Gold Resource : Q3 Financial Report (goro current folio 10q q3 revised taxonomy2024)

About this update from Gold Resource Corporation

(Mark One) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 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, $0.001 par value 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 G 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 G 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 G Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 161,765,685 shares of common stock outstanding as of October 31, 2025. GOLD RESOURCE CORPORATION FORM 10-Q Table of Contents Page Third Quarter 2025 Summary 3 Part I - FINANCIAL INFORMATION 5 Item 1. Condensed Consolidated Interim Financial Statements and Notes 5 5 6 and nine months ended September 30, 2025 and 2024 (unaudited) 7 September 30, 2025 and 2024 (unaudited) 9 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 35 Item 3. Quantitative and Qualitative Disclosures About Market Risk 58 Item 4. Controls and Procedures 60 Part II - OTHER INFORMATION 61 Item 1. Legal Proceedings 61 Item 1A. Risk Factors 61 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 61 Item 3. Defaults upon Senior Securities 61 Item 4. Mine Safety Disclosures 61 Item 5. Other Information 61 Item 6. Exhibits 62 Signatures 63 Condensed Consolidated Interim Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 Condensed Consolidated Interim Statements of Operations for the three and nine months ended September 30, 2025 and 2024 (unaudited) Condensed Consolidated Interim Statements of Changes in Shareholders' Equity for the three Condensed Consolidated Interim Statements of Cash Flows for the nine months ended Notes to the Condensed Consolidated Interim Financial Statements (unaudited) DDGM Processing Plant THIRD QUARTER 2025 SUMMARY A summary for the three months ended September 30, 2025 is presented below and discussed further under Item 2-Management's Discussion and Analysis of Financial Condition and Results of Operations : Don David Gold Mine ("DDGM") In the third quarter of 2025, DDGM, located in Mexico, produced and sold a total of 6,298 gold equivalent ("AuEq") ounces, comprised of 1,422 gold ounces and 417,710 silver ounces, at an average sales price per ounce of $3,546 and $41.39, respectively. By the end of the third quarter, the Company began receiving newly acquired equipment and, when combined with the strategic use of third-party contractors, this enabled an increase in available headings and a subsequent improvement in production. Underground grade control and infill drilling advanced as planned at the Three Sisters vein system, focused on the Sandy and Sadie vein sets. Results from this work continue to refine and validate the geologic model, supporting near-term production planning. Additional drilling targeted the Splay 31, Marena North, Candelaria, and Viridiana veins in the Arista system, and the Soledad South vein in the Switchback system. These programs aim to optimize economic returns from near-term production across multiple vein systems. Underground exploration drilling remains on hold, with step-out targets at Three Sisters and Arista planned for future drill testing following completion of necessary development and improvements in the Company's working capital position. Corporate and Financial The Company has $12.8 million in working capital and $9.8 million in cash and cash equivalents as of September 30, 2025. On September 8, 2025, the Company closed on a $11.4 million registered direct offering for the sale of 25,315,954 shares of the Company's common stock at a price of $0.45 per share. The Company issued 14,204,846 of these shares, for the fair value of approximately $6.4 million, to fully pay off the term loan received in June 2025 as a non-cash equity settlement. The Company had a net loss of $4.7 million, or $0.03 per share, for the quarter, which was primarily the result of lower tonnes produced and less ounces sold. Early in the quarter, output was constrained by limited access to critical mining equipment, stemming from an aging fleet, and by a shortage of alternative ore production headings, but by the end of the third quarter, as mentioned above, the Company made improvements to overcome some of these challenges, and thus increased production. Total cash cost after co-product credits for the quarter was $2,116 per AuEq ounce, and total all-in sustaining cost ("AISC") after co-product credits for the quarter was $2,983 per AuEq ounce. (See Item 2-Management's Discussion and Analysis of Financial Condition and Results of Operations-Non-GAAP Measures for a reconciliation of non-GAAP measures to applicable U.S. GAAP measures). Liquidity Update Tonnes produced from the mining operations at DDGM year-to-date 2025 remain lower than in the previous year and, except for silver, grades were lower as well. The Company continued to encounter significant issues with equipment availability partway into the third quarter due to the age and condition of some of the critical mining equipment in use at the mine. Due to the challenges with equipment availability, the Company was not able to maintain its projected timeline for mine development and had limited flexibility to mine alternate headings. In addition, the mill continued to experience mechanical issues that resulted in lower throughput, and when combined with the lower tonnes mined, resulted in a production shortfall. To minimize the mechanical issues and return the mine to a cash positive position, the Company engaged a third-party contract miner during the third quarter of 2025 and started to upgrade its mining fleet. As a result, by the end of the third quarter, the Company was able to increase production from a number of production headings. The Company believes that the mine has the potential to generate positive cash flow based on the information to date from the new Three Sisters area, as well as other zones that have been discovered near existing headings. The Company is in the process of developing access to and drill-defining these new areas. With the improvements mentioned above, the Company is expecting the remaining months of 2025 to result in positive operating income. In 2025, the Company has been focused on improving its cash position through the issuance of debt and equity. The Company raised $2.5 million through a registered direct offering in January 2025. In September 2025, the Company closed on a second registered direct offering of $11.4 million for the sale of 25,315,954 shares of the Company's common stock at a price of $0.45 per share. The Company issued 14,204,846 of these shares, for the fair value of approximately $6.4 million, to fully pay off the term loan received in June 2025 as a non-cash equity settlement. In February 2025, the Company sold its interest in Green Light Metals for $0.9 million in proceeds. On May 7, 2025, the Company received a tax refund of 79.6 million pesos (approximately $4.0 million) related to DDGM taxes paid in 2023. During the nine months ended September 30, 2025, the Company raised approximately $8.6 million through its At-The-Market Offering ("ATM") Program, after deducting the agent's commissions and other expenses. Although the Company has significantly improved its financial position year to date, the lower production and grades from the mine through the third quarter of 2025 raise substantial doubt about the Company's ability to continue as a going concern, as reflected by the year-to-date net losses of $24.5 million and the cash used in operations of $2.5 million. Although the Company believes that there is adequate financing in place to cover the planned underground development and equipment improvements, there can be no assurances that the Company will achieve short-term production targets and therefore may continue with liquidity concerns. PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements GOLD RESOURCE CORPORATION CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (U.S. dollars in thousands, except share amounts) (Unaudited) As of September 30, As of December 31, Note 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 9,797 $ 1,628 Accounts receivable, net 12,939 2,184 Inventories, net 6 7,196 6,940 Prepaid expenses and other current assets 8 1,293 5,828 Total current assets 31,225 16,580 Property, plant, and mine development, net 9 132,453 128,389 Other non-current assets 10 661 905 Total assets $ 164,339 $ 145,874 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 13,857 $ 11,258 Mining royalty taxes payable, net 632 195 Accrued expenses and other current liabilities 11 3,908 3,031 Total current liabilities 18,397 14,484 Reclamation and remediation liabilities 13 12,494 10,669 Gold and silver stream agreements liability 12 86,491 74,432 Deferred tax liabilities, net 7 15,264 14,041 Contingent consideration 15 3,501 3,389 Other non-current liabilities 11 2,230 1,576 Total liabilities 138,377 118,591 Commitments and contingencies 15 Shareholders' equity: Common stock - $0.001 par value, 200,000,000 shares authorized: 161,765,685 and 95,324,949 shares outstanding at September 30, 2025 and December 31, 2024, respectively 162 96 Additional paid-in capital 138,392 115,319 Accumulated deficit (105,537) (81,077) Treasury stock at cost, 336,398 shares (5,884) (5,884) Accumulated other comprehensive loss (1,171) (1,171) Total shareholders' equity 25,962 27,283 Total liabilities and shareholders' equity $ 164,339 $ 145,874 The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. 