UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2022~~2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-34857

Gold Resource Corporation

_{(Exact Name of Registrant as Specified in its charter)}

Colorado

84-1473173

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

7900 E. Union Ave, Suite 320, Denver, Colorado 80237

(Address of Principal Executive Offices) (Zip Code)

(303) 320-7708

(Registrant’s telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:


a
Title of each class	Trading Symbol	Name of each exchange where registered
Common Stock	GORO	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes⌧No◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes⌧No◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	◻	Accelerated filer	☒

Non-accelerated filer	◻	Smaller reporting company	☐☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act◻

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐No⌧

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~88,398,109~~88,694,038 shares of common stock outstanding as of ~~October 28, 2022~~.November 2, 2023.

Table of Contents

THIRD QUARTER ~~2022~~2023 HIGHLIGHTS

Highlights for the three months ended September 30, ~~2022~~2023 are summarized below and discussed further ~~in our~~ under Item 2—Management’s Discussion and ~~Analysis:~~Analysis of Financial Condition and Results of Operations:

~~Financial~~

●

~~Our balance sheet remains strong, with $22.5 million in cash as of September 30, 2022. The decrease of $11.2 million since December 31, 2021, is after:~~

year-to-date cash inflow of $7.9 million from operating activities, net of $16.2 million in income tax payments for tax years 2021 and 2022 and $6.9 million investment in the Back Forty Project feasibility study and permitting work;

investing Canadian dollar (“C$”) 2.4 million (or U.S. dollar $1.7 million) in Maritime Resources Corp., ticker symbol “MAE.V” on the Toronto Stock Exchange—Venture Exchange (“TSX-V”), in exchange for 9.9% of the company’s shares in a private placement;

~~investing $14.1 million in capital expenditures; and~~

~~distributing to shareholders $2.7 million in dividends ($0.9 million this quarter, totaling over $122 million since 2010).~~

●

~~Net loss was $9.7 million or $0.11 loss per share for the quarter. The third quarter net loss is mainly driven by:~~

~~lower commodity prices in the third quarter relative to the prior quarter and the same period in 2021;~~

~~higher depreciation and amortization due to capital additions and a year-over-year lower Mineral Reserve base; and~~

~~higher exploration expense due to the investment in the Back Forty Project feasibility study and permitting.~~

●

~~Working capital was $28.9 million as of September 30, 2022, $0.4 million lower than as of December 31, 2021. The decrease is primarily due to a decrease in cash as discussed above.~~

●

Total cash cost for the quarter was $1,103 per gold equivalent (“AuEq”) ounce (after co-product credits) and total all-in sustaining cost for the quarter was $1,831 per AuEq ounce (after co-product credits). Both non-GAAP measures were higher in the quarter due to the impact of lower co-product credits as a result of lower base metal prices (see ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Measures~~ ~~below for a reconciliation of non-GAAP measures to applicable GAAP measures).~~

Don David Gold Mine

●

~~The Don David Gold Mine (“DDGM”) safety program aims to bolster the overall health and safety culture of our employees.~~

There were no lost time incidents during the ~~third quarter of 2022.~~

quarter. The year-to-date ~~lost time injury frequency rate per million hours~~Lost Time Injury Frequency Rate (“LTIFR”) safety record is 0.11, which is significantly lower than the Mexican average of ~~2.76~~0.89 (in US equivalent). Safety at Gold Resource Corporation is ~~substantially below~~paramount. Even with a good track record at the ~~Camimex (Mexican Chamber of Mines) benchmark of 5.7~~¹.

~~During~~Don David Gold Mine (“DDGM”), the ~~third~~Company continues to strive each quarter ~~of 2022, production, mine development,~~for improved measures, awareness, and ~~exploration were deliberately but temporarily slowed to improve safety specific to ground support and ventilation.~~training.

●

In the third quarter of ~~2022,~~2023, the Don David Gold Mine produced and sold a total of ~~8,042~~6,532 gold equivalent (“AuEq”) ounces, ~~comprising 5,478~~comprised of 3,982 gold ounces and ~~225,012~~208,905 silver ounces at an average sales price per ounce of ~~$1,627~~$1,934 and ~~$19,~~$24, respectively.

●

~~While exploration was temporarily slowed to address safety improvement opportunities, work~~The DDGM diamond drilling program continued as planned during the third quarter, using five drill rigs with encouraging results. Drilling continued to ~~focus~~advance on ~~infill~~two fronts: (1) Infill drilling designed to upgrade Inferred resources to the Indicated category; and (2) Expansion drilling with ~~encouraging results from~~the objective of identifying additional Inferred resources via step-out drilling. The drilling during the third quarter was successful in testing the northern extensions of the Splay 31 and Marena North veins of the Arista system, as well as in expanding the Three Sisters and ~~Switchback~~Gloria vein ~~systems. The step-out resource expansion drilling is ongoing,~~systems to the northwest and ~~surface sampling programs at the Alta Gracia project continue.~~down-dip (Switchback system).

Back Forty Project

●

~~The feasibility study~~Optimization work related to the metallurgy and the economic model for the Back Forty Project in Michigan, USA ~~progressed during the third quarter of 2022. Work related to metallurgy~~was completed, and the ~~economic model is expected~~Company released the Technical Report Summary for the Back Forty Project as Exhibit 96.1 to ~~continue into~~Form 8-K filed on October 26, 2023. ~~Permit applications will not be submitted with state agencies in Michigan until the completion~~Results of the ~~feasibility study.~~work indicate a more robust economic project with no planned impacts to wetlands that is more protective of the environment, which should facilitate a successful mine permitting process.

Financial

●

The Company has $6.7 million in cash as of September 30, 2023, and zero debt.

●

~~On August 5, 2022,~~Net loss was $7.3 million or $0.08 per share for the ~~Company~~quarter, which was ~~invited by Michigan’s Department~~after a significant push on exploration development and underground drilling.

●

Working capital was $13.8 million as of ~~Environment, Great Lakes~~September 30, 2023.

●

Total cash cost after co-product credits for the quarter was $1,839 per gold equivalent (“AuEq”) ounce and ~~Energy~~total all-in sustaining cost (“~~EGLE”~~AISC”) after co-product credits for the quarter was $2,669 per AuEq ounce. The year-to-date total cash cost after co-product credits was $1,210, and the total AISC after co-product credits was $1,852. (See Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Measures below for a reconciliation of non-GAAP measures to participate in a voluntary Scoping Environmental Impact Assessment (“SEIA”) meeting to present to local community leaders the initial site plan and other key improvements being incorporated into the Back Forty Project’s optimized feasibility study.applicable GAAP measures).

¹~~Further information regarding the Mexican Chamber of Mines benchmark can be found at~~ ~~https://www.camimex.org.mx/index.php/estadisticas/Seguridad~~

Gold Resource Corporation
2

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

GOLD RESOURCE CORPORATION

CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS

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

(Unaudited)


		As of		As of			As of		As of
		September 30,		December 31,			September 30,		December 31,
	Note	2022		2021		Note	2023		2022
ASSETS
Current assets:
Cash and cash equivalents		$	22,531	$	33,712		$	6,706	$	23,675
Accounts receivable, net			3,741		8,672			4,714		5,085
Inventories, net	4		13,593		10,361	4		10,442		13,500
Promissory note	6		3,575		3,885
Prepaid expenses and other current assets	7		4,457		2,285	6		7,038		3,839
Zinc zero cost collar	17		432		-
Total current assets			48,329		58,915			28,900		46,099
Property, plant and mine development, net	8		149,232		156,771
Property, plant, and mine development, net						7		144,194		152,563
Deferred tax assets, net						5		11,589		5,927
Other non-current assets			1,977		76	8		5,009		5,509
Total assets		$	199,538	$	215,762		$	189,692	$	210,098
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	11,267	$	13,308		$	10,240	$	13,329
Income taxes payable, net			567		6,801
Mining royalty taxes payable, net			3,156		2,975			1,015		3,945
Zinc zero cost collar	17		-	��	1,844
Contingent consideration						12		2,209		2,211
Accrued expenses and other current liabilities	9		4,476		4,731	9		1,637		5,197
Total current liabilities			19,466		29,659			15,101		24,682
Reclamation and remediation liabilities	11		3,232		3,112	11		12,349		10,366
Gold and silver stream agreements	10		43,201		42,560
Gold and silver stream agreements liability						10		44,703		43,466
Deferred tax liabilities, net	5		11,826		13,126	5		14,269		15,151
Contingent consideration	12		4,036		4,603	12		2,138		2,179
Other non-current liabilities	9		2,133		1,952	9		1,618		2,490
Total liabilities			83,894		95,012			90,178		98,334
Shareholders' equity:
Common stock - $0.001 par value, 200,000,000 shares authorized:
88,398,109 and 88,338,774 shares outstanding at September 30, 2022 and December 31, 2021, respectively			89		89
88,628,365 and 88,398,109 shares outstanding at September 30, 2023 and December 31, 2022, respectively								89		89
Additional paid-in capital			110,736		110,153			111,734		111,024
Retained earnings			11,874		17,563
(Accumulated deficit) retained earnings								(5,254)		7,706
Treasury stock at cost, 336,398 shares			(5,884)		(5,884)			(5,884)		(5,884)
Accumulated other comprehensive loss			(1,171)		(1,171)			(1,171)		(1,171)
Total shareholders' equity			115,644		120,750			99,514		111,764
Total liabilities and shareholders' equity		$	199,538	$	215,762		$	189,692	$	210,098

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and ~~Notes—Unaudited~~Notes (Unaudited)
3

Table of Contents

GOLD RESOURCE CORPORATION

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS

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

(Unaudited)


		For the three months ended				For the nine months ended					For the three months ended				For the nine months ended
		September 30,				September 30,					September 30,				September 30,
	Note	2022		2021		2022		2021		Note	2023		2022		2023		2022

Sales, net	3	$	23,869	$	29,029	$	106,350	$	87,133	3	$	20,552	$	23,869	$	76,587	$	106,350
Cost of sales:
Production costs			19,380		17,216		61,176		51,982			18,957		19,380		59,109		61,176
Depreciation and amortization			6,609		3,521		19,829		11,299			5,790		6,609		19,518		19,829
Reclamation and remediation			58		47		181		152			216		58		611		181
Total cost of sales			26,047		20,784		81,186		63,433			24,963		26,047		79,238		81,186
Mine gross (loss) profit			(2,178)		8,245		25,164		23,700			(4,411)		(2,178)		(2,651)		25,164
Costs and expenses:
General and administrative expenses			1,799		2,355		5,618		6,070			1,764		1,799		5,087		5,618
DDGM exploration expenses			1,143		1,805		3,190		3,660
Back Forty Project expenses			3,830		-		6,925		-
Restructuring expenses			-		-		-		496
Mexico exploration expenses												1,540		1,143		3,974		3,190
Michigan Back Forty Project expenses												420		3,830		1,265		6,925
Stock-based compensation	16		450		30		1,617		711	16		(102)		450		502		1,617
Realized and unrealized (gain) loss on zinc zero cost collar	17		(218)		184		120		184	17		-		(218)		-		120
Other expense (income), net	18		765		(10)		1,817		543
Other expense, net										18		1,967		765		4,147		1,817
Total costs and expenses			7,769		4,364		19,287		11,664			5,589		7,769		14,975		19,287
(Loss) income before income taxes			(9,947)		3,881		5,877		12,036			(10,000)		(9,947)		(17,626)		5,877
Provision for income taxes	5		(217)		2,352		8,915		6,697
Net (loss) income		$	(9,730)	$	1,529	$	(3,038)	$	5,339
Net (loss) income per common share:
Basic and diluted net (loss) income per common share	19	$	(0.11)	$	0.02	$	(0.03)	$	0.07
(Benefit) provision for income taxes										5		(2,659)		(217)		(4,666)		8,915
Net loss											$	(7,341)	$	(9,730)	$	(12,960)	$	(3,038)
Net loss per common share:
Basic and diluted net loss per common share										19	$	(0.08)	$	(0.11)	$	(0.15)	$	(0.03)

Weighted average shares outstanding:
Basic	19		88,391,220		74,552,545		88,358,188		74,481,281
Diluted	19		88,391,220		74,898,520		88,358,188		74,842,095
Basic and diluted										19		88,499,327		88,391,220		88,458,276		88,358,188

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and ~~Notes—Unaudited~~Notes (Unaudited)
4

Table of Contents

GOLD RESOURCE CORPORATION

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

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

(Unaudited)


	For the three months ended September 30, 2022 and 2021													For the three months ended September 30, 2023 and 2022
	Number of Common Shares	Par Value of Common Shares		Additional Paid- in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total Shareholders' Equity
Balance, June 30, 2021	74,868,322	$	75	$	85,269	$	14,974	$	(5,884)	$	(1,171)	$	93,263
Stock-based compensation	-		-		160		-		-		-		160
Common stock issued for vested restricted stock units	50,183		-		-		-		-		-		-
Dividends declared	-		-		-		(745)		-		-		(745)
Surrender of stock for taxes due on vesting	(428)		-		-		-		-		-		-
Net income	-		-		-		1,529		-		-		1,529
Balance, September 30, 2021	74,918,077	$	75	$	85,429	$	15,758	$	(5,884)	$	(1,171)	$	94,207
														Number of Common Shares	Par Value of Common Shares		Additional Paid- in Capital		Retained Earnings (accumulated deficit)		Treasury Stock		Accumulated Other Comprehensive Loss		Total Shareholders' Equity
Balance, June 30, 2022	88,709,090	$	89	$	110,480	$	22,488	$	(5,884)	$	(1,171)	$	126,002	88,709,090	$	89	$	110,480	$	22,488	$	(5,884)	$	(1,171)	$	126,002
Stock-based compensation	-		-		285		-		-		-		285	-		-		285		-		-		-		285
Common stock issued for vested restricted stock units	41,666		-		-		-		-		-		-	41,666		-		-		-		-		-		-
Dividends declared	-		-		-		(884)		-		-		(884)
Dividends declared ⁽¹⁾														-		-		-		(884)		-		-		(884)
Unclaimed shares related to the Aquila acquisition	(16,249)		-		(29)		-		-		-		(29)	(16,249)		-		(29)		-		-		-		(29)
Net income	-		-		-		(9,730)		-		-		(9,730)
Net loss														-		-		-		(9,730)		-		-		(9,730)
Balance, September 30, 2022	88,734,507	$	89	$	110,736	$	11,874	$	(5,884)	$	(1,171)	$	115,644	88,734,507	$	89	$	110,736	$	11,874	$	(5,884)	$	(1,171)	$	115,644

Balance, June 30, 2023														88,804,940	$	89	$	111,580	$	2,087	$	(5,884)	$	(1,171)	$	106,701
Stock-based compensation														-		-		105		-		-		-		105
Common stock issued for vested restricted stock units														41,668		-		-		-		-		-		-
Issuance of stock, net of issuance costs ⁽²⁾														130,199		-		56		-		-		-		56
Surrender of stock for taxes due on vesting														(12,044)		-		(7)		-		-		-		(7)
Net loss														-		-		-		(7,341)		-		-		(7,341)
Balance, September 30, 2023														88,964,763	$	89	$	111,734	$	(5,254)	$	(5,884)	$	(1,171)	$	99,514

(1)	Cash dividends declared and paid per share was $0.01 for the three months ended September 30, 2022. On February 13, 2023, the Company announced the suspension of future quarterly dividends to protect our balance sheet and to focus capital resources on exploration and growth opportunities.

(2)

An aggregate of 130,199 shares of the Company’s common stock were sold through the At The Market Agreement (“ATM”) during the three months ended September 30, 2023, for net proceeds to the Company, after deducting the Agent’s commissions and other expenses, of $0.1 million. There were no ATM sales during the three months ended September 30, 2022. Please also see Note—13 Shareholder’s Equity in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information.

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial ~~Statements.~~

Statements

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and ~~Notes—Unaudited~~Notes (Unaudited)
5

Table of Contents

GOLD RESOURCE CORPORATION

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

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

(Unaudited)


	For the nine months ended September 30, 2022 and 2021													For the nine months ended September 30, 2023 and 2022
	Number of Common Shares	Par Value of Common Shares		Additional Paid- in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total Shareholders' Equity		Number of Common Shares	Par Value of Common Shares		Additional Paid- in Capital		Retained Earnings (accumulated deficit)		Treasury Stock		Accumulated Other Comprehensive Loss		Total Shareholders' Equity
Balance, December 31, 2020	74,713,356	$	75	$	84,865	$	12,653	$	(5,884)	$	(1,171)	$	90,538
Balance, December 31, 2021														88,675,172	$	89	$	110,153	$	17,563	$	(5,884)	$	(1,171)	$	120,750
Stock-based compensation	-		-		506		-		-		-		506	-		-		952		-		-		-		952
Net stock options exercised	217,718		-		263		-		-		-		263	-		-		(331)		-		-		-		(331)
Common stock issued for vested restricted stock units	52,797		-		-		-		-		-		-	80,169		-		-		-		-		-		-
Dividends declared(1)	-		-		-		(2,234)		-		-		(2,234)	-		-		-		(2,651)		-		-		(2,651)
Surrender of stock for taxes due on vesting	(65,794)		-		(205)		-		-		-		(205)
Net income	-		-		-		5,339		-		-		5,339
Balance, September 30, 2021	74,918,077	$	75	$	85,429	$	15,758	$	(5,884)	$	(1,171)	$	94,207

Balance, December 31, 2021	88,675,172	$	89	$	110,153	$	17,563	$	(5,884)	$	(1,171)	$	120,750
Stock-based compensation	-		-		952		-		-		-		952
Stock options exercised - settled in cash	-		-		(331)		-		-		-		(331)
Common stock issued for vested restricted stock units	80,169		-		-		-		-		-		-
Dividends declared	-		-		-		(2,651)		-		-		(2,651)
Unclaimed shares related to the Aquila acquisition	(16,249)		-		(29)		-		-		-		(29)	(16,249)		-		(29)		-		-		-		(29)
Surrender of stock for taxes due on vesting	(4,585)		-		(9)		-		-		-		(9)	(4,585)		-		(9)		-		-		-		(9)
Net income	-		-		-		(3,038)		-		-		(3,038)
Net loss														-		-		-		(3,038)		-		-		(3,038)
Balance, September 30, 2022	88,734,507	$	89	$	110,736	$	11,874	$	(5,884)	$	(1,171)	$	115,644	88,734,507	$	89	$	110,736	$	11,874	$	(5,884)	$	(1,171)	$	115,644

Balance, December 31, 2022														88,734,507	$	89	$	111,024	$	7,706	$	(5,884)	$	(1,171)	$	111,764
Stock-based compensation														-		-		672		-		-		-		672
Common stock issued for vested restricted stock units														130,238		-		-		-		-		-		-
Issuance of stock, net of issuance costs ⁽²⁾														130,199		-		56		-		-		-		56
Surrender of stock for taxes due on vesting														(30,181)		-		(18)		-		-		-		(18)
Net loss														-		-		-		(12,960)		-		-		(12,960)
Balance, September 30, 2023														88,964,763	$	89	$	111,734	$	(5,254)	$	(5,884)	$	(1,171)	$	99,514

(1)	Cash dividends declared and paid per share were $0.03 for the nine months ended September 30, 2022. On February 13, 2023, the Company announced the suspension of future quarterly dividends to protect our balance sheet and to focus capital resources on exploration and growth opportunities.

(2)

An aggregate of 130,199 shares of the Company’s common stock were sold through the ATM Agreement during the nine months ended September 30, 2023, for net proceeds to the Company, after deducting the Agent’s commissions and other expenses, of $0.1 million. There were no ATM sales during the nine months ended September 30, 2022. Please also see Note—13 Shareholder’s Equity in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information.

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and ~~Notes—Unaudited~~Notes (Unaudited)
6

Table of Contents

GOLD RESOURCE CORPORATION

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

(Unaudited)


		For the nine months ended September 30,					For the nine months ended September 30,
	Note	2022		2021		Note	2023		2022
Cash flows from operating activities:
Net income		$	(3,038)	$	5,339
Adjustments to reconcile net income to net cash from operating activities:
Net loss							$	(12,960)	$	(3,038)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Deferred income tax benefit			(1,101)		(74)			(5,520)		(1,101)
Depreciation and amortization, including amortization in reclamation			19,936		11,405
Depreciation and amortization, including accretion in reclamation								19,586		19,936
Stock-based compensation			1,617		711			502		1,617
Other operating adjustments	21		(1,294)		475	21		1,210		(1,294)
Changes in operating assets and liabilities:
Accounts receivable			4,931		(721)			371		4,931
Inventories			(2,339)		(810)			1,580		(2,339)
Prepaid expenses and other current assets			(1,404)		(1,038)			300		(1,404)
Accounts payable and other accrued liabilities			(3,032)		2,730			(5,619)		(3,032)
Mining royalty and income taxes payable, net			(6,362)		3,855			(6,452)		(6,362)
Net cash provided by operating activities			7,914		21,872
Net cash (used in) provided by operating activities								(7,002)		7,914

Cash flows from investing activities:
Capital expenditures			(14,123)		(15,217)			(9,751)		(14,123)
Equity investment			(1,743)		-			-		(1,743)
Proceeds from the sale of gold and silver rounds			533		-			-		533
Net cash used in investing activities			(15,333)		(15,217)			(9,751)		(15,333)

Cash flows from financing activities:
Proceeds (for) from the exercise of stock options			(376)		263
Cash settlement of options exercise								-		(376)
Dividends paid			(2,651)		(2,481)			-		(2,651)
Proceeds from the ATM sales								56		-
Other financing activities			-		3			(23)		-
Net cash used in financing activities			(3,027)		(2,215)
Net cash provided by (used in) financing activities								33		(3,027)
Effect of exchange rate changes on cash and cash equivalents			(735)		(301)			(249)		(735)

Net (decrease) increase in cash and cash equivalents			(11,181)		4,139
Net decrease in cash and cash equivalents								(16,969)		(11,181)
Cash and cash equivalents at beginning of period			33,712		25,405			23,675		33,712
Cash and cash equivalents at end of period		$	22,531	$	29,544		$	6,706	$	22,531


Supplemental Cash Flow Information
Interest expense paid		$	-	$	-
Income and mining taxes paid		$	16,411	$	2,772		$	7,064	$	16,411
Non-cash investing activities:
Change in capital expenditures in accounts payable		$	(836)	$	(72)
Change in estimate for asset retirement costs		$	-	$	7
Non-cash investing or financing activities
Balance of capital expenditures in accounts payable							$	392	$	877

The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and ~~Notes—Unaudited~~Notes (Unaudited)
7

Table of Contents

GOLD RESOURCE CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL ~~STATEMENT~~SSTATEMENTS

September 30, ~~2022~~2023
(Unaudited)

1. Basis of Preparation of Financial Statements

The Condensed Consolidated Interim Financial Statements (“interim financial statements”) of Gold Resource Corporation and its subsidiaries (collectively, the “Company”) are unaudited and have been prepared in accordance with the rules of the Securities and Exchange Commission (“SEC”) for interim statements. Certain information and footnote disclosures required by United States Generally Accepted Accounting Principles (“U.S. GAAP”) have been condensed or omitted as permitted by such ~~rules, although~~rules. However, the Company believes that the disclosures included are adequate to make the information presented not misleading. In the opinion of management, all adjustments (including normal recurring adjustments) and disclosures necessary for a fair presentation of these interim financial statements have been included. The results reported in these interim financial statements ~~are~~do not necessarily ~~indicative of~~indicate the results that may be reported for the entire year. These interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, ~~2021~~2022 included in the Company’s annual report on Form ~~10-K.~~10-K (the “2022 Annual Report”). The year-end balance sheet data was derived from the audited financial statements. Unless otherwise noted, there have been no material changes to the footnotes from those accompanying the audited consolidated financial statements contained in the 2022 Annual Report.

