Gold Resource Corporation Announces Intent to Create Two Independent, Strategically-Focused Companies with Nevada Mining Unit Spin-Off to Shareholders - Seite 3

Benefits of Stand-Alone Nevada Mining Unit 

Focusing on organic growth, Spinco would expect increased margins from its Isabella Pearl project and to use the expected cash flow to potentially return dividends to shareholders. Spinco would seek to replicate GORO’s legacy success in its early years as a yield-play with a tight capital structure.  

Strong, expected near-term cash flow from Isabella Pearl operations could not only facilitate dividends but also target exploration and development of the mining unit’s highly prospective property portfolio in the Walker Lane Mineral Belt.  The Company currently controls over 25,000 acres in five high-grade gold properties in Nevada in various stages of production, delineation, and exploration.  In addition to the organic growth and targeted dividend strategy, the separation would also seek to unlock a value premium for the Nevada Mining Unit due to its location in one of the world’s premier mining jurisdictions. 

Post Spin-off Companies and Operations

Gold Resource’s management team will develop detailed separation plans for consideration by the Board of Directors. Completion of the spin-off is subject to certain conditions, including the filing and approval of a registration statement with the SEC and receipt of final Board approval. The Company expects that the registration statement will be filed in the near future. There is no assurance regarding the ultimate timing of the transaction or that it will in fact be completed. 

Following the separation, it is expected that Gold Resource will continue to operate and focus on its Oaxaca Mining Unit and its shares will continue to trade on the NYSE American under the symbol “GORO”.  Current operations include the Arista underground mine, as well as a large prospective land position of a consolidated 55-kilometer mineralized fault corridor. 

Nevada Spinco would focus on Nevada Mining Unit operations and growth.  Current operations include the Isabella Pearl open-pit mine, as well as four additional high-grade gold exploration properties.  To provide operating capital, the Company expects to make a capital contribution of $10 million to Spinco at the time of the transaction. Given its expected capitalization and other financial metrics, the Company expects Spinco to initially trade in the over-the-counter (OTC) public markets.  Spinco would consider up-listing to an exchange such as the New York Stock Exchange or Nasdaq at a future date, based on consistently meeting listing standards, market conditions, and strategic timing.