Gold Resource Corporation · AMEX:GORO
Gold Resource — Shareholder Meeting (June 2018)
61 slides from Gold Resource's shareholder meeting presentation, Jun 22, 2018
Slide 1: Annual General Meeting June 22, 2018
Annual General Meeting June 22, 2018 Gold Resource Corporation NYSE American: GORO Arista mine ore, Oaxaca, MX 2017: SEVEN CONSECUTIVE YEARS OF PROFITABILITY 2018: POSITIONING FOR EXCEPTIONAL 100% GOLD PRODUCTION GROWTH IN 2019
Slide 2: 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 3: Agenda
Agenda 2017 Highlights 2018 Year-to-Date Oaxaca Mining Unit Arista Mine CAPEX Projects ESR Seal 2018 Nevada Mining Unit Isabella Pearl Mine Growth Profile Company Vision Gold 3 Isabella Pearl Ground Breaking Ceremony NYSE American: GORO gold resource corporation
Slide 4: 2017 Review
7th consecutive year of profitability 7th consecutive year of organic growth $4.2 million net income, or $0.07 per share $75 total cash cost per precious metal gold equivalent ounce sold $590 all-in sustaining cash cost per ounce (“AISC”) Cash increase of $8.2 million to $22.4 million Increased Oaxa
Slide 5: 2017 Review
Achieved goal of over one year of Arista Mine Switchback vein system development prior to bulk tonnage mining at our Oaxaca Mining Unit Expanded the strike length of the Arista Mine Including Switchback vein system by 325 meters to 625 meters Added strategic exploration properties to Nevada Mining U
Slide 6: 2018 Year To Date
Received our Nevada Mining Unit’s (NMU) Isabella Pearl Project EA permit Announced our maiden NMU’s Proven and Probable Reserves Increasing Company gold reserves by 135% Acquired the County Line property adding 2,320 acres to our NMU Officially broke ground June 18, 2018 (symbolic ground breaking ce
Slide 7: 2018 Year To Date
Strong Q1: $5.5 million net income, or $0.10 per share $28.6 million cash and cash equivalents ($6.2M increase over Q4, 2017) $32.2 million net sales 6,647 gold ounces produced 425,884 silver ounces produced Negative $316 total cash cost per gold equivalent ounce sold (after by-product credits) $347
Slide 8: Oaxaca Mining Unit
Oaxaca Mining Unit 8 Oaxaca Mining Unit Production, Development & Exploration Stage NYSE American: GORO gold resource corporation
Slide 9: El Aguila Project
El Aguila Project Successfully developed Switchback all of 2017. Bulk tonnage mining February 2018 Continue to expand Arista Mine strike length at both Arista and Switchback vein systems 2017 exploration culminated in strongest P&P Reserve tonnes to date Oaxaca Mining Unit Aguila NYSE American: GORO
Slide 10: 2017 delivered strongest Proven & Probable Reserve tonnes to date
2017 delivered strongest Proven & Probable Reserve tonnes to date Oaxaca Mining Unit 10 NYSE American: GORO gold resource corporation for immediate release news March 8, 2018 nyse American: GORO gold resource corporation updated mineral reserve substantially increases Oaxaca mining unit’s mine life
Slide 11: Switchback Vein System; 2018 NW & SE Expansions
Switchback Vein System; 2018 NW & SE Expansions -Mineralized veins -Drill hole -Vein projection -Mine development Arista Mine Arista Vein System Switchback Vein System 1.18m@0.37g/tAu, 54g/tAg, 8.21%Zn +200m 0.94m@2.04g/tAu, 566g/tAg, 3.40%Zn 517115 517125 517126 517120 517124 517119 517121 517122 1
Slide 12: Arista Mine Plan View
Arista Vein system Oaxaca Mining Unit Arista Mine Plan View 12 Switchback Vein system 12 Switchback’s Solidad vein expanded to over 40 meters wide in this area This is unique and speaks to the system’s power NYSE American: GORO A very powerful geologic system gold resource corporation 0 50 250 500 1
Slide 13: Arista Vein System; 2018 NW Expansions