In connection with the preparation of the Company’s ~~annual report on Form 10-K.~~financial statements for the period ended September 30, 2023, the Company’s management identified an immaterial error in prior period financial statements, whereby deferred tax liabilities and deferred tax assets attributable to different tax-paying components of the entity or to different tax jurisdictions were incorrectly offset. The Company has corrected the consolidated balance sheets as of December 31, 2022, March 31, 2023, and June 30, 2023, for this immaterial error. The effects of these revisions are as follows:

Revision to the Consolidated Balance Sheet as of December 31, 2022 (unaudited):


	As filed as of				Revised as of
	December 31,		Adjustments		December 31,
	2022				2022
ASSETS
Current assets:
Total current assets	$	46,099	$	-	$	46,099
Property, plant, and mine development, net		152,563		-		152,563
Deferred tax assets, net		-		5,927		5,927
Other non-current assets		5,509		-		5,509
Total assets	$	204,171	$	5,927	$	210,098
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Total current liabilities	$	24,682	$	-	$	24,682
Reclamation and remediation liabilities		10,366		-		10,366
Gold and silver stream agreements liability		43,466		-		43,466
Deferred tax liabilities, net		9,224		5,927		15,151
Contingent consideration		2,179		-		2,179
Other non-current liabilities		2,490		-		2,490
Total liabilities		92,407		5,927		98,334
Shareholders' equity:
Total shareholders' equity		111,764		-		111,764
Total liabilities and shareholders' equity	$	204,171	$	5,927	$	210,098

~~Certain items in~~Additionally, the ~~prior period’s consolidated financial statements~~Company revised Note 22 to reflect the impact of the above correction on the Company’s Oaxaca, Mexico segment.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and ~~notes have been reclassified to conform~~Notes (Unaudited)
8

Table of Contents

Revision to the ~~current presentation. These reclassifications had no effect on~~Condensed Consolidated Balance Sheet (unaudited) as of March 31, 2023:


	As filed as of				Revised as of
	March 31,		Adjustments		March 31,
	2023				2023
Deferred tax assets, net	$	-	$	7,300	$	7,300
Total assets	$	195,201	$	7,300	$	202,501
Deferred tax liabilities, net	$	7,719	$	7,300	$	15,019
Total liabilities	$	84,210	$	7,300	$	91,510
Total liabilities and shareholders' equity	$	195,201	$	7,300	$	202,501

Revision to the ~~reported results~~Condensed Consolidated Balance Sheet (unaudited) as of ~~operations.~~June 30, 2023:


	As filed as of				Revised as of
	June 30,		Adjustments		June 30,
	2023				2023
Deferred tax assets, net	$	-	$	9,951	$	9,951
Total assets	$	191,072	$	9,951	$	201,023
Deferred tax liabilities, net	$	4,674	$	9,951	$	14,625
Total liabilities	$	84,371	$	9,951	$	94,322
Total liabilities and shareholders' equity	$	191,072	$	9,951	$	201,023

2. Recently Adopted Accounting Standards

Recent accounting pronouncements issued have been evaluated and do not presently impact our financial ~~statements and supplemental data.~~statements.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes—Unaudited
8

~~Table of Contents~~

3. Revenue

The Company derives its revenue from the sale of doré and concentrates. The following table presents the Company’s net sales for each period presented, disaggregated by source:


	For the three months ended September 30,					For the nine months ended September 30,				For the three months ended September 30,				For the nine months ended September 30,
	2022		2021			2022		2021		2023		2022		2023		2022

	(in thousands)					(in thousands)				(in thousands)				(in thousands)
Doré sales, net
Gold	$	1,517		$	1,634	$	5,245	$	6,816	$	417	$	1,517	$	2,685	$	5,245
Silver		46			38		123		643		19		46		120		123
Less: Refining charges		(18)			(21)		(35)		(112)		(3)		(18)		(45)		(35)
Total doré sales, net		1,545			1,651		5,333		7,347		433		1,545		2,760		5,333
Concentrate sales
Gold		7,592			8,709		35,983		22,904		7,273		7,592		25,844		35,983
Silver		4,266			6,179		15,497		19,443		4,900		4,266		18,082		15,497
Copper		2,164			2,447		8,969		9,547		2,049		2,164		7,792		8,969
Lead		2,075			3,641		9,670		8,641		2,060		2,075		7,807		9,670
Zinc		10,003			9,187		40,672		27,193		6,283		10,003		23,762		40,672
Less: Treatment and refining charges		(2,842)			(2,307)		(8,710)		(8,098)		(2,785)		(2,842)		(9,255)		(8,710)
Total concentrate sales, net		23,258			27,856		102,081		79,630		19,780		23,258		74,032		102,081
Realized (loss) gain - embedded derivative, net⁽¹⁾		(1,212)			(246)		814		204		(633)		(1,212)		249		814
Unrealized gain (loss) - embedded derivative, net		278			(232)		(1,878)		(48)		972		278		(454)		(1,878)
Total sales, net	$	23,869		$	29,029	$	106,350	$	87,133	$	20,552	$	23,869	$	76,587	$	106,350

(1)

Copper, lead, and zinc are co-products. In the Realized (loss) gain - embedded derivative, net, there ~~are $0.9~~is $0.7 million loss and ~~$0.8~~$0.4 million ~~gain,~~loss, respectively, related to these co-products for the three and nine months ended September 30, ~~2022.~~2023. There ~~are $0.2~~is $0.9 million and ~~$0.5~~$0.8 million gain,

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes (Unaudited)
9

Table of Contents

respectively, in the Realized (loss) gain - embedded derivative, net, related to the co-products for the three and nine months ended September 30, ~~2021.~~2022.

4. Inventories, net

At September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, inventories, net, consisted of the following:


	As of		As of		As of		As of
	September 30,		December 31,		September 30,		December 31,
	2022		2021		2023		2022

					(Unaudited)
	(in thousands)				(in thousands)
Stockpiles - underground mine	$	655	$	-	$	69	$	597
Concentrates		3,574		2,048		2,301		3,271
Doré, net		641		452		366		653
Subtotal - product inventories		4,870		2,500		2,736		4,521
Materials and supplies ⁽¹⁾		8,723		7,861		7,706		8,979
Total	$	13,593	$	10,361	$	10,442	$	13,500

(1)	Net of reserve for obsolescence of ~~$384~~$0.1 million both as of September 30, ~~2022~~2023 and December 31, ~~2021.~~2022.

5. Income Taxes

The Company recorded an income tax benefit of $2.7 million and $4.7 million, respectively, for the three and nine months ended September 30, 2023. For the three and nine months ended September 30, 2022, the Company recorded an income tax benefit of $0.2 million and income tax expense ~~$8.9 million, respectively, for the three and nine months ended September 30, 2022. For the three and nine months ended September 30, 2021, the Company recorded an income tax expense~~ of ~~$2.4 million and $6.7~~$8.9 million, respectively. In accordance with applicable

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes—Unaudited
9

~~Table of Contents~~

accounting rules, the interim provision for taxes is calculated using the estimated consolidated annual effective tax rate. The consolidated effective tax rate is a function of the combined effective tax rates for the jurisdictions in which the Company operates. Variations in the relative proportions of jurisdictional income could result in fluctuations to the Company’s consolidated effective tax rate. At the federal level, the Company’s income in the U.S. is taxed at 21%, and a 5% withholding tax applies to dividends received from Mexico. ~~The~~Income in Mexico ~~income~~ is taxed at 37.5% (30% income tax and 7.5% mining tax), and ~~Canada~~Canada’s income is taxed at 26.5%, which results in a consolidated effective tax rate above statutory U.S. Federal rates. The U.S. and Canadian jurisdictions do not currently generate taxable income.

Please also see Note—23 Subsequent Events in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited).

Mexico Mining Taxation

Mining entities in Mexico are subject to two mining duties, in addition to the 30% Mexico corporate income ~~tax. The first is~~tax: (i) a “special” mining duty of 7.5% of taxable income as defined under Mexican tax law (also referred to as “mining royalty tax”) on extraction activities performed by concession ~~holders.~~holders, and (ii) the “extraordinary” mining duty of 0.5% on gross revenue from the sale of gold, silver, and platinum. The mining royalty tax is generally ~~applicable~~applies to earnings before income tax, depreciation, depletion, amortization, and ~~interest,~~interest. In calculating the mining royalty tax, there are no Gold Resource Corporation deductions related to depreciable costs from operational fixed assets. However, prospecting and ~~it is considered an income tax for purposes of financial reporting. The second is~~exploration expenses are amortized using a ~~0.5% mining duty over sales of gold and silver, but this duty is not considered an income tax for financial reporting purposes and reported as production cost.~~10% rate in a 10-year straight line. Both duties are tax deductible for ~~Mexico~~ income tax purposes.

~~On January 1, 2022, the 2022 Tax Reform became~~ As a result, our effective ~~in Mexico, which included several amendments~~tax rate applicable to the Income Tax Law relevant to tax deductions. For 2022, a depreciation rate of 5% per year was established for construction of facilities, additions, repairs, improvements, adaptations, as well as any other construction performed in a mining lot, in accordance with Article 12 of theCompany’s Mexican ~~Mining Law.~~

operations is higher than Mexico’s statutory rate.

The Company periodically transfers funds from its Mexican ~~wholly-owned~~wholly owned subsidiary to the U.S. ~~in the form of~~as dividends, which are subject to a 10% Mexico withholding tax, unless otherwise provided per a tax treaty. The current U.S.-Mexico tax treaty limits the dividend withholding tax between these countries to 5%, as long as ~~certain~~specific requirements are met. Based on the Company’s understanding that it meets these requirements, the Company pays a 5% withholding tax on dividends paid from Mexico. The estimated annual effective tax rate reflects the impact of the planned annual dividends for ~~2022 is reflected in the estimated annual effective tax rate.~~2023. As of September 30, ~~2022,~~2023, the Company recorded ~~$0.8~~a $0.1 million deferred tax liability related to the 5% withholding tax on funds available for transfer to the U.S. as dividends in the future ~~and~~are no longer deemed to be permanently reinvested in Mexico.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes (Unaudited)
10

Table of Contents

If these funds are distributed to the U.S. from Mexico in the future, at that time, they will be subject to the 5% dividend withholding tax payment upon distribution.

AsIn October 2023, the Company received a notification from the Mexican Tax Administration Services (“SAT”) with a sanction of 331 million pesos (approximately $18 million) as the result of a 2015 tax audit that began in 2021. The 2015 tax audit performed by SAT encompassed various tax aspects, including but not limited to intercompany transactions, mining royalty tax, and extraordinary mining tax. Management is in process of assessing this tax notification to better evaluate possible outcomes. Management believes the 2015 tax return was prepared correctly and that as of September 30, ~~2022,~~2023, the Company ~~believes that it~~ has no liability for uncertain tax positions.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes—Unaudited
10

~~Table of Contents~~

~~6. Promissory Note~~

A promissory note was acquired in the Aquila Resources, Inc. (“Aquila”) acquisition. In October 2021, Aquila sold its Wisconsin assets to Green Light Metals in return for a C$4.9 million ($3.9 million) promissory note. In June, an amended agreement was executed. Under the amended promissory note, Green Light Metals is to deliver C$4.9 million in Green Light Metal common shares once Green Light Metals goes public, or private shares of Green Light Metals at the maturity date of December 31, 2022, whichever occurs first. The shares are expected to represent approximately 20% to 28% of the total outstanding shares of Green Light Metals. Due to the short maturity of the promissory note, the carrying amount approximates the fair value, and likewise, no interest and collateral is required. Until maturity, the Company will record unrealized foreign currency gain or loss on the promissory note.

7.6. Prepaid Expenses and Other Current Assets

At September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, prepaid expenses and other current assets consisted of the following:


	As of		As of		As of		As of
	September 30,		December 31,		September 30,		December 31,
	2022		2021		2023		2022

	(in thousands)				(in thousands)
Advances to suppliers	$	1,019	$	188	$	492	$	867
Prepaid insurance		2,019		1,222		1,764		1,298
Prepaid income tax						3,693		432
Other current assets		1,419		875		1,089		1,242
Total	$	4,457	$	2,285	$	7,038	$	3,839

~~In Mexico~~Prepaid income tax

Mexican tax statutes specify that the current year tax prepayments be calculated based on a coefficient for prior year earnings, regardless of current year results. However, starting in the third quarter, these same statutes allow companies to request a reduction of the coefficient, which adjusts for losses experienced in the current year. DDGM applied for this reduction, and when approved, the Company expects that no more tax prepayments will be required this year, and a tax refund of approximately $3 Million is expected next year after filing the 2023 tax return.

Other current assets

A value added (“IVA”) tax in Mexico is assessed on the sales of products and purchases of materials and services. Businesses owe IVA taxes as the business sells a product and collects IVA taxes from its customers. Likewise, businesses are generally entitled to recover the taxes they have paid related to purchases of materials and services, either as a refund or credit to IVA tax payable. Amounts recorded as IVA taxes in the consolidated financial statements represent the net estimated IVA tax payable or receivable, since there is a legal right of offset of IVA taxes. As of September 30, ~~2022,~~2023, this resulted in ~~a small~~an asset balance ~~($0.6 million), which is~~of $0.8 million, included in Other current ~~assets above.~~assets.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes (Unaudited)
11

Table of Contents

8.7. Property, Plant, and Mine Development, net

At September 30, ~~2022~~2023 and December 31, ~~2021, property, plant~~2022, Property, Plant, and ~~mine development,~~Mine Development, net consisted of the following:

As of

As of

September 30,

December 31,

2022

2021

(in thousands)
Asset retirement costs

$
1,065

$
1,065
Construction-in-progress ⁽¹⁾

300

15,854
Furniture and office equipment

1,719

1,685
Land

9,033

9,230
Mineral interest

79,543

79,964
Light vehicles and other mobile equipment

2,328

2,224
Machinery and equipment

40,119

33,213
Mill facilities and infrastructure

35,917

24,973
Mine Development

102,457

92,138
Software and licenses

1,552

1,592
Subtotal

274,033

261,938
Accumulated depreciation and amortization

(124,801)

(105,167)
Total

$
149,232

$
156,771


	As of		As of
	September 30,		December 31,
	2023		2022

	(in thousands)
Asset retirement costs	$	7,449	$	7,449
Construction-in-progress		440		351
Furniture and office equipment		1,782		1,732
Land		9,033		9,033
Mineral interest		79,543		79,543
Light vehicles and other mobile equipment		2,126		2,327
Machinery and equipment		42,770		41,343
Mill facilities and infrastructure		36,394		35,917
Mine Development		113,519		105,263
Software and licenses		1,554		1,552
Subtotal ⁽¹⁾		294,610		284,510
Accumulated depreciation and amortization		(150,416)		(131,947)
Total	$	144,194	$	152,563

(1)	Includes accrued capital expenditures of ~~$0.2~~$0.3 million and ~~$1.7~~$1.3 million at September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes—Unaudited
11

~~Table of Contents~~

The Company recorded depreciation and amortization expense of ~~$6.6~~$5.8 million and ~~$19.8~~$19.5 million, respectively, for the three and nine months ended September 30, ~~2022~~2023, as compared to ~~$3.5~~$6.6 million and ~~$11.3~~$19.8 million, respectively, for the same periods ended September 30, ~~2021.~~2022.

8. Other Non-current Assets

At September 30, 2023 and December 31, 2022, other non-current assets consisted of the following:


	As of		As of
	September 30,		December 31,
	2023		2022

	(in thousands)
Investment in Maritime	$	1,211	$	1,559
Investment in Green Light Metals		3,608		3,611
Other non-current assets		190		339
Total	$	5,009	$	5,509

Investment in Maritime

On September 22, 2022, the Company invested Canadian Dollar (“C$”) 2.4 million (or $1.7 million) in the common shares of Maritime Resources Corp. The 47 million shares purchased represented 9.9% of the issued and outstanding shares of Maritime. As of September 30, 2023 and December 31, 2022, the fair value of the investment was $1.2 and $1.6 million, respectively.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes (Unaudited)
12

Table of Contents

Investment in Green Light Metals

A promissory note was acquired in the Aquila Resources Inc. (“Aquila”) acquisition on December 10, 2021. In October 2021, Aquila sold its Wisconsin assets to Green Light Metals in return for a C$4.9 million ($3.9 million) promissory note. In December 2022, an amended agreement was executed (1) amending the maturity date to December 28, 2022, (2) clarifying the definition of “qualified financing,” which set the value to C$0.40 per share for the common shares that were to be issued at maturity; and (3) adding a top-up provision that would result in additional common shares being issued to the Company if any Green Light Metals financing was raised at less than C$0.40 per share before March 31, 2023, essentially preventing dilution and ensuring that the total value of the Green Light Metals shares held by the Company at March 31, 2023 remains at C$4.9 million.

Upon maturity on December 28, 2022, the Company received 12,250,000 private shares of Green Light Metals, which settled the promissory note. The shares received represented 28.5% ownership in Green Light Metals at the time. After this settlement and before March 31, 2023, additional financing was raised by Green Light Metals at C$0.40 per share. Therefore, the top-up provision was not triggered, and no additional shares were received. The Company’s ownership in Green Light Metals as of September 30, 2023 is approximately 28.0%. As of both September 30, 2023 and December 31, 2022, the fair value of this equity investment was $3.6 million.

9. Accrued Expenses and Other Liabilities

At September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, accrued expenses and other liabilities consisted of the following:


	As of		As of		As of		As of
	September 30,		December 31,		September 30,		December 31,
	2022		2021		2023		2022

	(in thousands)				(in thousands)
Accrued royalty payments	$	1,769	$	1,743	$	771	$	1,787
Share-based compensation liability - current						79		-
Employee profit sharing obligation		2,028		1,888		64		2,206
Other payables		679		1,100		723		1,204
Total accrued expenses and other current liabilities	$	4,476	$	4,731	$	1,637	$	5,197

Accrued non-current labor obligation	$	1,166	$	920	$	1,221	$	1,050
Share-based compensation liability		835		206		336		884
Other long-term liabilities		132		826		61		556
Total other non-current liabilities	$	2,133	$	1,952	$	1,618	$	2,490

10. Gold and Silver Stream Agreements

The following table presents the Company’s liabilities related to the Gold and Silver Stream Agreements as of September 30, ~~2022~~2023 and December 31, ~~2021:~~2022:


	As of		As of		As of		As of
	September 30,		December 31,		September 30,		December 31,
	2022		2021		2023		2022

	(in thousands)				(in thousands)
Liability related to the Gold Stream Agreement	$	20,506	$	20,364	$	20,951	$	20,881
Liability related to the Silver Stream Agreement		22,695		22,196		23,752		22,585
Total liability	$	43,201	$	42,560	$	44,703	$	43,466

Periodic interest expense will be incurred based on an implied interest rate. The implied interest rate is determined based on the timing and probability of future production and ~~an 8%~~a 6% discount rate. Interest expense is recorded to the Condensed Consolidated Interim Statements of Operations, and the gold and silver stream agreement liability onis recorded in the Condensed Consolidated Interim Balance Sheet. These liabilities approximate fair value.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes (Unaudited)
13

Table of Contents

Gold Streaming Agreement

In November 2017, Aquila entered into a stream agreement with Osisko Bermuda Limited (“OBL”), a ~~wholly-owned~~wholly owned subsidiary of Osisko Gold Royalties Ltd (TSX & NYSE: OR), pursuant to which OBL agreed to commit approximately $55 million to Aquila through a gold stream purchase agreement. In June 2020, Aquila amended its agreement with Osisko, reducing the total committed amount to $50 million, ~~as well as~~and adjusting certain milestone dates under the gold stream to align with the current project development timeline. Aquila had received a total of $20 million of the committed funds at the time of the Gold Resource Corporation acquisition. ~~Remaining~~The remaining deposits from OBL are $5 million upon receipt of permits required ~~for the development~~to develop and ~~operation of~~operate the Back Forty Project and $25 million upon the first drawdown of an appropriate project debt finance facility. OBL has been provided a general security agreement over the Back Forty Project, which consists of the subsidiaries of Gold Resource Acquisition ~~Sub,~~Sub. Inc., a 100% owned subsidiary of Gold Resource Corporation. The initial term of the agreement is for 40 years, automatically renewable for successive ten-year periods. The agreement is subject to certain operating and financial covenants, which are in good standing as of September 30, ~~2022.~~2023.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes—Unaudited
12

~~Table of Contents~~

The $20 million received from OBL through September 30, ~~2022~~2023 is shown as a long-term liability on the Condensed Consolidated Interim Balance Sheet, along with an implied interest. The implied interest rate is applied on the OBL advance payments and calculated on the total expected life-of-mine production to be deliverable using the gold and silver metal prices as of September 30, 2023 and a discount rate of 6% (as supported in the Back Forty Project ~~Preliminary Economic Assessment) at the five-year average street consensus metal prices (based on the median) evaluated as of December 31, 2021 and is discounted at 8.0%~~S-K 1300 Technical Report Summary). As the remaining $30 million deposit is subject to the completion of ~~certain~~specific milestones and the satisfaction of certain other conditions, this amount is not reflected on the Condensed Consolidated Interim Balance Sheet.

Per the terms of the gold stream agreement, OBL will purchase 18.5% of the refined gold from Back Forty (the “Threshold Stream Percentage”) until the Company has delivered 105,000 ounces of gold (the “Production Threshold”). Upon satisfaction of the Production Threshold, the Threshold Stream Percentage will be reduced to 9.25% of the refined gold (the “Tail Stream”). In exchange for the refined gold delivered under the Stream Agreement, OBL will pay the Company ongoing payments equal to 30% of the spot price of gold on the day of delivery, subject to a maximum payment of $600 per ounce. Where the market price of gold is greater than the price paid, the difference realized from the sale of the gold will be applied ~~against~~as a repayment of the deposit received from Osisko.

(See Note 12—Commitments and Contingencies in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information.)

Silver Stream Agreement

Through a series of contracts, Aquila executed a silver stream agreement with OBL to purchase 85% of the silver produced and sold at the Back Forty Project. A total of $17.2 million has been advanced under the agreement as of September 30, ~~2022.~~2023. There are no future deposits ~~remaining~~to receive under the agreement. The initial term of the agreement is for 40 years, automatically renewable for successive ten-year periods. The agreement is subject to certain operating and financial covenants, which are in good standing as of September 30, ~~2022.~~

2023.

Per the terms of the silver stream agreement, OBL will purchase 85% of the silver produced from the Back Forty Project at a fixed price of $4 per ounce of silver. Where the market price of silver is greater than $4 per ounce, the difference realized from the sale of the silver will be applied ~~against~~as a repayment of the deposit received from Osisko.

The $17.2 million received from OBL through September 30, ~~2022~~2023 is shown as a long-term liability on the Condensed Consolidated Interim Balance Sheet along with an implied interest. (See Note 12—Commitments and Contingencies in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information.)

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes (Unaudited)
14

Table of Contents

11. Reclamation and Remediation

The following table presents the changes in reclamation and remediation obligations for the nine months ended September 30, ~~2022~~2023 and the year ended December 31, ~~2021:~~2022:


	2022		2021		2023		2022

	(in thousands)				(in thousands)
Reclamation liabilities – balance at beginning of period	$	1,833	$	1,890	$	1,949	$	1,833
Foreign currency exchange loss (gain)		25		(57)
Foreign currency exchange loss						192		116
Reclamation liabilities – balance at end of period		1,858		1,833		2,141		1,949

Asset retirement obligation – balance at beginning of period(1)		1,279		1,208		8,417		1,279
Changes in estimate ⁽¹⁾						-		6,384
Liability for Aquila drillhole capping ⁽²⁾						404		-
Accretion		77		109		547		668
Foreign currency exchange loss (gain)		18		(38)
Foreign currency exchange loss						840		86
Asset retirement obligation – balance at end of period		1,374		1,279		10,208		8,417
Total period end balance	$	3,232	$	3,112	$	12,349	$	10,366

(1)

In 2022, the Company updated its closure plan study, which resulted in a $6.4 million increase in the estimated liability and asset retirement costs. This increase is a result of formalizing a tailings storage facility closure plan, the addition of the dry stack facility and the filtration plant, and the increase of inflation in Mexico.

(2)

As of December 31, 2022, the Company reported the liability to remediate exploration drill holes at the Back Forty Project in Michigan, USA in other non-current liabilities. As of March 31, 2023, this liability was reclassified to non-current reclamation and remediation liabilities. Upon completion of the optimization work and the related mine closure plan, an asset for asset retirement obligation and corresponding liability for reclamation and remediation will be recorded.

The Company’s undiscounted reclamation liabilities of ~~$1.9~~$2.1 million and ~~$1.8~~$1.9 million as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, are related to the Don David Gold Mine in Mexico. These represent reclamation liabilities that were expensed through 2013 before proven and probable reserves were established and the Company was considered to be a development stage entity; therefore, most of the costs, including asset retirement costs, were not allowed to be capitalized as part of our Property, Plant, &and Mine Development.

The Company’s asset retirement obligations reflect the additions to the asset for reclamation and remediation costs in Property, Plant, &and Mine Development, post 2013 development stage status, which are discounted using a credit adjusted

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes—Unaudited
13

~~Table of Contents~~

risk-free rate of 8%. As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company’s asset retirement obligation was $10.2 million and $8.4 million, respectively, primarily related to the Don David Gold Mine in ~~Mexico was $1.4 million~~Mexico.

For the Back Forty Project in the third quarter of 2023, the Company capped 26 drillholes as required by state law. The remaining 50 study holes are not expected to be capped in the next 12 months and ~~$1.3 million, respectively.~~are shown as long-term liability.

12. Commitments and Contingencies

Commitments

As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company has equipment purchase commitments of approximately ~~$1.2~~$1.7 million and ~~$0.4~~$1.2 million, respectively.

Contingent Consideration

With the Aquila acquisition, the Company assumed a contingent consideration related to the December 30, 2013, Aquila acquisition of 100% of the shares of HudBay Michigan Inc. (“HMI”), a subsidiary of HudBay Minerals Inc. (“HudBay”), effectively giving Aquila 100% ownership in the Back Forty Project (the “HMI Acquisition”). Pursuant to the HMI Acquisition, HudBay’s 51% interest in the Back Forty Project was acquired in consideration for the issuance of common shares of Aquila, future milestone payments tied to the development of the Back Forty Project, and a 1% net

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes (Unaudited)
15

Table of Contents

smelter return royalty on production from certain land parcels in the project. The issuance of shares and 1% net smelter obligations were settled before the Company acquired Aquila.

The contingent consideration is composed of the following in Canadian dollars:

The value of future installments is based on C$9 million tied to the development of the Back Forty project as follows:

C$3 million payable on completion of any form of financing for purposes including the commencement of construction of the Back ~~Forty.~~Forty Mine. Up to 50% of the C$3 million can be paid, at the Company’s option, in Gold Resource Corporation shares, with the balance payable in ~~cash (if~~cash. (If, as of ~~November 2023~~the tenth anniversary of the HMI acquisition by Aquila, this milestone has not been achieved or payment made, ~~HMI~~HudBay has the right to repurchase a 51% ownership in the Back Forty Project);

C$2 million payable in cash 90 days after the commencement of commercial production;

C$2 million payable in cash 270 days after the commencement of commercial production; and

C$2 million payable in cash 450 days after the commencement of commercial production.

The value of the contingent consideration as of September 30, ~~2022~~2023 was ~~$4.0 million.~~$4.3 million, including $2.2 million in current liabilities and $2.1 million in non-current liabilities. As the Company has the option to pay the first milestone payment of C$3 million ($2.2 million) in 2023 in order to prevent the repurchase of 51% ownership by HMI, this portion is presented as a current liability, with $2.1 million remaining in long-term liability. The contingent consideration ~~will be~~is adjusted for the ~~foreign currency translation,~~ time value of money and the likelihood of the milestone payments. Any future changes in the value of the contingent consideration will be recognized in the Condensed Consolidated Interim Statements of Operations.

Other Contingencies

The Company has certain other contingencies resulting from litigation, claims, and other commitments ~~that are~~and is subject to ~~a variety of~~various environmental and safety laws and regulations ~~incidents related~~incident to the ordinary course of business. The Company currently has no basis to conclude that any or all of such contingencies will materially affect its financial position, results of operations, or cash flows. However, in the future, there may be changes to these contingencies, or additional contingencies may occur, any of which might result in an accrual or a change in current accruals recorded by the ~~Company, and there~~Company. There can be no assurance that ~~their~~the ultimate disposition of contingencies will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

With the ~~successful~~ acquisition of Aquila Resources Inc. on December 10, 2021, the Company assumed substantial liabilities that relate to the gold and silver stream agreements with Osisko Bermuda ~~Limited (see~~ ~~Note 10 - Gold and Silver Stream Agreements~~).Limited. Under the agreements, Osisko deposited a total of $37.2 million upfront in exchange for a portion of the future gold and silver production from the Back Forty Project. The stream agreements contain customary provisions regarding default and security. In the event that our subsidiary defaults under the stream agreements, including by failing to achieve commercial production ~~by an agreed upon~~at a future date, it may be required to repay the deposit plus accumulated interest

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes—Unaudited
14

~~Table of Contents~~

at a rate agreed with Osisko. If it fails to do so, Osisko may be entitled to enforce ~~their~~its remedies as a secured party and take possession of the assets that comprise the Back Forty Project.

