Gold Resource Corporation · AMEX:GORO
Gold Resource — Shareholder Meeting (June 2016)
56 slides from Gold Resource's shareholder meeting presentation, Jun 15, 2016
Slide 1: Forward Looking Statements
This brochure contains statements that plan for or anticipate the future. Forward-looking statements include statements about the Company's ability to develop and produce gold or other precious metals, statements about our future business plans and strategies, statements about future revenue and the
Slide 2: AGM Agenda
AGM Agenda 3 -2015 overview -Social License -Oaxaca Mining Unit -Switchback development -Nevada Mining Unit -2016 and the year ahead -Cost reduction efforts -Precious metals space Gold Mesa Property, Nevada USA
Slide 3: Context / Perspective
Context / Perspective 4 -Challenging time in a challenging industry -Volatile bear market in metals space continues -Suppressed metal prices compounds difficulty -Cost reduction measures stretch Company thin -We expect another challenging and difficult year ahead -WE ARE UP FOR THE CHALLENGE Stated
Slide 4: Context / Perspective: All Understatements & We rose to the challenge
Context / Perspective 5 All Understatements & We rose to the challenge
Slide 5: 2015 Overview: fifth consecutive year of profitability
2015 Overview 6 2015 marked our 5th consecutive year of profitability
Slide 6: 2015 Overview: 65th consecutive monthly dividend
2015 Overview 7 2015 marked our 65th consecutive monthly dividend since commercial production
Slide 7: 2015 Overview: modified budget and cost reduction measures
2015 Overview 8 In a challenging bear market in the precious metal space, we boldly modified our budget, business plan and implemented cost reduction measures
Slide 8: 2015 Overview: positioned to survive the bear market
2015 Overview 9 Successfully positioned the Company to survive the continued bear market of 2015
Slide 9: 2015 Overview: prepared to prosper in 2016 turnaround
2015 Overview 10 Prepared to prosper as the 2016 turnaround in precious metals may continue to gain momentum
Slide 10: 2015 Highlights
2015 Highlights 11 -Produced 29,644 gold ounces -Produced 2,506,337 silver ounces -Base metal production; 1,310 tonnes copper, 4,174 tonnes lead and 13,900 tonnes zinc -Annual net income of $3.1M or $0.06 per share
Slide 11: 2015 Highlights: dividends and drill intercepts
2015 Highlights 12 -$6.5 million annual dividends paid ($0.12 per share) -Achieved total dividend distributions milestone of $108 million -Continued high-grade drill intercepts from Arista and Switchback vein systems -Replaced tonnes mined back into our Proven and Probable Reserve Study -Acquired op
Slide 12: 2016 Social / Corporate License
2016 Social / Corporate License Company was awarded the “ESR” seal for 2016 which acknowledges: -Socially responsible company -Positive social, environment & economic impact -Positive culture and business strategy -Employees, clients & business partners know Company has met ESR standards
Slide 13: Oaxaca Mining Unit
Property Interest Exploration Development Production El Aguila 100% Alta Gracia 100% Las Margaritas 100% El Rey 100% El Chamizo 100% El Fuego 100% 15 Oaxaca Mining Unit Oaxaca Mining Unit Mining friendly jurisdiction 6 Potential high-grade Gold & Silver Properties 684 square kilometers 55 kilometer
Slide 14: Oaxaca Mining Unit; Arista Underground Mine
16 Splay 05 Baja Vein Arista Vein Santiago Decline Ramp Oaxaca Mining Unit; Arista Underground Mine El Aguila ~600 meters
Slide 15: Arista Mine; 2016 targeted ore blocks
Arista Mine; 2016 targeted ore blocks L8.5 L13.0 Primary Ramp SwitchBack Ramp Splay – 05 Ramp Internal Ramp L18.0 L21.0 L23.0 Splay - 05 Soledad Sabrina Santiago Baja & Splay-66 Chuy & Viridiana Vein 1 & Vein 3 Arista Vein System Switchback Vein System
Slide 16: Arista Mine; 2016 targeted production
Arista Mine; 2016 targeted Production 5% +/- range based on: - 26,000 gold ounces - 1,900,000 silver ounces - 1,100 copper tonnes - 3,200 lead tonnes - 12,900 zinc tonnes