Arista Vein System; 2018 NW Expansions Plan View Arista Vein system Switchback Vein system -Mineralized veins -Recent holes -Previous holes -Vein -Vein projection -Mine development -Meters down m hole Arista Mine Plan View 1.6m@9.36g/tAu 13 8.9m@1.68g/tAu 2.0m@6.68g/tAu 2.1m@1.98g/tAu 1,583g/tAg NYS
Slide 14: Arista Mine Plan View: 7+ production years
Oaxaca Mining Unit Arista Mine Plan View 14 7+ production years and system is growing Arista Vein system Switchback Vein system 14 Potential growth of another 7-10+ years? NYSE American: GORO 0 50 250 500 13 1846500n 80800z 808500z 80900z 809500z 14 1846500n 1847000n gold resource corporation
Slide 15: 2018 Switchback long section
2018 Switchback long section 15 N-27 N-26 N-25 N-24 N-23 N-22 N-17 N-28 INTAKE EXTRACTION Secondary Vent Intake raises Positive Ramp to connect Level 17 Arista Switchback NYSE American: GORO Numerous levels developed Levels developed in 2017 month Nov-17 Dlc-17 Ene-18 Feb-18 Mar-18 Abr-18 May-18 Jun
Slide 16: 2018 Switchback Cross Section
2018 Switchback Cross Section 16 L24.0 Parallel ventilation drift L22.0 Ramp (+) Vent Raises CURRENT DEVELOPMENT FUTURE DEVELOPMENT L17.0 L27.0 Soledad Sagrario Sofía SB-N L14.0 L10.0 ARISTA SWITCHBACK NYSE American: GORO Numerous veins and working faces gold resource corporation
Slide 17: Phase IV tailings dam raise
Phase IV tailings dam raise Oaxaca Mining Unit Capex Projects Ongoing construction Target completion date of Nov-Dec 2018 Phase IV NYSE American: GORO Phase I & II Phase III Mill gold resource corporation
Slide 18: Paste backfill project
Paste backfill project Improved global ground support and overall mine safety Paste backfill will enable 100% extraction of wide Switchback orebody Reduced backfill cycle time, improve mining efficiency and lower operational costs Utilizing tailings in backfill paste extends overall tailing facility
Slide 19: Grid power project
Grid power project Project started back in Feb. 2014 Route change in March 2016 Route change December 2016 May 2017 negotiations concluded with 11 communities Environmental permit received April 2018 June 2018 permit conditions met Line connection possible Q4 2018, timing dictated by Federal Power c
Slide 20: Company awarded Mexico's ESR seal for fourth consecutive year
Company awarded Mexico’s “ESR” seal for fourth consecutive year Socially responsible company Positive social, environmental & economic impact 2018 Social / Corporate License 33 NYSE American: GORO gold resource corporation 33 Empresa Socialmente Responsible
Slide 21: Nevada Mining Unit
Nevada Mining Unit 21 Targeting to be the next Nevada gold producer + 100% increase to Company’s annual gold production NYSE American: GORO gold resource corporation GRC Nevada Inc. a subsidiary of gold resource corporation nyse American: GORO
Slide 22: Nevada Mining Unit Development & Exploration Stage
Nevada Mining Unit *Option to own 100% of property **Targeted production H1 2019 dependent on funding, construction timeframes, cashflow 22 Property Interest Exploration Development Production Isabella Pearl 100% 2019** Mina Gold 100% Gold Mesa Option* East Camp Douglas 100% County Line 100% Located
Slide 23: Nevada Mining Unit properties
Nevada Mining Unit 23 Hawthorne Mina Gold +1.6M tonnes @ 1.88 g/t Au avg* Gold Mesa Drill highlights include; 15.24m @ 6.27 g/t Au starting 9m downhole Synergistic Mining Unit Approach: Close property proximities Equipment, facility & management sharing Cash flow from Isabella Pearl to finance addit
Slide 24: 2018 increased Company wide gold reserves by 135%
2018 increased Company wide gold reserves by 135% Nevada Mining Unit 24 NYSE American: GORO gold resource corporation NYSE American: GORO for immediate release April 19, 2018 news nyse American: GORO gold resource corporation increases gold reserves by 135% announcing maiden mineral reserve for Isab