13. Shareholders’ Equity

The Company’s At The Market Offering Agreement with H.C. Wainwright & Co., LLC (the “Agent”), which was entered into in November 2019 (the “ATM Agreement”), pursuant to which the Agent agreed to act as the Company’s sales agent with respect to the offer and sale from time to time of the Company’s common stock having an aggregate gross sales price of up to $75.0 million, was renewed in June 2023. An aggregate of 130,199 shares of the Company’s common stock were sold through the ATM Agreement during both the three and nine months ended September 30, 2023, for net proceeds to the Company, after deducting the Agent’s commissions and other expenses, of $0.1 million. There were no ATM sales during the three and nine months ended September 30, 2022.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes (Unaudited)
16

Table of Contents

No dividends were declared and paid in 2023. During the three and nine months ended September 30, 2022, the Company declared and paid dividends of $0.01 per common share and $0.03 per common share for an aggregate total of $0.9 million and $2.7 million, respectively. During the three and nine months ended September 30, 2021, the Company declared dividends of $0.01 per common share and $0.03 per common share, respectively, and paid an aggregate total of $0.7 million and $2.5 million, respectively. As of September 30, 2022, there are 88,398,109 ~~issued~~ ~~and outstanding shares of common stock.~~

14. Derivatives

Embedded Derivatives

Concentrate Sales

Concentrate sales contracts contain embedded derivatives due to the provisional pricing terms for unsettled shipments. At the end of each reporting period, the Company records an adjustment to accounts receivable and revenue to reflect the mark-to-market adjustments for outstanding provisional invoices based on forward metal prices. Please see Note—20 Fair Value Measurement in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited)for additional information on the realized and unrealized gain (loss) recorded to adjust accounts receivable and revenue.

The following table summarizes the Company’s unsettled sales contracts at September 30, ~~2022~~2023 with the quantities of metals under contract subject to final pricing ~~occurring~~expected to occur through ~~November 2022:~~December 2023:


	Gold		Silver		Copper		Lead		Zinc			Total	Gold		Silver		Copper		Lead		Zinc			Total
	(ounces)		(ounces)		(tonnes)		(tonnes)		(tonnes)				(ounces)		(ounces)		(tonnes)		(tonnes)		(tonnes)
Under contract		4,784		253,342		282		1,647		3,373				3,361		274,538		165		2,278		2,106
Average forward price (per ounce or tonne)	$	1,741	$	19.52	$	7,738	$	2,011	$	3,474			$	1,934		23.63		8,256		2,138		2,445
Unsettled sales contracts value (in thousands)	$	8,329	$	4,945	$	2,182	$	3,312	$	11,718	$	30,486	$	6,500	$	6,487	$	1,362	$	4,870	$	5,149	$	24,368

Other Derivatives

Zinc zero cost collar

Derivative instruments that are not designated as hedging instruments are required to be recorded on the balance sheet at fair value. Changes in fair value ~~will~~ impact the Company’s earnings through mark-to-market adjustments until the physical commodity is delivered or the financial instrument is settled. The fair value does not reflect the realized or cash value of the instrument.

As of ~~September 30,~~December 31, 2022, the Company’s ~~derivatives not designated as hedges consist of zinc zero cost collars used~~hedge program concluded, but the Company may utilize similar programs in the future to manage ~~its~~ near-term exposure to cash flow variability from zinc price risks. A zero cost collar is a combination of two options: a sold call option and a purchased put option. The Company sold call options to establish the ceiling price of $3,500 per tonne of zinc that the Company will receive for the contracted zinc volume of 1,950 tonnes for October through December 2022. The purchased put establishes the floor price of $3,200 per tonne of zinc that the Company will receive for the same contracted tonnes and period of time.

Derivatives are carried at fair value and on a net basis when a legal right of offset exists with the same counterparty. Otherwise, any fair value gains or losses are recognized in earnings in the current period. The London Metal Exchange (“LME”) average zinc price of $3,660 per tonne during the nine months ended September 30, 2022 exceeded the call option ceiling of $3,313 per tonne, resulting in a realized loss of $2.4 million. The zinc price forward curve as of September 30, 2022 is below the put option ceiling, resulting in a $0.4 million asset on the remaining 1,950 tonnes. The asset recognized resulted in an unrealized gain of $2.3 million for the nine months ended September 30, 2022.

metal prices.

The Company manages credit risk by selecting counterparties believed to be financially strong, by entering into netting arrangements with counterparties, and by requiring other credit risk mitigants, as appropriate. The Company actively

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes—Unaudited
15

~~Table of Contents~~

evaluates the creditworthiness of its counterparties, assigns appropriate credit limits, and monitors credit exposures against those assigned limits.

15. Employee Benefits

Effective October 2012, the Company adopted a ~~profit sharing~~profit-sharing plan (the “Plan”), which covers all U.S. employees. The Plan meets the requirements of a qualified retirement plan pursuant to the provisions of Section 401(k) of the Internal Revenue Code. The Plan also ~~provides~~allows eligible employees ~~the opportunity~~ to make tax deferred contributions to a retirement trust account up to ~~50%~~90% of their qualified wages, subject to the IRS annual maximums.

Under Mexican law, employees are entitled to receive statutory profit sharing ~~(Participacion~~(Participación a los Trabajadores de las Utilidades or “PTU”) ~~payment.~~payments. The required cash payment to employees in the aggregate is equal to 10% of their employer’s profit subject to PTU, which differs from profit determined under U.S. GAAP. Please see Note 9—Accrued Expenses and Other Liabilities in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited)for additional information.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes (Unaudited)
17

Table of Contents

16. Stock-Based Compensation

The Company’s compensation program comprises three main elements: base salary, an annual short-term incentive plan (“STIP”) cash award, and long-term equity-based incentive compensation (“LTIP”) in the form of ~~performance share~~deferred stock units (“~~PSUs”~~DSUs”), restricted stock units (“RSUs”), stock options, and ~~deferred stock~~performance share units (“~~DSUs”~~PSUs”).

The Gold Resource Corporation 2016 Equity Incentive Plan (the “Incentive Plan”) allows for the issuance of up to 5 million shares of common stock in the form of incentive and non-qualified stock options, stock appreciation rights, RSUs, stock grants, stock units, performance shares, ~~performance share units,~~PSUs, and performance cash. Additionally, pursuant to the terms of the Incentive Plan, any award outstanding under the prior plan that is terminated, expired, forfeited, or canceled for any reason will be available for grant under the Incentive Plan.

~~Effective January 1, 2021,~~DSUs of nil and 278,663, respectively, were granted to the ~~Company’s~~ Board of Directors onduring the ~~recommendation of the Compensation Committee, implemented a program to issue DSUs. DSUs are qualifying instruments under the terms of the Company’s Incentive Plan~~three and ~~therefore do not require additional shareholder approval. The vesting and settlement terms of the DSUs are determined by the Compensation Committee at the time the DSUs are awarded.~~

nine months ended September 30, 2023. DSUs of nil and 214,357 were granted to the Board of Directors during the three and nine months ended September 30, 2022, respectively. DSUs ~~of nil~~are vested immediately and ~~130,000 were granted to the Board of Directors during the three and nine months ended September 30, 2021, respectively. DSUs are~~ redeemable in cash or shares at the ~~earlier~~earliest of 10 years or upon the eligible directors’ termination. Termination is deemed to occur on the earliest ofof: (1) the date of voluntary resignation or retirement of the director from the Board; (2) the date of death of the director; or (3) the date of removal of the director from the Board whether by shareholder resolution, failure to achieve re-election, or otherwise; and on which date the director is not a director or employee of the Company or any of its affiliates. These awards contain a cash settlement feature and are therefore classified as a liability and are marked to ~~fair value~~market each reporting period.

The Company may also issue DSUs for directors in lieu of board fees at their request. During the three and nine months ended September 30, 2023, respectively, 32,323 and 63,624 DSUs were granted in lieu of board fees that are also subject to mark-to-market adjustment. During the three and nine months ended September 30, 2022, respectively, there were 3,746 and 10,454 DSUs granted in lieu of board ~~fees that are also subject~~fees. Additionally, during the first quarter of 2023, executives were granted 212,407 DSUs in lieu of half of their STIP cash bonus for 2022.

During the three and nine months ended September 30, 2023, 49,589 and 373,489 DSUs were redeemed, respectively, for the cash value of $31 thousand and $0.3 million. There were no DSU redemptions during the same periods in 2022.

As of September 30, 2023 and 2022, the non-current liability balances related to ~~mark-to-market adjustment. Both~~DSUs were $0.2 million and $0.6 million, respectively. For the three and nine months ended September 30, 2023, the changes in liabilities related to DSUs resulted in $0.1 million and $20 thousand credit, respectively, to stock-based compensation expense. For the three and nine months ended September 30, 2022, the changes in liabilities related to DSUs resulted in $13 thousand and $0.4 million stock-based compensation expense, respectively.

RSUs of nil and 779,192 were granted during the three and nine months ended September 30, 2021, respectively, there were 1,960 DSUs granted in lieu of board fees that are also subject to mark-to-market adjustment. As of September 30, 2022 and 2021, the liability balance related to DSUs was $0.6 million and $0.2 million,2023, respectively.

RSUs of nil and 611,681 were granted during the three and nine months ended September 30, 2022, respectively. ~~No RSUs were granted during~~During the three and nine months ended September 30, ~~2021.~~2023, a total of 41,668 and 237,193 RSUs vested, respectively, for which 29,624 and 100,057 common shares were issued, respectively, with a fair value of $16,886 and $78,867, respectively. During the three and nine months ended September 30, 2023, a total of RSUs of 12,044 and 30,181, respectively, were withheld for taxes due to net settlement, and nil and 106,955 RSUs, respectively, were deferred. During the three and nine months ended September 30, 2022, a total of 41,666 and 119,467 RSUs vested, respectively, from which 41,666 and 80,169 RSUs were redeemed, respectively, issuing 41,666 and 75,584 common shares with ~~an intrinsic value and~~ a fair value of $74,165 and $138,101, respectively. During the three and nine months ended September 30, ~~2021,~~2022, nil and 39,298 RSUs were deferred.

No stock options were granted nor exercised during the three and nine months ended September 30, 2023. Stock options of nil and 320,816 were granted during the three and nine months ended September 30, 2022, respectively. Stock options of nil and 355,000, respectively, ~~a total of 50,183~~were exercised during the three and ~~52,797 RSUs vested and redeemed, and 49,755 and 52,369 common shares~~nine months ended September 30, 2022. The exercises in 2022 were ~~issued with an intrinsic value and a fair value of $0.1 million and $0.1 million, respectively.~~ settled in cash.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and ~~Notes—Unaudited~~Notes (Unaudited)
1618

Table of Contents

PSUs of nil and 534,890, respectively, were granted during the three and nine months ended September 30, 2023. PSUs of nil and 695,041, respectively, were granted during the three and nine months ended September 30, 2022. PSUs cliff vest usually in three years based on the relative and absolute total shareholder return of a predetermined peer group and are expected to be settled in cash.

During the three and nine months ended September 30, 2023, there were 250,522 and 349,005 PSUs, respectively, forfeited due to employee terminations. There were no forfeitures during the same periods in 2022.

As of September 30, 2023 and 2022, the current liability balances related to PSUs were $0.1 million and nil, respectively, and the non-current liability balances related to PSUs were $0.1 million and $0.2 million, respectively.

Stock-based compensation expense for the periods presented is as follows:


	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022

	(in thousands)				(in thousands)
Deferred stock units		(89)		13		(20)		383
Restricted stock units		95		161		422		465
Stock options	$	10	$	124	$	250	$	523
Performance stock units		(118)		152		(150)		246
Total	$	(102)	$	450	$	502	$	1,617

The Company’s STIP for its management team provides annual cash payable upon achievement of specified performance metrics. As of September 30, 2023, the Company accrued $1.0 million payable in cash related to the 2023 STIP program.

Stock options of nil and 320,816 were granted during the three and nine months ended September 30, 2022, respectively. Stock options of nil and 600,000 were granted during the three and nine months ended September 30, 2021, respectively. Stock options of nil and 355,000, respectively, were exercised during the three and nine months ended September 30, 2022. These exercises were settled in cash. No stock options were exercised during the three months ended September 30, 2021. During the nine months ended September 30, 2021, stock options to purchase an aggregate of 217,718 shares of the Company’s common stock were exercised at a weighted average exercise price of $1.31 per share.

PSUs of nil and 695,041 were granted during the three and nine months ended September 30, 2022, respectively. No PSUs were granted during the three and nine months ended September 30, 2021. PSUs cliff vest usually in three years based on the relative total shareholder return of a predetermined peer group and are expected to be settled in cash.

~~Stock-based compensation expense for the periods presented is as follows:~~

For the three months ended September 30,

For the nine months ended September 30,

2022

2021

2022

2021

(in thousands)

(in thousands)
Stock options

$
124

$
74

$
523

$
436
Restricted stock units

161

87

465

71
Performance stock units

152

-

246

-
Deferred stock units

13

(131)

383

204
Total

$
450

$
30

$
1,617

$
711

~~The Co~~mpany has a short-term incentive plan (“STIP”) for its management team that provides annual cash payable upon achievement of specified performance metrics. As of September 30, 2022, we accrued $0.7 million payable in cash related to the 2022 STIP program.

17. Zinc Zero Cost Collar

During the three and nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, the realized and unrealized (gains) losses related to the Company’s ~~Zinc Zero Cost Collar~~zinc zero cost collar are the following:


	For the three months ended September 30,				For the nine months ended September 30,				For the three months ended September 30,				For the nine months ended September 30,
	2022		2021		2022		2021		2023		2022		2023		2022

	(in thousands)				(in thousands)				(in thousands)				(in thousands)
Realized (gain) loss on zinc zero cost collar	$	(61)	$	40	$	2,396	$	40	$	-	$	(61)	$	-	$	2,396
Unrealized (gain) loss on zinc zero cost collar		(157)		144		(2,276)		144
Unrealized gain on zinc zero cost collar ⁽¹⁾										-		(157)		-		(2,276)
Total	$	(218)	$	184	$	120	$	184	$	-	$	(218)	$	-	$	120

(1)	Gains and losses due to changes in fair value are non-cash in nature until such time that they are realized through cash transactions.

On May 18, 2021, the Company entered into a Trading Agreement with Auramet International LLC that governs nonexchange traded, over-the-counter, spot, forward and option transactions on both a deliverable and non-deliverable basis involving various metals and currencies. Gains and losses due to changes in fair value are non-cash in nature until such time that they are realized through cash transactions. Please see Note 14—Derivatives in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited)for additional information. As of ~~September 30,~~December 31, 2022, the ~~zinc zero cost collar was~~Company’s hedge program concluded, but the Company may utilize similar programs in ~~an asset position ($0.4 million), while in prior periods we had a liability related~~the future to ~~the program.~~manage near-term exposure to cash flow variability from metal prices.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and ~~Notes—Unaudited~~Notes (Unaudited)
1719

Table of Contents

18. Other Expense, net

Other expense, net, for the periods presented consisted of the following:

For the three months ended September 30,

For the nine months ended September 30,

2022

2021

2022

2021

(in thousands)

(in thousands)
Unrealized currency exchange loss (gain) ⁽¹⁾

$
678

$
(59)

$
1,200

$
257
Realized currency exchange (gain) loss

(34)

24

125

(35)
Realized and unrealized loss (gain) from gold and silver rounds, net

9

54

(19)

86
Employee benefit obligation ⁽²⁾

-

-

-

700
Interest on streaming liabilities

257

-

567

-
Other (income) expense

(145)

(29)

(56)

(465)
Total

$
765

$
(10)

$
1,817

$
543


	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022

	(in thousands)				(in thousands)
Unrealized currency exchange (gain) loss ⁽¹⁾	$	260	$	678	$	599	$	1,200
Realized currency exchange loss		(7)		(34)		302		125
Realized and unrealized loss (gain) from gold and silver rounds, net		2		9		(1)		(19)
Loss on disposal of fixed assets		-		-		12		-
Interest on streaming liabilities ⁽²⁾		688		257		1,237		567
Severance ⁽³⁾		664		-		1,541		-
Other expense (income)		360		(145)		457		(56)
Total	$	1,967	$	765	$	4,147	$	1,817

(1)

Gains and losses due to changes in fair value are non-cash in nature until such time that they are realized through cash transactions. For additional information regarding the Company’s fair value measurements and investments, please see Note 20—Fair Value Measurementin Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information.

(2)

~~In year-to-date 2022, Employee benefit obligation~~Interest expense increased in the third quarter of ~~$0.2 million is recorded in production cost rather than in other expense, net. In 2021, the initial Employee benefit obligation~~2023 due to updating the ~~Mexico Labor Reform was recorded as other expense.~~streaming models based on the Technical Report Summary (S-K 1300) filed for the Back Forty Project in October 2023.

(3)	This is due to an organized reduction of workforce and leadership change at DDGM in Mexico.

19. Net ~~Income~~Loss per Common Share

Basic net income per common share is calculated based on the weighted average number of common shares outstanding for the period. Diluted earnings per common share are calculated based on the assumption that stock options and other dilutive securities outstanding, which have an exercise price less than the average market price of the Company’s common shares during the period, would have been exercised on the later of the beginning of the period or the date granted and that the funds obtained from the exercise were used to purchase common shares at the average market price during the period. All of the Company’s RSUs ~~and DSUs~~ are considered to be dilutive in periods with net income.

The effect of the Company’s dilutive securities is calculated using the treasury stock method, and only those instruments that result in a reduction in net income per common share are included in the calculation. Options to purchase ~~2.1~~1.1 million shares of common stock at weighted average exercise ~~prices~~price of ~~$3.52 and~~$2.98 were outstanding as of September 30, 2023, but had no dilutive effect due to the net loss for the period. Options to purchase 2.1 million shares of common stock at a weighted average exercise ~~prices~~price of ~~and $5.11~~$3.52 were outstanding as of September 30, 2022 ~~and 2021, respectively,~~ but ~~were not included in~~had no dilutive effect due to the ~~computation of diluted weighted average common shares outstanding, as~~net loss for the ~~exercise price of the options exceeded the average price of the Company’s common stock during the reporting period, and therefore are anti-dilutive.~~

period.

Basic and diluted net income per common share is calculated as follows:


	For the three months ended				For the nine months ended				For the three months ended				For the nine months ended
	September 30,				September 30,				September 30,				September 30,
	2022		2021		2022		2021		2023		2022		2023		2022
Numerator:
Net income (in thousands)	$	(9,730)	$	1,529	$	(3,038)	$	5,339
Net loss (in thousands)									$	(7,341)	$	(9,730)	$	(12,960)	$	(3,038)

Denominator:
Basic weighted average shares of common stock outstanding		88,391,220		74,552,545		88,358,188		74,481,281		88,499,327		88,391,220		88,458,276		88,358,188
Dilutive effect of share-based awards		-		345,975		-		360,814		-		-		-		-
Diluted weighted average common shares outstanding		88,391,220		74,898,520		88,358,188		74,842,095		88,499,327		88,391,220		88,458,276		88,358,188

Basic and diluted net (loss) income per common share	$	(0.11)	$	0.02	$	(0.03)	$	0.07
Basic and diluted net loss per common share									$	(0.08)	$	(0.11)	$	(0.15)	$	(0.03)

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and ~~Notes—Unaudited~~Notes (Unaudited)
1820

Table of Contents

20. Fair Value Measurement

Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2

Quoted prices in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

As required by accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. These assets and liabilities are remeasured for each reporting period. The following ~~table sets~~tables set forth certain of the Company’s assets and liabilities measured at fair value ~~on a recurring basis~~ by level within the fair value hierarchy as of September 30, ~~2022~~2023 and December 31, ~~2021:~~2022:


	As of		As of			As of		As of
	September 30,		December 31,		Input Hierarchy Level	September 30,		December 31,		Input Hierarchy Level
	2022		2021			2023		2022

	(in thousands)					(in thousands)
Cash and cash equivalents	$	22,531	$	33,712	Level 1	$	6,706	$	23,675	Level 1
Accounts receivable, net	$	3,741	$	8,672	Level 2	$	4,714	$	5,085	Level 2
Investment in equity securities	$	1,716	$	-	Level 1
Derivative asset - zinc zero cost collar	$	432	$	-	Level 2
Derivative liability - zinc zero cost collar	$	-	$	(1,844)	Level 2
Contingent consideration	$	(4,036)	$	(4,603)	Level 3
Gold and silver stream agreements	$	(43,201)	$	(42,560)	Level 3
Investment in equity securities-Maritime						$	1,211	$	1,559	Level 1
Investment in equity securities-Green Light Metals						$	3,608	$	3,611	Level 3

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and cash equivalents: Cash and cash equivalents consist primarily of cash deposits and are valued at cost, ~~which approximates~~approximating fair value.

Accounts receivable, net: Accounts receivable, net ~~includes~~include amounts due to the Company for deliveries of concentrates and doré sold to ~~customers, net of embedded derivatives mark-to-market value of $1.7 million as of September 30, 2022, and nil as of December 31, 2021.~~customers. Concentrate sales contracts provide for provisional pricing as specified in such contracts. These sales contain an embedded derivative related to the provisional pricing mechanism which is bifurcated and ~~are~~ accounted for as a derivative. At the end of each reporting period, the Company records an adjustment to sales to reflect the mark-to-market of outstanding provisional invoices based on the forward price curve. Because these provisionally priced sales have not yet settled as of the reporting date, the mark-to-market adjustment related to these invoices is included in accounts receivable as of each reporting ~~date~~date.

At September 30, 2023 and December 31, 2022, the Company had an unrealized gain of $0.1 million and an unrealized gain of $0.6 million, respectively, included in its accounts receivable on the accompanying Condensed Consolidated Interim Balance Sheets related to mark-to-market ~~adjustments.~~adjustments on the embedded derivatives. Please see Note 14—Derivatives in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited)for additional information.

Investment in equity ~~securities~~securities—Maritime: On September 22, 2022, Gold Resource Corporation invested C$2.4 million (or $1.7 million) in the common shares of Maritime Resources Corp. (“Maritime”), ticker symbol MAE.V on TSX-V, in a private placement. The 47 million shares purchased represent less than 10% of the issued and outstanding shares of Maritime. As of September 30, ~~2022,~~2023, the share price of Maritime was ~~the same~~C$0.035, compared to C$0.045 as ~~at the time~~ of ~~purchase; and~~December 31, 2022; therefore, noan unrealized ~~gain or~~ loss of $0.4 million was ~~recorded.~~recorded, offset by a small foreign exchange gain.

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes—Unaudited
19

~~Table of Contents~~

~~Derivative liability - zinc zero cost collar~~: Derivatives are carried at fair value and on a net basis as a legal right of offset exists with the same counterparty. The valuation is using the Black Scholes model as applied to zinc call options and considers interest rate forecast, market volatility, and the zinc forward price curve for each respective hedge period. Any fair value gains or losses are recognized in earnings in the current period. The fair value does not reflect the realized or cash value of the instrument. Mark-to-market adjustments are made until the physical commodity is delivered or the financial instrument is settled. At each reporting period Management evaluates the unrealized gain (loss) on the derivatives instruments based on average London Metal Exchange forward underlying price over a period from the trade date to the payment date.

For the zinc zero cost collar, when the prior month LME average zinc price is greater than the call price, positions settling in the period are recorded as a realized gain or loss, and unsettled positions are recorded as an unrealized gain or loss.

~~Contingent consideration~~: For September 30, 2022, a time value of money calculation was utilized to value the contingent consideration. Each milestone payment was assessed separately. Key risks including permitting, feasibility study, commercial production, and timing were each assigned a probability weighting based on the likelihood of occurrence, and a 60.75% overall probability was used. The change in the fair value since December 31, 2021 is contributable to unrealized foreign currency exchange adjustment. Please see ~~Note 12—~~~~Commitments and Contingencies~~ ~~for additional information.~~

~~Gold and silver stream agreements~~: The gold and silver stream liabilities are carried at fair value. The discounted cash flow model that was used to determine the fair value utilizes significant unobservable inputs, such as the probability and timing of permitting, feasibility study, and commercial production. Also, a periodic interest expense is recorded based on an implied interest rate. The implied interest rate is determined based on a 67.5% probability of future production and an 8% discount rate. The change in the fair value since December 31, 2021 is contributable to the implied interest. Please see ~~Note 10—Gold and Silver Stream Agreements~~ ~~for additional information.~~

Gains and losses related to changes in the fair value of these financial instruments were included in the Company’s Condensed Consolidated Interim Statements of Operations as shown in the following table:

For the three months ended September 30,

For the nine months ended September 30,

Statements of Operations Classification

2022

2021

2022

2021

Note
(in thousands)

Realized and unrealized derivative (loss) gain, net
14
$
(934)

$
(478)

$
(1,064)

$
156

Sales, net
Realized gain (loss) on zinc zero cost collar
17
$
61

$
(40)

$
(2,396)

$
(40)

Realized and unrealized loss on zinc zero cost collar
Unrealized gain (loss) on zinc zero cost collar
17
$
157

$
(144)

$
2,276

$
(144)

Realized and unrealized loss on zinc zero cost collar

~~Realized/Unrealized Derivatives~~

~~The following tables summarize the Company’s realized/unrealized derivatives for the periods presented~~ ~~(in thousands)~~:

Gold

Silver

Copper

Lead

Zinc

Total
For the three months ended September 30, 2022

Realized loss

$
(198)

$
(141)

$
(158)

$
(88)

$
(627)

$
(1,212)
Unrealized (loss) gain

(95)

(81)

108

96

250

278
Total realized/unrealized derivatives, net

$
(293)

$
(222)

$
(50)

$
8

$
(377)

$
(934)

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes—Unaudited
20

~~Table of Contents~~

Gold

Silver

Copper

Lead

Zinc

Total
For the three months ended September 30, 2021

Realized (loss) gain

$
(110)

$
(295)

$
(4)

$
72

$
91

$
(246)
Unrealized gain (loss)

28

(11)

(16)

(84)

(149)

(232)
Total realized/unrealized derivatives, net

$
(82)

$
(306)

$
(20)

$
(12)

$
(58)

$
(478)

Gold

Silver

Copper

Lead

Zinc

Total
For the nine months ended September 30, 2022

Realized (loss) gain

$
(16)

$
13

$
(173)

$
(32)

$
1,022

$
814
Unrealized (loss) gain

(96)

30

3

(103)

(1,712)

(1,878)
Total realized/unrealized derivatives, net

$
(112)

$
43

$
(170)

$
(135)

$
(690)

$
(1,064)

Gold

Silver

Copper

Lead

Zinc

Total
For the nine months ended September 30, 2021

Realized (loss) gain

$
(133)

$
(123)

$
63

$
146

$
251

$
204
Unrealized gain (loss)

58

10

(24)

(63)

(29)

(48)
Total realized/unrealized derivatives, net

$
(75)

$
(113)

$
39

$
83

$
222

$
156

~~21. Supplementary Cash Flow Information~~

Other operating adjustments and write-downs within the net cash provided by operations on the Condensed Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2022 and 2021 consisted of the following:

For the three months ended September 30,

For the nine months ended September 30,

2022

2021

2022

2021

(in thousands)

(in thousands)
Unrealized loss (gain) on gold and silver rounds

$
8

$
55

$
(54)

$
86
Unrealized foreign currency exchange loss (gain)

678

(59)

1,200

257
Unrealized (gain) loss on zinc zero cost collar

(157)

144

(2,276)

144
Other

4

(106)

(164)

(12)
Total other operating adjustments

$
533

$
34

$
(1,294)

$
475

~~Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes—Unaudited~~Notes (Unaudited)
21

~~Table of Contents~~

~~22. Segment Reporting~~

As of September 30, 2022, the Company has organized its operations into three geographic regions: Oaxaca, Mexico, Michigan, U.S.A., and Corporate and Other. Oaxaca, Mexico represents the Company’s only production stage property. Michigan, U.S.A. is an advanced exploration stage property. Intercompany revenue and expense amounts have been eliminated within each segment in order to report on the basis that management uses internally for evaluating segment performance. The Company’s business activities that are not considered production stage or advanced exploration stage properties are included in Corporate and Other.