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 September 30, September 30, Note 2025 2024 2025 2024 Restated Restated Sales, net 5 $ 24,878 $ 13,272 $ 48,460 $ 52,756 Cost of sales: Production costs 15,613 17,198 39,179 51,074 Depreciation and amortization 2,610 4,178 7,670 14,221 Reclamation and remediation 434 566 1,262 1,892 Total cost of sales 18,657 21,942 48,111 67,187 Mine gross profit (loss) 6,221 (8,670) 349 (14,431) Costs and expenses: General and administrative expenses 1,205 1,293 2,993 2,975 Mexico exploration expenses 799 767 1,649 1,850 Michigan Back Forty Project expenses 191 177 562 524 Stock-based compensation 19 403 203 1,198 647 Other expense, net 20 7,337 5,175 16,952 14,246 Total costs and expenses 9,935 7,615 23,354 20,242 Loss before income taxes (3,714) (16,285) (23,005) (34,673) Income tax provision (benefit) 7 941 (3,608) 1,455 10,686 Net loss $ (4,655) $ (12,677) $ (24,460) $ (45,359) Net loss per common share: Basic and diluted net loss per common share 21 $ (0.03) $ (0.14) $ (0.19) $ (0.50) Weighted average shares outstanding: Basic and diluted 21 142,909,014 93,279,750 129,081,618 91,005,507 The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. 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, 2025 and 2024 Number of Common Shares Par Value of Common Shares Additional Paid-in Capital Accumulated Deficit Treasury Stock Accumulated Other Comprehensive Total Shareholders' Equity Loss Balance, June 30, 2024 92,629,246 $ 93 $ 114,049 $ (57,258) $ (5,884) $ (1,171) $ 49,829 Stock-based compensation - - 184 - - - 184 Issuance of common stock, net of issuance costs (1) 1,230,180 1 598 - - - 599 Net loss - - - (12,677) - - (12,677) Balance, September 30, 2024 - Restated 93,859,426 $ 94 $ 114,831 $ (69,935) $ (5,884) $ (1,171) $ 37,935 Balance, June 30, 2025 136,786,129 $ 137 $ 126,958 $ (100,882) $ (5,884) $ (1,171) $ 19,158 Stock-based compensation - - 72 - - - 72 Registered Direct Offering (2) 11,111,108 11 4,984 - - - 4,995 Issuance of equity to settle the loan (2) 14,204,846 14 6,378 - - - 6,392 Net loss - - - (4,655) - - (4,655) Balance, September 30, 2025 162,102,083 $ 162 $ 138,392 $ (105,537) $ (5,884) $ (1,171) $ 25,962 No shares of the Company's common stock were sold through the ATM Program during the three months ended September 30, 2025. 1,230,180 shares of the Company's common stock were sold through the ATM Program during the three months ended September 30, 2024, for net proceeds of approximately $0.6 million to the Company, after deducting the agent's commissions and other fees. Please also see Note-16 Shareholder's Equity in Item 1-Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information. In September 2025, the Company closed on a $11.4 million registered direct offering for the sale of 25,315,954 shares of the Company's common stock at a price of $0.45 per share. The Company issued 14,204,846 of these shares, for the fair value of approximately $6.4 million, to fully pay off the term loan received in June 2025 as a non-cash equity settlement. The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. GOLD RESOURCE CORPORATION CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (U.S. dollars in thousands, except share amounts) (Unaudited) Number of Par Value of For the nine months ended September 30, 2025 and 2024 Accumulated Total Common Shares Common Shares Additional Paid- in Capital Accumulated Deficit Treasury Stock Other Comprehensive Shareholders' Equity Loss Balance, December 31, 2023 89,030,436 $ 89 $ 111,970 $ (24,576) $ (5,884) $ (1,171) $ 80,428 Stock-based compensation - - 463 - - - 463 Common stock issued for vested restricted stock units 196,991 - - - - - - Issuance of common stock, net of issuance costs (1) 4,708,993 5 2,429 - - - 2,434 Surrender of common stock for taxes due on vesting (76,994) - (31) - - - (31) Net loss - - - (45,359) - - (45,359) Balance, September 30, 2024 - Restated 93,859,426 $ 94 $ 114,831 $ (69,935) $ (5,884) $ (1,171) $ 37,935 Balance, December 31, 2024 95,661,347 $ 96 $ 115,319 $ (81,077) $ (5,884) $ (1,171) $ 27,283 Stock-based compensation - - 278 - - - 278 Common stock issued for vested restricted stock units 577,529 - - - - - - Issuance of common stock, net of issuance costs (1) 25,139,655 25 8,615 - - - 8,640 Surrender of common stock for taxes due on vesting (283,642) - (93) - - - (93) Equity settlement of PSUs and DSUs (2) 66,240 - 42 - - - 42 Registered Direct Offerings (3) 26,736,108 27 7,468 - - - 7,495 Issuance of equity to settle the loan (3) 14,204,846 14 6,378 - - - 6,392 Warrants (4) - - 385 - - - 385 Net loss - - - (24,460) - - (24,460) Balance, September 30, 2025 162,102,083 $ 162 $ 138,392 $ (105,537) $ (5,884) $ (1,171) $ 25,962 An aggregate of 25,139,655 shares of the Company's common stock were sold through the ATM Program during the nine months ended September 30, 2025, for proceeds of approximately $8.6 million to the Company, after deducting the agent's commissions and other fees. 4,708,993 shares of the Company's common stock were sold through the ATM Program during the nine months ended September 30, 2024, for proceeds of approximately $2.4 million to the Company, after deducting the agent's commissions and other fees. Please also see Note-15 Shareholder's Equity in Item 1-Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information. In connection with the departure of Alberto Reyes, the Company's former Chief Operating Officer, 90,311 of performance share units ("PSUs") held by Mr. Reyes as of the date of his separation were immediately vested and paid out to Mr. Reyes in shares of the Company's common stock in the amount equal to the value of such PSUs to which Mr. Reyes would have been entitled as if 100% of the target performance measures related to such PSUs were achieved. The PSUs were settled by issuing 42,265 shares of common stock, with 48,066 PSUs forfeited for taxes. Additionally, 51,242 outstanding deferred share units ("DSUs") were paid out to Mr. Reyes in shares of the Company's common stock by issuing 23,975 common shares, with 27,267 DSUs forfeited for taxes. In January 2025, the Company closed a registered direct offering of 15,625,000 shares of the Company's common stock at a price of $0.16 per share. In September 2025, the Company closed on a second registered direct offering of $11.4 million for the sale of 25,315,954 shares of the Company's common stock at a price of $0.45 per share. The Company issued 14,204,846 of these shares, for the fair value of approximately $6.4 million, to fully pay off the term loan received in June 2025 as a non-cash equity settlement. In connection to the loan the Company received on June 26, 2025, the Company issued a common stock purchase warrant for the purchase of up to 1,500,000 shares of the Company's common stock at an exercise price per share of $0.65. These warrants qualified for equity accounting and were valued using a Black-Scholes model. The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. GOLD RESOURCE CORPORATION CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) (Unaudited) For the nine months ended September 30, Cash flows from operating activities: Note 2025 2024 Restated Net loss $ (24,460) $ (45,359) Adjustments to reconcile net loss to net cash used in operating activities: Deferred income tax expense 1,205 10,509 Depreciation and amortization 8,423 15,589 Stock-based compensation 1,198 647 Interest on streaming liabilities 12,059 9,612 Other operating adjustments, net 23 2,927 4,446 Changes in operating assets and liabilities: Accounts receivable (10,755) (1,078) Inventories (536) 1,185 Prepaid expenses and other current assets 879 (246) Other non-current assets (260) (154) Accounts payable and other accrued liabilities 2,440 4,011 Cash settled liability awards (33) (67) Mining royalty and income taxes payable, net 4,453 (1,048) Net cash used in operating activities (2,460) (1,953) Cash