8-K - GORO - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) ofthe Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):	September 7, 2021

GOLD

RESOURCE CORPORATION

(Exact name of registrant as specified in its charter)

Colorado	001-34857	84-1473173
(State or other jurisdiction of<br><br> incorporation)	(Commission<br><br>File Number)	(I.R.S. Employer<br><br>Identification Number)
2000 South Colorado Blvd., Tower 1, Suite 10200 Denver, Colorado	80222
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(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code:	(303) 320-7708
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(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<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each class	Trading Symbol(s)	Name of each exchange on which <br><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. ¨

Item 1.01	Entry into a Material Definitive Agreement.

On September 7, 2021, Gold Resource Corporation (“GORO” or the “Company”) entered into a binding letter agreement (the “Letter Agreement”) with Aquila Resources Inc. (“Aquila”) in connection with the Company’s proposed acquisition of all the issued and outstanding common shares of Aquila by way of a plan of arrangement under the Business Corporations Act (Ontario) (the “Transaction”).

In accordance with the Letter Agreement, and subject to the entering into of a definitive arrangement agreement (the “Arrangement Agreement”), GORO will acquire all the issued and outstanding Aquila shares in exchange for 0.0399 of a GORO share per Aquila share (the “Exchange Ratio”). The Exchange Ratio represents consideration of C$0.09 per Aquila share, implying an aggregate acquisition price for 100% of the outstanding Aquila shares of approximately C$30.9 million.

The Letter Agreement provides for a period of up to 45 days of exclusive negotiations by Aquila with GORO with a view to entering into a mutually acceptable Arrangement Agreement and provides that the Arrangement Agreement will reflect the Exchange Ratio and other economic terms set out in the Letter Agreement. The Arrangement Agreement will contain customary representations and warranties, covenants, closing conditions and deal protection mechanisms, including a break fee payable by Aquila to GORO equal to 4.0% of the total Transaction value in the event of termination of the Arrangement Agreement under certain circumstances.

The entering into of the Arrangement Agreement is subject to certain conditions set out in the Letter Agreement, including (i) the satisfaction of each of GORO and Aquila with its respective ongoing due diligence investigations, (ii) the receipt by Aquila’s board of directors of a written fairness opinion from its financial advisor, (iii) the approval of the Arrangement Agreement by the boards of directors of each of GORO and Aquila, and (iv) the entering into of support agreements with certain Aquila shareholders and certain other arrangements with third parties under certain of Aquila’s material contracts on a basis acceptable to GORO. The Letter Agreement also provides that if the Arrangement Agreement is not entered into in certain circumstances, Aquila will reimburse GORO for certain of its expenses incurred in connection with the proposed Transaction.

The Transaction will require the approval of at least 66⅔% of the votes cast in person or by proxy at a special meeting of Aquila shareholders. The Transaction is also subject to Ontario court approval and the receipt of applicable regulatory approvals. The parties anticipate that the Aquila special shareholder meeting and the closing of the Transaction will take place in the fourth quarter of 2021. The Transaction will not require the approval of GORO’s shareholders.

The foregoing description is qualified in its entirety by reference to the Letter Agreement filed as Exhibit 10.1 attached hereto and incorporated herein by reference.

Item 7.01	Regulation FD Disclosure.

On September 7, 2021, the Company issued a press release reporting its entry into the Letter Agreement. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference to this Current Report on Form 8-K in such filing.

Item 9.01	Financial Statements and Exhibits.
(d)	Exhibits.
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Exhibit No.	Description
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10.1	Letter Agreement by and between Gold Resource Corporation and Aquila Resources Inc., dated September 7, 2021.
99.1	Press Release dated September 7, 2021.
104	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

SIGNATURES

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.

	GOLD RESOURCE CORPORATION
Date: September 8, 2021	By:	/s/ Allen Palmiere
	Name:	Allen Palmiere
	Title:	Chief Executive Officer and President

Exhibit 10.1

September 7, 2021

Via E-mail

Aquila Resources Inc.

141 Adelaide Street West, Suite 520

Toronto, Ontario

Canada M5H 3L5

Attention: Barry Hildred, Executive Chairman, and Guy Le Bel, President and Chief Executive Officer

Gentlemen,

Further to our previous discussions, this letter agreement (this “Agreement”) sets out our mutual agreement regarding a proposed business combination transaction (the “Transaction”) between Gold Resource Corporation (“Gold Resource”) and Aquila Resources Inc. (“Aquila”) involving the acquisition of all the issued and outstanding shares of Aquila (the “Aquila Shares”) for consideration consisting of shares of common stock of Gold Resource (“GORO Shares”).

Gold Resource is a gold and silver producer, developer and explorer organized under the laws of the State of Colorado and headquartered in Denver. Our Don David Gold Mine in Oaxaca State, Mexico consists of six properties located along 55 continuous kilometers of the San José structural corridor, having estimated proven and probable reserves of approximately 158,000 ounces of contained gold and 9.5 million ounces of contained silver as at December 31, 2020. Gold Resource has a fully-diluted market capitalization of approximately US$136 million based on its current 20-day volume-weighted average price (“VWAP”) on the NYSE American stock exchange (the “NYSE American”) as of the close of trading on September 3, 2021.