~~The following table shows selected information from the Consolidated Balance Sheets relating to the Company’s segments (in thousands):~~

Oaxaca,
Mexico

Michigan,
USA

Corporate
and Other

Consolidated
As of September 30, 2022

Total current assets

$
41,848

$
3,911

$
2,570

$
48,329
Total non-current assets

59,908

89,347

1,954

151,209
Total assets

$
101,756

$
93,258

$
4,524

$
199,538
Total current liabilities

15,893

2,636

937

19,466
Total non-current liabilities

2

62,706

1,720

64,428
Total shareholders' equity

85,861

27,916

1,867

115,644
Total liabilities and shareholders' equity

$
101,756

$
93,258

$
4,524

$
199,538

As of December 31, 2021

Total current assets

$
50,057

$
5,528

$
3,330

$
58,915
Total non-current assets

66,756

90,018

73

156,847
Total assets

$
116,813

$
95,546

$
3,403

$
215,762
Total current liabilities

25,833

2,459

1,367

29,659
Total non-current liabilities

1,436

63,438

479

65,353
Total shareholders' equity

89,544

29,649

1,557

120,750
Total liabilities and shareholders' equity

$
116,813

$
95,546

$
3,403

$
215,762

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes—Unaudited
22

Table of Contents

Investment in equity securities—Green Light Metals: Upon maturity on December 28, 2022, the Company received 12,250,000 private shares of Green Light Metals, which settled the promissory note receivable from Green Light Metals. The ~~following table shows selected information from~~shares received represented approximately 28.5% ownership at the time. Management chose to account for this investment using the fair value option; therefore, these securities are carried at fair value. As of September 30, 2023, the value of this equity investment was C$4.9 million ($3.6 million). The value of the issued shares was determined to be C$0.40 per share, which was based on the significant unobservable input of Green Light Metals recent equity transactions. For the nine months ended September 30, 2023, there have been no gains or losses on the value of the shares the Company received, other than some foreign exchange loss.

Gains and losses related to changes in the fair value of these financial instruments were included in the Company’s Condensed Consolidated Interim Statements of Operations, ~~relating to~~as shown in the ~~Company’s segments (in thousands):~~following table:

Oaxaca,
Mexico

Michigan,
USA ⁽¹⁾

Corporate
and Other

Consolidated
For the three months ended September 30, 2022

Sales, net

$
23,869

$
-

$
-

$
23,869
Total mine cost of sales, including depreciation

26,016

21

10

26,047
Exploration expense

1,143

3,830

-

4,973
Total other costs and expenses, including G&A

(105)

349

2,552

2,796
Provision for income taxes

(1,235)

-

1,018

(217)
Net loss

$
(1,950)

$
(4,200)

$
(3,580)

$
(9,730)

For the three months ended September 30, 2021

Sales, net

$
29,029

$
-

$
-

$
29,029
Total mine cost of sales, including depreciation

20,784

-

-

20,784
Exploration expense

1,802

-

3

1,805
Total other costs and expenses, including G&A

122

-

2,437

2,559
Provision for income taxes

2,089

-

263

2,352
Net income (loss)

$
4,232

$
-

$
(2,703)

$
1,529

~~(1)~~

~~Michigan, USA was acquired on December 10, 2021, and therefore, there is no information for the three months ended September 30, 2021.~~


		For the three months ended September 30,				For the nine months ended September 30,				Statements of Operations Classification
		2023		2022		2023		2022

	Note	(in thousands)
Realized and unrealized derivative gain (loss), net	14	$	339	$	(934)	$	(205)	$	(1,064)	Sales, net
Realized gain (loss) on zinc zero cost collar	17	$	-	$	61	$	-	$	(2,396)	Realized and unrealized (gain) loss on zinc zero cost collar
Unrealized gain on zinc zero cost collar	17	$	-	$	157	$	-	$	2,276	Realized and unrealized (gain) loss on zinc zero cost collar

Oaxaca,
Mexico

Michigan,
USA ⁽¹⁾

Corporate
and Other

Consolidated
For the nine months ended September 30, 2022

Sales, net

$
106,350

$
-

$
-

$
106,350
Total mine cost of sales, including depreciation

81,105

54

27

81,186
Exploration expense

3,190

6,925

-

10,115
Total other costs and expenses, including G&A

1,019

787

7,366

9,172
Provision for income taxes

7,634

-

1,281

8,915
Net income (loss)

$
13,402

$
(7,766)

$
(8,674)

$
(3,038)

For the nine months ended September 30, 2021

Sales, net

$
87,133

$
-

$
-

$
87,133
Total mine cost of sales, including depreciation

63,433

-

-

63,433
Exploration expense

3,642

-

18

3,660
Total other costs and expenses, including G&A

655

-

7,349

8,004
Provision for income taxes

6,434

-

263

6,697
Net income (loss)

$
12,969

$
-

$
(7,630)

$
5,339

~~(1)~~

~~Michigan, USA was acquired on December 10, 2021, and therefore, there is no information for the nine months ended September 30, 2021.~~

Realized/Unrealized Derivatives

The following tables summarize the Company’s realized/unrealized derivatives for the periods presented (in thousands):


	Gold		Silver		Copper		Lead		Zinc		Total
For the three months ended September 30, 2023
Realized gain (loss)	$	10	$	16	$	(38)	$	19	$	(640)	$	(633)
Unrealized (loss) gain		(40)		(34)		38		(129)		1,137		972
Total realized/unrealized derivatives, net	$	(30)	$	(18)	$	-	$	(110)	$	497	$	339


	Gold		Silver		Copper		Lead		Zinc		Total
For the three months ended September 30, 2022
Realized loss	$	(198)	$	(141)	$	(158)	$	(88)	$	(627)	$	(1,212)
Unrealized (loss) gain		(95)		(81)		108		96		250		278
Total realized/unrealized derivatives, net	$	(293)	$	(222)	$	(50)	$	8	$	(377)	$	(934)


	Gold		Silver		Copper		Lead		Zinc		Total
For the nine months ended September 30, 2023
Realized gain (loss)	$	251		361		8		167		(538)	$	249
Unrealized (loss) gain		(121)		(339)		(18)		(139)		163		(454)
Total realized/unrealized derivatives, net	$	130	$	22	$	(10)	$	28	$	(375)	$	(205)


	Gold		Silver		Copper		Lead		Zinc		Total
For the nine months ended September 30, 2022
Realized (loss) gain	$	(16)	$	13	$	(173)	$	(32)	$	1,022	$	814
Unrealized (loss) gain		(96)	$	30	$	3	$	(103)	$	(1,712)		(1,878)
Total realized/unrealized derivatives, net	$	(112)	$	43	$	(170)	$	(135)	$	(690)	$	(1,064)

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and ~~Notes—Unaudited~~Notes (Unaudited)
22

Table of Contents

21. Supplementary Cash Flow Information

Other operating adjustments and write-downs within the net cash provided by operations on the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 consisted of the following:


	For the nine months ended September 30,
	2023		2022

	(in thousands)
Unrealized gain on gold and silver rounds	$	(3)	$	(54)
Unrealized foreign currency exchange loss		599		1,200
Unrealized gain on zinc zero cost collar		-		(2,276)
Other		614		(164)
Total other operating adjustments	$	1,210	$	(1,294)

22. Segment Reporting

As of September 30, 2023, the Company has organized its operations into three geographic regions: Oaxaca, Mexico, Michigan, U.S.A., and Corporate and Other. Oaxaca, Mexico represents the Company’s only production stage property. Michigan, U.S.A. is an advanced exploration stage property. Intercompany revenue and expense amounts have been eliminated within each segment in order to report the net income (loss) on the basis that management uses internally for evaluating segment performance. The Company’s business activities that are not considered production stage or advanced exploration stage properties are included in Corporate and Other.

The following table shows selected information from the Condensed Consolidated Interim Balance Sheets relating to the Company’s segments (in thousands):


	Oaxaca, Mexico		Michigan, USA		Corporate and Other		Consolidated
As of September 30, 2023
Total current assets	$	26,547	$	130	$	2,223	$	28,900
Total non-current assets		66,199		93,224		1,369		160,792
Total assets	$	92,746	$	93,354	$	3,592	$	189,692
Total current liabilities	$	11,042		2,520		1,539	$	15,101
Total non-current liabilities		13,178		61,368		531		75,077
Total shareholders' equity		68,526		29,466		1,522		99,514
Total liabilities and shareholders' equity	$	92,746	$	93,354	$	3,592	$	189,692

As of December 31, 2022
Total current assets	$	38,032	$	272	$	7,795	$	46,099
Total non-current assets		69,269		92,927		1,803		163,999
Total assets	$	107,301	$	93,199	$	9,598	$	210,098
Total current liabilities	$	20,035	$	3,352	$	1,295	$	24,682
Total non-current liabilities		11,460		60,648		1,544		73,652
Total shareholders' equity		75,806		29,199		6,759		111,764
Total liabilities and shareholders' equity	$	107,301	$	93,199	$	9,598	$	210,098

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes (Unaudited)
23

Table of Contents

The following table shows selected information from the Condensed Consolidated Interim Statements of Operations relating to the Company’s segments (in thousands):


	Oaxaca, Mexico		Michigan, USA		Corporate and Other		Consolidated
For the nine months ended September 30, 2023
Sales, net	$	76,587	$	-	$	-	$	76,587
Total mine cost of sales, including depreciation		77,395		65		1,778		79,238
Exploration expense		3,974		1,265		-		5,239
Total other costs and expenses, including G&A		869		981		7,886		9,736
Income taxes benefit		(3,911)		(479)		(276)		(4,666)
Net loss	$	(1,740)	$	(1,832)	$	(9,388)	$	(12,960)

For the nine months ended September 30, 2022
Sales, net	$	106,350	$	-	$	-	$	106,350
Total mine cost of sales, including depreciation		81,105		54		27		81,186
Exploration expense		3,190		6,925		-		10,115
Total other costs and expenses, including G&A		1,019		787		7,366		9,172
Provision for income taxes		7,634		-		1,281		8,915
Net income (loss)	$	13,402	$	(7,766)	$	(8,674)	$	(3,038)


	Oaxaca, Mexico		Michigan, USA		Corporate and Other		Consolidated
For the three months ended September 30, 2023
Sales, net	$	20,552	$	-	$	-	$	20,552
Total mine cost of sales, including depreciation		24,359		23		581		24,963
Exploration expense		1,540		420		-		1,960
Total other costs and expenses, including G&A		166		767		2,696		3,629
Income taxes benefit		(2,349)		(42)		(268)		(2,659)
Net loss	$	(3,164)	$	(1,168)	$	(3,009)	$	(7,341)

For the three months ended September 30, 2022
Sales, net	$	23,869	$	-	$	-	$	23,869
Total mine cost of sales, including depreciation		26,016		21		10		26,047
Exploration expense		1,143		3,830		-		4,973
Total other costs and expenses, including G&A		(105)		349		2,552		2,796
(Benefit) provision for income taxes		(1,235)		-		1,018		(217)
Net loss	$	(1,950)	$	(4,200)	$	(3,580)	$	(9,730)

23. Subsequent Events

Subsequent to the current quarter end, in October 2023, the Company received a notification from the Mexican Tax Administration Services with a sanction of 331 million pesos (approximately $18 million) as the result of a 2015 tax audit that began in 2021. The 2015 tax audit performed by SAT encompassed various tax aspects, including but not limited to intercompany transactions, mining royalty tax, and extraordinary mining tax. Management is in process of assessing this tax notification to better evaluate possible outcomes. Management believes the 2015 tax return was prepared correctly. Please also see Note—5 Income Taxes in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited).

Gold Resource Corporation—Condensed Consolidated Interim Financial Statements and Notes (Unaudited)
24

Table of Contents

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion summarizes the results of operations of Gold Resource Corporation and its subsidiaries (“~~we”, “our”,~~we,” “our,” “us,” or ~~“us”~~the “Company”) for the three and nine months ended September 30, ~~2022~~2023 and compares those results with the three and nine months ended September 30, ~~2021.~~2022. It also analyzes the Company’s financial condition as of September 30, ~~2022~~2023, and compares it to the financial condition as of December 31, ~~2021.~~2022. This discussion should be read in conjunction with management’s discussion and analysis and the audited consolidated financial statements and footnotes ~~for the year ended December 31, 2021~~ contained in ~~our annual report on Form 10-K.~~

the 2022 Annual Report.

The discussion also presents certain non-GAAP financial measures that are important to management in its evaluation of our operating results, and which are used by management to compare our performance with what we perceive to be peer group mining companies and are relied on as part of management’s decision-making process. Management believes these measures may also be important to investors in evaluating our performance. For a detailed description of each of the non-GAAP financial measures and a reconciliation to GAAP financial measures, please see the discussion below under “Non-GAAP Measures.” Also see Forward-Looking Statements at the end of this Item 2 for important information regarding statements contained herein.

Overview

Gold Resource Corporation is a mining company that pursues gold, silver, and other metal projects that are expected to achieve both low operating costs and high returns on capital. The Don David Gold Mine is our cornerstone asset comprised of six properties. The Company’s focus is to unlock the significant upside potential of this asset through optimization of the current operations, growing the existing resource by investing in exploration drilling, and identifying new opportunities near existing infrastructure. The primary mineral production comes from the Arista underground mine. This mine supplies ore to our processing facilities to produce gold and silver doré and copper, lead, and zinc concentrates that also contain gold and silver.

The Back Forty Project, when developed, is expected to produce gold and silver doré and copper and zinc concentrates bearing gold and silver. Optimization work related to metallurgy and the economic model was completed during the third quarter of 2023 and the Company filed the Back Forty Project Technical Report Summary (S-K 1300) on October 26, 2023. Results of the work indicate a more robust economic project with no planned impacts to wetlands that is more protective of the environment, which should facilitate a successful mine permitting process. The Board continues to evaluate options in order to develop the Back Forty Project.

Review of Strategic Alternatives

Notwithstanding the technical successes noted above, in light of the continued challenges facing the Company, the Company’s Board of Directors has decided to initiate a formal review process, with the assistance of outside financial and legal advisors, to evaluate strategic alternatives for the Company. The comprehensive process will begin immediately and will evaluate a broad range of options to maximize shareholder value, including a potential sale of the Company.

There is no deadline or definitive timetable for completion of the strategic alternatives review process and there can be no assurance regarding the results or outcome of this review. The Company does not intend to comment further on this strategic review process until it has been completed or the Company determines that a disclosure is required by law or otherwise deemed appropriate.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
25

Table of Contents

Removing Loose Rock

DDGM has focused on safety, efficiency, and cost-saving initiatives, while emphasizing strong leadership and collaboration. The safety efforts have resulted in zero lost time injuries for the quarter and a significantly lower Lost Time Injury Frequency Rate of 0.11 compared to Cámara Minera de México’s average of 0.89. Leadership training programs have been successfully implemented, empowering leaders to enhance team productivity and safety. Union leaders and contractors have actively participated in safety programs, fostering a cooperative work community.

While production maintained tonnage levels similar to the first quarter, a significant portion of the material came from lower levels with a decreased Net Smelter Return. Mining these sections was necessary to integrate transverse long-hole stoping in the fourth quarter, which is expected to impact mining costs positively.

To ensure long-term sustainability and profitability, DDGM has implemented cost-saving measures, including a 10% reduction in headcount, minimizing crusher usage during peak hours, improving mining cycle efficiencies, and enhancing drilling and bolting processes. These measures optimize operations without compromising safety or productivity.

Lastly, DDGM's persistent commitment to safety, efficiency, leadership development, collaboration with unions and contractors, and cost-saving initiatives positions the company for continued success. The company remains dedicated to delivering value to shareholders, while maintaining responsible and sustainable mining practices.

2023 DDGM Exploration Update

Our portfolio of properties that make up the Don David Gold Mine are located along a 55-kilometer trend of the San Jose structural corridor in the Sierra Madre Sur mountain range. This northwest trending structural corridor spans three historic mining districts within the state of Oaxaca. Regional surface exploration activity continues on several properties with a goal of defining additional priority drill targets, demonstrating our commitment to long-term investment in Oaxaca, Mexico.

Underground exploration (expansion) and underground infill drilling continued during the third quarter of 2023, where access is available, using five diamond-drill rigs from various locations within the Arista mine. Expansion drilling was conducted to (1) further test the Three Sisters and Gloria vein systems, as well as other newly identified vein targets in the Arista North vein system including the Splay 31 and Marena North veins, and (2) infill drilling in the central-north Switchback deposit and in the Three Sisters and Gloria vein systems to further define and expand Mineral Reserves and Mineral Resources in these areas.

The underground drill program continues to advance our 2023 exploration objectives of identifying new mineralization and defining and upgrading additional mineral resources that were identified during the previous drilling campaign. These recent drill results will be incorporated into a 2023 resource estimate update. Preliminary calculations show a positive increase in tonnage with higher grades in both the Arista and Switchback vein deposits, along with an increase to the inferred resources of the Gloria and Three Sisters vein systems.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
26

Table of Contents

During the third quarter of 2023, eight exploration drill holes were completed, for a total of 3,343 meters, while 54 infill drill holes were completed for 9,374 meters. The positive results from the ongoing exploration drilling campaign have validated the additional investment of capital in exploration during 2023 and have further bolstered the area’s potential for future mineral exploration.

Exploration drilling in the third quarter of 2023 continued to target the following zones at the Arista mine:

The northwest extension of the Switchback system at depth and along strike, where we have confirmed the continuation of the system, which now extends for over 1,100 meters along a northeast-southwest strike, remaining open in both directions as well as up- and down-dip.

The Three Sisters vein system, in conjunction with the recently discovered Gloria vein system, continued to be drill targeted in the third quarter of 2023. The Three Sisters and Gloria vein systems have now been defined over a strike length of more than 700 meters, with both systems remaining open along a northwest-southeast strike and at depth.

Exploration drilling got underway during the third quarter to test the northwest extension of the Arista vein system, targeting the Splay 31 and Marena North veins in particular. This drilling occurs approximately 100 meters northwest of the historic Arista mine working limits. Vein intercepts drilled during the third quarter show visual mineralized continuity (along strike and at depth) in the projections of the northwest trending Arista veins (i.e., Splay 31, Marena North) northwest of areas previously modeled and outside the current resource shell. The projected intersection of the western terminus of the Gloria vein with the northwest trending Arista vein system is becoming an increasingly exciting future exploration target at DDGM.

In the third quarter of 2023, infill drilling was focused on Levels 27 and 28 in the central and north Switchback vein system. This drilling successfully confirmed the continuity and economic viability of the Susana North, Soledad North, Salamanca, and Sagrario veins along strike to the northwest and down-dip of the current Switchback deposit and outside current resource shells. Additionally, infill drilling began late in the third quarter on the Three Sisters vein system and the Splay 31 vein of the North Arista vein system, with the aim of upgrading inferred resources to the indicated category. Due to their proximity to existing mine infrastructure, these areas will provide efficient and quick access to near-term mine production opportunities.

Hole No. 523080: Marena North vein (386.91 – 395.09 m; 8.18 m)
from Arista North system expansion drilling Q3 2023

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
27

Table of Contents

Regional exploration during the third quarter of 2023 continued to focus on evaluating and prioritizing advanced stage projects located along the 55-kilometer trend in the San Jose structural corridor. These projects include Alta Gracia, Margaritas, Chamizo, El Rey, and Jabali, all situated within the 55.1 square kilometers of concession holdings controlled by the Don David Gold Mine. Additionally, other prospects in the vicinity of the Arista mine are being re-evaluated for near-term potential, with the goal of defining additional priority drill targets. A regional geologic map to outline of the DDGM concession holdings with the advanced stage project locations is provided below.

Regional Geologic Map Showing Advanced Stage Exploration Project Locations

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
28

Table of Contents

Results of Operations

Don David Gold Mine

Mine activities during the third quarter of 2023 included development and ore extraction from the Arista mine.

The following table summarizes certain production statistics about our Don David Gold Mine for the periods indicated:


	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022
Arista Mine
Milled
Tonnes Milled		116,626		110,682		346,857		375,367
Grade
Average Gold Grade (g/t)		1.52		1.98		1.82		2.57
Average Silver Grade (g/t)		73		80		85		75
Average Copper Grade (%)		0.32		0.37		0.35		0.37
Average Lead Grade (%)		1.29		1.59		1.56		1.86
Average Zinc Grade (%)		3.24		4.21		3.61		4.38
Recoveries
Average Gold Recovery (%)		77.9		82.9		79.7		84.3
Average Silver Recovery (%)		89.7		91.3		91.0		92.7
Average Copper Recovery (%)		74.5		72.8		77.0		75.0
Average Lead Recovery (%)		69.5		71.0		74.1		76.3
Average Zinc Recovery (%)		85.2		83.7		84.8		83.5
Combined
Tonnes Milled ⁽¹⁾		116,626		110,682		347,917		376,625
Tonnes Milled per Day ⁽²⁾		1,557		1,361		1,455		1,492
Metal production (3)
Gold (ozs.)		4,443		5,851		16,251		26,355
Silver (ozs.)		247,159		261,256		859,651		842,636
Copper (tonnes)		276		296		946		1,030
Lead (tonnes)		1,048		1,249		3,996		5,342
Zinc (tonnes)		3,223		3,901		10,629		13,745
Metal produced and sold ⁽³⁾
Gold (ozs.)		3,982		5,478		14,777		22,605
Silver (ozs.)		208,905		225,012		777,977		722,041
Copper (tonnes)		245		282		904		976
Lead (tonnes)		947		1,056		3,681		4,450
Zinc (tonnes)		2,571		2,943		8,772		10,892
Percentage payable metal ⁽³⁾
Gold (%)		90		94		91		86
Silver (%)		85		86		90		86
Copper (%)		89		95		96		95
Lead (%)		90		85		92		83
Zinc (%)		80		75		83		79

(1)	During the first and second quarter of 2022 and during the first quarter of 2023, tonnes milled includes 1,043, 215, and 1,060 purchased tonnes, respectively, related to a collaborative initiative with a local community to ensure the proper environmental treatment and storage of the material.

(2)	Based on actual days the mill operated during the period.

(3)

The difference between what we report as "ounces/tonnes produced" and "payable ounces/tonnes sold" is attributable to the difference between the quantities of metals contained in the concentrates we produce versus the portion of those metals actually paid for according to the terms of our sales contracts. Differences can also arise from inventory changes incidental to shipping schedules, or variances in ore grades and recoveries, which impact the amounts of metals contained in concentrates produced and sold.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
29

Table of Contents

Third quarter 2023 compared to third quarter 2022

Production

During the three months ended September 30, 2023, total tonnes milled of 116,626 were 5% higher than in the same period in 2022. Metal production for gold, silver, copper, lead, and zinc decreased by 24%, 5%, 7%, 16%, and 17%, respectively, during the three months ended September 30, 2023 as compared to the same period last year as a result of the lower tonnes processed and lower metal grades as expected and in line with the 2023 mine plan.

Grades & Recoveries

During the three months ended September 30, 2023, all of the ore processed came from the Arista underground mine with an average gold grade of 1.52 g/t and silver grade of 73 g/t, compared to 1.98 g/t and 80 g/t, respectively, for the same period in 2022. In 2023, the average gold and silver grades were 23% and 9% lower, respectively. As shown in the Technical Report Summary for DDGM incorporated by reference in the 2022 Annual Report (the “Technical Report Summary”), grades are expected to decline in 2023 in line with the life of mine average shown in the estimates of mineral reserves (as defined by subpart 1300 of Regulation S-K, “Mineral Reserve”) and mineral resources (as defined by subpart 1300 of Regulation S-K, “Mineral Resource”) tables contained therein (the “Mineral Reserve and Mineral Resource Tables”). As grades decline, recoveries are expected to decline as well. Our base metals average grades during the three months ended September 30, 2023 were 0.32% for copper, 1.29% for lead, and 3.24% for zinc. Copper, lead, and zinc grades were 14%, 19%, and 23% lower, respectively, than in the same period in 2022.

