8-K
GOLD RESOURCE CORP (GORO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 6, 2023
GOLD RESOURCE CORP ORATION
(Exact name of registrant as specified in its charter)
| Colorado | 001-34857 | 84-1473173 |
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| (State or other jurisdiction of<br><br>incorporation) | (Commission<br><br>File Number) | (I.R.S. Employer<br><br>Identification Number) |
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| 7900 E. Union Ave , Suite 320 | | |
| Denver , Colorado | | 80237 |
| (Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number including area code: (303) 320-7708
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<br><br><br><br> |
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Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | Trading Symbol(s) | Name of each exchange on which<br>registered |
| Common Stock | GORO | NYSE American |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ◻
1.01
Item 2.02 Results of Operations and Financial Condition.
On November 6, 2023, Gold Resource Corporation (“the Company”) issued a news release reporting its production and unaudited financial results for the third quarter of 2023. A copy of the news release is attached as Exhibit 99.1 to this report.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any of the Company’s filings or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are furnished with this report:
| 99.1 | News Release dated November 6, 2023 | |
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| 104 | | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | | GOLD RESOURCE CORPORATION | |
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| Date: November 6, 2023 | By: | /s/ Allen Palmiere | |
| Name: | Allen Palmiere | ||
| Title: | Chief Executive Officer and President |
3
Exhibit 99.1
| NEWS - FOR IMMEDIATE RELEASE | NYSE American: GORO |
|---|---|
| November 6, 2023 | |
GOLD RESOURCE CORPORATION REPORTS THIRD QUARTER OPERATIONAL
RESULTS AND ANNOUNCES THE INITIATION OF A REVIEW
TO EVALUATE STRATEGIC ALTERNATIVES
Denver, Colorado – November 6, 2023 – Gold Resource Corporation (NYSE American: GORO) (the “Company”) is pleased to announce its year-to-date and quarterly operational results from its Don David Gold Mine (DDGM) near Oaxaca, Mexico, and a corporate update on its other activities.
Year-to-Date Highlights Include:
| ● | Produced and sold 14,777 ounces of gold and 777,977 ounces of silver **** |
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| ● | Produced and sold 8,772 tonnes of zinc, 904 tonnes of copper, and 3,681 tonnes of lead |
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| ● | Total cash cost after co-product credits for the quarter was $1,839 per gold equivalent ounce |
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| ● | Cash balance of $6.7 million with no debt and working capital of $13.8 million at September 30, 2023 |
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| ● | Completed Back Forty Optimization Study that indicates after-Tax: a $214 million NPV6% with a 25.7% IRR and a 2.5 year payback |
| --- | --- |
“Our quarterly operational results to date continue to remain in line with our 2023 mine plan and guidance even though our financial results continue to be lower than planned,” stated Allen Palmiere, President and CEO for the Company. “Factors that are out of our control continue to affect our bottom line, including a strengthening Mexican Peso to the US dollar, increased local power costs, and lower metal prices for our co-product metals of copper, lead, and zinc. We continue to identify and implement opportunities for cost reductions and other operational efficiencies to offset these factors. Our exploration drilling program at DDGM continues to yield encouraging drill results from our underground exploration program with the goal of increasing the average grade of our 2024 mine plan and life of mine resources. Earlier in 2023, we filed our inaugural Environmental, Social, and Governance report, and we are seeing very positive reception from the local communities and government. We were also very successful this quarter in completing the optimization work around the Back Forty project and filing an S-K 1300 that resulted in a more robust project with an improved project valuation and increased economic returns, while reducing environment impacts.”
Review of Strategic Alternatives
Notwithstanding the technical successes noted above, in light of the continued challenges facing the Company, the Company’s Board of Directors has decided to initiate a formal review process, with the assistance of outside financial and legal advisors, to evaluate strategic alternatives for the Company. The comprehensive process will begin immediately and will evaluate a broad range of options to maximize shareholder value, including a potential sale of the Company. The Company has engaged Cormark Securities Inc. as financial advisor to assist in its review of strategic alternatives. Davis Graham & Stubbs LLP has been appointed as legal advisor in connection with the review process.
