SOURCE: Gold Resource Corporation

Gold Resource Corporation

April 26, 2012 16:05 ET

Gold Resource Corporation Reports Preliminary Independent Resource Estimate; Announces Company Conference Call

COLORADO SPRINGS, CO--(Marketwire - Apr 26, 2012) - Gold Resource Corporation (NYSE Amex: GORO) is pleased to report preliminary results from an independent resource estimate compiled from drilling data at the Company's La Arista vein system at its El Aguila Project in Mexico. Measured and indicated resources include approximately 1.4 million gold equivalent ounces (all metals) at 1 gram gold equivalent cutoff. The estimate is being prepared by the Denver engineering firm of Pincock, Allen & Holt in compliance with the standards established by Canadian Securities Administrators' National Instrument 43-101 ("NI 43-101") and are considered preliminary until the technical report is finalized.** Investors are urged to read the report when it is completed. The Company commissioned the report under NI 43-101 in an effort to provide resource estimates similar to those provided by its industry peer group, most of which report under NI 43-101. The resource estimates provided in this study are not considered "reserves" as defined by the U.S. Securities and Exchange Commission ("SEC") in Industry Guide 7 ("Guide 7") and U.S. investors are strongly cautioned not to assume that all or any part of measured, indicated or inferred resources will ever be converted into reserves as defined by the SEC. Gold Resource Corporation is a low-cost gold producer with operations in the southern state of Oaxaca, Mexico.

Gold Resource Corporation will host a conference call Friday, April 27, 2012 at 11:00 a.m. EDT to comment on the preliminary resource results. Conference call specifics can be found at the end of this press release.

"We are pleased with the preliminary results of this independent study of our drilling as the analysis confirms the high-grade nature of our deposit at La Arista," stated Mr. William Reid, Chief Executive Officer of Gold Resource. "This study was effectively performed over the same area as our original internal analysis, which was used to make our decision to proceed with construction of the underground mine and to commence mineral production. This independent analysis required application of certain constraints and restrictions that we believe make it a more conservative estimate than our original internal estimates. Though the preliminary independent estimate and our internal estimates were formulated using different parameters, each provides its own important insights while verifying our high-grade vein system."

The table below gives the preliminary values at various cutoff grades, mine life in years and gold equivalent ounces.

PRELIMINARY INDEPENDENT ARISTA VEIN SYSTEM RESOURCE ESTIMATE(1)
Arista Cutoff Tonnes Mine
Life(2)(Years)
Au Ag Cu Pb Zn True EQ Oz
Deposit Grade
g/t
g/t g/t % % % Width (m) Au(3)
Indicated 1 1,012,309 3.24 281 0.39 1.25 4.05 4.99 417,155
Inferred 1 3,468,402 1.80 191 0.30 1.23 4.12 4.00 1,055,288
Total 1 4,480,711 10 2.13 212 0.32 1.23 4.11 4.23 1,472,384
Indicated 7 567,494 5.17 444 0.52 1.75 5.16 4.81 349,976
Inferred 7 1,737,991 3.14 319 0.42 1.93 6.13 4.68 849,792
Total 7 2,305,485 5 3.64 350 0.44 1.89 5.90 4.72 1,199,768
Indicated 9 478,783 5.71 497 0.56 1.90 5.54 4.94 325,945
Inferred 9 1,258,759 4.02 396 0.48 2.26 6.28 4.08 727,637
Total 9 1,737,543 4 4.49 424 0.50 2.16 6.08 4.32 1,053,582
(1) RESOURCE CRITERIA INCLUDES STANDARDS ESTABLISHED UNDER CANADIAN NI 43-101 FOR INDICATED AND INFERRED RESOURCES, WHICH ARE NOT PROVEN AND PROBABLE RESERVES FOR U.S. REPORTING PURPOSES. NI 43-101 DOES NOT ALLOW THE INDICATED AND INFERRED CATEGORIES TO BE TOTALLED.
(2) Years mine life estimate assumes 440,000 tonnes / year mill throughput
(3) EQ Oz Au indicates all metals converted to gold equivalent ounces. Metal prices used for gold equivalent values in the study were: $1,000.00/oz gold, $20.00/oz silver, $2.50/lb copper, $0.61/lb lead and $0.99/lb zinc.

Mr. Reid stated, "The purpose of any estimate is to predict what will be mined. High-grade vein deposits can be difficult to model and to estimate as the variations of metal content between drill holes can be great and therefore may not be fully represented in the model. The ultimate sample of course is mining the deposit. What we have seen from 13 months of actual mining confirms our belief in this high-grade deposit."