Gold and silver recoveries for the three months ended September 30, 2023 were 77.9% and 89.7%, respectively, reflecting a 6% decrease for gold and a 2% decrease for silver over the same period in 2022. The mineralization in the third quarter of 2023 was different from the same period in 2022, containing high quartz. Quartz has an adverse effect on the floatation. Some of the gold is encapsulated in the quartz and is lost due to the fact it cannot be recovered in the flotation circuit. Copper, lead, and zinc recoveries for the three months ended September 30, 2023 were 74.5%, 69.5%, and 85.2%, respectively. While recoveries for the three months ended September 30, 2023 for both copper and zinc increased by 2%, recoveries for lead decreased by 2% compared to the same period in 2022. As shown in the Technical Report Summary incorporated by reference in the 2022 Annual Report, future recoveries and grades are expected to align with the life of mine average shown in the Mineral Reserve and Mineral Resource Tables.

Year-to-date 2023 compared to year-to-date 2022

Production

During the nine months ended September 30, 2023, total tonnes milled of 346,857 were 8% lower than during the same period in 2022. Metal production for gold, copper, lead, and zinc decreased by 38%, 8%, 25%, and 23%, respectively, during the nine months ended September 30, 2023 as compared to the same period last year, as a result of the lower tonnes processed and lower metal grades as expected and in line with the 2023 mine plan. Metal production for silver increased by 2% during the nine months ended September 30, 2023 as compared to the same period last year due to higher silver grades.

Grades & Recoveries

During the nine months ended September 30, 2023, the majority of ore processed came from the Arista underground mine with an average gold grade of 1.82 g/t and silver grade of 85 g/t, compared to 2.57 g/t and 75 g/t, respectively, for the same period in 2022. The average gold grade was 29% lower, and the average silver grade was 13% higher in 2023. As shown in the Technical Report Summary incorporated by reference in the 2022 Annual Report, grades are expected to decline in 2023 in line with the life of mine average shown in the Mineral Reserve and Mineral Resource Tables. As grades decline, recoveries are expected to decline as well. Our base metals average grades during the nine months ended September 30, 2023 were 0.35% for copper, 1.56% for lead, and 3.61% for zinc. Copper, lead, and zinc grades were 5%, 16%, and 18% lower, respectively, than in the same period in 2022.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
30

Table of Contents

Gold and silver recoveries for the nine months ended September 30, 2023 were 79.7% and 91.0%, respectively, reflecting a 5% decrease for gold and a 2% decrease for silver over the same period in 2022. In 2023, we encountered different mineralization, containing zones of high quartz. Quartz has an adverse effect on the floatation. Some of the gold is encapsulated in the quartz and is lost due to the fact it cannot be recovered in the flotation circuit. Copper, lead, and zinc recoveries for the nine months ended September 30, 2023 were 77.0%, 74.1%, and 84.8%, respectively. While recoveries for copper and zinc for the nine months ended September 30, 2023 increased by 3% and 2%, respectively, recoveries for lead decreased by 3% compared to the same period in 2022. As shown in the Technical Report Summary incorporated by reference in the 2022 Annual Report, future recoveries and grades are expected to align with the life of mine average shown in the Mineral Reserve and Mineral Resource Tables.

Sales Statistics

The following table summarizes certain sales statistics about the Don David Gold Mine operations for the periods indicated:


	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022
Net sales
Gold	$	7,690	$	9,109	$	28,529	$	41,228
Silver		4,919		4,312		18,202		15,620
Copper		2,049		2,164		7,792		8,969
Lead		2,060		2,075		7,807		9,670
Zinc		6,283		10,003		23,762		40,672
Less: Treatment and refining charges		(2,788)		(2,860)		(9,300)		(8,745)
Realized and unrealized gain (loss) - embedded derivative, net		339		(934)		(205)		(1,064)
Total sales, net	$	20,552	$	23,869	$	76,587	$	106,350
Metal produced and sold
Gold (ozs.)		3,982		5,478		14,777		22,605
Silver (ozs.)		208,905		225,012		777,977		722,041
Copper (tonnes)		245		282		904		976
Lead (tonnes)		947		1,056		3,681		4,450
Zinc (tonnes)		2,571		2,943		8,772		10,892
Average metal prices realized ⁽¹⁾
Gold ($ per oz.)	$	1,934	$	1,627	$	1,948	$	1,823
Silver ($ per oz.)	$	23.61	$	18.54	$	23.86	$	21.65
Copper ($ per tonne)	$	8,185	$	7,115	$	8,624	$	9,015
Lead ($ per tonne)	$	2,196	$	1,882	$	2,166	$	2,166
Zinc ($ per tonne)	$	2,195	$	3,186	$	2,648	$	3,828
Gold equivalent ounces sold
Gold Ounces		3,982		5,478		14,777		22,605
Gold Equivalent Ounces from Silver		2,550		2,564		9,529		8,575
Total AuEq oz		6,532		8,042		24,306		31,180

(1)	Average metal prices realized vary from the market metal prices due to final settlement adjustments from our provisional invoices when they are settled. Our average metal prices realized will therefore differ from the average market metal prices in most cases.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
31

Table of Contents

Third quarter 2023 compared to third quarter 2022

The key drivers of the production and financial results for the third quarter of 2023, as compared to the third quarter of 2022, relate to the higher tonnes mined and changes in metal grades. These results align with the 2023 mine plan and were considered in the 2023 guidance disclosed in the 2022 Annual Report. Financial results have also been impacted unfavorably by the strengthening Mexican peso and the lower zinc price realized in 2023.

Metal Sold

During the three months ended September 30, 2023, gold sales of 3,982 ounces, silver sales of 208,905 ounces, copper sales of 245 tonnes, lead sales of 947 tonnes, and zinc sales of 2,571 tonnes decreased by 27%, 7%, 13%, 10% and 13% respectively, as compared to the same period in 2022.

Average metal prices realized

During the three months ended September 30, 2023, the average metal prices were $1,934 per ounce for gold, $23.61 per ounce for silver, $8,185 per tonne for copper, $2,196 per tonne for lead, and $2,195 per tonne for zinc. Compared to the same period in 2022, the average metal price for gold, silver, copper, and lead increased by 19%, 27%, 15%, and 17%, respectively, while the average metal price zinc decreased 31%.

Year-to-date 2023 compared to year-to-date 2022

Key drivers in the production and financial results for the nine months ended September 30, 2023, as compared to the same period in 2022, relate to the lower tonnes mined and changes in metal grades. These results align with the 2023 mine plan and were considered in the 2023 guidance disclosed in the 2022 Annual Report. Financial results have also been impacted unfavorably by the strengthening Mexican peso and the lower zinc price realized in 2023.

Metal Sold

During the nine months ended September 30, 2023, gold sales of 14,777 ounces, copper sales of 904 tonnes, lead sales of 3,681 tonnes, and zinc sales of 8,772 tonnes decreased by 35%, 7%, 17%, and 19%, respectively, as compared to the same period in 2022. Silver sales of 777,977 ounces increased by 8% during the nine months ended September 30, 2023 compared to the same period in 2022.

Average metal prices realized

During the nine months ended September 30, 2023, the average metal prices were $1,948 per ounce for gold, $23.86 per ounce for silver, $8,624 per tonne for copper, $2,166 per tonne for lead, and $2,648 per tonne for zinc. Compared to the same period in 2022, the average metal price for gold and silver increased by 7% and 10%, respectively, while the average metal price for copper and zinc decreased by 4% and 31%, respectively. The average price for lead was the same as in the comparable period in 2022.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
32

Table of Contents

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
33

Table of Contents

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
34

Table of Contents

Financial Measures

The following table summarizes certain financial data of the Company for the periods indicated:


	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022

	(in thousands)				(in thousands)
Doré and concentrate sales	$	23,001	$	27,663	$	86,092	$	116,159
Less: Treatment and refining charges		(2,788)		(2,860)		(9,300)		(8,745)
Realized/unrealized derivatives, net		339		(934)		(205)		(1,064)
Sales, net		20,552		23,869		76,587		106,350
Total cost of sales		24,963		26,047		79,238		81,186
Mine gross (loss) profit		(4,411)		(2,178)		(2,651)		25,164
Other costs and expenses, including tax:		2,930		7,552		10,309		28,202
Net loss	$	(7,341)	$	(9,730)	$	(12,960)	$	(3,038)

Other Non-GAAP Financial Measures:
Total cash cost after co-product credits per AuEq oz sold ⁽¹⁾	$	1,839	$	1,103	$	1,210	$	314
Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold ⁽¹⁾	$	2,669	$	1,838	$	1,852	$	944
Total all-in cost after co-product credits per AuEq oz sold ⁽¹⁾	$	3,001	$	2,457	$	2,082	$	1,329

(1)

For a detailed description of each of the non-GAAP financial measures and a reconciliation to GAAP financial measures, please see the discussion below under “~~Non-GAAP Measures~~”.

~~See~~ ~~Forward-Looking Statements~~ ~~at the end of this Item 2 for important information regarding statements contained herein.~~

~~Overview~~Sales Statistics

Gold Resource Corporation is a mining company that pursues gold and silver projects that are expected to achieve both low operating costs and high returns on capital. The Don David Gold Mine currently has six projects with the primary mineral production coming from the Arista underground mine. This mine supplies ore to our processing facilities to produce gold and silver doré and copper, lead, and zinc concentrates which also contain gold and silver.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
24

~~Table of Contents~~

The Back Forty Project, when developed, is expected to produce gold and silver doré and copper and zinc concentrates bearing gold and silver. The feasibility study work progressed during the third quarter of 2022. Work related to metallurgy and the economic model is expected to continue into 2023. Permit applications will not be submitted with state agencies in Michigan until the completion of the feasibility study. The Company has formed an integrated project team to optimize the feasibility study, related mine plan, and to ensure a positive long-term impact on the environment and host communities.

~~Field safety inspection underground~~

Focusing on a zero-harm workplace for our employees, the environment, and our local communities has resulted in a deliberate but temporary slowdown of the Company’s underground development, exploration drilling, and production rate of tonnes processed by the mill.

Safety audits and minor ground failures identified additional training, and a renewed focus on safety was required related to ground support and ventilation. Additionally, the safety audits identified that the ground water conditions were starting to corrode some of the ground support, so an effort was initiated to replace the bolts to further improve the safety of the mine.

This deliberate and disciplined approach to safety has also helped to identify opportunities to deploy new ground support and mining methods. The slowdown of mine development and exploration is expected to initially impact the timing of the Mineral Resources and Mineral Reserves update which is now expected in the first half of 2023.

The team at Gold Resource Corporation holds itself accountable to the highest environmental, social, and governance standards. Our commitment to acting responsibly and delivering excellence in sustainability allows us to deliver benefits to all our stakeholders, including our employees and local communities.

~~COVID-19 Pandemic~~

The Company continues to protect the health and safety of our employees, contractors, and communities by taking precautionary measures, including specialized training, social distancing, and close monitoring of national and regional COVID-19 impacts and governmental guidelines. Since our non-mining workforce is able to work remotely with the benefit of technology, we are able to maintain our operations and internal controls over financial reporting and disclosures.

As of the date of the issuance of these unaudited Condensed Consolidated Interim Financial Statements, there have been no other significant impacts, including impairments, to the Company’s operations and financial statements. However, the long-term impact of the COVID-19 outbreak on the Company’s results of operations, financial position, and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of COVID-19 on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results of operations, financial position, and cash flows may be materially adversely affected. The Company is not able to estimate the duration of the pandemic and potential impact on its business if disruptions or delays in business developments and shipments of product occur. In addition, a severe prolonged economic downturn could result in a variety of risks to the business, including a decreased ability to raise additional capital when and if needed on acceptable terms, if at all. As the situation continues to evolve, the Company will continue to monitor market conditions closely and respond accordingly. The Company has completed various scenario planning analyses to consider potential impacts of COVID-19 on its business, including volatility in commodity prices, temporary disruptions and/or curtailments of operating activities

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
25

~~Table of Contents~~

~~(voluntary or involuntary). The Company believes that current working capital balances will be sufficient for the foreseeable future, although there is no assurance that will be the case.~~

~~Results of Operations~~

~~Don David Gold Mine~~

~~Mine activities during the first three quarters of 2022 included development and ore extraction from the Arista mine. The below map is the site layout of the Arista mine and plant site.~~

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
26

~~Table of Contents~~

The following table summarizes certain ~~production~~sales statistics about ~~our~~the Don David Gold Mine operations for the periods indicated:

For the three months ended September 30,

For the nine months ended September 30,

2022

2021

2022

2021
Arista Mine

Milled

Tonnes Milled

110,682

97,806

375,367

351,572
Grade

Average Gold Grade (g/t)

1.98

2.68

2.57

2.04
Average Silver Grade (g/t)

80

91

75

82
Average Copper Grade (%)

0.37

0.37

0.37

0.39
Average Lead Grade (%)

1.59

2.29

1.86

1.84
Average Zinc Grade (%)

4.21

4.79

4.38

4.20
Recoveries

Average Gold Recovery (%)

82.9

82.0

84.3

81.2
Average Silver Recovery (%)

91.3

93.0

92.7

92.4
Average Copper Recovery (%)

72.8

68.4

75.0

74.7
Average Lead Recovery (%)

71.0

71.4

76.3

75.4
Average Zinc Recovery (%)

83.7

73.9

83.5

76.1
Combined

Tonnes Milled ⁽¹⁾

110,682

98,010

376,625

366,580
Tonnes Milled per Day ⁽²⁾

1,361

1,353

1,492

1,495
Metal production ⁽³⁾

Gold (ozs.)

5,851

6,933

26,355

19,585
Silver (ozs.)

261,256

265,829

842,636

869,418
Copper (tonnes)

296

284

1,030

1,093
Lead (tonnes)

1,249

1,808

5,342

5,199
Zinc (tonnes)

3,901

3,920

13,745

11,980
Metal produced and sold ⁽³⁾

Gold (ozs.)

5,478

5,809

22,605

16,525
Silver (ozs.)

225,012

255,394

722,041

778,776
Copper (tonnes)

282

268

976

1,015
Lead (tonnes)

1,056

1,550

4,450

3,940
Zinc (tonnes)

2,943

3,059

10,892

9,386
Percentage payable metal ⁽³⁾

Gold (%)

94

84

86

84
Silver (%)

86

96

86

90
Copper (%)

95

94

95

93
Lead (%)

85

86

83

76
Zinc (%)

75

78

79

78


	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022
Net sales
Gold	$	7,690	$	9,109	$	28,529	$	41,228
Silver		4,919		4,312		18,202		15,620
Copper		2,049		2,164		7,792		8,969
Lead		2,060		2,075		7,807		9,670
Zinc		6,283		10,003		23,762		40,672
Less: Treatment and refining charges		(2,788)		(2,860)		(9,300)		(8,745)
Realized and unrealized gain (loss) - embedded derivative, net		339		(934)		(205)		(1,064)
Total sales, net	$	20,552	$	23,869	$	76,587	$	106,350
Metal produced and sold
Gold (ozs.)		3,982		5,478		14,777		22,605
Silver (ozs.)		208,905		225,012		777,977		722,041
Copper (tonnes)		245		282		904		976
Lead (tonnes)		947		1,056		3,681		4,450
Zinc (tonnes)		2,571		2,943		8,772		10,892
Average metal prices realized ⁽¹⁾
Gold ($ per oz.)	$	1,934	$	1,627	$	1,948	$	1,823
Silver ($ per oz.)	$	23.61	$	18.54	$	23.86	$	21.65
Copper ($ per tonne)	$	8,185	$	7,115	$	8,624	$	9,015
Lead ($ per tonne)	$	2,196	$	1,882	$	2,166	$	2,166
Zinc ($ per tonne)	$	2,195	$	3,186	$	2,648	$	3,828
Gold equivalent ounces sold
Gold Ounces		3,982		5,478		14,777		22,605
Gold Equivalent Ounces from Silver		2,550		2,564		9,529		8,575
Total AuEq oz		6,532		8,042		24,306		31,180

(1)

~~Combined tonnes milled in the first, second, and third quarter of 2021 included 11,577 tonnes, 3,227 tonnes, and 204 tonnes~~Average metal prices realized vary from the ~~Open Pit Mine, respectively. The Open Pit Mine is no longer~~market metal prices due to final settlement adjustments from our provisional invoices when they are settled. Our average metal prices realized will therefore differ from the average market metal prices in production. Additionally, Q1 and Q2 2022 combined tonnes milled includes 1,043 and 215 purchased tonnes, respectively, related to an environmental initiative with a local community. There were no purchased tonnes processed in the third quarter of 2022.

~~(2)~~

~~Based on actual days the mill operated during the period.~~

~~(3)~~

The difference between what we report as “Metal production” and “Metal produced and sold” is attributable to the difference between the quantities of metals contained in the concentrates we produce versus the portion of those metals for which we are paid, net of metal deductions, according to the terms of our sales contracts. The terms of our smelting and trading sales contracts reflect customary commercial terms in the mining industry, with withheld metals ranging from less than 1% up to 30% depending on the product sold (doré, copper concentrate, lead concentrate, or zinc concentrate) and the volume of metals contained within that product. The “Percentage payable metals” is the ratio of Metals production divided by metal produced and sold. Differences can also arise from inventory changes related to shipping schedules, or variances in ore grades and recoveries, which impact the amount of metals contained in concentrates produced and sold.most cases.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
2731

Table of Contents

Third quarter ~~2022~~2023 compared to third quarter ~~2021~~2022

~~For~~The key drivers of the ~~three months ended September 30, 2022, the Don David Gold Mine production totaled 5,851 gold ounces and 261,256 silver ounces, representing a 16% decrease in gold~~ production and ~~a 2% decrease~~financial results for the third quarter of 2023, as compared to the third quarter of 2022, relate to the higher tonnes mined and changes in ~~silver production, from~~metal grades. These results align with the ~~same period~~2023 mine plan and were considered in ~~2021. The change is a direct result of~~the 2023 guidance disclosed in the 2022 Annual Report. Financial results have also been impacted unfavorably by the strengthening Mexican peso and the lower ~~gold and silver grades processed.~~

zinc price realized in 2023.

~~Production Volumes~~Metal Sold

During the three months ended September 30, ~~2022, total~~2023, gold sales of 3,982 ounces, silver sales of 208,905 ounces, copper sales of 245 tonnes, ~~milled~~lead sales of ~~110,682 were 13% higher than in the three months ended September 30, 2021. Metal production for gold, silver, lead,~~947 tonnes, and zinc sales of 2,571 tonnes decreased ~~during the three months ended September 30, 2022~~by 27%, 7%, 13%, 10% and 13% respectively, as compared to the same period ~~last year. While~~in 2022.

Average metal production generally increased year over year, production in the three months ended September 30, 2022, was lower than metal production in the same period in 2021 due to the Company’s deliberate but temporary slowdown of production to improve safety specific to ground support and ventilation, as well as a more prolonged rainy season in 2022 compared to the same period in 2021.

The paste fill plant continues to provide substantial efficiencies since it commenced operations in 2019 by returning processing waste to underground workings. The paste fill is an effective method of reducing surface tailings and provides structural ground support that allows for more complete mining of mineral reserves. Additionally, the tailings filtration plant and dry stack facility completed in 2021 conserve and recirculate water, eliminate risks related to traditional tailings facilities, accelerate reclamation of certain areas of the open pit mine, and extend the life of the operations. Currently 60% of the tails are sent to the dry stack facility, and the remaining 40% are sent to the underground operations in the form of paste fill for ground support. While the original tailings storage facility is available should the need arises, at this time, there is no plan to deposit tailings in this facility.

~~Grades & Recoveries~~prices realized

During the three months ended September 30, ~~2022,~~2023, the ~~majority of ore processed came from the Arista underground mine with an~~ average metal prices were $1,934 per ounce for gold, ~~grade of 1.98 g/t~~$23.61 per ounce for silver, $8,185 per tonne for copper, $2,196 per tonne for lead, and ~~silver grade of 80 g/t, compared~~$2,195 per tonne for zinc. Compared to ~~2.68 g/t and 91 g/t, respectively, for~~ the same period in ~~2021. The~~2022, the average metal price for gold, ~~grade was 26% lower~~silver, copper, and ~~silver grade 12% lower.~~lead increased by 19%, 27%, 15%, and 17%, respectively, while the average metal price zinc decreased 31%.

Year-to-date 2023 compared to year-to-date 2022

~~Our base metals average grades during~~

Key drivers in the ~~three~~production and financial results for the nine months ended September 30, ~~2022 were 0.37% copper, 1.59% lead, and 4.21% zinc. Copper grades were similar~~2023, as in t~~he same period in 2021. Lead and zinc grades were 31% and 12% lower, respectively, than in the same period in 2021.~~

Gold and silver recoveries for the three months ended September 30, 2022 were 82.9% and 91.3%, respectively, reflecting a 1.1% increase for gold and a 1.8% decrease for silver over the same period in 2021. Copper and zinc recoveries for the three months ended September 30, 2022 increased 6.4% and 13.2%, respectively, compared to the same period in ~~2021. Lead recoveries for~~2022, relate to the ~~three months ended September 30, 2022 were 71.0%, reflecting a 0.6% decrease over the same period~~lower tonnes mined and changes in ~~2021. Gold recoveries year-to-date have reached design objectives after the installation of the regrind circuit; however, during the third quarter, recoveries for all metals,~~metal grades. These results align with the ~~exception of zinc, decreased as a result of a change~~2023 mine plan and were considered in the ~~mineralization of~~2023 guidance disclosed in the ~~ore processed. The mineralization is being evaluated to identify improvement opportunities that will benefit future recovery rates.~~2022 Annual Report. Financial results have also been impacted unfavorably by the strengthening Mexican peso and the lower zinc price realized in 2023.

~~Year-to-date 2022 compared to year-to-date 2021~~Metal Sold

~~For~~During the nine months ended September 30, ~~2022, the Don David Gold Mine production totaled 26,355~~2023, gold sales of 14,777 ounces, copper sales of 904 tonnes, lead sales of 3,681 tonnes, and ~~842,636 silver ounces, representing a~~zinc sales of 8,772 tonnes decreased by 35% ~~increase in gold production~~, 7%, 17%, and ~~a 3% decrease silver production, from~~19%, respectively, as compared to the same period in ~~2021.~~2022. Silver sales of 777,977 ounces increased by 8% during the nine months ended September 30, 2023 compared to the same period in 2022.

Average metal prices realized

During the nine months ended September 30, 2023, the average metal prices were $1,948 per ounce for gold, $23.86 per ounce for silver, $8,624 per tonne for copper, $2,166 per tonne for lead, and $2,648 per tonne for zinc. Compared to the same period in 2022, the average metal price for gold and silver increased by 7% and 10%, respectively, while the average metal price for copper and zinc decreased by 4% and 31%, respectively. The ~~change directly results from higher gold grades~~average price for lead was the same as in the comparable period in 2022.

Gold Resource Corporation—Management’s Discussion and ~~lower silver grades.~~Analysis of Financial Condition and Results of Operations
32

Table of Contents

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
2833

Table of Contents

~~Production Volumes~~

~~During the nine months ended September 30, 2022, total tonnes milled of 376,625 were in line with the same period in 2021. Metal production for gold, lead, and zinc increased during the nine months ended September 30, 2022 as compared to the same period last year, primarily due to increases in grades and recoveries.~~

~~Grades & Recoveries~~

During the nine months ended September 30, 2022, the majority of ore processed came from the Arista underground mine with an average gold grade of 2.57 g/t and silver grade of 75 g/t, compared to 2.04 g/t and 82 g/t, respectively, for the same period in 2021. The average gold grade was 26% higher and silver grade was 8% lower than in the same period in 2021, consistent with the current year mine plan.

Our base metals average grades during the nine months ended September 30, 2022 were 0.37% copper, 1.86% lead, and 4.38% zinc. Lead and zinc grades were 1% and 4% higher, while copper was 6% lower than the same period in 2021, consistent with the current year mine plan. Metal grades are contingent on the location of the ore mined within the deposit and will trend to the average grades reported in the Mineral Reserves and Mineral Resource tables~~contained in our annual report on Form 10-K for the year ended December 31, 2021.~~

Gold and silver recoveries for the nine months ended September 30, 2022 were 84.3% and 92.7%, respectively, reflecting a 3.8% and 0.3% increase over the same period in 2021. Gold recoveries have reached design objectives after the installation of the regrind circuit. Copper, lead, and zinc recoveries for the nine months ended September 30, 2022 increased by 0.3%, 1.3%, and 9.8%, respectively, compared to the same period in 2021.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
2934

Table of Contents

Financial Measures

The following table summarizes certain financial data of the Company for the periods indicated:

For the three months ended September 30,

For the nine months ended September 30,

2023

2022

2023

2022

(in thousands)

(in thousands)
Doré and concentrate sales

$
23,001

$
27,663

$
86,092

$
116,159
Less: Treatment and refining charges

(2,788)

(2,860)

(9,300)

(8,745)
Realized/unrealized derivatives, net

339

(934)

(205)

(1,064)
Sales, net

20,552

23,869

76,587

106,350
Total cost of sales

24,963

26,047

79,238

81,186
Mine gross (loss) profit

(4,411)

(2,178)

(2,651)

25,164
Other costs and expenses, including tax:

2,930

7,552

10,309

28,202
Net loss

$
(7,341)

$
(9,730)

$
(12,960)

$
(3,038)

Other Non-GAAP Financial Measures:

Total cash cost after co-product credits per AuEq oz sold ⁽¹⁾

$
1,839

$
1,103

$
1,210

$
314
Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold ⁽¹⁾

$
2,669

$
1,838

$
1,852

$
944
Total all-in cost after co-product credits per AuEq oz sold ⁽¹⁾

$
3,001

$
2,457

$
2,082

$
1,329

(1) For a detailed description of each of the non-GAAP financial measures and a reconciliation to GAAP financial measures, please see the discussion below under “Sales Statistics

The following table summarizes certain sales statistics about the Don David Gold Mine operations for the periods indicated:

For the three months ended September 30,

For the nine months ended September 30,

For the three months ended September 30,

For the nine months ended September 30,

2022

2021

2022

2021

2023

2022

2023

2022
Net sales

Gold

$
9,109

$
10,343

$
41,228

$
29,720

$
7,690

$
9,109

$
28,529

$
41,228
Silver

4,312

6,217

15,620

20,086

4,919

4,312

18,202

15,620
Copper

2,164

2,447

8,969

9,547

2,049

2,164

7,792

8,969
Lead

2,075

3,641

9,670

8,641

2,060

2,075

7,807

9,670
Zinc

10,003

9,187

40,672

27,193

6,283

10,003

23,762

40,672
Less: Treatment and refining charges

(2,860)

(2,328)

(8,745)

(8,210)

(2,788)

(2,860)

(9,300)

(8,745)
Realized and unrealized (loss) gain - embedded derivative, net

(934)

(478)

(1,064)

156
Realized and unrealized gain (loss) - embedded derivative, net

339

(934)

(205)

(1,064)
Total sales, net

$
23,869

$
29,029

$
106,350

$
87,133

$
20,552

$
23,869

$
76,587

$
106,350
Metal sold

Metal produced and sold

Gold (ozs.)