Slide 17: Arista Mine; Arista & Switchback Vein Systems
Arista Mine; Arista & Switchback Vein Systems -Mineralized veins -Past drill holes -Fault -Vein -Mine development Arista Mine Plan View Arista Vein System Switchback Vein System ~500 meters
Slide 18: Arista Mine; 2016 Switchback High-Grade
Arista Mine; 2016 Switchback High-Grade Arista Vein System Switchback Vein System -Mineralized veins -Past drill holes -Fault -Vein -Mine development -Meters down M hole Arista Mine Plan View
Slide 19: Arista Mine; 2016 Switchback High-Grade
Arista Mine; 2016 Switchback High-Grade 8M@6.85g/tAu, 462g/tAg 10M@4.20g/tAu, 212g/tAg 11M@4.13g/tAu,153g/tAg 14M@3.16g/tAu,71g/tAg 12M@2.28g/tAu,151g/tAg Arista Vein System Switchback Vein System 18M@2.23g/tAu, 191g/tAg 9.5M@8.85g/tAu, 669g/tAg 13M@4.04g/tAu, 114g/tAg 11M@2.97g/tAu, 147g/tAg -Miner
Slide 20: Arista Mine; Switchback Drill Highlights
Arista Mine; Switchback Drill Highlights NOTABLE SWITCHBACK DRILL RESULTS Hole # Angle From Interval Au Ag Cu Pb Zn deg Meters Meters g/t g/t % % % 516111 -40 122.18 9.50 8.85 669 0.67 1.86 6.83 Incl. 122.80 0.95 31.40 5,420 1.35 0.93 2.32 Incl. 129.25 2.43 10.36 64 0.90 1.65 3.59 177.33 18.27 2.23
Slide 21: Arista Mine; Airflow Schematic
23 Fresh air intake Level 21 Exhaust air exit Level 14 Fresh air intake Level 10 Arista Switchback Arista Mine; Airflow Schematic Level 21 mine development has advanced over 300 meters with ~300 meters remaining to the ore zone Level 14 mine development advancement
Slide 22: Arista Mine; Switchback Development
-Significant continued high-grade drill intercepts (best to date) -Second drift advancement from level 21 progressing well -Targeting 4th quarter 2016 ore feed Development pace dependent on rock competency, water, gas flows, etc. No appreciable amount of water / gas has been encountered to date in S
Slide 23: Oaxaca Mining Unit; Alta Gracia
Oaxaca Mining Unit; Alta Gracia Alta Gracia Project Alta Gracia MIRADOR VEIN Hole # Angle From Interval Au Ag deg Meters Meters g/t g/t 4140009 -47 133.10 5.06 1.53 1,383 incl. 133.10 0.31 0.34 365 incl. 133.41 0.36 1.06 845 incl. 133.77 1.35 0.39 155 incl. 135.12 0.35 0.81 609 incl. 135.47 0.54 1.7
Slide 24: Oaxaca Mining Unit; Alta Gracia Update
- Mine Permit in hand - Community and Union agreements / approval now in place to receive pending blasting permit - Constructing powder magazines for blasting permit Oaxaca Mining Unit; Alta Gracia Update Alta Gracia
Slide 25: Oaxaca Mining Unit; Alta Gracia Targets
Oaxaca Mining Unit; Alta Gracia Targets Alta Gracia -Target Q4 2016/Q1 2017 Aguila mill feed Timing largely dependent on final blasting permit -Target initial small scale mining at ~100-200 tonnes per day -Targeted agitated leach circuit mill feed (currently dormant) -Company’s 2016 production Outlo
Slide 26: Oaxaca Mining Unit; Alta Gracia Veins
Oaxaca Mining Unit; Alta Gracia Veins a)
Slide 27: Oaxaca Mining Unit; Alta Gracia Mineral Access
Oaxaca Mining Unit; Alta Gracia Mineral Access Independencia Mirador Vein 38,500 tonnes @ 0.28 g/t Au, 248 g/t Ag 25,900 tonnes @ 1.14 g/t Au, 387 g/t Ag Mirador Splay 9,000 tonnes @ 1.22 g/t Au, 392 g/t Ag Initial mineral access from improving existing workings
Slide 28: Oaxaca Mining Unit; Las Margaritas-Los Trenes Target
Oaxaca Mining Unit; Las Margaritas-Los Trenes Target Margaritas Looking southeast along N70W fault system in the direction of the Arista Mine 10.7km direct line or 21km by road Road access close to target Los Trenes
Slide 29: Las Margaritas; Los Trenes Soil Sampling
Las Margaritas; Los Trenes Soil Sampling - Arista style ridge along N70W structure - Gold and silver anomalies in soil samples - Nearby road access - Exciting new target, potentially drilled in 2016 Gold Silver
Slide 30: Nevada Mining Unit; Exploration Stage