flows from investing activities: Capital expenditures (12,186) (6,353) Proceeds from the sale of investment in Green Light Metals 854 1,178 Net cash used in investing activities (11,332) (5,175) Cash flows from financing activities: Net proceeds from note payable 6,114 - Proceeds from ATM Program sales, net of issuance costs 8,640 2,434 Net proceeds from the Registered Direct Offerings 7,495 - Other financing activities (138) (33) Net cash provided by financing activities 22,111 2,401 Effect of exchange rate changes on cash and cash equivalents (150) (175) Net increase (decrease) in cash and cash equivalents 8,169 (4,902) Cash and cash equivalents at beginning of period 1,628 6,254 Cash and cash equivalents at end of period $ 9,797 $ 1,352 Supplemental Cash Flow Information Income and mining taxes paid $ (71) $ 1,088 Non-cash investing or financing activities: Value of common shares issued for share-based compensation redemption $ 161 $ 49 Value of common shares issued to extinguish term loan $ 6,397 $ - Balance of capital expenditures in accounts payable $ 1,226 $ 386 Balance of equipment financing $ 457 $ 1,041 The accompanying notes are an integral part of these Condensed Consolidated Interim Financial Statements. GOLD RESOURCE CORPORATION NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS September 30, 2025 (Unaudited) 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. 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 do not necessarily 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, 2024, included in the Company's annual report on Form 10-K (the "2024 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 2024 Annual Report. Restatement of Financial Statements The interim unaudited condensed consolidated financial statements include corrections to the three and nine months periods ended September 30, 2024, which were presented in Note 24 to the consolidated financial statements for the year ended December 31, 2024, in the Company's 2024 Form 10-K filed on April 8, 2025. During the preparation of the consolidated financial statements for the year ended December 31, 2024, management of the Company identified that liabilities related to the Company's Back Forty Project with respect to the Gold and Silver Stream Agreements with Osisko (the "Osisko Stream Agreements") were incorrectly presented in the Company's financial statements due to errors in the application of U.S. GAAP. The errors related to the calculation of interest accretion over the liabilities associated with the Osisko Stream Agreements (the "streaming liabilities"). It was determined that the streaming liabilities should be accounted for under Financial Accounting Standards Board's Accounting Standards Codification 606, Revenue from Contracts with Customers, and that a significant financing component is present that should be accreted using the effective interest method. The resulting errors understated the streaming liabilities and net loss for all the impacted periods noted below. The correction to the Company's consolidated statements of operations also impacts the Company's consolidated balance sheets, consolidated statements of changes in shareholders' equity, consolidated statements of cash flows, and certain notes to the consolidated financial statements. In the restated presentation, the Company also recorded previously uncorrected misstatements that were determined to be immaterial to the financial statements in prior periods. The following table presents the Company's restatement impact in the unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2024: UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the three months ended September 30, 2024 For the nine months ended September 30, 2024 As Previously Restatement Restated As Previously Restatement Restated Reported Impacts Reported Impacts (U.S. dollars in thousands, except share and per share amounts) Sales, net $ 13,272 $ - $ 13,272 $ 52,756 $ - $ 52,756 Cost of sales: Production costs 17,198 - 17,198 51,074 - 51,074 Depreciation and amortization 4,178 - 4,178 14,221 - 14,221 Reclamation and remediation 566 - 566 1,892 - 1,892 Total cost of sales 21,942 - 21,942 67,187 - 67,187 Mine gross loss (8,670) - (8,670) (14,431) - (14,431) Costs and expenses: General and administrative expenses 1,293 - 1,293 2,975 - 2,975 Mexico exploration expenses 767 - 767 1,850 - 1,850 Michigan Back Forty Project expenses 202 (25) 177 549 (25) 524 Stock-based compensation 203 - 203 647 - 647 Other expense, net 2,977 2,198 5,175 10,846 3,400 14,246 Total costs and expenses 5,442 2,173 7,615 16,867 3,375 20,242 Loss before income taxes (14,112) (2,173) (16,285) (31,298) (3,375) (34,673) Income tax (benefit) provision (3,617) 9 (3,608) 10,952 (266) 10,686 Net loss $ (10,495) $ (2,182) $ (12,677) $ (42,250) $ (3,109) $ (45,359) Net loss per common share: Basic and diluted net loss per common share $ (0.11) $ (0.03) $ (0.14) $ (0.46) $ (0.04) $ (0.50) Weighted average shares outstanding: Basic and diluted 93,279,750 - 93,279,750 91,005,507 - 91,005,507 The following table presents the Company's restatement impact in the unaudited condensed consolidated statement of changes in shareholders' equity for the three months ended September 30, 2024: UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY For the three months ended September 30, 2024 Number of Common Shares Par Value of Common Shares Additional Paid - in Capital Retained Earnings (Accumulated Treasury Stock Accumulated Other Comprehensive Total Shareholders' Equity Deficit) Loss As Previously Reported (U.S. dollars i n thousands, except share amounts) Balance, June 30, 2024 92,629,246 $ 93 $ 114,049 $ (40,066) $ (5,884) $ (1,171) $ 67,021 Stock-based compensation - - 184 - - - 184 Issuance of common stock, net of issuance costs 1,230,180 1 598 - - - 599 Net loss - - - (10,495) - - (10,495) Balance, September 30, 2024 93,859,426 $ 94 $ 114,831 $ (50,561) $ (5,884) $ (1,171) $ 57,309 Restatement Impacts Balance, June 30, 2024 - $ - $ - $ (17,192) $ - $ - $ (17,192) Stock-based compensation - - - - - - - Issuance of common stock, net of issuance costs - - - - - - - Net loss - - - (2,182) - - (2,182) Balance, September 30, 2024 - $ - $ - $ (19,374) $ - $ - $ (19,374) Restated Balance, June 30, 2024 92,629,246 $ 93 $ 114,049 $ (57,258) $ (5,884) $ (1,171) $ 49,829 Stock-based compensation - - 184 - - - 184 Issuance of common stock, net of issuance costs 1,230,180 1 598 - - - 599 Net loss - - - (12,677) - - (12,677) Balance, September 30, 2024 93,859,426 $ 94 $ 114,831 $ (69,935) $ (5,884) $ (1,171) $ 37,935 The following table presents the Company's restatement impact in the unaudited condensed consolidated statement of changes in shareholders' equity for the nine months ended September 30, 2024: UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY For the nine months ended September 30, 2024 Number of Common Shares Par Value of Common Shares Additional Paid - in Capital Retained Earnings (Accumulated Treasury Stock Accumulated Other Comprehensive Total Shareholders' Equity Deficit) Loss As Previously Reported (U.S. dollars i n thousands, except share amounts) Balance, December 31, 2023 89,030,436 $ 89 $ 111,970 $ (8,311) $ (5,884) $ (1,171) $ 96,693 Stock-based compensation - - 463 - - - 463 Common stock issued for vested restricted stock units 196,991 - - - - - - Issuance of common stock, net of issuance costs 4,708,993 5 2,429 - - - 2,434 Surrender of common stock for taxes due on vesting (76,994) - (31) - - - (31) Net loss - - - (42,250) - - (42,250) Balance, September 30, 2024 93,859,426 $ 94 $ 114,831 $ (50,561) $ (5,884) $ (1,171) $ 57,309 Restatement Impacts Balance, December 31, 2023 - $ - $ - $ (16,265) $ - $ - $ (16,265) Stock-based compensation - - - - - - - Common stock issued for vested restricted stock units - - - - - - - Issuance of common stock, net of issuance costs - - - - - - - Surrender of common stock for taxes due on vesting - - - - - - - Net loss - - - (3,109) - - (3,109) Balance, September 30, 2024 - $ - $ - $ (19,374) $ - $ - $ (19,374) Balance, December 31, 2023 89,030,436 $ 89 $ 111,970 $ (24,576) $ (5,884) $ (1,171) $ 80,428 Restated Stock-based compensation - - 463 - - - 463 Common stock issued for vested restricted stock units 196,991 - - - - - - Issuance of common stock, net of issuance costs 4,708,993 5 2,429 - - - 2,434 Surrender of common stock for taxes due on vesting (76,994) - (31) - - - (31) Net loss - - - (45,359) - - (45,359) Balance, September 30, 2024 93,859,426 $ 94 $ 114,831 $ (69,935) $ (5,884) $ (1,171) $ 37,935 The following table presents the Company's restatement impact in the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2024: UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 