5,478

5,809

22,605

16,525

3,982

5,478

14,777

22,605
Silver (ozs.)

225,012

255,394

722,041

778,776

208,905

225,012

777,977

722,041
Copper (tonnes)

282

268

976

1,015

245

282

904

976
Lead (tonnes)

1,056

1,550

4,450

3,940

947

1,056

3,681

4,450
Zinc (tonnes)

2,943

3,059

10,892

9,386

2,571

2,943

8,772

10,892
Average metal prices realized ⁽¹⁾

Gold ($ per oz.)

$
1,627

$
1,762

$
1,823

$
1,790

$
1,934

$
1,627

$
1,948

$
1,823
Silver ($ per oz.)

$
18.54

$
23.19

$
21.65

$
25.63

$
23.61

$
18.54

$
23.86

$
21.65
Copper ($ per tonne)

$
7,115

$
9,092

$
9,015

$
9,466

$
8,185

$
7,115

$
8,624

$
9,015
Lead ($ per tonne)

$
1,882

$
2,397

$
2,166

$
2,231

$
2,196

$
1,882

$
2,166

$
2,166
Zinc ($ per tonne)

$
3,186

$
3,032

$
3,828

$
2,924

$
2,195

$
3,186

$
2,648

$
3,828
Precious metal gold equivalent ounces sold

Gold equivalent ounces sold

Gold Ounces

5,478

5,809

22,605

16,525

3,982

5,478

14,777

22,605
Gold Equivalent Ounces from Silver

2,564

3,361

8,575

11,151

2,550

2,564

9,529

8,575
Total AuEq oz

8,042

9,170

31,180

27,676

6,532

8,042

24,306

31,180
(1) Average metal prices realized vary from the market metal prices due to final settlement adjustments from our provisional invoices when they are settled. Our average metal prices realized will therefore differ from the average market metal prices in most cases.

~~Third quarter 2022 compared to third quarter 2021~~

~~Metal Sold~~

During the three months ended September 30, 2022, gold sales of 5,478 ounces, silver sales of 225,012 ounces, lead sales of 1,056 tonnes, and zinc sales of 2,943 tonnes decreased by 6%, 12%, 32%, and 4%, respectively, as compared to the same period in 2021. Copper sales increased by 5% during the three months ended September 30, 2022 compared to the same period in 2021.

~~Average metal prices realized~~

During the three months ended September 30, 2022, the average metal prices were $1,627 per ounce for gold, $18.54 per ounce for silver, $7,115 per tonne for copper, $1,882 per tonne for lead, and $3,186 per tonne for zinc. Compared to the same period in 2021, the average metal price for zinc increased by 5%, while the average metal price for gold, silver, copper, and lead decreased by 8%, 20%, 22%, and 22%, respectively.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
30
~~Table of Contents~~
~~Year-to-date 2022 compared to year-to-date 2021~~

~~Metal Sold~~

During the nine months ended September 30, 2022, gold sales of 22,605 ounces, lead sales of 4,450 tonnes, and zinc sales of 10,892 tonnes increased by 37%, 13%, and 16%, respectively, as compared to the same period in 2021. Silver and copper sales decreased by 7% and 4%, respectively, during the nine months ended September 30, 2022 compared to the same period in 2021.

~~Average metal prices realized~~

~~During the nine months ended September 30, 2022, the average metal prices were $1,823 per ounce for gold, $21.65 per ounce for silver,~~$9,015 per tonne for copper, $2,166 per tonne for lead, and $3,828 per tonne for zinc. Compared to the same period in 2021, the average metal price for gold and zinc increased by 2% and 31%, respectively, while the average metal price for silver, copper, and lead decreased by 16%, 5%, and 3%, respectively.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
31
Table of Contents
Third quarter 2023 compared to third quarter 2022
The key drivers of the production and financial results for the third quarter of 2023, as compared to the third quarter of 2022, relate to the higher tonnes mined and changes in metal grades. These results align with the 2023 mine plan and were considered in the 2023 guidance disclosed in the 2022 Annual Report. Financial results have also been impacted unfavorably by the strengthening Mexican peso and the lower zinc price realized in 2023.
Metal Sold
During the three months ended September 30, 2023, gold sales of 3,982 ounces, silver sales of 208,905 ounces, copper sales of 245 tonnes, lead sales of 947 tonnes, and zinc sales of 2,571 tonnes decreased by 27%, 7%, 13%, 10% and 13% respectively, as compared to the same period in 2022.
Average metal prices realized
During the three months ended September 30, 2023, the average metal prices were $1,934 per ounce for gold, $23.61 per ounce for silver, $8,185 per tonne for copper, $2,196 per tonne for lead, and $2,195 per tonne for zinc. Compared to the same period in 2022, the average metal price for gold, silver, copper, and lead increased by 19%, 27%, 15%, and 17%, respectively, while the average metal price zinc decreased 31%.
Year-to-date 2023 compared to year-to-date 2022

Key drivers in the production and financial results for the nine months ended September 30, 2023, as compared to the same period in 2022, relate to the lower tonnes mined and changes in metal grades. These results align with the 2023 mine plan and were considered in the 2023 guidance disclosed in the 2022 Annual Report. Financial results have also been impacted unfavorably by the strengthening Mexican peso and the lower zinc price realized in 2023.

Metal Sold
During the nine months ended September 30, 2023, gold sales of 14,777 ounces, copper sales of 904 tonnes, lead sales of 3,681 tonnes, and zinc sales of 8,772 tonnes decreased by 35%, 7%, 17%, and 19%, respectively, as compared to the same period in 2022. Silver sales of 777,977 ounces increased by 8% during the nine months ended September 30, 2023 compared to the same period in 2022.
Average metal prices realized
During the nine months ended September 30, 2023, the average metal prices were $1,948 per ounce for gold, $23.86 per ounce for silver, $8,624 per tonne for copper, $2,166 per tonne for lead, and $2,648 per tonne for zinc. Compared to the same period in 2022, the average metal price for gold and silver increased by 7% and 10%, respectively, while the average metal price for copper and zinc decreased by 4% and 31%, respectively. The average price for lead was the same as in the comparable period in 2022.
Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
32
Table of Contents

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
33
Table of Contents

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
34
Table of Contents
Financial Measures

The following table summarizes certain financial data of the Company for the periods indicated:

For the three months ended September 30,

For the nine months ended September 30,

For the three months ended September 30,

For the nine months ended September 30,

2022

2021

2022

2021

2023

2022

2023

2022

(in thousands)

(in thousands)

(in thousands)

(in thousands)
Doré and concentrate sales

$
27,663

$
31,835

$
116,159

$
95,187

$
23,001

$
27,663

$
86,092

$
116,159
Less: Treatment and refining charges

(2,860)

(2,328)

(8,745)

(8,210)

(2,788)

(2,860)

(9,300)

(8,745)
Realized/unrealized derivatives, net

(934)

(478)

(1,064)

156

339

(934)

(205)

(1,064)
Sales, net

23,869

29,029

106,350

87,133

20,552

23,869

76,587

106,350
Total cost of sales

26,047

20,784

81,186

63,433

24,963

26,047

79,238

81,186
Mine gross (loss) profit

(2,178)

8,245

25,164

23,700

(4,411)

(2,178)

(2,651)

25,164
Other costs and expenses, including tax:

7,552

6,716

28,202

18,361

2,930

7,552

10,309

28,202
Net (loss) income

$
(9,730)

$
1,529

$
(3,038)

$
5,339
Net loss

$
(7,341)

$
(9,730)

$
(12,960)

$
(3,038)

Other Non-GAAP Financial Measures:

Total cash cost after co-product credits per AuEq oz sold ⁽¹⁾

$
1,103

$
448

$
314

$
519

$
1,839

$
1,103

$
1,210

$
314
Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold ⁽¹⁾

$
1,831

$
1,753

$
938

$
1,318

$
2,669

$
1,838

$
1,852

$
944
Total all-in cost after co-product credits per AuEq oz sold ⁽¹⁾

$
2,449

$
2,286

$
1,323

$
1,691

$
3,001

$
2,457

$
2,082

$
1,329

(1) For a detailed description of each of the non-GAAP financial measures and a reconciliation to GAAP financial measures, please see the discussion below under “Non-GAAP Measures”.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
32
~~Table of Contents~~
Third quarter ~~2022~~2023 compared to third quarter ~~2021~~2022

Sales, net

~~DDGM net~~Net sales of ~~$23.9~~$20.6 million for DDGM for the three months ended September 30, ~~2022~~2023 decreased by ~~$5.2~~$3.3 million, or ~~18%~~14%, ~~when~~ compared to ~~2021.~~the same period in 2022. The decrease in ~~2022~~2023 net sales is the result of decreased sales volumes and lower realized metal prices for zinc, as outlined in the sales statistics table above. Additionally, treatment and refining charges during the three months ended September 30, ~~2022 increased~~2023 decreased by ~~23%~~3% as a result of the decline in third quarter 2023 production as compared to third quarter 2022 production.
Total cost of sales
Total cost of sales of $25.0 million for the three months ended September 30, 2023 decreased by 4% from $26.0 million for the same period in 2022. The $1.0 million decrease was primarily related to a $0.4 million decrease in production cost and a $0.8 million decrease in depreciation expense. Production costs of $19.0 million for the three months ended September 30, 2023 are 2% lower than the production costs of $19.4 million for the same period in 2022. Although the cost of sales and production costs were lower during the third quarter of 2023 compared to the same period in 2023, the cost of sales as a percentage of revenue was 12% higher because the increased power rates and the strengthening of the peso negatively impacted production costs.
Mine gross (loss) profit
For the three months ended September 30, 2023, the Company had a mine gross loss of $4.4 million. Mine gross loss increased by $2.2 million, or 103%, compared to the same period in 2022. The increase in loss was primarily due to a $3.3 million, or 14% decrease in net sales, offset bya $0.4 million, or 2% decrease in production costs and a $0.8 million, or 12% decrease in depreciation and amortization expenses.
The relationship between sales and the cost of sales, and therefore mine gross profit, is not perfectly correlated to the tonnes of ore processed. While both sales and the cost of sales are impacted by the tonnes of ore processed, other factors,
Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
35
Table of Contents
such as the grade of ore processed, metal commodity prices, and operating costs have a significant impact on mine gross profit. For example, in the third quarter of 2023, the tonnes of ore processed increased by 5%, but the total cost of sales only decreased by 4% compared to the third quarter of 2022 due to a 9% lower cost per tonne processed; however, sales decreased by 14%.
We expect grades to vary from period to period based on the annual mine plan. The gold grades are expected to trend downwards over time, toward the average grade of 1.14 g/t (exclusive of silver, copper, lead, and zinc contained grades), reflected in our mineral reserve estimate. However, as mine development progresses and infill drilling occurs, opportunities to refine mining methods and reduce dilution may have a favorable impact on future mined grades.
Net (loss) income
For the three months ended September 30, 2023, we recorded a net loss of $7.3 million, compared to a net loss of $9.7 million during the same period in 2022. The $2.4 million decrease in net loss is mainly attributable to the higher tax benefit in the third quarter of 2023.
Year-to-date 2023 compared to year-to-date 2022

Sales, net
Net sales of $76.6 million for DDGM for the nine months ended September 30, 2023 decreased by $29.8 million, or 28%, compared to the same period in 2022. The decrease in 2023 sales is the result of decreased sales volumes outlined in the sales statistics table above. Additionally, treatment and refining charges during the nine months ended September 30, 2023 increased by 6% due to an increase in the zinc treatment charge benchmark and spot price.

Total cost of sales

Total cost of sales ~~increased~~decreased by 2% to ~~$26.0~~$79.2 million for the ~~three~~nine months ended September 30, ~~2022~~2023 from ~~$20.8~~$81.2 million for the same period in ~~2021.~~2022. The ~~$5.2~~$2.0 million ~~increase~~decrease was primarily related to a ~~$3.1 million increase in depreciation expense and a~~ $2.1 million ~~increase~~decrease in production ~~costs. Depreciation expense was~~cost, offset by higher ~~as a result of the addition of $16.9 million capital related to the dry stack~~reclamation and filtration plant and the gold regrind project that were placed in service in 2022, and the Mineral Reserve base being lower in the units of production calculation, resulting in higher depreciation cost per tonne of ore processed.remediation expenses. Production costs of ~~$19.4~~$59.1 million for the ~~three~~nine months ended September 30, ~~2022~~2023 are ~~13% higher~~3% lower than the production costs of ~~$17.2~~$61.2 million for the same period in ~~2021.~~2022. The ~~increase~~decrease is directly related to ~~a 13% increase~~an 8% decrease in ore tonnes processed.
Although the cost of sales and production costs were lower during the nine months ended September 30, 2023 compared to the same period in 2022, the cost of sales as a percentage of revenue was 27% higher because of the increased power rates and the strengthening of the peso negatively impacted production costs.
Mine gross (loss) profit

For the ~~three months~~nine months ended September 30, ~~2022,~~2023, mine gross profit decreased ~~by 126%,~~$27.8 million, or ~~$10.4 million,~~111% compared to the same period in ~~2021.~~2022, from a mining gross profit of $25.2 million in 2022 to a mining gross loss of $2.7 million in 2023. The decrease was primarily due to a ~~18%,~~$29.8 million, or ~~$5.2 million~~28% decrease in net sales, ~~and~~offset by a ~~25%,~~$2.1 million, or ~~$5.2 million increase~~3% decrease in ~~cost of sales~~ ~~as described above.~~
production costs.
The relationship between sales and the cost of sales, and therefore mine gross profit, is not perfectly correlated to the tonnes of ore processed. While both sales and the cost of sales are impacted by the tonnes of ore processed, other factors, ~~–the~~such as the grade of ore processed, metal commodity prices, and operating ~~cost unit prices—tend to~~costs have a ~~greater~~significant impact on ~~the relationship to~~ mine gross profit. For example, infor the ~~third quarter of 2022,~~nine months ended September 30, 2023, the volume of ore processed ~~increased 13%~~decreased by 8%, but the total cost of sales decreased only by 2% compared to the ~~third quarter of 2021;~~same period in 2022 due to a 6% higher cost per tonne processed; however, sales decreased by ~~18%~~28% due to a decrease in ore tonnes processed and ~~total cost~~a decrease in grade of ~~sales increased by 25%.~~ore tonnes processed for gold and base metals. The decrease in sales is explained by the decrease in ~~grade~~volumes as well as the decrease in grades for gold and ~~metal prices during the third quarter of 2022,~~base metals in 2023, and the ~~increase~~decrease in operating costs is primarily explained by the ~~increase~~decrease in ~~depreciation in addition to the impact from higher variable~~production costs ~~due to the higher ore tonnes processed.~~and depreciation.
Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
36
Table of Contents
We expect grades to vary from period to period based on the annual mine plan. The gold ~~and silver~~ grades are expected to trend downwards over time, toward the average grade of ~~1.51~~1.14 g/t ~~and 77 g/t, respectively (and exclusive~~(exclusive of silver, copper, lead, and zinc contained grades), reflected in our ~~Mineral Reserve~~mineral reserve estimate. However, as capital intensive mine development progresses and infill drilling occurs, opportunities to refine mining methods and eliminate dilution may have a favorable impact on future mined grades.
Net (loss) income
For the nine months ended September 30, 2023, we recorded a net loss of $13.0 million, as compared to a net loss of $3.0 million during the same period in 2022. The $10.0 million increase in net loss is mainly attributable to the mine gross loss discussed above.
Other Costs and Expenses, Including Taxes

For the three months ended September 30,

For the nine months ended September 30,

2023

2022

2023

2022

(in thousands)

(in thousands)

Other costs and expenses:

General and administrative expenses

$
1,764

$
1,799

$
5,087

$
5,618

Mexico exploration expenses

1,540

1,143

3,974

3,190

Michigan Back Forty Project expenses

420

3,830

1,265

6,925

Stock-based compensation

(102)

450

502

1,617

Realized and unrealized (gain) loss on zinc zero cost collar

-

(218)

-

120

Other expense, net

1,967

765

4,147

1,817

Total other costs and expenses

5,589

7,769

14,975

19,287

(Benefit) provision for income taxes

(2,659)

(217)

(4,666)

8,915

Total other costs, including taxes

$
2,930

$
7,552

$
10,309

$
28,202

Third quarter 2023 compared to third quarter 2022
General and administrative expenses: For both the three months ended September 30, 2023 and 2022, general and administrative expenses were $1.8 million.
DDGM Exploration expenses: For the three months ended September 30, 2023, exploration expenses in DDGM totaled $1.5 million, compared to $1.1 million for the same period in 2022. Exploration activities in Oaxaca, Mexico, increased compared to the same period in 2022 primarily due to increased exploration drilling activity and increased contract drilling rates in 2023.
Back Forty Project expenses: For the three months ended September 30, 2023, costs for the optimization work totaled $0.4 million, compared to $3.8 million for the same period in 2022. The 89% decrease is due to the completion of the optimization work in the third quarter of 2023 and utilizing third parties only on a limited basis until after the completion of the capital cost analysis for the project.
Stock-based compensation: Stock-based compensation decreased by $0.5 million for the three months ended September 30, 2023 compared to the same period in 2022. This decrease is mainly due to the downward mark-to-market adjustment in the liability-classified share-based awards due to a decrease in share price.
Realized and unrealized loss on zinc zero cost collar: As of December 31, 2022, the Company’s hedge program concluded; therefore, no gains or losses were recorded in 2023. For the three months ended September 30, 2022, a $0.2 million gain was recorded related to the zinc zero cost collar, consisting of a realized gain of $0.1 million and an unrealized gain of $0.1 million.
Other expense, net: For the three months ended September 30, 2023, $2.0 million of other expense was recorded compared to $0.8 million in other expense during the same period of 2022. The $1.2 million increase primarily is the result
Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
3337
Table of Contents
of the $0.7 million severance expense due to the reduction of workforce and changes in the leadership team at DDGM in Mexico. Please see ~~Net (loss) income~~Note 18 - Other expense, net in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited) for a detailed breakdown.

Provision for income taxes: For the three months ended September 30, ~~2022, we recorded net loss of $9.7~~2023, income tax benefit was $2.7 million, as compared to ~~net~~$0.2 million income ~~of $1.5 million during~~tax benefit for the same period in ~~2021.~~2022. The ~~747% decrease~~increase in ~~net~~ income tax benefit for the three months ended September 30, 2023 is ~~attributable~~due to the ~~lower mine gross profit discussed above and higher other costs and expenses discussed below, including $3.8 million expenses related~~2023 third quarter loss primarily occurring in Mexico whereas the 2022 third quarter loss occurred primarily in USA subject to ~~the Back Forty Project.~~
a full valuation allowance.
Year-to-date ~~2022~~2023 compared to year-to-date ~~2021~~2022
General and administrative expenses: For the nine months ended September 30, 2023 and 2022, general and administrative expenses were $5.1 million and $5.6 million, respectively, representing a 9% decrease from the same period of 2022 primarily due to the impact of increased audit fees and consulting services in the second quarter of 2022, related to finalizing the Aquila acquisition and the allocation of $1.7 million corporate personnel costs for management and technical services specifically related to DDGM from general and administrative expenses to production costs for the Mexican operations.
~~Sales, net~~DDGM Exploration expenses: For the nine months ended September 30, 2023, exploration expenses in DDGM totaled $4.0 million, compared to $3.2 million for the same period in 2022. Exploration activities in Oaxaca, Mexico, increased compared to the same period in 2022 primarily due to increased drilling activity and increased contract drilling rates in 2023.
Back Forty Project expenses: For the nine months ended September 30, 2023, costs for the optimization work totaled $1.3 million, compared to $6.9 million for the same period in 2022. The 82% decrease is due to the completion of the optimization work in the third quarter of 2023 and utilizing third parties only on a limited basis until after the completion of the capital cost analysis for the project.
~~DDGM net sales of $106.4~~Stock-based compensation: Stock-based compensation decreased by $1.1 million for the nine months ended September 30, ~~2022 increased by $19.2 million, or 22%, when~~2023 compared to the same period in 2021. The increase in 2022 sales is the result of increased sales volumes in gold, lead, and zinc, and higher realized metal prices for gold and zinc outlined in the Sales Statistics table above. Gold ounces sold for the nine months ended September 30, 2022 increased by 6,080 ounces, or 37% over the same period in 2021. Additionally, treatment and refining charges during the nine months ended September 30, 2022 increased by 7% as a result of an increase in the zinc treatment charge benchmark and spot price.

~~Total cost of sales~~

Total cost of sales increased to $81.2 million for the nine months ended September 30, 2022 from $63.4 million for the same period in 2021. The $17.8 million increase was primarily related to a $8.5 million increase in depreciation expense and a $9.2 million increase in production costs. Depreciation expense was higher as a result of the addition of $16.9 million capital related to the dry stack and filtration plant and the gold regrind project that were placed in service in 2022, and the Mineral Reserve base being lower in the units of production calculation, resulting in higher depreciation cost per tonne of ore processed. Production costs of $61.2 million for the nine months ended September 30, 2022 are 18% higher than the production costs of $52.0 million for the same period in 2021. The increase is primarily related to a $2.4 million increase in consumable goods driven by price increases, a $1.8 million increase in spare parts utilized for equipment maintenance, a $2.1 million impact related to an increase in headcount and employee wages, and a $1.6 million increase in transportation costs due to a 9% price increase in negotiated transportation cost.

~~Mine gross (loss) profit~~

~~For the~~ ~~nine months ended September 30, 2022, mine gross profit increased by 6%, or $1.5 million, compared to the same period in 2021. The increase was~~ ~~primarily due to a 22%, or $19.2 million increase in net sales offset by a 28%, or $17.8 million increase in cost of salesas described above.~~

The relationship between sales and the cost of sales, and therefore mine gross profit, is not perfectly correlated to the tonnes of ore processed. While both sales and the cost of sales are impacted by the tonnes of ore processed, other factors –the grade of ore processed, metal commodity prices and operating cost unit prices—tend to have a greater impact on the relationship to mine gross profit. For example, in 2022, the volume of ore processed increased 3% compared to 2021; however, sales increased by 22% and total cost of sales increased by 28%. The increase in sales is explained by the increase in gold and zinc grade and metal prices during 2022, and the increase in operating costs is explained by the increase in depreciation in addition to the impact from higher costs related to price increases and increased wages as discussed above.

We expect grades to vary from period to period based on the annual mine plan. The gold and silver grades are expected to trend downwards over time toward the average grade of 1.51 g/t and 77 g/t, respectively (and exclusive of copper, lead and zinc contained grades), reflected in our Mineral Reserve estimate. However, as capital intensive mine development progresses and infill drilling occurs, opportunities to refine mining methods and eliminate dilution may have a favorable impact on future mined grades.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
34
~~Table of Contents~~
~~Net (loss) income~~

~~For the nine months ended September 30, 2022, we recorded net loss of $3.0 million, as compared to net income of $5.3 million during the same period in 2021. The 157%~~2022. This decrease ~~in net income is attributable to the higher mine gross profit discussed above, offset by higher other costs and expenses discussed below, including $6.5 million or 177% higher exploration costs.~~

~~Other Costs and Expenses, Including Taxes~~

For the three months ended September 30,

For the nine months ended September 30,

2022

2021

2022

2021

(in thousands)

(in thousands)

Other costs and expenses:

��

General and administrative expenses

$
1,799

$
2,355

$
5,618

$
6,070

DDGM exploration expenses

1,143

1,805

3,190

3,660

Back Forty Project expenses

3,830

-

6,925

-

Restructuring expenses

-

-

-

496

Stock-based compensation

450

30

1,617

711

Realized and unrealized (gain) loss on zinc zero cost collar

(218)

184

120

184

Other expense, net

765

(10)

1,817

543

Total other costs and expenses

7,769

4,364

19,287

11,664

Provision for income taxes

(217)

2,352

8,915

6,697

Total other costs, including taxes

$
7,552

$
6,716

$
28,202

$
18,361

~~General and administrative expenses –~~ For the three and nine months ended September 30, 2022, general and administrative expenses were $1.8 million and $5.6 million, respectively, representing a 24% and 7% decrease from the same period of 2021 primarily due to costs in 2021 related to employee and management changes.

~~DDGM Exploration expenses –~~ For the three and nine months ended September 30, 2022, exploration expenses in DDGM totaled $1.1 million and $3.2 million, respectively, compared to $1.8 million and $3.7 million for the same period in 2021. Exploration activities in Oaxaca, Mexico decreased compared to the same period in 2021 due to the work being conducted to enhance community relationships.