32 Nevada Mining Unit; Exploration Stage Nevada Mining Unit Mining friendly jurisdiction Located in historic gold mining district High-grade open pit potential Property Interest Exploration Development Production Gold Mesa Option
Slide 31: Nevada Mining Unit; Gold Mesa claims and historic mines
33 Nevada Mining Unit; Exploration Stage Paradise Peak Mine 2.6MMoz.Au 43 MMoz.Ag Rawhide Mine 1.6MMoz.Au 17.5 MMoz.Ag Round Mountain Mine 10MMoz.Au Bruner Canamex drill results: 118m@4.08g/t Au July 2012 Calvada 2 Mine .5MMoz.Au 1 MMoz.Ag Calvada 3 Mine Santa Fe Mine NEVADA Mineral County GRC’s Gol
Slide 32: Gold Mesa; Initial April 2016 Drill Program
Gold Mesa; Initial April 2016 Drill Program
Slide 33: Gold Mesa; High-Grade Results
Gold Mesa; High-Grade Results 33.5M@1.89g/t Au 10.7M@1.17g/t Au 4.6M@2.02g/t Au 15.2M@6.27g/t Au 6.1M@1.10g/t Au 2016 Drill Result Highlights Announced June 14 Include: 7.6M@1.23g/t Au
Slide 34: Gold Mesa; High-Grade Results
Gold Mesa; High-Grade Results High-grade open pit potential Near surface mineralization 15.2M of 6.27g/t Au starting 9 meters down hole Drill data interpretation underway Second drill program planned Continued drill success eyes future production decision
Slide 35: 2016 The Year Ahead
2016 The Year Ahead 37 -Company is well positioned to capitalize on opportunities -2016 precious metal bull market thus far is encouraging -Expect a better year on numerous fronts -Metal price manipulators are confessing and being exposed -We look forward to the year ahead and stronger metals prices
Slide 36: 2016 Cost Reductions: Change of Auditors
2016 Cost Reductions 38 Change of Auditors to EKS&H announced March, 2016 Stronger value proposition Nationally ranked, 40th largest accounting firm Servicing ~53 companies Strong mining team Based in Denver Colorado
Slide 37: 2016 Cost Reductions: Change of ERP
2016 Cost Reductions 39 Change of Enterprise Resource Planning (ERP) to NetSuite, going live early 2016 Stronger value proposition Less reliant on expensive consultants Decreased IT maintenance costs Worlds #1 Cloud Business Management Software Suite
Slide 38: 2016 Cost Reduction Goals: Power Grid Project
2016 Cost Reduction Goals 40 Power Grid Project (probable 2016-2017) ~$3.5 million estimated capital expenditure ( ~7 month project payback) Estimated annual power cost savings of ~$4 million +/- Finalizing negotiations with ejidos for easements Working with Federal Power Commission for final approv
Slide 39: 2016 Cost Reduction Goals: Salina Cruz Port Project
2016 Cost Reduction Goals 41 Salina Cruz Port Project (probable 2016) Shorter distance to haul concentrates Military controlled port facility Successful first 2016 trial shipment sent to port and by boat Ongoing trucker union negotiations for final haulage rates Targeted goal, actual results may var
Slide 40: 2016 Priorities and Focus
2016 Priorities and Focus 42 -Continue to expand Arista mine -Develop Switchback vein system -Bring Alta Gracia online -Cost reduction projects -Continued exploration -Expand high-grade mineralization -Test additional open pit targets -Evaluating new project opportunities Oaxaca Mining Unit: Nevada
Slide 41: Gold Against The System
Gold Against The System 43 http://www.cnbc.com/2016/05/23/theres-still-time-to-buy-gold-technical-and-fundamental-traders-contend.html Gold and silver are the best performing assets in 2016 yet the mainstream media titles headlines that underscore gold as the anti-system to be brought down by the FE
Slide 42: Physical Gold vs. Paper Gold
Physical Gold vs. Paper Gold 44 http://www.visualcapitalist.com/inside-look-worlds-biggest-paper-gold-market/ Gold and silver are real money London and COMEX paper gold are fractionally reserve paper trading settled in cash. Cash is fiat currency backed only by the promise of a bankrupt system and e
Slide 43: Physical Gold vs. Paper Gold
45 http://www.visualcapitalist.com/inside-look-worlds-biggest-paper-gold-market/ Physical Gold vs. Paper Gold Synthetic paper gold Physical Gold