The table below compares mined grades verses in-situ (in place prior to mining dilution) grades from the upper portions of the Arista deposit mined to date. The table lists actual head grades through the mill over the last 13 months of production (from March 1, 2011 to March 31, 2012), as well as those head grades adjusted for dilution that takes place in the mining process which we have estimated at 20%.

MINED GRADES vs. IN-SITU ESTIMATES
Tonnes Au g/t Ag g/t Cu % Pb % Zn % AuEq oz/t(2)
Weighted Avg Grade(1)(13 months production) 242,014 3.7 457 0.47 1.42 3.07 0.41
In-Situ grade of mined ore prior to estimated 20% dilution 4.6 571 0.59 1.78 3.84 0.51
2009 internal estimate 2,962,000
True Width=3.6m
Mine life = 7 yrs
6.5 506 0.60 2.24 6.75 0.53
(1) Actual Mill Head Grades processed from March 1, 2011 to March 31, 2012
(2) Precious metal gold equivalent (AuEq), 50:1 silver to gold ratio

Mr. Reid continued, "While we know that estimates have their limitations, which may be amplified for high-grade deposits, the important point is that all these estimates appear to confirm, and the mining to date substantiates our high-grade deposit."

The preliminary results also appear to indicate the existence of several additional veins which need to be explored, preferably by more drilling, crosscutting and drifting and mining. The Company's exploration drilling is now focused on expansion of the Arista deposit which remains open at both depth and along strike extensions. Currently three underground and two surface drill rigs continue mine development and exploration of the Arista deposit.

Conference Call

Gold Resource Corporation's CEO, Mr. William W. Reid, will host a conference call Friday, April 27, 2012 at 11:00 a.m. EDT. Mr. Reid will comment on the preliminary independent resource report and will take questions from callers. The conference call will be recorded.

Email Q&A

The Company asks callers to email their questions to info@goldresourcecorp.com before or during the conference call. Management will address submitted email questions during the Q&A portion of the conference call. Email question format should include the individual's name, institution / organization / individual investor, and question.

Date: Friday, March 27, 2012

Time: 11:00AM EDT (9:00 AM Mountain)

Attendee Access Information:

Title: Gold Resource Corporation's Preliminary Independent Resource Estimate
Host Name: William W. Reid
Company Name: Gold Resource Corporation

US/CAN Toll free: 888-205-6786
Int'l Toll: 913-312-1387

Passcode: 800435

Please dial-in to the meeting at least 5 minutes prior to the start time using the attendee phone number and passcode.

**Please note that a resource estimate report prepared in accordance with the requirements set forth in NI 43-101 uses standards that are materially different from the standards generally permitted in reports filed with the U.S. SEC.

The terms "mineral resource", "proven mineral reserve" and "probable mineral reserve" used in a technical report based on NI 43-101 are Canadian mining terms defined in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") in the CIM Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as the same may be amended from time to time by the CIM. These definitions differ from the definitions of those terms in Guide 7 promulgated by the SEC. Under U.S. standards, mineralization may not be classified as a "reserve" unless a determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Under Guide 7 standards, a "Final" or "Bankable" feasibility study is required to report reserves, the three-year historical average precious metals prices are used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate government authority. One consequence of these differences is that "reserves" calculated in accordance with Canadian standards may not be "reserves" under Guide 7 standards. U.S. investors should be aware that Gold Resource Corporation has not conducted a feasibility study for any of its properties located in the Mexico and as such, the properties do not have "reserves" as defined by Guide 7. U.S. investors are cautioned not to assume that any part or all of the disclosed mineralized material will be confirmed or converted into Guide 7 compliant "reserves" and are urged to consider closely the disclosure in our Form 10-K. You can review and obtain copies of these filings from the SEC website at http://www.sec.gov/edgar.shtml.

A report prepared in accordance with NI 43-101 will state measured, indicated and inferred resources, which are measurements that are generally not permitted in filings made with the SEC. The estimation of measured resources and indicated resources involve greater uncertainty as to their existence and economic feasibility than the estimation of proven and probable reserves. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources. It cannot be assumed that all or any part of inferred resources will ever be upgraded to a higher category. Therefore, U.S. investors are also cautioned not to assume that all or any part of inferred resources exist, or that they can be mined legally or economically.

The SEC only permits issuers to report "mineralized material" in tonnage and average grade without reference to contained ounces. Under U.S. regulations, the tonnage and average grade described by us would be characterized as mineralized material. We provide such disclosure about our exploration properties to allow a means of comparing our projects to those of other companies in the mining industry, many of which are Canadian and report pursuant to NI 43-101.

We also caution that drilling results are not indicative of mineralized material in other areas where we have mining interests. Furthermore, mineralized material identified on our properties does not and may never have demonstrated economic or legal viability.

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 52,902,620 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.

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