~~Back Forty Project expenses –~~ For the three and nine months ended September 30, 2022, feasibility study and permitting costs, totaled $3.8 million and $6.9 million, respectively. There were no expenses for the Back Forty Project for the same period in 2021 as the project was not acquired until December 2021. Until a Mineral Reserve and Mineral Resource is defined by Gold Resource Corporation, Back Forty expenditures will continue to be reported as advanced exploration expense.
~~Stock-based compensation –~~ ~~Stock-based compensation increased by $0.4 million and $0.9 million, respectively, for the three and nine months ended September 30, 2022 compared to the same period in 2021. This increase~~ is mainly due to the ~~equity awarded~~downward mark-to-market adjustment in ~~March 2022~~the liability-classified share-based awards due to ~~Senior Management related to 2021 performance, equity awarded~~a decrease in ~~June 2022 related to Senior Management’s 2022 compensation structure, and DSUs granted in March 2022 to the Board of Directorsrelated to their 2022 compensation structure.Equity awards were not issued to Senior Management during 2021. Management continues to work with an independent compensation consultant to evaluate the stock-based compensation program.~~
share price.
Realized and unrealized loss on zinc zero cost collar –: As of December 31, 2022, the Company’s hedge program concluded; therefore, no gains or losses were recorded in 2023. For the ~~three and~~ nine months ended September 30, 2022, ~~respectively, a $0.2 million gain and~~ a $0.1 million loss was recorded related to the zinc zero cost collar. The zinc forward price decreased from $3,666 per tonne as of December 31, 2021 to $2,978 per tonne as of September 30, 2022. This decrease resulted in the $1.8 million liability as of December 31, 2021 turning into a $0.4 million asset as of September 30, 2022. The year-to-date loss of $0.1 million is the result of the year-to-date realized loss of $2.4 million offset by the $2.3 million unrealized gain related to the zero cost collars that ~~will mature~~matured from October through December 2022.
Other expense, net: For the nine months ended September 30, 2023, $4.1 million of other expense was recorded compared to $1.8 million other expense during the same period of 2022. The $2.3 million increase primarily is the result of the $1.5 million severance expense due to the reduction of workforce and change in the leadership team at DDGM in Mexico. Please see Note 18 - Other expense, net in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited) above for a detailed breakdown.
Provision for income taxes: For the nine months ended September 30, 2023, income tax benefit was $4.7 million, compared to $8.9 million income tax expense for the same period in 2022. The decrease in income tax expense for the nine months ended September 30, 2023 is driven by the decrease in the nine-month net income before income taxes.
Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
3538
Table of Contents
~~Other expense, net –~~ For the three and nine months ended September 30, 2022, respectively, $0.8 million and $1.8 million of other expense was recorded compared to $0.0 million income and $0.5 million other expense during the same period of 2021. The $1.2 million increase in the year-to-date expense is primarily due to a $1.1 million increase in realized and unrealized foreign exchange loss and $0.6 million in interest expense related to the gold and silver stream liabilities assumed with the Aquila acquisition, offset by lower employee benefit obligations as the initial balance as a result of the Mexico Labor Reform was recorded as other expense in 2021 and going forward, they will be included in production costs. See ~~Note 18 - Other expense, net~~ ~~for a detailed breakdown.~~

~~Provision for income taxes~~ – For the three and nine months ended September 30, 2022, respectively, income tax benefit was $0.2 million and income tax expense was $8.9 million, a 109% decrease and a 33% increase from $2.4 million and $6.7 million expense for the same period in 2021. The decrease in income tax expense for the three months ended September 30, 2022 is driven by the 356% decrease in the three-month net income before income taxes. The increase in the income tax expense for the nine months ended September 30, 2022 is primarily due to a higher effective tax rate driven by the 2022 Tax Reform that decreased allowable deductions and a $0.8 million deferred tax liability recorded related to the 5% withholding tax on funds available for transfer to the U.S. as dividends in the future.

Other Non-GAAP Financial Measures
Third quarter 2023 compared to third quarter 2022
Total cash cost after co-product credits per AuEq oz ~~sold –~~sold: For the three months ended September 30, ~~2022,~~2023, the total cash cost after co-product credits per AuEq oz sold is ~~$1,103~~$1,839 compared to ~~$448~~$1,103 for the ~~three months ended September 30, 2021. During the third quarter of 2022, total cash cost per ounce~~same period in 2022. The increase is ~~higher~~ due to the lower amount of co-product credits we received ~~related to~~during the ~~lower base metal prices realized,~~third quarter of 2023, and the ~~12%~~19% decrease in the total number of ~~gold equivalent~~AuEq ounces sold, offset by a 3% decrease in treatment and refining charges as a result of the decline in third quarter 2023 production as compared to third quarter 2022 production. Although production costs were lower in the third quarter of 2023 compared to the same period last year, the strengthening peso and ~~higher~~increased energy costs negatively impacted production costs ~~discussed above.~~

~~For~~and, therefore, the ~~nine months ended September 30, 2022,~~cost per tonne processed and the total cash cost after co-product credits per AuEq oz sold is $314 compared to $519 for the same period in 2021. Year-to-date 2022, total cash cost per ounce is lower due to the higher amount of co-product credits we received during the first half of the year and the 13% increase in total number of gold equivalent ounces sold. ~~These favorable impacts to total cash cost after co-product credits were offset by higher production costs discussed above.~~

Total consolidated all-in sustaining cost after co-product credits per AuEq oz ~~sold –~~sold: For the three months ended September 30, ~~2022,~~2023, the total consolidated all-in sustaining cost after co-product credits per AuEq oz sold was ~~$1,831~~$2,669 compared to ~~$1,753~~$1,838 for the same period in ~~2021.~~2022. The increase directly relates to the higher cash costs per ounce discussed above.
Total all-in cost after co-product credits per AuEq oz sold: For the three months ended September 30, 2023, the total all-in cost after co-product credits per AuEq oz sold was $3,001 compared to $2,457 for the same period in 2022. The increase is due to the higher all-in sustaining costs discussed above and lower exploration expense related to advancing the Back Forty optimization work and permitting activities.
Year-to-date 2023 compared to year-to-date 2022
Total cash cost after co-product credits per AuEq oz sold: For the nine months ended September 30, 2023, the total cash cost after co-product credits per AuEq oz sold was $1,210 compared to $368 for the same period in 2022. The increase is due to the lower amount of co-product credits we received during the nine months ended September 30, 2023, the 22% decrease in total number of AuEq ounces sold, and the 6% increase in treatment and refining charges as a result of an increase in the zinc treatment charge benchmark and spot price. Although production costs were lower for the nine months ended September 30, 2023 compared to the same period last year, the strengthening peso and increased energy costs negatively impacted production costs and, therefore, the cost per tonne processed and the total cash cost after co-product credits per AuEq oz sold.
Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
39
Table of Contents
Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold: For the nine months ended September 30, 2023, the total consolidated all-in sustaining cost after co-product credits per AuEq oz sold was $1,852 compared to $998 for the same period in 2022. The increase is directly related to the higher cash costs per ounce discussed above, partially offset by lower sustaining capital expenditures.

For the nine months ended September 30, 2022, the total consolidated all-in sustaining cost after co-product credits per AuEq oz sold was $938 compared to $1,318 for the same period in 2021. The decrease is directly related to the lower cash costs per ounce discussed above offset by higher sustaining capital expenditures and stock-based compensation.

Total all-in cost after co-product credits per AuEq oz ~~sold –~~sold: For the ~~three~~nine months ended September 30, ~~2022,~~2023, the total all-in cost after co-product credits per AuEq oz sold was ~~$2,449~~$2,082 compared to ~~$2,286~~$1,383 for the same period in ~~2021.~~2022. The increase is due to the higher all-in sustaining costs discussed above, ~~and higher exploration expense related to advancing the~~partially offset by lower Back Forty ~~feasibility study~~costs due to nearing completion of the optimization work and ~~permitting activities.~~

~~For the nine months ended September 30, 2022, the total all-in~~utilizing third parties only on a limited basis until after completion of capital cost ~~after co-product credits per AuEq oz sold was $1,323 compared to $1,691~~analysis for the same period in 2021. The decrease is due to the lower all-in sustaining costs discussed above offset by higher exploration expense related to advancing the Back Forty feasibility study work and permitting activities.project.
For a detailed description of each of the non-GAAP financial measures and a reconciliation to GAAP financial measures, please see the discussion below under “Non-GAAP Measures.”

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
36
~~Table of Contents~~
~~2022~~ ~~Capital and Exploration Investment Summary~~

For the nine months ended September 30, 2022

2022 full year projection

(in thousands)
Sustaining Investments:

Underground Development
Capital
$
5,251

$
7.0 - 8.0 million
Infill Drilling and Exploration Development
Capital

5,056

7.0 - 7.5 million
Other Sustaining Capital
Capital

1,922

2.0 - 2.5 million
Subtotal of Sustaining Investments:

12,229

Growth Investments:

DDGM growth:

Gold Regrind
Capital

745

-
Dry Stack Completion
Capital

1,149

-
Surface Exploration / Other
Exploration

1,641

2.0 - 2.5 million
Underground Exploration Drilling
Exploration

1,549

2.0 - 2.5 million
Back Forty growth:

Back Forty Feasibility Study & Permits
Exploration

6,925

9.0-9.5 million
Subtotal of Growth Investments:

12,009

Total Capital and Exploration:

$
24,238

$
29.0 - 32.5 million

The Company’s investment in Mexico continued in the third quarter of 2022 totaling $17.3 million year-to-date. Our investment in Mexico is focused on favorably impacting our environment, social and governance programs while creating operational efficiencies and longevity. At the Back Forty Project, $6.9 million has been invested in feasibility and permitting initiatives year-to-date.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
37
~~Table of Contents~~
~~Underground and Exploration Development:~~

Mine development during the quarter included ramps and access to different areas of the deposit, ventilation shafts, and exploration development drifts. A total of 3,210 meters of development, at a cost of $7.5 million (864 meters at a cost of $2.2 million in the third quarter), was completed during the year through September 30, 2022. Through September 30, 2022, underground mine development was $5.3 million and exploration development was $2.2 million (included in Infill Drilling and Exploration Development in the table above). As part of ongoing safety initiatives, the Company also invested in additional ground support and improved ventilation for the mine, which deliberately but temporarily slowed underground and exploration development. We plan to invest a total of $7.0 million to $8.0 million in underground development and an additional $3.5 million to $4.0 million in exploration development in 2022.

~~Underground safety inspection and ventilation survey~~

~~Back Forty Feasibility and Permitting:~~

Work on the optimized feasibility study progressed during the third quarter of 2022. Mine planning, process plant design and site layout and infrastructure were significantly completed during the quarter. Current initiatives are focused on finalizing the financial models with operating and capital costs, which may be subject to some volatility due to the inflationary market conditions. Environmental and cultural resource considerations have been a key factor in the overall project design. On August 5, 2022, the Company was invited by Michigan’s Department of Environment, Great Lakes and Energy to participate in a Scoping Environmental Impact Assessment Meeting to present the initial site plan and other key improvements being incorporated into the Back Forty Project’s optimized feasibility study. This was an opportunity to meet with tribal representatives to promote the Back Forty Project, which is focused on favorably impacting our environment, social and governance programs, while identifying economic and operational efficiencies. The feasibility study work for the Back Forty Project progressed during the third quarter of 2022. Work related to metallurgy and the economic model is expected to continue into 2023. Permit applications will not be submitted with state agencies in Michigan until the completion of the feasibility study.

~~2022 DDGM Exploration Updates~~

Our portfolio of properties that make up our Don David Gold Mine are located along a 55 kilometer trend of the San Jose structural corridor in the Sierra Madre Sur mountain range. This structural corridor trends north 70 degrees west and
Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
38
~~Table of Contents~~
spans three historic mining districts within Oaxaca. Surface exploration activity continues on several properties with a goal to define priority drill targets, demonstrating our commitment to a long-term investment in Oaxaca, Mexico.

Underground exploration drilling is ongoing, when access is available, from various locations within the Arista mine: 1) to continue testing of the Three Sisters Zone, as well as other new vein targets and 2) to further define and expand the Mineral Reserves and Mineral Resource of the current vein systems in production. The previously discussed temporary slowdown of mine development and exploration during the third quarter impacted the timing of the definition and expansion of Mineral Resources and Mineral Reserves. Work on exploration development headings will resume in the fourth quarter, which will enable further expansion and infill drilling to advance in 2023 on both the Arista and Switchback vein systems.

During the quarter, we completed 4 exploration drill holes (2,409 meters) and 48 infill drill holes (8,590 meters). Year-to-date, we have completed 16 exploration drill holes (8,003 meters) and 127 infill drill holes (18,641 meters).

● Infill drilling continued to focus on the Arista vein system up- and down-dip of existing workings. Additional drilling in the Switchback system continued in the third quarter. Infill drilling continues to confirm zones of high-grade mineralization within the resource model as well as additional mineralized structures outside existing models, in the third quarter, for instance, in the Marena zone (Arista), and Sarabi and Susana N veins (Switchback).
● Exploration drilling continued to test expansion of the Switchback system to the southeast at depth and along strike and we have confirmed the continuation of the system. During Q4 we plan to continue exploration in the Three Sisters and northwestern part of the Switchback system. The Switchback system extends for over a kilometer along a NW-SE strike and remains open in both directions as well up- and down-dip.

~~Susana N vein, from Switchback drilling 2022~~

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
39
~~Table of Contents~~
~~Surface exploration programs continued to be performed in the Alta Gracia mining district and focused on soil sampling in the Fundicion zone. Below is a map of the Alta Gracia Project.~~

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
40
Table of Contents
2023 Capital and Exploration Investment Summary

For the nine months ended September 30, 2023

2023 full year guidance

(in thousands)
Sustaining Investments:

Underground Development
Capital
$
3,464

Infill Drilling
Capitalized Exploration

3,315

Other Sustaining Capital
Capital

1,485

Surface and Underground Exploration Development & Other
Capitalized Exploration

1,131

Subtotal of Sustaining Investments:

9,395

$
9 - 11 million
Growth Investments:

DDGM growth:

Surface Exploration / Other
Exploration

2,058

Underground Exploration Drilling
Exploration

1,916

Underground Exploration Development
Capitalized Exploration

356

Back Forty growth:

Back Forty Project Optimization & Permitting
Exploration

1,265

Subtotal of Growth Investments:

5,595

$
6 - 7 million
Total Capital and Exploration:

$
14,990

$
15 - 18 million

The Company’s investment in Mexico through the third quarter of 2023 totaled $13.3 million. Our investment in Mexico is focused on favorably impacting our environment, social, and governance programs while creating operational efficiencies and sustainability. At the Back Forty Project, year-to-date $ 1.3 million has been invested in optimization work and permitting initiatives year-to-date.
Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
41
Table of Contents
Underground and Exploration Development:
Mine development during the quarter included ramps and access to different areas of the deposit, ventilation shafts, and exploration development drifts. A total of 87 meters of development (included in Infill Drilling and Exploration Development in the table above), at a cost of $0.3 million was completed during the third quarter of 2023. As part of ongoing safety initiatives, the Company also invested in additional ground support and improved ventilation for the mine. Year to date, an investment of $1.5 million has been made in the construction of 520 meters of development for exploration purposes.

Examining exploration drill core at an underground drill station (Switchback)

Back Forty Feasibility and Permitting:
Work on optimizing the Back Forty Project was completed during the third quarter of 2023. Mine planning, process plant design, site layout, and infrastructure were largely completed during 2022. As a result, the Company filed the Back Forty Project Technical Report Summary (S-K 1300) on October 26, 2023. Results of the work indicate a more robust economic project with no planned impacts to wetlands that is more protective of the environment, which should facilitate a successful mine permitting process. The Board continues to evaluate potential alternative options in order to develop the Back Forty Project.
Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
42
Table of Contents
Non-GAAP Measures

Throughout this report, we have provided information prepared or calculated according to U.S. GAAP and have referenced certain non-GAAP performance measures ~~which~~that we believe will assist with understanding the performance of our business. These measures are based on precious metal gold equivalent ounces sold and include ~~cash cost before co-product credits per ounce,~~(i) total cash cost after co-product credits per ounce and (ii) total all-in sustaining cost ~~per ounce~~after co-product credits (“AISC”). per ounce. Because the non-GAAP performance measures do not have any standardized meaning prescribed by U.S. GAAP, they may not be comparable to similar measures presented by other companies. Accordingly, these measures should not be considered in isolation or as a substitute for, measures of performance prepared in accordance with U.S. GAAP. These non-GAAP measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP.

For financial reporting purposes, we report the sale of base metals as part of our revenue. Revenue generated from the sale of base metals in our concentrates is considered a co-product of our gold and silver production for the purpose of calculating our total cash cost after co-product credits for our Don David Gold Mine. We periodically review our revenues to ensure that our reporting of primary products and co-products is appropriate. Because we consider copper, lead, and zinc to be co-products of our precious metal production, the value of these metals continues to be applied as a reduction to total cash costs in our calculation of total cash cost after co-product credits per precious metal gold equivalent ounce sold. Likewise, we believe ~~the identification of~~identifying copper, lead, and zinc as co-product credits is appropriate due to their lower per unit economic value contribution compared to the precious metals and since gold and silver are the primary products we intend to produce.
Total cash cost after co-product credits is a measure developed by the Gold Institute to provide a uniform standard for industry comparison ~~purposes. AISC is calculated based on the current guidance from the World Gold Council.~~

~~Total cash cost before co-product credits~~ ~~includes all direct~~purposes, and indirect production costs related to our production of metals (including mining, milling and other plant facility costs, smelter treatment and refining charges, royalties, and site general and administrative costs) less stock-based compensation allocated to production costs plus treatment and refining costs.
~~Total cash cost after co-product credits~~it includes total cash cost before co-product credits, less co-product credits, or revenues earned from base metals.

AISC includes total cash cost after co-product credits plus other costs related to sustaining production, including allocated sustaining general and administrative expenses and sustaining capital expenditures. We determined sustaining capital expenditures as those capital expenditures that are necessary to maintain current production and execute the current mine plan.
~~Cash cost before co-product credits per ounce, total cash cost after co-product credits per ounce, and~~ AISC ~~are~~is calculated ~~by dividing~~based on the ~~relevant costs, as determined using~~current guidance from the ~~cost elements noted above, by precious metal gold equivalent ounces sold for the periods presented.~~
World Gold Council.
Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
4143
Table of Contents
Reconciliations to U.S. GAAP

The following table summarizes the Company’s total all-in cost after co-product credits per precious metal gold equivalent ounce sold:

For the three months ended September 30,

For the nine months ended September 30,
For the three months ended September 30,

For the nine months ended September 30,

2022

2021

2022

2021
2023

2022

2023

2022

(in thousands, except per oz)
(in thousands, except per oz)
Precious metal gold equivalent ounces sold (oz)

8,042

9,170

31,180

27,676
Total production ⁽¹⁾
$
19,380

$
17,216

$
61,176

$
51,982
Gold equivalent ounces sold (oz)

6,532

8,042

24,306

31,180
Total production costs ⁽¹⁾
$
18,957

$
19,380

$
59,109

$
61,176
Treatment and refining charges ⁽²⁾

2,860

2,328

8,745

8,210

2,788

2,860

9,300

8,745
Co-product credits ⁽²⁾⁽³⁾

(13,369)

(15,434)

(60,128)

(45,841)

(9,733)

(13,369)

(38,998)

(60,128)
Total cash cost after co-product credits

8,871

4,110

��
9,793

14,351

12,012

8,871

29,411

9,793
Total cash cost after co-product credits per AuEq oz sold
$
1,103

$
448

$
314

$
519
$
1,839

$
1,103

$
1,210

$
314
Sustaining - capitalized expenditure ⁽³⁾⁽⁴⁾

3,605

4,356

12,229

8,568

3,489

3,605

8,264

12,229
Sustaining - Exploration Expenditure ⁽³⁾

-

5,224

-

6,781
Reclamation and remediation ⁽⁵⁾

216

58

611

181
Subtotal of DDGM sustaining costs

3,605

9,580

12,229

15,349

3,757

3,663

10,006

12,410
DDGM all-in sustaining cost after co-product credits per AuEq oz sold

1,551

1,493

$
706

$
1,073

2,414

1,559

$
1,622

$
712
Sustaining - general and administrative, including stock-based compensation expenses(6)

2,249

2,385

7,235

6,781

1,662

2,249

5,589

7,235
Consolidated all-in sustaining cost after co-product credits

14,725

16,075

29,257

36,481

17,431

14,783

45,006

29,438
Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold
$
1,831

$
1,753

$
938

$
1,318
$
2,669

$
1,838

$
1,852

$
944
Non-sustaining cost- capital expenditure ⁽³⁾⁽⁴⁾

-

3,085

1,894

6,649

209

-

356

1,894
Non-sustaining cost- exploration expenditure ⁽¹⁾

4,973

1,805

10,115

3,660

1,960

4,973

5,239

10,115
Subtotal of non-sustaining costs

4,973

4,890

12,009

10,309

2,169

4,973

5,595

12,009
Total all-in cost after co-product credits

19,698

20,965

41,266

46,790

19,600

19,756

50,601

41,447
Total all-in cost after co-product credits per AuEq oz sold
$
2,449

$
2,286

$
1,323

$
1,691
$
3,001

$
2,457

$
2,082

$
1,329

(1) Refer to Production costs in Item 1.1—Condensed Consolidated Interim Financial ~~Statements:~~Statements and Notes (unaudited): Condensed Consolidated Interim Statements of ~~Operations~~Operations.
(2) Refer to Treatment and refining charges in Item ~~Item 1.~~1—Condensed Consolidated Interim Financial ~~Statements:~~Statements and Notes (unaudited): Note 3 -– Revenue. ~~The~~
(3) Refer to Realized/Unrealized Derivatives for copper, zinc, and lead in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited): Note 20 – Fair Value Measurement. Note that Co-product credits for the prior year ~~(2021) Co-product credits~~(2022) comparable numbers were adjusted to include realized embedded ~~derivatives.~~derivatives only for co-products (which better represents the cash cost after co-product credits because it now excludes unrealized gains or losses) and align with the current year presentation.
~~(3)~~(4) ~~Sum of, refer~~Refer to Capital expenditures in Item 1.1—Condensed Consolidated Interim Financial ~~Statements:~~Statements and Notes (unaudited): Condensed Consolidated Interim Statements of Cash ~~Flows~~Flows.
(5) Refer to Reclamation and remediation in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited): Condensed Consolidated Interim Statements of Operations. Note that the prior year (2022) comparable numbers were adjusted to includeReclamation and remediation (which better represents the all-in sustaining cost after co-product credits because reclamation and remediation is part of normal operating activities) and align with the current year presentation.
(6) Refer to General and administrative expenses and Stock-based compensation in Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited): Condensed Consolidated Interim Statements of Operations.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
4244
Table of Contents
Trending Highlights

2021

2022

Q1
Q2
Q3
Q4

Q1
Q2
Q3
Operating Data

Total tonnes milled
138,980
129,590
98,010
135,398

136,844
129,099
110,682
Average Grade

Gold (g/t)
1.68
1.93
2.68
1.93

3.00
2.63
1.98
Silver (g/t)
72
77
91
82

81
64
80
Copper (%)
0.43
0.36
0.37
0.38

0.41
0.32
0.37
Lead (%)
1.70
1.63
2.29
2.17

1.97
1.99
1.59
Zinc (%)
4.29
3.64
4.79
4.77

4.89
4.00
4.21
Metal production (before payable metal deductions)

Gold (ozs.)
6,097
6,555
6,933
6,853

11,187
9,317
5,851
Silver (ozs.)
307,610
295,979
265,829
330,873

332,292
249,088
261,256
Copper (tonnes)
441
368
284
413

431
303
296
Lead (tonnes)
1,737
1,654
1,808
2,345

2,073
2,020
1,249
Zinc (tonnes)
4,377
3,683
3,920
5,349

5,562
4,282
3,901
Metal produced and sold

Gold (ozs.)
5,019
5,697
5,809
6,119

8,381
8,746
5,478
Silver (ozs.)
253,061
270,321
255,394
287,805

265,407
231,622
225,012
Copper (tonnes)
382
365
268
405

408
286
282
Lead (tonnes)
1,176
1,214
1,550
2,059

1,639
1,755
1,056
Zinc (tonnes)
3,134
3,193
3,059
4,167

4,359
3,590
2,943
Average metal prices realized

Gold ($ per oz.)
$ 1,787
$ 1,822
$ 1,762
$ 1,811

$ 1,898
$ 1,874
$ 1,627
Silver ($ per oz.)
$ 26.77
$ 26.88
$ 23.19
$ 23.51

$ 23.94
$ 22.05
$ 18.54
Copper ($ per tonne)
$ 8,873
$ 10,375
$ 9,092
$ 9,768

$ 10,144
$ 9,275
$ 7,115
Lead ($ per tonne)
$ 2,082
$ 2,162
$ 2,397
$ 2,339

$ 2,347
$ 2,168
$ 1,882
Zinc ($ per tonne)
$ 2,797
$ 2,945
$ 3,032
$ 3,466

$ 3,842
$ 4,338
$ 3,186
Precious metal gold equivalent ounces sold

Gold Ounces
5,019
5,697
5,809
6,119

8,381
8,746
5,478
Gold Equivalent Ounces from Silver
3,791
3,999
3,356
3,736

3,348
2,729
2,564
Total AuEq oz
8,810
9,696
9,165
9,855

11,729
11,475
8,042
Financial Data ($'s in thousands except for per ounce)

Total sales, net
$ 27,268
$ 30,836
$ 29,029
$ 38,063

$ 45,417
$ 37,064
$ 23,869
Earnings from mining operations before depreciation and amortization
11,974
11,259
11,766
17,744

25,281
15,281
4,431
Total cash cost after co-product credits per AuEq oz sold
408
713
466
73

(121)
247
1,103
Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold
937
1,280
1,031
451

499
799
1,831
Production Costs
15,243
19,523
17,216
20,252

20,074
21,722
19,380
Production Costs/Tonnes Milled
110
151
176
150

147
168
175
Earnings before interest, taxes, depreciation and amortization
8,520
7,413
7,402
10,304

15,328
13,716
(3,338)
Operating Cash Flows
6,831
9,298
5,743
12,911

4,230
7,976
(4,292)
Net income
2,527
1,283
1,529
2,689

4,019
2,673
(9,730)
Earnings per share - basic
$ 0.03
$ 0.02
$ 0.02
$ 0.03

$ 0.05
$ 0.03
($ 0.11)

2022

2023

Q1
Q2
Q3
Q4

Q1
Q2
Q3
Operating Data

Total tonnes milled
136,844
129,099
110,682
116,616

117,781
113,510
116,626
Average Grade

-

Gold (g/t)
3.00
2.63
1.98
2.51

2.33
1.59
1.52
Silver (g/t)
81
64
80
109

94
86
73
Copper (%)
0.41
0.32
0.37
0.45

0.37
0.37
0.32
Lead (%)
1.97
1.99
1.59
1.58

1.73
1.64
1.29
Zinc (%)
4.89
4.00
4.21
4.27

3.88
3.72
3.24
Metal production (before payable metal deductions)