Slide 25: 2018 Received final EA Permit
2018 Received final EA Permit Nevada Mining Unit 25 NYSE American: GORO gold resource corporation for immediate release May 15, 2018 news NYSE American: GORO gold resource corporation receives final permit and board approval for Isabella pearl gold project, mineral county, Nevada Colorado Springs –
Slide 26: Catalyst driven divergence from GLD and GDXJ
26 NYSE American: GORO Catalyst driven Divergence from GLD (gold) and GDXJ (peers) Market beginning to credit Nevada Mining Unit Nevada Mining Unit April 19 135% P&P Gold Reserves NMU May 16 IP EA Permit Received NMU May 1 Q1 $0.10 per share earnings OMU NMU: Nevada Mining Unit, OMU: Oaxaca Mining U
Slide 27: Isabella Pearl Project construction commences
Isabella Pearl Project 27 NYSE American: GORO Isabella Pearl Deposit gold resource corporation for immediate release June 19, 2018 News Nyse American: GORO Gold resource corporation commences Isabella pearl gold project construction, mineral county, Nevada Colorado springs – June 19, 2018 – gold res
Slide 28: Isabella Pearl Project
28 NYSE American: GORO Isabella Pearl Project gold resource corporation 28
Slide 29: Isabella Pearl Project
29 NYSE American: GORO Isabella Pearl Project gold resource corporation
Slide 30: Isabella Pearl Project
30 NYSE American: GORO Isabella Pearl Project gold resource corporation
Slide 31: Targeted production H1 2019
31 Targeted production H1 2019* Targeted production ranges ~29,300 oz Gold Year 1 ~40,800 oz Gold Year 2 ~41,200 oz Gold Year 3 ~41,600 oz Gold Year 4 Low estimated CAPEX $30M Open pit heap leach project Less than 12 month construction* Mining permits granted 5/15/2018 Official ground breaking 6/18/
Slide 32: Management has never taken an easy route
32 Pearl Isabella Company Management has never taken a route that is easy at the expense of its shareholders Commenced Oaxaca production without P&P reserves to reach cashflow sooner and limit dilution Backfilled Oaxaca P&P after cashflow was achieved Attempting a Project build with cashflow while b
Slide 33: Isabella Pearl Project Funding Status
Isabella Pearl Project Funding Status 33 Pearl Isabella ~$10M in cash and equipment financing previously spent /allocated ~$10M* in cash treasury to be allocated towards CAPEX ($28M cash balance @ Q1 end) ~$10M in Oaxaca operations future cashflow targeted for remaining CAPEX Project funding priorit
Slide 34: Isabella Pearl Plan Map
Isabella Pearl Plan Map 34 Open Pit Crushing Heap ADR Plant Water well Project Boundary Waste Power Generators Barren overflow ponds Highway access Highlights: 2 hours from Reno NV Small footprint / EA Low CAPEX costs Short haul distances Good infrastructure Closed pipe system Dry Preg & barren pond
Slide 35: Isabella Pearl Flow Sheet
Isabella Pearl Flow Sheet 35 35 Crushing Stacking Heap Leach ADR Plant Carbon Gold Dore Facility Ore Stockpiles NYSE American: GORO gold resource corporation
Slide 36: Process Equipment: ADR Plant
36 Isabella Pearl Project; Process Equipment NYSE American: GORO Adsorption - Desorption – Regeneration (ADR) Plant used for dore production Cost: $3,400,000 Paid in full with cash ADR status: Construction 100% complete, delivery to mine site once foundation is poured
Slide 37: ADR Plant / Dore Production
Pregnant & Barren Strip tanks Adsorption Columns Cyanide tanks Preg Tank Carbon Tank Acid Wash Tank Carbon Fines Tank Carbon Kiln Retort Mercury recovery Precipitate Dore Furnace 37 Mercury abatement ADR Plant / Dore Production (Adsorption-Desorption-Regeneration) NYSE American: GORO
Slide 38: Closed ADR Plumbing Circuit
Isabella Pearl Project; Closed ADR Plumbing Circuit Heap Pad ADR Plant Closed system “Dry” Pregnant & Barren overflow ponds Pregnant Solution Pregnant Solution Barren Solution Barren Solution 38 NYSE American: GORO