2024 As Previously Reported (U. Restatement Impacts S. dollars in thous Restated ands) Cash flows from operating activities: Net loss $ (42,250) $ (3,109) $ (45,359) Adjustments to reconcile net loss to net cash used in operating activities: Deferred income tax expense (benefit) 10,775 (266) 10,509 Depreciation and amortization 15,589 - 15,589 Stock-based compensation 647 - 647 Interest on streaming liabilities 6,356 3,256 9,612 Other operating adjustments, net 4,446 - 4,446 Changes in operating assets and liabilities: Accounts receivable (1,078) - (1,078) Inventories 1,185 - 1,185 Prepaid expenses and other current assets (1,291) 1,045 (246) Other non-current assets (154) - (154) Accounts payable and other accrued liabilities 4,937 (926) 4,011 Cash settled liability awards (67) - (67) Mining royalty and income taxes payable, net (1,048) - (1,048) Net cash used in operating activities (1,953) - (1,953) Cash flows from investing activities: Capital expenditures (6,353) - (6,353) Proceeds from the sale of investment in Maritime 1,178 - 1,178 Net cash used in investing activities (5,175) - (5,175) Cash flows from financing activities: Proceeds from the ATM sales, net of issuance costs 2,434 - 2,434 Other financing activities (33) - (33) Net cash provided by financing activities 2,401 - 2,401 Effect of exchange rate changes on cash and cash equivalents (175) - (175) Net decrease in cash and cash equivalents (4,902) - (4,902) Cash and cash equivalents at beginning of period 6,254 - 6,254 Cash and cash equivalents at end of period $ 1,352 $ - $ 1,352 Supplemental Cash Flow Information Income and mining taxes paid $ 1,088 $ - $ 1,088 Non-cash investing or financing activities: Value of common shares issued for RSU redemption $ 49 $ - $ 49 Balance of capital expenditures in accounts payable $ 385 $ 1 $ 386 Balance of equipment financing $ 1,041 $ - $ 1,041 New Accounting Pronouncements The FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures in December 2023, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, and are applied prospectively with retrospective application permitted. The Company is evaluating the impact this guidance will have on the disclosures in the consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) to improve the disclosures about a public business entity's expense and provide more detailed information about the types of expenses included in certain expense captions in the consolidated financial statements. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and the amendments in this update should be applied either prospectively or retrospectively. The Company is evaluating the impact this guidance will have on the disclosures in the consolidated financial statements. Going Concern In accordance with Accounting Standards Codification ("ASC") 205-40, Going Concern, ("ASC 205-40"), the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date on which this Quarterly Report on Form 10-Q is filed. The accompanying interim financial statements have been prepared assuming that the Company will continue as a going concern. Although the Company made some improvement in 2025, the Company's financial position and operating results, along with the Company's inability to achieve its production estimates through the third quarter of 2025, raise substantial doubt about the Company's ability to continue as a going concern, as reflected by the year-to-date net losses of $24.5 million and the cash used in operations of $2.5 million. The interim financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. To improve its cash position, during the nine months ended September 30, 2025, the Company raised approximately $8.6 million through its ATM Program, after deducting the agent's commissions and other expenses. The Company has raised gross proceeds of approximately $2.5 million through a registered direct offering in January. In September 2025, the Company closed on a second registered direct offering of $11.4 million for the sale of 25,315,954 shares of the Company's common stock at a price of $0.45 per share. The Company issued 14,204,846 of these shares, for the fair value of approximately $6.4 million, to fully pay off the term loan received in June 2025 as a non-cash equity settlement, as further described in Note 14 . In February 2025, the Company sold its interest in Green Light Metals for $0.9 million, and on May 7, 2025, the Company received the previously disclosed tax refund of 76 million pesos from the overpayment of Mexico taxes by DDGM in 2023, plus an inflation adjustment, for a total of 79.6 million pesos (approximately $4.0 million). In connection with the loan agreement described in Note 14 , the Company has issued a common stock purchase warrant to an affiliate of one of the private investors for the purchase of up to 1,500,000 shares of the Company's common stock at an exercise price per share of $0.65, the aggregate exercise proceeds of which may provide additional funds for the Company. For the nine months ended September 30, 2025, the Company has raised a net total of $27.2 million through these efforts. However, there can be no assurances that the mine revenue will be sufficient to generate profits and positive cash flows from operations in the future, and the Company may be compelled to place the mine on "care and maintenance" status and cease operations if additional sources of capital is required and not available at such time. Revenue The Company derives its revenue mainly from the sale of 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, 2025 2024 2025 2024 (in thousands) (in thousands) Doré sales, net Gold $ 126 $ - $ 1,213 $ 24 Silver 9 - 54 1 Less: Refining charges (1) - (10) (6) Total doré sales, net 134 - 1,257 19 Concentrate sales Gold 4,858 3,416 9,166 17,173 Silver 17,271 5,424 29,825 17,332 Copper 659 917 1,545 5,099 Lead 417 918 1,481 3,342 Zinc 1,868 4,045 6,390 13,108 Less: Treatment and refining charges (607) (1,394) (1,602) (4,410) Total concentrate sales, net 24,466 13,326 46,805 51,644 Realized gain - embedded derivative, net (1) 20 344 76 1,333 Unrealized gain (loss) - embedded derivative, net 258 (398) 322 (240) Total sales, net $ 24,878 $ 13,272 $ 48,460 $ 52,756 (1) Copper lead, and zinc are co-products. In the realized gain - embedded derivative, net, there is $51 thousand loss and $139 thousand loss related to these co-products for the three and nine months ended September 30, 2025, respectively. There is $0.2 million and $0.5 million gain, in the realized gain - embedded derivative, net, related to the co-products for both the three and nine months ended September 30, 2024, respectively. Inventories, net At September 30, 2025 and December 31, 2024, inventories, net, consisted of the following: As of September 30, As of December 31, 2025 2024 (in thousands) Stockpiles - underground mine $ 340 $ 73 Concentrates 1,859 902 Doré, net - 169 Subtotal - product inventories 2,199 1,144 Materials and supplies (1) 4,997 5,796 Total $ 7,196 $ 6,940 Net of reserve for obsolescence of $1.1 million and $0.7 million as of September 30, 2025 and December 31, 2024, respectively. Income Taxes The Company recorded an income tax expense of $1.5 million for the nine months ended September 30, 2025. For the nine months ended September 30, 2024, the Company recorded an income tax expense of $10.7 million. In accordance with applicable 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%. Income in Mexico is taxed at 38.5% (30% income tax and 8.5% mining tax), and Canada's income is taxed at a combined federal and provincial rate of 26.5%, which results in a consolidated effective tax rate above statutory U.S. Federal rates. On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was enacted in the U.S. The OBBBA permanently extends multiple tax provisions of the 2017 Tax Cuts and Jobs Act, as well as repeals, modifies, and introduces various other tax provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company does not anticipate the bill will have a material impact on the consolidated financial statements. Mexico Valuation Allowance The Company recorded a valuation allowance on all of the Mexico Income Tax net deferred tax assets in 2024 and has continued with a valuation allowance on all of the Mexico Income Tax net deferred tax assets as of September 30, 2025. In accordance with applicable accounting rules, a valuation allowance is recorded when it is more likely than not that some portion of the deferred tax assets will not be realized, after considering all available evidence, both positive and negative. The Company determined a valuation allowance on Mexico Income Tax deferred tax assets was necessary due primarily to the