COLORADO SPRINGS, CO–(Marketwire -05/10/12)- Gold Resource Corporation (GORO) today announced record results for its first quarter ending March 31, 2012, including an increase of 308% production of precious metal gold equivalent and an increase of 281% mine gross profit over the first quarter of 2011. Gold Resource Corporation is a low-cost gold producer with operations in the southern state of Oaxaca, Mexico.

2012 Q1 HIGHLIGHTS

• Record production of 30,528 ounces precious metal gold equivalent (AuEq)


• 308% AuEq production increase over Q1, 2011


• Record mine gross profit generated $33.7 million


• 281% mine gross profit increase over Q1, 2011


• Total cash cost of $191 per ounce AuEq (including 5% royalty)


• Record net income of $16.1 million or $0.30 per share


• 693% net income increase over Q1, 2011


• Pretax income of $23.4 million or $0.44 per share


• Dividend distributions of $7.9 million, or $0.15 per share for quarter


• Physical gold and silver treasury of $5.6 million


• Successfully launched physical gold and silver dividend program

Overview of Q1 2012 Results from El Aguila Project

Gold Resource Corporation’s El Aguila Project produced 30,528 ounces of precious metal gold equivalent (AuEq) at a total cash cost of $191 per AuEq ounce and realized average prices of $1,740 per ounce gold and $34 per ounce silver for its sales during the first quarter. The mine generated gross profit of $33.7 million. The Company paid $7.9 million to shareholders in dividends and converted $2.9 million of its treasury into physical gold and silver. In addition, the Company successfully launched its dividend program where shareholders have the option to convert their cash dividends to physical gold and/or silver.

“The first quarter set a strong base for the Company with record production, record revenues and dividends of $7.9 million while focusing on aggressive growth,” stated Gold Resource Corporation’s President, Mr. Jason Reid. “We maintain our 2012 production goal, targeting a range of 120,000 to 140,000 precious metal gold equivalent ounces.”

Below is a table of the key production statistics for our El Aguila Project during the three months ended March 31, 2012.

 

 Production and Sales Statistics

Three months

ended

March 31, 2012

—————

Production Summary
Milled:

Tonnes Milled 75,078

Tonnes Milled per Day 825
Grade:

Average Gold Grade (g/t) 4.27

Average Silver Grade (g/t) 483

Average Copper Grade (%) 0.49

Average Lead Grade (%) 1.73

Average Zinc Grade (%) 3.59
Recoveries:

Average Gold Recovery (%) 89

Average Silver Recovery (%) 94

Average Copper Recovery (%) 76

Average Lead Recovery (%) 74

Average Zinc Recovery (%) 74
Gross Payable metal produced

Gold (ozs.) 9,222

Silver (ozs.) 1,091,304

Copper (tonnes) 350

Lead (tonnes) 1,206

Zinc (tonnes) 2,252
Payable metal sold

Gold (ozs.) 6,668

Silver (ozs.) 828,376

Copper (tonnes) 210

Lead (tonnes) 706

Zinc (tonnes) 1,082
Average metal prices realized

Gold (per oz.) $ 1,740

Silver (per oz.) $ 34

Copper (per tonne) $ 8,599

Lead (per tonne) $ 2,144

Zinc (per tonne) $ 2,133
Gold equivalent ounces produced

Gold (ounces) 9,222

Equivalent Gold (ounces) from Silver 21,306

—————

Total Gold and Gold Equivalent (ounces) 30,528

—————
Unit costs

Costs per tonne – ore mined $ 26

Costs per tonne – ore milled $ 63

—————

Total cost per tonne $ 89

—————

Cash operating cost per ounce gold equivalent (1) $ 131

Total cash operating cost per ounce gold equivalent (1) $ 191
(1) A reconciliation of this non-GAAP measure to cost of sales and other

direct production costs and depreciation, depletion and amortization,

the most comparable GAAP measure, can be found in the Company’s

quarterly report on Form 10-Q for the period ended March 31, 2012 filed

with the SEC and available at http://www.sec.gov/.

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. The Company has 100% interest in six potential high-grade gold and silver properties in Mexico’s southern state of Oaxaca. The Company has 52,911,516 shares outstanding, no warrants and no debt. Gold Resource Corporation is the only Company to offer its shareholders a dividend option to obtain physical gold or silver in addition to cash. 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 the results of operations for Gold Resource Corporation for the three months ended March 31, 2012 and 2011, its financial condition at March 31, 2012 and December 31, 2011 and its cash flows for the three months ended March 31, 2012 and 2011. The summary data for the three months ended March 31, 2012 and 2011 is unaudited; the summary data for the year ended December 31, 2011 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2011, 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 ounce contained in this press release is a non-GAAP financial measure. Please see “Management’s Discussion and Analysis and Results of Operation” contained in the Company’s most recent Form 10-Q and Form 10-K.