There is no deadline or definitive timetable for the completion of the strategic alternatives review process, and there can be no assurance regarding the results or outcome of this review. The Company does not intend to comment further on this strategic review process until it has been completed or the Company determines that a disclosure is required by law or otherwise deemed appropriate.
Third Quarter Operational Results
Don David Gold Mine
| ● | No lost time incidents during the quarter. Our year-to-date Lost Time Injury Frequency Rate safety record is 0.11 as compared to the Mexican average of 0.89 (in US equivalent). Safety at Gold Resource Corporation is paramount. Even with a good track record at the DDGM, the Company continues to strive each quarter for improved measures, awareness, and training. |
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| ● | The DDGM diamond drilling program continued as planned during the third quarter, using five drill rigs with encouraging results. Drilling continued to advance on two fronts: (1) Infill drilling designed to upgrade Inferred resources to the Indicated category; and (2) Expansion drilling with the objective of identifying additional Inferred resources via step-out drilling. The drilling during the third quarter was successful in testing the northern extensions of the Splay 31 and Marena North veins of the Arista system, as well as in expanding the Three Sisters and Gloria vein systems to the northwest and down-dip (Switchback system). |
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Back Forty Project
| ● | Optimization work related to the metallurgy and the economic model for the Back Forty Project in Michigan, USA, was completed, and the Company released the Technical Report Summary (S-K 1300) for the Back Forty Project as Exhibit 96.1 to Form 8-K filed on October 26, 2023. Results of the work indicate a more robust economic project with no planned impacts to wetlands that is more protective of the environment, which should facilitate a successful mine permitting process. |
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Financial
| ● | Total cash cost after co-product credits for the quarter was $1,839 per gold equivalent (“AuEq”) ounce, and total all-in sustaining cost (“AISC”) after co-product credits for the quarter was $2,669 per AuEq ounce. The year-to-date total cash cost after co-product credits of $1,210 and total AISC after co-product credits of $1,852 are no longer within the guidance due to the strengthening of the peso and lower zinc prices. (See Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Measures below for a reconciliation of non-GAAP measures to applicable GAAP measures). |
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2023 Capital and Exploration Investment Summary
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| | | For the nine months ended September 30, 2023 | | 2023 full year guidance | ||
| | | (in thousands) | ||||
| Sustaining Investments: | | | | | | |
| Underground Development | Capital | $ | 3,464 | | | |
| Infill Drilling | Capitalized Exploration | | 3,315 | | | |
| Other Sustaining Capital | Capital | | 1,485 | | | |
| Surface and Underground Exploration Development & Other | Capitalized Exploration | | 1,131 | | | |
| Subtotal of Sustaining Investments: | | | 9,395 | | $ | 9 - 11 million |
| Growth Investments: | | | | | | |
| DDGM growth: | | | | | | |
| Surface Exploration / Other | Exploration | | 2,058 | | | |
| Underground Exploration Drilling | Exploration | | 1,916 | | | |
| Underground Exploration Development | Capitalized Exploration | | 356 | | | |
| Back Forty growth: | | | | | | |
| Back Forty Project Optimization & Permitting | Exploration | | 1,265 | | | |
| Subtotal of Growth Investments: | | | 5,595 | | $ | 6 - 7 million |
| Total Capital and Exploration: | | $ | 14,990 | | $ | 15 - 18 million |