recent losses at the Mexico mine. Mexico Mining Taxation Mining entities in Mexico are subject to two mining duties, in addition to the 30% Mexico corporate income tax: (i) a "special" mining duty of 8.5%, effective January 1, 2025, of taxable income as defined under Mexican tax law (also referred to as "mining royalty tax") on extraction activities performed by concession holders, and (ii) the "extraordinary" mining duty of 1.0%, also effective January 1, 2025, on gross revenue from the sale of gold, silver, and platinum. The mining royalty tax generally applies to earnings before income tax, depreciation, depletion, amortization, and interest. In calculating the mining royalty tax, there are no corporate deductions related to depreciable costs from operational fixed assets. However, prospecting and exploration expenses are amortized using a 10% rate in a 10-year straight line. Both duties are tax deductible for income tax purposes. As a result, the Company's effective tax rate applicable to the Company's Mexican operations is higher than Mexico's statutory income tax rate. The Company periodically transfers funds from its Mexican wholly owned subsidiary to the U.S. as dividends. Mexico requires a 10% Mexico withholding tax on all post-2013 earnings. The Company began distributing post-2013 earnings from Mexico in 2018. According to the existing U.S. - Mexico tax treaty, the dividend withholding tax between these countries is reduced to 5% if certain requirements are met. The Company determined that it had met such requirements and paid a 5% withholding tax on dividends received from Mexico, and as a result, $0.1 million in withholding taxes was paid for the nine months ended September 30, 2024. At the end of 2024, the Company reviewed the tax treaty and believes that it qualifies for a 0% tax withholding. Going forward, the Company will apply a 0% tax withholding on any dividend payments from its Mexico subsidiary. No dividends from Mexico were received by the Company for the nine months ended September 30, 2025. In October 2023, the Company received a notification from the Mexican Tax Administration Services ("SAT") with a sanction of 331 million pesos (approximately $18.0 million as of September 30, 2025) 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 disputing this tax notification and sent a letter of protest to the tax authorities along with providing all requested documentation. Management intends to pursue legal avenues of protest, including filing a lawsuit with the Mexico court system, if necessary, to ensure that these adjustments are removed. Management believes its position taken on the 2015 income tax return meets the more likely than not threshold and that as of September 30, 2025 and December 31, 2024, the Company has no liability for uncertain tax positions. If the Company were to determine there was an unrecognized tax benefit, the Company would recognize the liability and the related interest and penalties within income tax (benefit) provision. Prepaid Expenses and Other Current Assets At September 30, 2025 and December 31, 2024, prepaid expenses and other current assets consisted of the following: As of As of September 30, December 31, 2025 2024 (in thousands) Advances to suppliers $ 56 $ 46 Prepaid insurance 684 1,121 Prepaid income tax - 3,906 Other current assets 553 755 Total $ 1,293 $ 5,828 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. Starting in the third quarter of each year, these same statutes allow companies to request a reduction of the coefficient, which adjusts for losses experienced in the current year. During 2023, DDGM had to prepay approximately 76 million pesos despite the losses for the year. In 2024, some of these overpayments were reconciled and used to offset the required 2024 tax prepayments. Due to the 2024 losses, no income tax payments are expected in 2025. On May 7, 2025, the Company received the previously disclosed tax refund of 76 million pesos from the overpayment of Mexico taxes by DDGM in 2023, plus an inflation adjustment, for a total of 79.6 million pesos (approximately $4.0 million). 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, 2025 and December 31, 2024, this resulted in a liability balance in accrued expenses and other liabilities of $1.2 million and an asset balance in other current assets of $0.5 million, respectively. Property, Plant, and Mine Development, net At September 30, 2025 and December 31, 2024, property, plant, and mine development, net consisted of the following: As of As of September 30, December 31, 2025 2024 (in thousands) Asset retirement costs ("ARO asset") $ 6,740 $ 6,740 Construction-in-progress 1,532 1,165 Furniture and office equipment 1,858 1,722 Land 9,033 9,033 Mineral interest 79,543 79,543 Light vehicles and other mobile equipment 2,134 2,118 Machinery and equipment 46,412 44,858 Mill facilities and infrastructure 36,456 36,463 Mine development 131,382 120,906 Software and licenses 1,554 1,554 Subtotal 316,644 304,102 Accumulated depreciation and amortization (184,191) (175,713) Total $ 132,453 $ 128,389 The Company recorded depreciation and amortization expense of $2.6 million and $7.7 million for the three and nine months ended September 30, 2025, respectively, and $4.2 million and $14.2 million for the three and nine months ended September 30, 2024, respectively. Other Non-current Assets At September 30, 2025 and December 31, 2024, other non-current assets consisted of the following: As of As of September 30, December 31, 2025 2024 (in thousands) Investment in Green Light Metals - 852 Other non-current assets 661 53 Total $ 661 $ 905 Investment in Green Light Metals On December 28, 2022, the Company received 12.25 million common shares of Green Light Metals as a settlement for a promissory note receivable acquired with the Aquila Resources Inc. ("Aquila") acquisition. This represented approximately 28.5% ownership in Green Light Metals at the time. In the first quarter of 2025, through its subsidiary, Aquila Resources USA Inc., the Company entered into a share purchase agreement with multiple purchasers to sell all of its interest in the Green Light Metals shares, for $0.10 Canadian dollars ("C$") per share, for total net proceeds of C$1.2 million ($0.9 million), which was received on February 11, 2025. As of December 31, 2024, the fair value of this investment was $0.9 million. Accrued Expenses and Other Liabilities At September 30, 2025 and December 31, 2024, accrued expenses and other liabilities consisted of the following: As of As of September 30, December 31, 2025 2024 (in thousands) Accrued royalty payments $ 584 $ 650 Accrual for short-term incentive plan 814 701 Liability for Aquila drillhole capping 8 8 Share-based compensation liability - current 189 33 Equipment financing - 744 Employee profit sharing obligation 1 5 Other payables (1) 2,312 890 Total accrued expenses and other current liabilities $ 3,908 $ 3,031 Accrued non-current labor obligation $ 1,138 $ 1,251 Stock-based compensation liability 960 318 Other lease liability 132 - Other long-term liabilities - 7 Total other non-current liabilities $ 2,230 $ 1,576 Amounts recorded as IVA taxes in the condensed consolidated interim balance sheets represent the net estimated IVA tax payable or receivable, since there is a legal right of offset of IVA taxes. As of September 30, 2025 and December 31, 2024, this resulted in a liability balance in accrued expenses and other liabilities of $1.2 million and an asset balance in other current assets of $0.5 million, respectively. Gold and Silver Stream Agreements The following table presents the Company's liabilities related to the Company's Gold and Silver Stream Agreements (the "Osisko Stream Agreements") with Osisko Bermuda Limited ("Osisko") as of September 30, 2025 and December 31, 2024: As of As of September 30, December 31, 2025 2024 (in thousands) Liability related to the Osisko Gold Stream Agreement $ 38,425 $ 33,067 Liability related to the Osisko Silver Stream Agreement 48,066 41,365 Total liability $ 86,491 $ 74,432 The Osisko Stream Agreements contain customary provisions regarding default and security. In the event that the Company defaults under the Osisko Stream Agreements, including by failing to achieve commercial production by an agreed upon date, it may be required to repay the deposit plus accumulated interest at a rate agreed with Osisko. If the Company fails to do so, Osisko may elect to enforce its remedies as a secured party and take possession of the assets that comprise the Back Forty Project. Gold Stream Agreement In November 2017, Aquila entered into a stream agreement with Osisko, pursuant to which Osisko agreed to commit approximately $55.0 million to