 

 GOLD RESOURCE CORPORATION

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

for the three months ended March 31, 2012 and 2011

(U.S. dollars in thousands, except shares and per share amounts)

(Unaudited)
 2012 2011

———— ————
Sales of metals concentrate, net $ 40,622 $ 11,280

———— ————
Mine cost of sales:

Production costs applicable to sales 6,679 2,352

Depreciation, depletion, and amortization 232 64

Accretion 20 21

———— ————

Total mine cost of sales 6,931 2,437

———— ————

Mine gross profit 33,691 8,843
Costs and expenses:

General and administrative expenses 2,571 1,735

Stock-based compensation expense 2,056 1,377

Exploration expenses 1,353 512

Construction and development 2,358 3,066

———— ————

Total costs and expenses 8,338 6,690

———— ————
Operating income (loss) 25,353 2,153
Other income (expense) (1,989) (120)

———— ————
Income (loss) before income taxes 23,364 2,033
 Provision for income taxes 7,242 –

———— ————

Net income (loss) $ 16,122 $ 2,033

============ ============
Other comprehensive (loss) income:

Currency translation gain (loss) 1,464 464

———— ————

Net comprehensive (loss) income $ 17,586 $ 2,497

============ ============
Net income per common share:

Basic $ 0.30 $ 0.04

============ ============

Diluted $ 0.29 $ 0.04

============ ============

Weighted average shares outstanding:

Basic 52,898,984 52,998,303

============ ============

Diluted 56,362,916 57,840,414

============ ============
 GOLD RESOURCE CORPORATION

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands, except shares)
 March 31, December 31,

2012 2011

————- ————-

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents $ 44,004 $ 51,960

Gold and silver bullion 5,626 2,549

Accounts receivable 17,900 14,281

Inventories 7,453 4,243

IVA taxes receivable 6,099 4,425

Deferred tax assets 11,118 11,118

Prepaid expenses 864 951

————- ————-

Total current assets 93,064 89,527
Land and mineral rights 227 227

Property and equipment – net 12,323 10,318

Deferred tax asset 19,517 19,517

Other assets 7 6

————- ————-

Total assets $ 125,138 $ 119,595

============= =============
 LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:

Accounts payable $ 1,160 $ 1,691

Accrued expenses 4,522 4,879

IVA taxes payable 8,142 4,984

Income taxes payable 7,320 15,987

Dividends payable 2,645 2,645

————- ————-

Total current liabilities 23,789 30,186
Asset retirement obligation 2,514 2,281

————- ————-

Total liabilities 26,303 32,467
Shareholders’ equity:

Preferred stock – $0.001 par value,

5,000,000 shares authorized: no shares

issued and outstanding – –

Common stock – $0.001 par value, 100,000,000

shares authorized: 53,006,871 and

52,998,303 shares issued and outstanding,

respectively 53 53

Additional paid-in capital 126,650 132,529

(Deficit) accumulated during the exploration

stage (23,400) (39,522)

Treasury stock at cost, 104,251 shares (1,954) (1,954)

Other comprehensive income – currency

translation adjustment (2,514) (3,978)

————- ————-

Total shareholders’ equity 98,835 87,128

————- ————-
 Total liabilities and shareholders’ equity $ 125,138 $ 119,595

============= =============
 GOLD RESOURCE CORPORATION

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

for the three months ended March 31, 2012 and 2011

(U.S. dollars in thousands)

(Unaudited)
 2012 2011

————- ————-
Cash flows from operating activities:

Net income (loss) $ 16,122 $ 2,033

————- ————-

Adjustments to reconcile net income (loss)

to net cash provided by (used in) operating

activities:

Depreciation, depletion, and amortization 296 144

Accretion expense 20 21

Stock compensation 2,056 1,377

Foreign currency translation adjustment 1,464 464

Unrealized loss (gain) from gold/silver

bullion held (198) –

Changes in operating assets and liabilities:

Accounts receivable (3,619) (3,209)

Inventories (3,210) (4,688)

IVA taxes receivable (1,674) (424)

Prepaid expenses 88 –

Accounts payable (531) 449

Accrued expenses (358) (230)

IVA taxes payable 3,158 501

Income taxes payable (8,667) –

Other – (9)

————- ————-

Total adjustments (11,175) (5,604)

————- ————-

Net cash provided by (used in) operating

activities 4,947 (3,571)

————- ————-
Cash flows from investing activities:

Capital expenditures (2,302) (1,425)

Purchase of gold and silver bullion (2,879) –

————- ————-

Net cash (used in) investing activities (5,181) (1,425)

————- ————-
Cash flows from financing activities:

Dividends paid (7,935) (4,770)

————- ————-

Net cash provided by (used in) financing

activities (7,935) (4,770)

————- ————-
Effect of exchange rates on cash and

equivalents 213 88

————- ————-
Net increase (decrease) in cash and

equivalents (7,956) (9,678)
Cash and equivalents at beginning of period 51,960 47,582
 ————- ————-

Cash and equivalents at end of period $ 44,004 $ 37,904

============= =============
Supplemental Cash Flow Information

Interest paid $ – $ –

============= =============

Income taxes paid $ 17,305 $ –

============= =============