Gold Resource Corporation Announces Intent to Create Two Independent, Strategically-Focused Companies with Nevada Mining Unit Spin-Off to Shareholders

COLORADO SPRINGS, CO, Oct. 05, 2020 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE – Gold Resource Corporation (NYSE American: GORO), a gold and silver producer, developer, and explorer with operations in Oaxaca, Mexico and Nevada, USA, today announced its intent to spin-off its Nevada Mining Unit to shareholders as a separate, publicly-traded company (“Spinco”).  

The transaction is expected to be structured as a pro-rata distribution of 100% of the Spinco shares to Gold Resource shareholders. Approximately 20 million shares of Spinco are expected to be distributed to the Company’s shareholders. Shareholder approval is not required for the spin-off, which is expected to be tax-free to Gold Resource shareholders for U.S. tax purposes.   

The Spinco transaction is subject to certain customary conditions, including the approval of a Spinco registration statement to be filed with the Securities and Exchange Commission and final approval by the Company’s Board of Directors.  The transaction is targeted to be completed by year-end 2020 or the first quarter of 2021.     

Expected Benefits of the Transaction 

• Permit each company to focus on its own unique strategic business plan 
• Allow each company flexibility to allocate resources and deploy capital in a manner consistent with its own business strategy 
• Unlock a value premium for the Nevada Mining Unit due to its location in one of the world’s premier mining jurisdictions 
• Allow each company to focus on streamlining each distinct operation – underground, hard rock operations in Mexico, and open-pit heap leach operations in Nevada, USA  
• Two separate companies have the potential to provide investors with greater value than a single combined company 

CEO Comment

“We are at an exciting juncture in the evolution of our Company,” stated Gold Resource Corporation’s CEO and President, Mr. Jason Reid.  “Significant management effort places us at a point where both of our mining units are poised to experience meaningful increases in future free cash flow: our Oaxaca Mining Unit looks to benefit from the confluence of several recently completed capital projects that are expected to positively impact our future operations, cost structure and exploration potential; and our Nevada Mining Unit continues ramping up its gold production rate as it begins to benefit from the high-grade Pearl zone of the Isabella Pearl Mine and exploring our highly prospective properties.  Both individual mining units include large exploration land packages that are expected to benefit from strong demand and metal prices for our products. We believe that this the right time to separate the businesses.”