Gold (ozs.)
11,187
9,317
5,851
7,767

7,171
4,637
4,443
Silver (ozs.)
332,292
249,088
261,256
370,768

322,676
289,816
247,159
Copper (tonnes)
431
303
296
406

336
334
276
Lead (tonnes)
2,073
2,020
1,249
1,323

1,559
1,389
1,048
Zinc (tonnes)
5,562
4,282
3,901
4,198

3,837
3,569
3,223
Metal produced and sold

Gold (ozs.)
8,381
8,746
5,478
7,514

6,508
4,287
3,982
Silver (ozs.)
265,407
231,622
225,012
335,168

294,815
274,257
208,905
Copper (tonnes)
408
286
282
372

332
327
245
Lead (tonnes)
1,639
1,755
1,056
941

1,417
1,317
947
Zinc (tonnes)
4,359
3,590
2,943
3,265

3,060
3,141
2,571
Average metal prices realized

Gold ($ per oz.)
$ 1,898
$ 1,874
$ 1,627
$ 1,734

$ 1,915
$ 2,010
$ 1,934
Silver ($ per oz.)
$ 23.94
$ 22.05
$ 18.54
$ 21.25

$ 23.04
$ 24.93
$ 23.61
Copper ($ per tonne)
$ 10,144
$ 9,275
$ 7,115
$ 8,221

$ 9,172
$ 8,397
$ 8,185
Lead ($ per tonne)
$ 2,347
$ 2,168
$ 1,882
$ 1,954

$ 2,158
$ 2,153
$ 2,196
Zinc ($ per tonne)
$ 3,842
$ 4,338
$ 3,186
$ 2,577

$ 3,195
$ 2,485
$ 2,195
Gold equivalent ounces sold

Gold Ounces
8,381
8,746
5,478
7,514

6,508
4,287
3,982
Gold Equivalent Ounces from Silver
3,348
2,729
2,564
4,107

3,547
3,402
2,550
Total AuEq oz
11,729
11,475
8,042
11,621

10,055
7,689
6,532
Financial Data

Total sales, net (in thousands)
$ 45,417
$ 37,064
$ 23,869
$ 32,374

$ 31,228
$ 24,807
$ 20,552
Production Costs (in thousands)
$ 20,074
$ 21,722
$ 19,380
$ 19,773

$ 19,850
$ 20,302
$ 18,957
Production Costs/Tonnes Milled
$ 147
$ 168
$ 175
$ 170

$ 169
$ 179
$ 163
Operating Cash Flows (in thousands)
$ 4,230
$ 7,976
($ 4,292)
$ 6,243

$ 1,024
($ 551)
($ 7,475)
Net income (loss) (in thousands)
$ 4,019
$ 2,673
($ 9,730)
($ 3,283)

($ 1,035)
($ 4,584)
($ 7,341)
Earnings (loss) per share - basic
$ 0.05
$ 0.03
($ 0.11)
($ 0.04)

($ 0.01)
($ 0.05)
($ 0.08)

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
4345
Table of Contents
Trending Highlights of Non-GAAP Measures

2022

2023

Q1
Q2
Q3
Q4

Q1
Q2
Q3

(in thousands, except per oz)
Gold equivalent ounces sold (oz)
11,729
11,475
8,042
11,621

10,055
7,689
6,532
Total production costs
$ 20,074
$ 21,722
$ 19,380
$ 19,773

$ 19,850
$ 20,302
$ 18,957
Treatment and refining charges
2,748
3,137
2,860
3,327

3,184
3,328
2,788
Co-product credits ⁽¹⁾
(24,732)
(22,027)
(13,369)
(13,314)

(15,881)
(13,384)
(9,733)
Total cash cost after co-product credits
($ 1,910)
$ 2,832
$ 8,871
$ 9,786

$ 7,153
$ 10,246
$ 12,012
Total cash cost after co-product credits per AuEq oz sold
($ 163)
$ 247
$ 1,103
$ 842

$ 711
$ 1,333
$ 1,839
Sustaining - capitalized expenditure
$ 4,596
$ 4,028
$ 3,605
$ 4,110

$ 2,588
$ 2,187
$ 3,489
Sustaining - Exploration Expenditure
-
-
-
-

548
531
52
Reclamation and remediation ⁽²⁾
62
61
58
620

195
200
216
Subtotal of DDGM sustaining costs
$ 4,658
$ 4,089
$ 3,663
$ 4,730

$ 3,331
$ 2,918
$ 3,757
DDGM all-in sustaining cost after co-product credits per AuEq oz sold
$ 234
$ 603
$ 1,559
$ 1,249

$ 1,043
$ 1,712
$ 2,414
Sustaining - general and administrative, including stock-based compensation expenses
$ 2,673
$ 2,313
$ 2,249
$ 2,768

$ 1,790
$ 2,137
$ 1,662
Consolidated all-in sustaining cost after co-product credits
$ 5,421
$ 9,234
$ 14,783
$ 17,284

$ 12,274
$ 15,301
$ 17,431
Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold
$ 462
$ 805
$ 1,838
$ 1,487

$ 1,221
$ 1,990
$ 2,669
Non-sustaining cost- capital expenditure
$ 1,353
$ 541
$ -
$ -

$ -
$ 147
$ 209
Non-sustaining cost- exploration expenditure
2,305
2,837
4,973
2,934

1,839
1,440
1,960
Subtotal of non-sustaining costs
$ 3,658
$ 3,378
$ 4,973
$ 2,934

$ 1,839
$ 1,587
$ 2,169
Total all-in cost after co-product credits
$ 9,079
$ 12,612
$ 19,756
$ 20,218

$ 14,113
$ 16,888
$ 19,600
Total all-in cost after co-product credits per AuEq oz sold
$ 774
$ 1,099
$ 2,457
$ 1,740

$ 1,404
$ 2,196
$ 3,001

(1) Refer to Realized/Unrealized Derivatives for copper, zinc, and lead in the current and previously filed Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited): Note 20 – Fair Value Measurement. Note that Co-product credits for the prior year (2022) comparable numbers were adjusted to include realized embedded derivatives only for co-products (which better represents the cash cost after co-product credits because it now excludes unrealized gains or losses) and align with the current year presentation.
(2) Refer to Reclamation and remediation in the current and previously filed Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited): Condensed Consolidated Interim Statements of Operations. Note that the prior year (2022) comparable numbers were adjusted to includeReclamation and remediation (which better represents the all-in sustaining cost after co-product credits because reclamation and remediation is part of normal operating activities) and align with the current year presentation.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
46
Table of Contents
Liquidity and Capital Resources

As of September 30, ~~2022, the~~2023, working capital ~~of $28.9~~was $13.8 million, ~~consists~~consisting of current assets of ~~$48.3~~$28.9 million and current liabilities of ~~$19.5~~$15.1 million. This represents a 1%$7.6 million, or ~~$0.4 million~~36%, decrease from the working capital balance of ~~$29.3~~$21.4 million as of December 31, ~~2021.~~2022. The primary factors influencing the decrease in our working capital ~~was~~were a ~~decrease in~~payment of the liability related to the ~~zinc zero cost collar, as well as~~mining royalty tax, the cash ~~provided~~used by operating activities of ~~$7.9~~$7.0 million, ~~offset by $15.3 million of~~and the cash used in investing activities of $9.8 million as reported in the Condensed Consolidated Interim Statements of Cash Flows. Our working capital balance fluctuates as we use cash to fund our operations, financing and investing activities, including exploration, mine development, and income ~~taxes, and shareholder dividends.~~taxes. We believe that as a result of our cash balances, the performance of our current and expected operations, and the current metals prices, we will be able to meet our known obligations and other potential cash requirements for ~~at least~~ the next 12 ~~months from the date of this report.~~
months.
Long-term liabilities assumed with the Aquila acquisition, capital requirements to develop the Back Forty Project, and potential project financing may have an impact on liquidity in the long term. These long-term liabilities are contingent upon the approval of the Back Forty Project by the Company’s Board of Directors and securing project financing. Project financing is not expected to be required any earlier than 2024.

Cash and cash equivalents as of September 30, ~~2022~~2023 decreased to ~~$22.5~~$6.7 million from ~~$33.7~~$23.7 million as of December 31, ~~2021,~~2022, a net decrease in cash of ~~$11.2~~$17.0 million. The decrease is primarily due to cash spent on capital and exploration expenditures at DDGM and at the Back Forty Project ~~equity investment in Maritime,~~ and mining royalty tax payments for the ~~2021 and~~ 2022 tax ~~years, offset by cash inflow from operations.~~
years.
Of the ~~$22.5~~$6.7 million cash balance as of September 30, ~~2022, $20.3~~2023, $5.0 million was held in foreign subsidiaries, primarily held in U.S. dollar denominated accounts, with the remainder in foreign currencies readily convertible to U.S. dollars. The Don David Gold Mine’s primary source of liquidity is the sale of doré and concentrates. The Don David Gold Mine has been self-sustaining since production commencement in 2010 and has ~~provided excess~~been a source of cash for U.S. operations and projects.

Net cash ~~provided by~~used in operating activities for the nine months ended September 30, ~~2022~~2023 was ~~$7.9~~$7.0 million compared to ~~$21.9~~$7.9 million operating cash inflow for the same period in ~~2021.~~2022. While net sales decreased by 28% for the nine months ended September 30, 2023, compared to the same period in 2022, due to lower grades and lower recoveries, production costs only decreased by 3% due to the strengthening of peso and higher inflation, resulting in net cash outflows from operations in 2023.
Net cash used in investing activities of $9.8 million for the nine months ended September 30, 2023 decreased from $15.3 million from the same period in 2022. The decrease is mainly attributed to the 2022 investment in work to complete the commissioning of the filtration plant, the dry stack facility, and the gold regrind circuit. Investing activities in 2023 are mainly attributable to continued reinvestment in DDGM.

Net cash ~~used in investing~~from financing activities ~~of $15.3 million~~ for the nine months ended September 30, ~~2022~~2023 was ~~in line with the $15.2 million from the same period in 2021.~~

~~Net cash used in financing activities for nine months ended September 30, 2022 was~~a net inflow of $33 thousand compared to a net outflow of $3.0 million ~~compared to a net outflow of $2.2 million~~ for the same period in ~~2021.~~2022. The change is primarily related to ~~option exercises settled in cash in 2022.~~
the discontinuation of shareholder dividends.
While current macro risk factors, such as economic uncertainties and supply chain interruptions ~~and COVID-19~~ have not had a significant adverse impact on exploration plans, results of operations, financial position, and cash flows during the current fiscal year, future impacts are unknown at this time. However, we believe there is sufficient liquidity and capital resources to fund operations and corporate activities for the foreseeable future.

In May 2020, we filed a universal shelf registration statement with the SEC on Form S-3 for the proposed offering from time to time of up to $200,000,000 of our securities, including common stock, preferred stock, and/or warrants (the “Shelf Registration Statement”). We also entered into anThe Company’s At ~~the~~The Market Offering Agreement with H.C. Wainwright & Co., LLC (the “Agent”), which was entered into in November 2019 (the “ATM Agreement”), pursuant to which ~~we may sell shares of our common stock under~~ the ~~Shelf Registration Statement at market prices~~Agent agreed to act as the Company’s sales agent with respect to the offer and sale from time to ~~time. However, pursuant~~time of the Company’s common stock having an aggregate gross sales price of up to ~~General Instruction I.A.3~~$75.0 million, was renewed in June 2023. An aggregate of ~~Form S-3, we are not eligible to use~~130,199 shares of the Shelf Registration Statement until the 2022 Form 10-K is filed in 2023 due to the late filing of a Form 8-K including the historical financial statements related to our acquisition of Aquila Resources. Based on our current cash balances and the anticipated performance of our current and expected operations, we do not currently expect that the unavailability of our Shelf Registration Statement or our inability to utilizeCompany’s common stock were sold through the ATM Agreement ~~will have a material impact on our liquidity.~~
during both the three and nine months ended September 30, 2023, for net proceeds to the Company, after deducting the Agent’s commissions and other expenses, of $0.1 million. There were no ATM sales during the three and nine months ended September 30, 2022.
Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
4447
Table of Contents
Accounting Developments

For a discussion of ~~Recently Adopted~~recently adopted and ~~Recently Issued Accounting Pronouncements,~~recently issued accounting pronouncements, please see Note ~~- 2~~ 2—Recently Adopted Accounting Standards in ~~this~~Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited) above.

Forward-Looking Statements

This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We use the words “anticipate,” “continue,” “likely,” “estimate,” “expect,” “may,” “could,” “will,” “project,” “should,” ~~“believe”~~“believe,” and similar expressions (including negative and grammatical variations) to identify forward looking statements. Such forward-looking statements include, without limitation, statements regarding:

● Our strategy for significant future investment in Oaxaca, Mexico, and in Michigan, USA, for development and exploration activities;
● The ~~anticipated beneficial impacts of the recently constructed dry stack tailings facility;~~
● ~~The~~ expected timing for the Back Forty optimized feasibility study, permitting, detailed engineering, and project financing;
● Our expectations regarding future grades and recoveries from mining at DDGM;
● Expectations regarding ~~2022~~ capital investment, exploration spending, and general and administrative costs;
● Future exploration plans at ~~DDGM;~~DDGM, including vein systems targeted for future exploration activity;
● Compliance with existing legal and regulatory requirements, including future asset reclamation costs;
● Estimates of Mineral Resources ~~(“Mineral Resources”)~~ and Mineral ~~Reserves (“Mineral Reserves”);~~Reserves;
● Our expectations regarding whether dividends will be paid in the ~~future payment of dividends;~~future; and
● Our ability to satisfy our obligations and other potential cash requirements over the next twelve months.

Forward-looking statements are neither historical facts nor assurances of future performance. Rather, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

● The extent of the impact of the COVID-19 pandemic, including the duration, spread, severity, and any repeated resurgence of the COVID-19 pandemic, the duration and scope of related government orders and restrictions, the impact on our employees, and the extent of the impact of the COVID-19 pandemic on our mining operations;
● Commodity price fluctuations;
● Mine protests and work stoppages;
● Rock formations, faults and fractures, water flow and possible CO2 gas exhalation, or other unanticipated geological challenges;
● Unexpected changes in business and economic conditions, including supply chain challenges, the rate of inflation, and their impact on operating and capital costs;
Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
48
Table of Contents
● Changes in interest rates and currency exchange rates;
● Adverse technological changes and cybersecurity threats;
● Unanticipated increases in our operating costs and other costs of doing business;
● Access to land and availability of materials, equipment, supplies, labor and supervision, power, and water;
● Results of current and future feasibility studies;
Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
45
~~Table of Contents~~
● Interpretation of drill hole results and the geology, grade, and continuity of mineralization;
● Litigation by private parties or regulatory action by governmental entities;
● Acts of God, such as floods, earthquakes, and any other natural disasters;
● The inherent uncertainty of Mineral Resource and Mineral Reserve estimates; and
● Such other factors are discussed below under ~~“Risk Factors”~~Item 1A—Risk Factors in Part II—Other Information.
Many of these factors are beyond our ability to control or predict. Although we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, such expectations may prove to be materially incorrect due to known and unknown risks and uncertainties. You should not unduly rely on any of our forward-looking statements. These statements speak only as of the date of this ~~quarterly report~~Quarterly Report on Form 10-Q. Except as required by law, we are not obligated to publicly release any revisions to these forward-looking statements to reflect future events or developments. All subsequent written and oral forward-looking statements attributable to us and persons acting on our behalf are qualified in their entirety by the cautionary statements contained in this section and elsewhere in this Quarterly Report on Form 10-Q.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations
4649
Table of Contents
ITEM 3: Quantitative and Qualitative Disclosures about Market Risk

Our exposure to market risks includes, but is not limited to, the following risks: changes in commodity prices, foreign currency exchange rates, provisional sales contract risks, changes in interest rates, and equity price risks. We do not use derivative financial instruments as part of an overall strategy to manage market risk; however, we may consider such arrangements in the future as we evaluate our business and financial strategy.

Commodity Price Risk

The results of our operations, cash flows, and financial condition largely depend ~~in large part~~ upon the market prices of gold, silver, copper, lead, and zinc. Metal prices fluctuate widely and are affected by numerous factors beyond our control. The level of interest rates, the rate of inflation, government fiscal and monetary policy, the stability of exchange rates, and the world supply of and demand for gold, silver, and other metals, among other factors, can all cause significant fluctuations in commodity prices. Such external economic factors are, in turn, influenced by changes in international investment patterns, monetary systems, and political developments. The metal price markets have fluctuated widely in recent years, and future price declines could cause a mineral project to become uneconomic, thereby having a material adverse effect on our business and financial condition. We previously entered into a zinc zero cost collar to protect the selling price for zinc, but that hedge program concluded on December 31, 2022. We have not entered into derivative contracts to protect the selling price for gold, silver, copper, or lead. We may, in the future, more actively manage our exposure through additional derivative contracts, although we have no intention of doing so in the ~~near-term.~~
Effective May 18, 2021, the Company entered into a Trading Agreement with Auramet International LLC that govern non-exchange traded, over-the-counter, spot, forward, and option transactions on both a deliverable and non-deliverable basis involving various metals and currencies. Subsequently the Company entered into zinc zero cost collars. These derivatives are not designated as hedges. The zero cost collars are used to manage the Company’s near-term exposure to cash flow variability from zinc price risks. We do not currently use financial instruments with respect to any of the other base metal production.near term.
In addition to materially adversely affecting our reserve estimates, results of operations and/or our financial condition, declining gold and silver prices could require a reassessment of the feasibility of a project. Even if a project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause delays in the implementation of a project.

Foreign Currency Risk
Our foreign operation sells its gold, silver, copper, lead, and zinc production based on U.S. dollar metal prices. Fluctuations in foreign currency exchange rates do not have a material impact on our revenue since gold, silver, copper, lead, and zinc are sold ~~throughout the world~~worldwide in U.S. dollars.
Foreign currency exchange rate fluctuations can increase or decrease our costs to the extent that we pay costs in currencies other than the U.S. Dollar. We are primarily impacted by Mexican peso rate changes relative to the U.S. Dollar, as we incur some costs in the Mexican peso. When the value of the peso rises in relation to the U.S. Dollar, some of our costs in Mexico may increase, thus materially adversely affecting our operating results. Alternatively, when the value of the peso drops in relation to the U.S. Dollar, peso-denominated costs in Mexico will decrease in U.S. Dollar terms. Future fluctuations may give rise to foreign currency exposure, which may affect our financial results. Approximately 50% to 60% of expenses are paid in currencies other than the U.S. dollar.

We have not utilized market-risk sensitive instruments to manage our exposure to foreign currency exchange ~~rates but~~rates. However, we may, in the future, actively manage our exposure to foreign currency exchange rate risk.

Gold Resource Corporation
4750
Table of Contents
Provisional Sales Contract Risk

We enter into concentrate sales contracts, which, in general, provide for a provisional payment to us based upon provisional assays and prices. The provisionally priced sales contracts contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of concentrates determined at the quoted metal prices at the time of shipment delivery to the customer. The embedded derivative, which does not qualify for hedge accounting, is adjusted to market through revenue each period prior to settlement. Changes in the prices of metals between the shipment delivery and the final settlement date will result in adjustments to revenues related to the sales of concentrate previously recorded upon shipment delivery. Please see Note 14—Derivatives in ~~this~~ Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited) above for additional information.

Interest Rate Risk

We consider our interest rate risk exposure to be insignificant at this time, as our interest rate is related and embedded in immaterial payments for office leases.

Equity Price Risk
We have, in the past, and may in the future, seek to acquire additional funding through the sale of common stock and other equity. The price of our common stock has been volatile in the past and may also be volatile in the future. As a result, there is a risk that we may not be able to sell our common stock at an acceptable price should the need for new equity funding arise.

ITEM 4: Controls and Procedures

Evaluation of Disclosure Controls and Procedures

~~Our~~During the fiscal period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended). Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the required time periods and are designed to ensure that information required to be disclosed in ~~the~~our reports that we file under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure. The Chief Executive Officer and the Chief Financial Officer, with assistance from management, have evaluated the effectiveness of disclosure controls and procedures as of September 30, 2022. This evaluation included consideration of the material weakness in internal controls over financial reporting that was identified and disclosed in our annual report on Form 10-K for the year ended December 31, 2021. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of September 30, 2022 as the material weakness has not yet been fully remediated. Notwithstanding such material weakness in internal control over financial reporting, our management, including our Chief Executive Officer and our Chief Financial Officer, has concluded that our consolidated financial statements present fairly, in all material respects, our financial position, results of our operations, and our cash flows for the periods presented in this quarterly report, in conformity with U.S. GAAP.

~~Material Weakness in Internal Control Over Financial Reporting~~

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Due to the Aquila acquisition on December 10, 2021, management performed review and approval controls related to the balances consolidated into the statement of financial position and statement of operations at December 31, 2021. The Aquila acquisition consisted of multiple complex valuations including the gold and silver stream agreements, the deferred tax liability and land. While multiple layers of approval and reasonableness tests were conducted, management prepared insufficient documentation related to the performance of these review controls to allow the independent registered public
Gold Resource Corporation
48
~~Table of Contents~~
accounting firm to reperform the controls. Additionally, due to the timing of the acquisition, it was necessary to perform these review controls in a compressed timeframe, which resulted in an adjustment identified by the independent registered public accounting firm between balance sheet accounts.

Due to the complexity of the acquisition, limited timing from the close of the transaction and the inherent limitation of internal controls over financial reporting, management concluded that our internal control over financial reporting as of December 31, 2021, had a material weakness related to the operating effectiveness of review controls over the accounting for and valuation of acquired assets and liabilities in the application of the acquisition method of accounting for asset acquisitions. All other internal controls over financial reporting as of December 31, 2021 and September 30, 2022 remained effective. Management continues to enhance documentation for significant (e.g., implementation of the PSU program) and /or unique (e.g., Maritime investment) transactions and evaluate if any additional action is required to further resolve and fully remediate the material weakness.

Changes in Internal Control Over Financial Reporting

There were no changes that occurred during the three ~~and nine~~ months ended September 30, ~~2022, other than those enhancements to documentation discussed above,~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION
ITEM 1: Legal Proceedings

~~We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation.~~

In February 2020, a local Ejido community (who claim to be an indigenous community) filed an injunction against the Mexican federal government through which they demanded the cancellation of several concession titles. The federal government ordered a suspension to prevent work related to excavating, drilling, opening tunnels and exploiting the mineral resources on the surface and subsoil of the concessions named in the injunction. Presently, the Don David Gold Mine does not perform such works in the named concessions in lands of the indigenous community. The lawsuit filed in February 2020 has not progressed to a final ruling.
Gold Resource Corporation
51
Table of Contents
We know of no other material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation.
ITEM 1A: Risk Factors

“Item 1A. Risk ~~Factors”~~Factors of ~~our Form 10-K for~~ the ~~year ended December 31, 2021~~2022 Annual Report includes a discussion of our known material risk factors, other than risks that could apply to any issuer or offering. There have been no material changes from the risk factors described in ~~our Form 10-K.~~
the 2022 Annual Report.
ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds

~~None~~
None.
ITEM 3: Defaults upon Senior Securities

~~None~~
None.
ITEM 4: Mine Safety Disclosures

While the Company owns an advanced exploration project in Michigan, USA, the project is not yet subject to the Mine Safety and Health Administration ~~(“MSHA”)~~ jurisdiction and therefore, the mine safety disclosure requirements are not applicable.

Gold Resource Corporation
49
~~Table of Contents~~
ITEM 5: Other Information

~~None~~
None.
ITEM 6: Exhibits

The following exhibits are filed or furnished herewith or incorporated herein by reference:

Exhibit
Number

Descriptions
31.1

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Allen Palmiere.
31.2

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for ~~Kimberly C. Perry.~~Chet Holyoak.
32*

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Allen Palmiere and ~~Kimberly C. Perry.~~Chet Holyoak.
101

Financial statements from the Quarterly Report on Form 10-Q of Gold Resource Corporation as of or for the three and nine months ended September 30, ~~2022,~~2023, formatted in inline XBRL: (i) the Condensed Consolidated Interim Balance Sheets, (ii) the Condensed Consolidated Interim Statements of Operations, (iii) the Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity, (iv) the Condensed Consolidated Interim Statements of Cash Flows, and (v) the Notes to the Condensed Consolidated Interim Financial Statements.
104

Cover Page Interactive Data File (embedded within the XBRL document)
*
This document is not being “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Registration Statements or other documents filed with the SEC shall not incorporate this exhibit by reference, except as otherwise expressly stated in such filing.

Gold Resource Corporation
5052
Table of Contents
SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the Company has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

GOLD RESOURCE CORPORATION

Dated: ~~October 31, 2022~~November 6, 2023

/s/ Allen Palmiere

By:
Allen Palmiere,

Chief Executive Officer,
President and Director

Dated: ~~October 31, 2022~~November 6, 2023

/s/ ~~Kimberly C. Perry~~Chet Holyoak

By:
~~Kimberly C. Perry,~~Chet Holyoak,

Chief Financial Officer

Gold Resource Corporation
5153

		Page
	Third Quarter ~~2022~~2023 Highlights	2

	Part I - FINANCIAL INFORMATION	3
Item 11..	Condensed Consolidated Interim Financial Statements and Notes	3
	Ø Condensed Consolidated Interim Balance Sheets as of September 30, ~~2022~~2023 (unaudited) and December 31, ~~2021~~2022	3
	Ø Condensed Consolidated Interim Statements of Operations for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)	4
	Ø Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)	5
	Ø Condensed Consolidated Interim Statements of Cash Flows for the nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)	7
	Ø Notes to the Condensed Consolidated Interim Financial Statements (unaudited)	8
Item 22..	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2425
Item 33..	Quantitative and Qualitative Disclosures About Market Risk	4750
Item 44..	Controls and Procedures	4851

	Part II - OTHER INFORMATION	51
Item 1.	Legal Proceedings	4951
Item 1A.	Risk Factors	4952
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4952
Item 3.	Defaults upon Senior Securities	4952
Item 4.	Mine Safety Disclosures	4952
Item 5.	Other Information	5052
Item 6.	Exhibits	5052
Signatures		5153


	Oaxaca, Mexico		Michigan, USA ⁽¹⁾		Corporate and Other		Consolidated
For the three months ended September 30, 2022
Sales, net	$	23,869	$	-	$	-	$	23,869
Total mine cost of sales, including depreciation		26,016		21		10		26,047
Exploration expense		1,143		3,830		-		4,973
Total other costs and expenses, including G&A		(105)		349		2,552		2,796
Provision for income taxes		(1,235)		-		1,018		(217)
Net loss	$	(1,950)	$	(4,200)	$	(3,580)	$	(9,730)

For the three months ended September 30, 2021
Sales, net	$	29,029	$	-	$	-	$	29,029
Total mine cost of sales, including depreciation		20,784		-		-		20,784
Exploration expense		1,802		-		3		1,805
Total other costs and expenses, including G&A		122		-		2,437		2,559
Provision for income taxes		2,089		-		263		2,352
Net income (loss)	$	4,232	$	-	$	(2,703)	$	1,529