Aquila through a gold stream purchase agreement (the "Osisko Gold Stream Agreement"). In June 2020, Aquila amended the Osisko Gold Stream Agreement, reducing the total committed amount to $50.0 million, as well as adjusting certain milestone dates under the gold stream to align with the current project development timeline. Aquila had received a total of $20.0 million of the funds committed at the time of the Company's acquisition. Remaining deposits from Osisko are $5.0 million upon receipt of permits required for the development and operation of the Back Forty Project and $25.0 million upon the first drawdown of an appropriate project debt finance facility. Osisko has been provided a general security agreement over the Back Forty Project, which consists of the subsidiaries of Gold Resource Acquisition Sub. Inc., a 100% owned subsidiary of the Company. The initial term of the Osisko Gold Stream Agreement is for 40 years, automatically renewable for successive ten-year periods. The Osisko Gold Stream Agreement is subject to certain operating and financial covenants, which are in good standing as of September 30, 2025. In March 2024, the Company secured an amendment to the Osisko Gold Stream Agreement that deferred the required completion of certain operational milestones related to permitting from 2024 to 2026. The $20.0 million received from Osisko pursuant to the Osisko Gold Stream Agreement through December 31, 2024 is shown as a long-term liability on the Consolidated Balance Sheets. A periodic interest expense is calculated based on a fixed market rate of interest, which is reviewed quarterly if there are any contractual amendments relating to the Osisko Stream Agreements. The fixed interest rate is applied on the Osisko advance payments and calculated on the total expected life-of-mine production to be deliverable and was 22.2% per annum at September 30, 2025 and at December 31, 2024. As the remaining $30.0 million deposit is subject to the completion of specific milestones and the satisfaction of certain other conditions, this amount is not reflected on the Consolidated Balance Sheets. Per the terms of the Osisko Gold Stream Agreement, Osisko will purchase 18.5% of the refined gold from Back Forty (the "Threshold Stream Percentage") until the Company has delivered 105,000 gold ounces (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, Osisko 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 the deposit received from Osisko. Please see Note 15-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 Osisko to purchase 85% of the silver produced and sold at the Back Forty Project (the "Osisko Silver Stream Agreement"). A total of $17.2 million has been advanced under the Osisko Silver Stream Agreement as of September 30, 2025. There are no future deposits remaining under the Osisko Silver Stream Agreement. The initial term of the Osisko Silver Stream Agreement is for 40 years, automatically renewable for successive ten-year periods. The Osisko Silver Stream Agreement is subject to certain operating and financial covenants, which are in good standing as of September 30, 2025. In March 2024, the Company secured an amendment to the Osisko Silver Stream Agreement that deferred the required completion of certain operational milestones related to permitting from 2024 to 2026. Per the terms of the Osisko Silver Stream Agreement, Osisko will purchase 85% of the silver produced from the Back Forty Project at a fixed price of $4.00 per ounce of silver. Where the market price of silver is greater than $4.00 per ounce, the difference realized from the sale of the silver will be applied against the deposit received from Osisko. The $17.2 million received from Osisko pursuant to the Osisko Silver Stream Agreement through December 31, 2024 is shown as a long-term liability on the Consolidated Balance Sheets. A periodic interest expense is calculated based on a fixed market rate of interest, which is reviewed quarterly if there are any contractual amendments relating to the Osisko Stream Agreements. The fixed interest rate is applied on the Osisko advance payments and calculated on the total expected life-of-mine production to be deliverable and was 22.2% per annum at September 30, 2025 and at December 31, 2024. Please see Note 15-Commitments and Contingencies in Item 1-Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information. Reclamation and Remediation The following table presents the changes in reclamation and remediation obligations for the nine months ended September 30, 2025 and for the year ended December 31, 2024: 2025 2024 (in thousands) Reclamation liabilities - balance at beginning of period $ 1,839 $ 2,233 Foreign currency exchange loss (gain) 213 (394) Reclamation liabilities - balance at end of period 2,052 1,839 Asset retirement obligation - balance at beginning of period 8,838 9,562 Changes in estimate (1) - 512 Liability for Aquila drillhole capping - (329) Accretion 565 793 Foreign currency exchange loss (gain) 1,047 (1,700) Asset retirement obligation - balance at end of period 10,450 8,838 Total period end balance $ 12,502 $ 10,677 In 2024, the Company updated its closure plan study, which resulted in a $0.5 million increase in the estimated liability and ARO asset. The following table presents the reclamation and remediation obligations as of September 30, 2025 and December 31, 2024: As of As of September 30, December 31, 2025 2024 (in thousands) Current reclamation and remediation liabilities (1) $ 8 $ 8 Non-current reclamation and remediation liabilities 12,494 10,669 Total $ 12,502 $ 10,677 (1) The current portion of reclamation and remediation liabilities related to drill hole capping in Aquila, Michigan, are included in Accrued expenses and other current liabilities. Please see Note 11- Accrued Expenses and Other Liabilities in Item 1-Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information. The Company's undiscounted reclamation liabilities of $2.1 million and $1.8 million as of September 30, 2025 and December 31, 2024, respectively, are related to DDGM. 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 the Company's 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 risk-free rate of 10%. As of September 30, 2025 and December 31, 2024, the Company's asset retirement obligation was $10.5 million and $8.8 million, respectively, primarily related to DDGM in Mexico. Loan Payable On June 26, 2025, the Company executed a loan agreement in the amount of $6.28 million, to be used for working capital. The loan bears a simple interest at a rate per annum equal to the sum of (i) the published Secured Overnight Financing Rate for a 1-month interest period ("SOFR") plus (ii) five percent (5.0%), with the initial interest rate of 9.32%. Principal and all interest are due and payable on December 26, 2026, but the Company repaid it without penalty in September from the proceeds of the Registered Direct Offering. In connection with the loan agreement, the Company has issued a common stock purchase warrant to an affiliate of one of the private investors for the purchase of up to 1,500,000 shares of the Company's common stock at an exercise price per share of $0.65. These warrants qualified for equity accounting and were valued using a Black-Scholes model. The loan and warrants were recorded on a relative fair value basis. On September 3, 2025, the Company fully paid its outstanding term loan liability balance of $5.9 million, along with applicable interest, by issuing 14,204,846 shares of its common stock. The common stock issued had an aggregate fair value of approximately $6.4 million, based on the average spot price of the Company's common stock on August 20, 2025. As a result, the Company recognized a loss on the extinguishment of the debt of $0.5 million, which is included in other income (expense) in the accompanying Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025. Commitments and Contingencies Commitments As of September 30, 2025 and December 31, 2024, the Company has equipment purchase commitments of $6.9 million and $1.5 million, respectively. Contingent Consideration With the Aquila acquisition, the Company assumed a contingent consideration. On December 30, 2013, Aquila's shareholders approved the 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 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: 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 Back Forty, 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; 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. Initially, the Company intended to pay the first C$3 million in 2023 to prevent HudBay's 51% buy-back option in the Back Forty Project. Management later decided that it was more