Slide 39: Equipment At Laydown Yard
Isabella Pearl Project; Equipment At Laydown Yard 39 NYSE American: GORO Staging / lay down equipment yard near Isabella Pearl Project New modular equipment built for mobility, quick setup and commissioning Equipment being readied for transport to Project
Slide 40: Metallurgical Confirmation
Metallurgical Confirmation 40 McClelland Lab (Reno NV) +80% recovery* Kappes Cassiday Lab (Reno NV) +90% recovery in 10 days** RDI Lab (Denver CO) reviewed results** Excellent metallurgical recoveries +81% at ½” crushed rock +60% ROM Conservative assumptions based on test work Crushed Rock ROM Recov
Slide 41: Heap Leach & Mining Contractor Selected
Heap Leach & Mining Contractor Selected With more than six decades of experience, Ledcor’s mining team has been one of the key building blocks of our organization. We have built relationships with some of the largest mining companies in the world – some for over 20 years and counting – by ensuring c
Slide 42: Recovered Gold & Cash Flows
Recovered Gold & Cash Flows Base case using $1222 gold and only Proven and Probable (P&P) Reserves (no inferred mineralization included here) $1200Au Positive cashflow from 1st year NYSE American: GORO
Slide 43: IP Project General/Project Manager
IP Project; General/Project Manager 43 Bob Cassinelli (+31 years mining and processing industry experience) Highly experienced mining and construction professional. Excellent managerial skills focused on costs and quality of end product for entire operation. Disciplines include planning, budgeting,
Slide 44: Growth Profile
Growth Profile NYSE American: GORO 44 ~56KAu Gold oz’s Nevada Oaxaca production steady state for demonstration purposes Nevada Mining Unit (Isabella Pearl Project) impact Substantial gold production increase of over 100%* Graph does not account for Ag, Cu, Pb & Zn production * Timing dependent fundi
Slide 45: Potential drivers of GORO going forward
Oaxaca Mining Unit Additional drill results Arista Mine expansion Grid power connection Nevada Mining Unit Construction updates Additional drill results Achieving production Corporate Limited or no dilution +100% gold production increase Increased dividends Catalysts 45 NYSE American: GORO Potential
Slide 46: 2018 and Beyond: Company vision
Clear consistent vision of Gold Resource Corporation as: Diversified Low-cost precious metal producer Explorer Dividend Payer Shareholder friendly philosophy Production growth profile 2018 and Beyond 46 NYSE American: GORO
Slide 47: Gold Commentary
Gold Commentary 47 All the reasons to own gold back in the bull market years are present now and have been compounding during the bear years: Global debt continues exploding higher Stock market’s numerous bubbles and overvaluation Politics Derivatives Terrorism Trade wars Physical gold accumulation
Slide 48: Gold
Gold 48 NYSE American: GORO 48 Form of money and store of wealth for thousands of years, outlasting 599 failed world fiat (paper) currencies* Gold is no one else's liability Global debt at all time high, 3X size of global economy* *http://www.independent.co.uk/news/business/analysis-and-features/glo
Slide 49: Gold: Global debt at historic highs
Gold NYSE American: GORO Global debt is at historic highs and governments should start cutting levels now, the IMF says Global debt levels came in at $164 trillion in 2016, a historic peak, the IMF said. Current global debt is at $233 trillion** Advanced economies had higher debt levels compared to
Slide 50: The U.S. Is Shackled By Historic Debt
Gold NYSE American: GORO The U.S. Is Shackled By Historic Debt U.S. government reached new milestone topping $21 trillion for first time. National debt grows by $17,000 per second on average. National debt growing by $52,000 per second last 8 months. Unprecedented debt with unstable economy where re
