in December 2016. Total dividend distributions for 2016 totaled $1.7 million, or $0.03 per share. The Company has now distributed more than $109 million in dividends back to shareholders since July 2010. 

About GRC:

Gold Resource Corporation is a mining company focused on production and pursuing development of gold and silver projects that feature low operating costs and produce high returns on capital. Gold Resource Corporation is a gold and silver producer, developer and explorer with operations in Oaxaca, Mexico and Nevada, USA. The Company has 56,839,823 shares outstanding, zero warrants, zero debt and has returned over $109 million back to its shareholders since commercial production commenced July 1, 2010. Gold Resource Corporation offers its shareholders the option to convert their cash dividends into physical gold and silver and take delivery. For more information, please visit GRC’s website, located at www.Goldresourcecorp.com and read the Company’s 10-K for an understanding of the risk factors involved.

Cautionary Statements:

This press release contains forward-looking statements that involve risks and uncertainties. The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. When used in this press release, the words “plan,” “target,” “anticipate,” “believe,” “estimate,” “intend” and “expect” and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, without limitation, the statements regarding Gold Resource Corporation’s strategy, future plans for production, future expenses and costs, future liquidity and capital resources, and estimates of mineralized material. All forward-looking statements in this press release are based upon information available to Gold Resource Corporation on the date of this press release, and the company assumes no obligation to update any such forward-looking statements. Forward looking statements involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. The Company’s actual results could differ materially from those discussed in this press release. In particular, there can be no assurance that production will continue at any specific rate. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the Company’s 10-K filed with the SEC.

See Accompanying Tables

The following information summarizes Gold Resource Corporations financial condition at December 31, 2016 and 2015, its results of operations including the years ended December 31, 2016, 2015 and 2014, and its cash flows for the years ended December 31, 2016, 2015 and 2014. The summary data for the years ended December 31, 2016 and 2015 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2016, but do not include the footnotes and other information that is included in the complete financial statements. Readers are urged to review the Company’s Form 10-K in its entirety, which can be found on the SEC’s website at www.sec.gov.

The calculation of our cash cost per precious metal gold equivalent per ounce, total all-in sustaining cost per precious metal gold equivalent per ounce and total all-in cost per precious metal gold equivalent per ounce contained in this press release are non-GAAP financial measures. Please see “Management’s Discussion and Analysis and Results of Operations” contained in the Company’s most recent Form 10-Q and Form 10-K for a complete discussion and reconciliation of the non-GAAP measures.