Slide 44: Physical Gold vs. Paper Gold: 95% unallocated
46 http://www.visualcapitalist.com/inside-look-worlds-biggest-paper-gold-market/ 95% of Gold Traded in London is unallocated 5% allocated with legal title Physical Gold vs. Paper Gold Synthetic paper gold manipulates gold market If +5% stand for delivery the system breaks
Slide 45: Physical Gold vs. Paper Gold: London price discovery
47 http://www.visualcapitalist.com/inside-look-worlds-biggest-paper-gold-market/ London dominates gold price discovery via synthetic paper gold Physical Gold vs. Paper Gold
Slide 46: Paper Gold vs Physical Gold
Paper Gold vs Physical Gold 48 http://www.visualcapitalist.com/inside-look-worlds-biggest-paper-gold-market/
Slide 47: Gold Manipulation
Gold Manipulation 49 Feb 23, 2015 (Bloomberg) – -The U.S. Justice Department is investigating the world’s biggest banks for manipulating prices of precious metals such as silver and gold (having already been caught and fined for manipulating LIBOR, FX, etc ) -At least 10 banks, including Barclays Pl
Slide 48: Gold Manipulation
Gold Manipulation 50 Gold manipulators continue to be exposed: Barclays Bank $43.9 million settlement for gold-fix are they the only one? Nov. 12, 2014 (Bloomberg) -- Switzerland’s regulator FINMA found “serious misconduct” and “clear attempt to manipulate precious metals” by UBS AG Bank. UBS fined
Slide 49: Gold Manipulation
Gold Manipulation 51 Gold manipulators continue to be exposed: Deutsche Bank Settles Silver, Gold Price-Manipulation Suits “Deutsche Bank AG has reached settlements in lawsuits over allegations it manipulated gold and silver prices, lawyers for traders of the commodities said in court filings ” "In
Slide 50: Gold Manipulation: So what now?
Gold Manipulation 52 So what now? With more manipulation being exposed perhaps we are seeing better price discovery in 2016 What else could add transparency? China to the rescue! http://www.bloomberg.com/news/articles/2016-04-13/deutsche-bank-settles-silver-price-fixing-claims-lawyers-say
Slide 51: Gold Price Discovery
Gold Price Discovery 53 All You Need to Know About China's New Shanghai Gold Fix Aimed at finding the market-wide price in the world's No.1 gold mining and importing nation, it will either complement, challenge or supersede the world's long-established daily benchmark set in London, according to off
Slide 52: China Gold Accumulation
China Gold Accumulation 54 -COMEX Hong Kong gold kilo bar withdrawals have passed 1,019 tonnes since March 2015 to Feb 2016 -Physical gold continues to move east while synthetic paper gold builds in the west http://investmentwatchblog.com/shanghai-gold-exchange-withdrawals-in-january-2016-top-225-to
Slide 53: 2016 Gold-Silver Performance
2016 Gold-Silver Performance 55 Gold Silver Source: Bigcharts.com GLD and SLV as proxy’s for metal prices Return of the Gold and Silver Bull Market?
Slide 54: Why Gold, Why Now
Why Gold, Why Now 56 China is taking delivery of physical gold while London and the U.S. COMEX trade and create more synthetic paper gold Shanghai Gold Exchange forcing more transparency and should ultimately control gold price fix once china has the gold holding they want and push there weight arou
Slide 55: Thank You For Attending the 2016 AGM
While overcoming many challenges Gold Resource Corporation achieved its fifth consecutive year of profitability in 2015 which brands the year as a success. We responded to the challenges we faced during 2015 and positioned ourselves in to benefit in spite of them. The acquisition of Gold Mesa is a c
Slide 56: Thank You For Attending the 2016 AGM
THANK YOU FOR ATTENDING Q Gow ResounesComonron THE 2016 AGM GORO WaT overmantinie many challenges Gold Resource Corporation achieved its fifth a consecutive year of profitability in 2015 which brands the year as a success. ki ~ | We responded to the challenges we faced during 2015 and positioned our