Gold Resource and its technical advisors have devoted significant time and effort to our due diligence concerning Aquila’s Back Forty Project. Upon the entering into of this Agreement, we will engage in negotiations with you and your board of directors within the parameters set out in this Agreement to continue to advance towards completing the Transaction on an expedited basis.

1.	Transaction Value

Gold Resource is prepared to acquire (directly or through a wholly-owned Canadian subsidiary) all of the issued and outstanding Aquila Shares for 0.0399 of a GORO Share per Aquila Share (the “Share Exchange Ratio”), to be issued upon completion of the Transaction. This represents an offer of C$0.09 per Aquila Share reflecting a premium of 12.5% and an aggregate acquisition price for 100% of the outstanding Aquila Shares of approximately C$30.9 million, based upon the closing prices of the Aquila Shares on the Toronto Stock Exchange (the “TSX”) and the GORO Shares on the NYSE American on September 3, 2021, and the average Bank of Canada exchange rate on such date. Based upon the 20-day VWAPs of the Aquila Shares on the TSX and the GORO Shares on the NYSE American, each as of the close of trading on September 3, 2021, and the daily average Bank of Canada exchange rate during the same 20 trading day period, the Share Exchange Ratio offers value to Aquila’s shareholders of C$0.087 per Aquila Share, representing a 29% premium over the 20-day VWAP of the Aquila Shares.

2000 S. Colorado Boulevard - Suite 10200 -Tower 1

Denver, CO, 80222

Tel. No. 720.459.3854

The Share Exchange Ratio is based upon our understanding that there are 343,395,707 Aquila Shares, 19,109,243 options to purchase Aquila Shares, 5,527,030 restricted share units (“RSUs”) and 3,634,402 deferred share units (“DSUs”) currently issued and outstanding. With respect to the treatment of convertible securities, upon completion of the Transaction:

a)	each of Aquila’s options which are outstanding on the effective date of the Transaction (the “EffectiveDate”), whether vested or unvested, will be cancelled and surrendered without any payment in respect thereof; and
b)	each of Aquila’s RSUs and DSUs which are outstanding on the Effective Date, whether vested or unvested,<br>will be cancelled and surrendered in exchange for a cash payment from Aquila equal to the 5-day VWAP of the Aquila Shares on the TSX as<br>of the close of trading on the second trading day preceding the Effective Date (less applicable withholdings).
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Upon completion of the Transaction, the former Aquila shareholders will own approximately 14.9% of the issued and outstanding GORO Shares on a fully diluted basis, allowing Aquila shareholders the opportunity to participate in the value we expect to continue to create from Gold Resource’s expanded portfolio of assets.

The Share Exchange Ratio assumes that there are no other securities of Aquila outstanding, including but not limited to warrants, convertible securities or other rights or options to acquire securities of Aquila. This Agreement also assumes that, other than the completion of Aquila’s previously announced sale of its Bend and Reef exploration properties (the “Bend and Reef Sale”), there will be no material changes in the balance sheet or operations of Aquila between the date hereof and completion of the Transaction. Gold Resource does not currently own any Aquila Shares.

In connection with the Transaction, GORO intends to honor all of the terms and conditions of Aquila’s existing employment agreements with its employees.

2.	Strategic Rationale

We believe a business combination between Gold Resource and Aquila is compelling from a financial, strategic and operational perspective and would like to highlight the following benefits of the Transaction to Aquila’s shareholders:

·	Based on the 20-day VWAPs of the Aquila Shares and the GORO Shares, the offer represents an immediate<br>premium to the shareholders of Aquila of approximately 29%. Given the current market environment and the lack of liquidity in the market<br>for the shares of Aquila, we believe that this a compelling offer.
·	It should be pointed out that GORO currently suffers from both a single mine and Mexican market discount<br>and is trading at approximately 2.5 times free cash flow from operations. This provides the Aquila shareholders participation in the anticipated<br>re-rating of GORO from a one mine company in Mexico to a two mine company with jurisdictional diversification.
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·	Aquila shareholders will have the opportunity to participate in the creation of a multi-jurisdictional,<br>diversified precious and base metal producer. We believe the combined company will:
o	offer a peer leading growth profile, robust free cash flow generation and a strong balance sheet to fund<br>disciplined, high-return growth from cash flow and cash on hand with no significant dilution;
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o	provide the ability to negotiate from a position of financial strength with lenders to fund the project<br>capex;
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o	benefit from our strong technical and operational teams’ expertise in polymetallic, open pit and<br>underground mines;
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o	benefit from value creation driven by a complementary portfolio of assets, geographical diversification,<br>historical low-cost production and organic growth potential and the benefits of scale that accrue to multi-mine producers;
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o	offer substantial measured and indicated (M&I) resources with a consistent grade profile;
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o	offer a high level of confidence that the Back Forty Project will be placed into production on an expedited<br>basis thus elevating GORO into a mid-tier producer with the anticipated attendant re-rating; and
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o	have an enhanced capital markets profile in the United States and Canada, offering greater scale and trading<br>liquidity to heighten appeal to global index, resource and generalist investors.
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3.	Structure
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The Transaction will be structured as a plan of arrangement of Aquila pursuant to the laws of the Province of Ontario, requiring Aquila shareholder approval and court approval. The approval of Gold Resource shareholders will not be required in connection with the Transaction as set out herein.