Trending Highlights
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| | 2022 | | 2023 | |||||
| | Q1 | Q2 | Q3 | Q4 | | Q1 | Q2 | Q3 |
| Operating Data | | | | | | | | |
| Total tonnes milled | 136,844 | 129,099 | 110,682 | 116,616 | | 117,781 | 113,510 | 116,626 |
| Average Grade | | | | | | - | | |
| Gold (g/t) | 3.00 | 2.63 | 1.98 | 2.51 | | 2.33 | 1.59 | 1.52 |
| Silver (g/t) | 81 | 64 | 80 | 109 | | 94 | 86 | 73 |
| Copper (%) | 0.41 | 0.32 | 0.37 | 0.45 | | 0.37 | 0.37 | 0.32 |
| Lead (%) | 1.97 | 1.99 | 1.59 | 1.58 | | 1.73 | 1.64 | 1.29 |
| Zinc (%) | 4.89 | 4.00 | 4.21 | 4.27 | | 3.88 | 3.72 | 3.24 |
| Metal production (before payable metal deductions) | | | | | | | | |
| Gold (ozs.) | 11,187 | 9,317 | 5,851 | 7,767 | | 7,171 | 4,637 | 4,443 |
| Silver (ozs.) | 332,292 | 249,088 | 261,256 | 370,768 | | 322,676 | 289,816 | 247,159 |
| Copper (tonnes) | 431 | 303 | 296 | 406 | | 336 | 334 | 276 |
| Lead (tonnes) | 2,073 | 2,020 | 1,249 | 1,323 | | 1,559 | 1,389 | 1,048 |
| Zinc (tonnes) | 5,562 | 4,282 | 3,901 | 4,198 | | 3,837 | 3,569 | 3,223 |
| Metal produced and sold | | | | | | | | |
| Gold (ozs.) | 8,381 | 8,746 | 5,478 | 7,514 | | 6,508 | 4,287 | 3,982 |
| Silver (ozs.) | 265,407 | 231,622 | 225,012 | 335,168 | | 294,815 | 274,257 | 208,905 |
| Copper (tonnes) | 408 | 286 | 282 | 372 | | 332 | 327 | 245 |
| Lead (tonnes) | 1,639 | 1,755 | 1,056 | 941 | | 1,417 | 1,317 | 947 |
| Zinc (tonnes) | 4,359 | 3,590 | 2,943 | 3,265 | | 3,060 | 3,141 | 2,571 |
| Average metal prices realized | | | | | | | | |
| Gold ($ per oz.) | $ 1,898 | $ 1,874 | $ 1,627 | $ 1,734 | | $ 1,915 | $ 2,010 | $ 1,934 |
| Silver ($ per oz.) | $ 23.94 | $ 22.05 | $ 18.54 | $ 21.25 | | $ 23.04 | $ 24.93 | $ 23.61 |
| Copper ($ per tonne) | $ 10,144 | $ 9,275 | $ 7,115 | $ 8,221 | | $ 9,172 | $ 8,397 | $ 8,185 |
| Lead ($ per tonne) | $ 2,347 | $ 2,168 | $ 1,882 | $ 1,954 | | $ 2,158 | $ 2,153 | $ 2,196 |
| Zinc ($ per tonne) | $ 3,842 | $ 4,338 | $ 3,186 | $ 2,577 | | $ 3,195 | $ 2,485 | $ 2,195 |
| Gold equivalent ounces sold | | | | | | | | |
| Gold Ounces | 8,381 | 8,746 | 5,478 | 7,514 | | 6,508 | 4,287 | 3,982 |
| Gold Equivalent Ounces from Silver | 3,348 | 2,729 | 2,564 | 4,107 | | 3,547 | 3,402 | 2,550 |
| Total AuEq oz | 11,729 | 11,475 | 8,042 | 11,621 | | 10,055 | 7,689 | 6,532 |
| Financial Data | | | | | | | | |
| Total sales, net (in thousands) | $ 45,417 | $ 37,064 | $ 23,869 | $ 32,374 | | $ 31,228 | $ 24,807 | $ 20,552 |
| Production Costs (in thousands) | $ 20,074 | $ 21,722 | $ 19,380 | $ 19,773 | | $ 19,850 | $ 20,302 | $ 18,957 |
| Production Costs/Tonnes Milled | $ 147 | $ 168 | $ 175 | $ 170 | | $ 169 | $ 179 | $ 163 |
| Operating Cash Flows (in thousands) | $ 4,230 | $ 7,976 | ($ 4,292) | $ 6,243 | | $ 1,024 | ($ 551) | ($ 7,475) |
| Net income (loss) (in thousands) | $ 4,019 | $ 2,673 | ($ 9,730) | ($ 3,283) | | ($ 1,035) | ($ 4,584) | ($ 7,341) |
| Earnings (loss) per share - basic | $ 0.05 | $0.03 | ($ 0.11) | ($ 0.04) | | ($ 0.01) | ($ 0.05) | ($ 0.08) |
Trending Highlights of Non-GAAP Measures
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|---|---|---|---|---|---|---|---|---|
| | 2022 | | 2023 | |||||
| | Q1 | Q2 | Q3 | Q4 | | Q1 | Q2 | Q3 |
| | (in thousands, except per oz) | |||||||
| Gold equivalent ounces sold (oz) | 11,729 | 11,475 | 8,042 | 11,621 | | 10,055 | 7,689 | 6,532 |
| Total production costs ^(1)^ | $ 20,074 | $ 21,722 | $ 19,380 | $ 19,773 | | $ 19,850 | $ 20,302 | $ 18,957 |
| Treatment and refining charges ^(2)^ | 2,748 | 3,137 | 2,860 | 3,327 | | 3,184 | 3,328 | 2,788 |
| Co-product credits ^(3)^ | (24,732) | (22,027) | (13,369) | (13,314) | | (15,881) | (13,384) | (9,733) |
| Total cash cost after co-product credits | ($ 1,910) | $ 2,832 | $ 8,871 | $ 9,786 | | $ 7,153 | $ 10,246 | $ 12,012 |
| Total cash cost after co-product credits per AuEq oz sold | ($ 163) | $ 247 | $ 1,103 | $ 842 | | $ 711 | $ 1,333 | $ 1,839 |