likely than not that HudBay would not exercise its buy-back option, and consequently, this amount was not paid. Additionally, since financing of the project is not expected in 2024, this liability was reclassified to long-term. As of the end of January 2024, by the contractual deadline, HudBay did not exercise its buy-back option, and thus, it is forfeited. The total value of the contingent consideration as of September 30, 2025 and December 31, 2024 was $3.5 million and $3.4 million, respectively. The contingent consideration is adjusted for the time value of money and the likelihood of the milestone payments. Any future change in the value of the contingent consideration is recognized in other expense, net, in the Condensed Consolidated Interim Statements of Operations. The following table shows the change in the balance of the contingent consideration for the nine months ended September 30, 2025 and for the year ended December 31, 2024: 2025 2024 (in thousands) Beginning Balance of contingent consideration: Non-current contingent consideration $ 3,389 $ 3,404 Change in value of contingent consideration - Non-current 112 (15) Ending Balance of contingent consideration: Non-current contingent consideration $ 3,501 $ 3,389 Other Contingencies The Company has certain other contingencies resulting from litigation, claims, and other commitments and is subject to various environmental and safety laws and regulations 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. There can be no assurance that 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 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. 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 the Company's subsidiary defaults under the stream agreements, including failing to achieve commercial production at a future date, it may be required to repay the deposit plus accumulated interest at a rate agreed with Osisko. If it fails to do so, Osisko may be entitled to enforce its remedies as a secured party and take possession of the assets that comprise the Back Forty Project. 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, was amended in May 2023 and renewed in June 2023. Pursuant to the amended ATM Agreement, the Agent has 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 the amount registered on the registration statement on Form S-3 relating to the ATM Program, which is $15.85 million as of April 11, 2025. No shares of the Company's common stock were sold during the three months ended September 30, 2025. During the nine months ended September 30, 2025, an aggregate of 25,139,655 shares of the Company's common stock were sold and settled through the ATM Program for proceeds to the Company of approximately $8.6 million, after deducting the agent's commissions and other fees. During the three and nine months ended September 30, 2024, an aggregate of 1,230,180 and 4,708,993 shares, respectively, of the Company's common stock were sold and settled through the ATM Program for net proceeds to the Company of approximately $0.6 million and $2.4 million, respectively, after deducting the agent's commissions and other fees. On January 21, 2025, the Company closed on a registered direct offering for the purchase of 15,625,000 shares of the Company's common stock at a price of $0.16 per share, resulting in total gross proceeds to the Company of approximately $2.5 million. On September 3, 2025, the Company closed on a second registered direct offering of $11.4 million for the sale of 25,315,954 shares of the Company's common stock at a price of $0.45 per share. The Company issued 14,204,846 of these shares, for the fair value of approximately $6.4 million, to fully pay off the term loan received in June 2025 as a non-cash equity settlement. In connection to the loan the Company received on June 26, 2025, the Company issued 1,500,000 common stock purchase warrants for the purchase of up to 1,500,000 shares of the Company's common stock at an exercise price per share of $0.65, subject to adjustment as provided in the warrant agreement. The warrants will expire on June 26, 2027. These warrants qualified for equity accounting and were valued using a Black-Scholes model. Derivatives Embedded Derivatives Concentrate sales contracts contain embedded derivatives due to the provisional pricing terms for shipments pending final settlement. At the end of each reporting period, the Company records an adjustment to accounts receivable and sales to reflect the mark-to-market adjustments for outstanding provisional invoices based on forward metal prices. Please see Note-22 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, 2025 with the quantities of metals under contract subject to final pricing expected to occur through January 2026: Gold (ounces) Silver (ounces) Copper (tonnes) Lead (tonnes) Zinc (tonnes) Total Under contract 1,643 493,509 81 448 1,176 Average forward price (per ounce or tonne) $ 3,448 $ 40.17 $ 9,778 $ 1,956 $ 2,790 Unsettled sales contracts value (in thousands) $ 5,665 $ 19,824 $ 792 $ 876 $ 3,281 $ 30,438 The Company manages credit risk by entering into arrangements with counterparties believed to be financially strong, and by requiring other credit risk mitigants, as appropriate. The Company actively evaluates the implicit creditworthiness of its counterparties, and monitors credit exposures. Employee Benefits Effective October 2012, the Company adopted a 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 allows eligible employees to make tax deferred contributions to a retirement trust account up to 90% of their qualified wages, subject to the IRS annual maximums. On April 23, 2021, a decree that reforms labor outsourcing in Mexico was published in the Federation's Official Gazette. This decree amended the outsourcing provisions, whereby operating companies can no longer source their labor resources used to carry out the core business functions from service entities or third-party providers. Under Mexican law, employees are entitled to receive statutory profit sharing (Participacion a los Trabajadores de las Utilidades or "PTU") 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 11 - Accrued Expenses and Other Liabilities in Item 1-Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information. Stock-Based Compensation The Company's compensation program comprises three main elements: (1) base salary, (2) an annual short-term incentive plan ("STIP") award which may be in the form of cash or deferred share units ("DSUs") with immediate vesting, and (3) long-term equity-based incentive compensation ("LTIP") in the form of stock options, restricted stock units ("RSUs"), and performance share units ("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, PSUs, and DSUs. The Company's STIP provides for an annual cash bonus payable upon achievement of specified performance metrics for its management team. STIP may also be settled as cash payable through the issuance of fully vested equity awards (such as fully vested stock grants or DSUs), or a combination of cash and stock DSUs. As of September 30, 2025, the Company accrued $0.3 million in accrued expenses and other liabilities related to the program. 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, 2025 2024 2025 2024 (in thousands) (in thousands) Stock options $ - $ - $ - $ 22 Restricted stock units 72 184 278 441 Performance share units 106 9 318 137 Deferred share units 225 10 602 47 Total $ 403 $ 203 $ 1,198 $ 647 Stock Options A summary of stock option activities under the Incentive Plan for the nine months ended September 30, 2025 and 2024 is presented below: Stock Options Weighted Average Exercise Price (per share) Outstanding as of December 31, 2023 840,612 $ 2.99 Granted, Exercised, Expired, or Forfeited - - Outstanding as of September 30, 2024 840,612 $ 2.99 Outstanding as of December 31, 2024 840,612 $ 2.99 Expired or Forfeited (80,204) 2.45 Outstanding as of September 30, 2025 760,408 $ 3.05 Vested and exercisable as of September 30, 2025 760,408 $ 3.05 Restricted Stock Units A summary of RSU activities under the Incentive Plan for the nine months ended September 30, 2025 and 2024 is presented below: Restricted Stock Units Fair Value (in thousands) Nonvested as of December 31, 2023 847,255 $ 319 Granted 832,091 Granted in lieu of bonus 637,929 Vested but not redeemed (deferred) (134,257) Vested and redeemed (119,997) Vested and forfeited for net settlement (76,994) Forfeited (54,769) Nonvested as of September 30, 2024 1,931,258 $ 675 Nonvested as of December 31, 2024 1,931,258 $ 444 Vested but not redeemed (deferred) (258,618) Vested and redeemed (293,887) Vested and forfeited for net settlement (208,309) Forfeited (360,753) Nonvested as of September 30, 