Slide 51: Gold: Derivatives market risk
Gold 51 NYSE American: GORO One of the biggest risks to the world's financial health is the derivatives market. It's complex, it's unregulated, and it should be of concern to you and world leaders that its notional value is 20 times the size of the world economy World Derivatives estimate $544 Trill
Slide 52: Increasing utilization of physical gold by nations
Gold 52 NYSE American: GORO Increasing utilization of physical gold by China, Russia, Iran, Turkey and others to: Avoid the impact of U.S. sanctions Create an offensive counterweight to U.S. dominance of dollar payment systems Gold offers significant defenses against these dollar-based sanctions. Go
Slide 53: Consistent accumulation of physical gold since 2008
Gold 53 NYSE American: GORO May 2018 Consistent accumulation of physical gold since 2008 Occasional investment interest or concerted move into gold? 53 53 https://www.bullionstar.com/blogs/gold-market-charts/tag/chinese-gold-market/ https://www.bullionstar.com/blogs/gold-market-charts/gold-market-ch
Slide 54: Shanghai Gold Exchange physical gold withdrawals
Gold 54 NYSE American: GORO Shanghai Gold Exchange physical gold withdrawals First 4 months of 2018 gold withdrawals have exceeded 9 out of the last 10 years annual withdrawal totals! 54 54 https://www.bullionstar.com/blogs/gold-market-charts/gold-market-charts-may-2018/ On an annualized basis, if t
Slide 55: Petroyuan Is Only The Beginning
Gold 55 NYSE American: GORO Petroyuan Is Only The Beginning, Pop Goes The Metals Market Hong Kong Exchanges and Clearing (HKEX) bought London Metals exchange (LME) in 2012 The primary reason for buying the LME was to obtain its warehouses and ensure a free flow of metals to points east Now we’re see
Slide 56: What is the theme here?
Gold 56 NYSE American: GORO What is the theme here? Concerted move away from dollars, into gold by China, Russia, Iran, Turkey, etc. Weak dollar often means higher gold prices Continued demand for physical gold If everything is so great as the mass media would have you believe why are countries accu
Slide 57: Opportunity: De-Dollarization Escalates
Opportunity NYSE American: GORO De-Dollarization Escalates: Russia Sells Off Record Amount Of US Treasury Bonds. US Treasury Department report published on June 15 revealed that Russia sold $47.4 billion out of the $96.1 billion it had held in Treasury bonds (T-bonds). Other recent sellers of T-bond
Slide 58: Opportunity: Hedging with gold
Opportunity NYSE American: GORO Hedging with gold (professional investors recently investing in gold): Lord Jacob Rothschild has diversifying into gold significantly since 2017. Stanley Druckenmiller, billionaire investor, believes this is the time when “all you need is gold and all other investment
Slide 59: Opportunity: Other money managers turn to gold
Opportunity NYSE American: GORO Other money managers turn to gold: March 2018 SIC (Strategic Investment Conference). Morgan Creek Capital Management said that gold and gold miners are as cheap as they’ve been since the peak of the technology bubble in 2000. DoubleLine Capital, Jeffrey Gundlach said,
Slide 60: Opportunity: Gold and Gold Miners as the Dust Settles
Opportunity NYSE American: GORO March 2018 SIC (Strategic Investment Conference)Cont: Could Gold and Gold Miners Shine as the Dust Settles? https://marketrealist.com/2018/06/why-are-top-money-managers-recommending-gold-to-hedge-risks The current average ratio of the NYSE Arca Gold Miners Index (GDX)
Slide 61: Thank you for being a GORO shareholder
Thank you for being a GORO shareholder and thank you for your time today Thank You 61 NYSE American: GORO