| Sustaining - capitalized expenditure ^(4)^ | $ 4,596 | $ 4,028 | $ 3,605 | $ 4,110 | | $ 2,588 | $ 2,187 | $ 3,489 |
| Sustaining - Exploration Expenditure ^(4)^ | - | - | - | - | | 548 | 531 | 52 |
| Reclamation and remediation ^(5)^ | 62 | 61 | 58 | 620 | | 195 | 200 | 216 |
| Subtotal of DDGM sustaining costs | $ 4,658 | $ 4,089 | $ 3,663 | $ 4,730 | | $ 3,331 | $ 2,918 | $ 3,757 |
| DDGM all-in sustaining cost after co-product credits per AuEq oz sold | $ 234 | $ 603 | $ 1,559 | $ 1,249 | | $ 1,043 | $ 1,712 | $ 2,414 |
| Sustaining - general and administrative, including stock-based compensation expenses ^(6)^ | $ 2,673 | $ 2,313 | $ 2,249 | $ 2,768 | | $ 1,790 | $ 2,137 | $ 1,662 |
| Consolidated all-in sustaining cost after co-product credits | $ 5,421 | $ 9,234 | $ 14,783 | $ 17,284 | | $ 12,274 | $ 15,301 | $ 17,431 |
| Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold | $ 462 | $ 805 | $ 1,838 | $ 1,487 | | $ 1,221 | $ 1,990 | $ 2,669 |
| Non-sustaining cost- capital expenditure ^(4)^ | $ 1,353 | $ 541 | $ - | $ - | | $ - | $ 147 | $ 209 |
| Non-sustaining cost- exploration expenditure ^(1)^ | 2,305 | 2,837 | 4,973 | 2,934 | | 1,839 | 1,440 | 1,960 |
| Subtotal of non-sustaining costs | $ 3,658 | $ 3,378 | $ 4,973 | $ 2,934 | | $ 1,839 | $ 1,587 | $ 2,169 |
| Total all-in cost after co-product credits | $ 9,079 | $ 12,612 | $ 19,756 | $ 20,218 | | $ 14,113 | $ 16,888 | $ 19,600 |
| Total all-in cost after co-product credits per AuEq oz sold | $ 774 | $ 1,099 | $ 2,457 | $ 1,740 | | $ 1,404 | $ 2,196 | $ 3,001 |
| (1) | Refer to Production costs in the current and previously filed Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited) in Condensed Consolidated Interim Statements of Operations. |
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| (2) | Refer to Treatment and refining charges in the current and previously filed Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited): Note 3 – Revenue. |
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| (3) | Refer to Realized/Unrealized Derivatives for copper, zinc, and lead in the current and previously filed Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited): Note 20 – Fair Value Measurement. Note that Co-product credits for the prior year (2022) comparable numbers were adjusted to include realized embedded derivatives only for co-products (which better represents the cash cost after co-product credits because it now excludes unrealized gains or losses) and align with the current year presentation. |
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| (4) | Refer to Capital expenditures in the current and previously filed Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited): Condensed Consolidated Interim Statements of Cash Flows. |
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| (5) | Refer to Reclamation and remediation in the current and previously filed Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited): Condensed Consolidated Interim Statements of Operations. Note that the prior year’s (2022) comparable numbers were adjusted to include Reclamation and remediation (which better represents the all-in sustaining cost after co-product credits because Reclamation and remediation are part of normal operating activities) and to align with the current year’s presentation. |
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| (6) | Refer to General and administrative expenses and Stock-based compensation in the current and previously filed Item 1—Condensed Consolidated Interim Financial Statements and Notes (unaudited): Condensed Consolidated Interim Statements of Operations. |
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About GRC:
Gold Resource Corporation is a gold and silver producer, developer, and explorer with its operations centered on the Don David Gold Mine in Oaxaca, Mexico. Under the direction of an experienced board and senior leadership team, the Company’s focus is to unlock the significant upside potential of its existing infrastructure and large land position surrounding the mine in Oaxaca, Mexico, and to develop the Back Forty Project in Michigan, USA. For more information, please visit GRC’s website, located at www.goldresourcecorp.com, and read the Company’s Form 10-K for an understanding of the risk factors associated with its business.
Q3 2023 Conference Call
The Company will host a conference call on Friday, November 7, 2023 at 12:00 p.m. Eastern Time.
The conference call will be recorded and posted to the Company’s website later in the day following the conclusion of the call. Following prepared remarks, Allen Palmiere, President and Chief Executive Officer, Alberto Reyes, Chief Operating Officer, and Chet Holyoak, Chief Financial Officer, will host a live question and answer (Q&A) session. There are two ways to join the conference call.
To join the conference via webcast, please click on the following link:
https://viavid.webcasts.com/starthere.jsp?ei=1637564&tp_key=c391b292bd
To join the call via telephone, please use the following dial-in details:
Participant Toll Free: +1 (888) 886-7786
International: +1 (416) 764-8658
Conference ID: 67122083
Please connect to the conference call at least 10 minutes prior to the start time using one of the connection options listed above.
Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by the following words: "may," "might," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "seek," "believe," "estimate," "predict," "potential," "continue," "contemplate," "possible," or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. They are not historical facts, nor are they guarantees of future performance. Any express or implied statements contained in this announcement that are not statements of historical fact may be deemed to be forward-looking statements, including, without limitation, statements regarding the timing and scope of a process to explore strategic alternatives for the Company, including a potential sale of the Company. It is possible that the Company’s actual results, financial condition, and developments may differ, possibly materially, from the anticipated results, developments, and financial condition indicated in these forward-looking statements. Management believes that these forward-looking statements are reasonable as of the time made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. Our Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. These forward-looking statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected, including, without limitation: whether the objectives of the strategic alternative review
process will be achieved; the terms, structure, benefits and costs of any strategic transaction; the timing of any transaction and whether any transaction will be consummated at all; the risk that the strategic alternatives review and its announcement could have an adverse effect on the ability of the Company to retain and hire key personnel and maintain relationships with suppliers, employees, shareholders, and other business relationships, and on its operating results and business generally; the risk the strategic alternatives review could divert the attention and time of the Company’s management; the risk of any unexpected costs or expenses resulting from the review; the risk of any litigation relating to the review; and the risks and uncertainties described in “Item 1A. Risk Factors” in our Annual report on Form 10-K for the year ended December 31, 2022 and those described from time to time in our future reports filed with the Securities and Exchange Commission.
For further information, please contact:
Chet Holyoak
Chief Financial Officer
Chet.holyoak@grc-usa.com
www.GoldResourceCorp.com