2025 809,691 $ 677 Performance Share Units A summary of PSU activities under the Incentive Plan for the nine months ended September 30, 2025 and 2024 is presented below: Performance Share Units Liability Balance (in thousands) Outstanding as of December 31, 2023 880,926 $ 164 Granted 682,367 Redeemed (201,258) Forfeited (33,113) Outstanding as of September 30, 2024 1,328,922 $ 235 Outstanding as of December 31, 2024 1,328,922 $ 148 Redeemed (1) (283,460) Forfeited for net settlement (48,066) Forfeited (236,330) Outstanding as of September 30, 2025 761,066 $ 376 (1) In connection with the departure of Alberto Reyes, the Company's former Chief Operating Officer, 90,311 of PSUs held by Mr. Reyes as of the date of his separation were immediately vested and paid out to Mr. Reyes in shares of the Company's common stock in the amount equal to the value of such PSUs to which Mr. Reyes would have been entitled as if 100% of the target performance measures related to such PSUs were achieved. The PSUs were settled by issuing 42,265 shares of common stock, with 48,066 PSUs forfeited for taxes. Deferred Share Units A summary of DSU activities under the Incentive Plan for the nine months ended September 30, 2025 and 2024 is presented below: Deferred Stock Units Liability Balance (in thousands) Outstanding as of December 31, 2023 586,291 $ 223 Granted in lieu of board fees 183,208 Outstanding as of September 30, 2024 769,499 $ 269 Outstanding as of December 31, 2024 883,384 $ 203 Granted in lieu of board fees 92,427 Redeemed (1) (23,975) Forfeited for net settlement (27,267) Outstanding as of September 30, 2025 924,569 $ 773 (1) In connection with the departure of Alberto Reyes, the Company's former Chief Operating Officer, 51,242 outstanding DSUs were paid out to Mr. Reyes in shares of the Company's common stock by issuing 23,975 common shares, with 27,267 DSUs forfeited for taxes. 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, 2025 2024 2025 2024 Restated Restated (in thousands) (in thousands) Unrealized currency exchange loss (1) $ 363 $ 889 $ 1,334 $ 2,220 Realized currency exchange loss (gain) 175 75 472 (82) Realized and unrealized gain from gold and silver rounds, net (28) (19) (61) (35) Realized and unrealized losses from sale of investments (2) 1 1,723 1 1,723 Interest on streaming liabilities (3) 4,222 3,457 12,059 9,612 Severance - 277 459 953 Interest on note payable 170 - 181 - Loss on loan payoff 479 - 479 - Other expense (income) 1,955 (1,227) 2,028 (145) Total $ 7,337 $ 5,175 $ 16,952 $ 14,246 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 22-Fair Value Measurement in Item 1-Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information . In the first quarter of 2025, through its subsidiary, Aquila Resources USA Inc., the Company entered into a share purchase agreement with multiple purchasers to sell all of its interest in the Green Light Metals shares, for C$0.10 per share, for total net proceeds of C$1.2 million ($0.9 million), which was received on February 11, 2025. As of December 31, 2024, the fair value of the investment was $0.9 million. On September 23, 2024, all the common shares of Maritime were sold in a private placement transaction for C$0.034 per share to a related party, Dundee Corporation, for total proceeds of C$1.6 million (or $1.2 million). As of December 31, 2023, the fair value of the investment was $1.6 million. Periodic interest expense is based on a fixed market rate of interest which is reviewed quarterly if there are any contractual amendments relating to th e Osisko Stream Agreements. Please see Note 12- Gold and Silver Stream Agreements in Item 1-Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information. Net Loss per Common Share Basic net income or loss per common share is calculated based on the weighted average number of shares of common stock outstanding for the period. Diluted earnings or loss 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 stock 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 stock at the average market price during the period. All of the Company's RSUs are anti-dilutive due to the Company's net loss for the period. Since PSUs and DSUs are expected to be cash settled, they are not included in the dilutive calculation. 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 0.8 million shares of common stock at weighted average exercise price of $3.05 were outstanding as of September 30, 2025, but had no dilutive effect due to the net loss for the period. Options to purchase 0.8 million shares of common stock at a weighted average exercise price of $2.99 were outstanding as of September 30, 2024, but it had no dilutive effect due to the net loss for the period. A common stock purchase warrant that was issued on June 26, 2025, which allows the holder to purchase 1,500,000 shares of common stock at the exercise price of $0.65, was outstanding as of September 30, 2025, but had no dilutive effect due to the net loss for the period. Basic and diluted net income per common share is calculated as follows: For the three months ended For the nine months ended September 30, September 30, 2025 2024 2025 2024 Numerator: Net loss (in thousands) $ (4,655) $ (12,677) $ (24,460) $ (45,359) Denominator: Basic and diluted weighted average common shares outstanding 142,909,014 93,279,750 129,081,618 91,005,507 Basic and diluted net loss per common share $ (0.03) $ (0.14) $ (0.19) $ (0.50) 22. 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 tables set forth certain of the Company's assets and liabilities measured at fair value by level within the fair value hierarchy as of September 30, 2025 and December 31, 2024: As of September 30, As of December 31, Input Hierarchy Level 2025 2024 (in thousands) Cash and cash equivalents $ 9,797 $ 1,628 Level 1 Accounts receivable, net $ 12,939 $ 2,184 Level 2 Investment in equity securities-Green Light Metals $ - $ 852 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, approximating fair value. Accounts receivable, net: Accounts receivable, net include amounts due to the Company for deliveries of concentrates and doré sold to 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 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. At September 30, 2025 and December 31, 2024, the Company had an unrealized gain of $0.3 million and an unrealized loss of $7 thousand, respectively, included in its accounts receivable on the accompanying Condensed Consolidated Interim Balance Sheets related to mark-to-market adjustments on the embedded derivatives. Please see Note 17-Derivatives in Item 1-Condensed Consolidated Interim Financial Statements and Notes (unaudited) for additional information. 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 shares received represented approximately 28.5% ownership at the time. In the first quarter of 2025, through Aquila, the Company entered into a share purchase agreement with multiple purchasers to sell all of its interest in the Green Light Metals shares, for C$0.10 per share, for total net proceeds of C$1.2 million ($0.9 million), which was received on February 11, 2025. As of December 31, 2024, the value of this equity investment was $0.9 million. Gains and losses related to changes in the fair value of embedded derivatives were included in the Condensed Consolidated Interim Statements of Operations, as shown in the following table (in thousands): For the three months ended September 30, For the nine months ended September 30, Statements of Operations Classification 2025 2024 2025 2024 Note (in thousands) Realized and unrealized derivative gain (loss), net 17 $ 278 $ (54) $ 398 $ 1,093 Sales, net 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, 2025 Realized gain (loss) $ 61 $ 10 $ (10) $ (5) $ (36) $ 20 Unrealized gain 37 164 11 - 46 258 Total realized/unrealized derivatives, net $ 98 $ 174 $ 1 $ (5) $ 10 $ 278 Gold Silver Copper Lead Zinc Total For the three months ended September 30, 2024 Realized gain (loss) $ 57 $ 130 $ (48) $ 46 $ 160 $ 345 Unrealized (loss) gain (6) (215) 34 (68) (144) (399) Total realized/unrealized derivatives, net $ 51 $ (85) $ (14) $ (22) $ 16 $ (54) Gold Silver Copper Lead Zinc Total For the nine months ended September 30, 2025 Realized gain (loss) $ 145 $ 70 $ (1) $ (16) $ (122) $ 76 Unrealized gain 93 148 16 22 43 322 Total realized/unrealized derivatives, net $ 238 $ 218 $ 15 $ 6 $ (79) $ 398 Gold Silver Copper Lead Zinc Total For the nine months ended September 30, 2024 Realized gain $ 443 $ 415 $ 79 $ 39 $ 358 $ 1,334 Unrealized (loss) gain (42) (83) (13) 6 (109) (241) Total realized/unrealized derivatives, net $ 401 $ 332 $ 66 $ 45 $ 249 $ 1,093

View stock analysis, news, and events for Gold Resource Corporation