Gold Resource will work with representatives of Aquila to determine a specific structure and sequencing of the plan of arrangement steps to give effect to the Transaction in a manner most beneficial to our respective securityholders. The Transaction will not be structured to afford a tax rollover to Canadian taxable shareholders of Aquila upon the exchange of their Aquila Shares for GORO Shares.

4.	Due Diligence

Gold Resource has conducted substantial technical due diligence on the Back Forty Project. The parties agree to continue to facilitate reciprocal technical, operational, financial, legal and business due diligence. Gold Resource’s remaining due diligence review (which will largely address operational, financial, legal and business matters) will be completed during the Exclusivity Period (as hereinafter defined), concurrently with the preparation and negotiation of definitive transaction agreements and any reciprocal due diligence that Aquila intends to conduct with regard to Gold Resource.

5.	Conditions & Definitive Agreements

The parties hereto agree to negotiate in good faith, acting reasonably, with a view to entering into a mutually acceptable definitive arrangement agreement (the “ArrangementAgreement”) providing for the detailed terms and conditions upon which the Transaction will be implemented. The entering into by the parties of the Arrangement Agreement is subject to the satisfaction of the following conditions:

(a)	each of Gold Resource and Aquila being satisfied with its respective due diligence investigations regarding<br>the other party as set out in Section 4 above;
(b)	the board of directors of Aquila having received a written opinion from its financial advisors that, as<br>of the date of this Agreement, the consideration to be received by the Aquila shareholders pursuant to the Transaction is fair, from a<br>financial point of view, to the Aquila shareholders;
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(c)	the board of directors of each of Gold Resource and Aquila having unanimously approved the terms and conditions<br>of the Arrangement Agreement;
(d)	the entering into of definitive voting support agreements between Gold Resource and (i) each of the<br>directors and officers of Aquila, and (ii) Orion Mine Finance, each in a form acceptable to Gold Resource, contemporaneously with<br>the entering into of the Arrangement Agreement (collectively, the “Voting Support Agreements”); and
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(e)	the negotiation of arrangements acceptable to Gold Resource for the satisfaction of any “change<br>of control” or similar obligations of Aquila that would be triggered by the entering into of the Arrangement Agreement or the completion<br>of the Transaction under any of Aquila’s material contracts.
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The Arrangement Agreement will reflect the Share Exchange Ratio and the treatment of the Aquila options, RSUs and DSUs set out herein, and will contain customary representations, warranties and covenants, closing conditions (including the obtaining of all necessary regulatory approvals, the approval of Aquila’s shareholders, and court approval), and deal protection mechanisms for a transaction of this nature, including non-solicitation covenants binding on Aquila, a right of Gold Resource to match any superior proposal made in respect of Aquila by any third party, and payment by Aquila to Gold Resource of a break fee equal to 4.0% of the total Transaction value in the event of the termination of the Arrangement Agreement under certain circumstances.

6.	Exclusivity

In consideration of the entering into by Gold Resource of this Agreement, Aquila agrees that during the period from and after the date hereof until the earliest of (i) the execution and delivery of the Arrangement Agreement and the Voting Support Agreements, (ii) the mutual agreement of the parties to terminate discussions regarding the Transaction, and (iii) 5:00 p.m. (Toronto time) on October 22, 2021, being the date that is 45 days from the date hereof (as the period ending on such earliest date may be extended by the mutual written agreement of the parties, the “Exclusivity Period”), Aquila shall, and shall cause its Representatives to:

(a)	negotiate exclusively and in good faith with Gold Resource in respect of the Transaction with a view to<br>settling an Arrangement Agreement as soon as practicable;
(b)	not complete, or enter into any agreement, letter of intent or similar arrangement with any person other<br>than Gold Resource and its Representatives concerning, any:
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(i)	plan of arrangement, amalgamation, share exchange, merger, business combination, consolidation, reorganization,<br>debt financing, restructuring, recapitalization or similar transaction involving Aquila or any of its subsidiaries;
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(ii)	sale or disposition of any material assets of Aquila or any of its subsidiaries outside the ordinary course<br>of business other than the Bend and Reef Sale;
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(iii)	issuance of any securities of Aquila from treasury (or grant of any other options or other rights to acquire<br>securities of Aquila) other than the issuance of (A) Aquila Shares pursuant to options, RSUs or DSUs awarded prior to the date hereof,<br>(B) certain RSUs to be issued to a senior executive of Aquila pursuant to such individual’s employment agreement with Aquila,<br>and (C) DSUs to be issued to members of the board of directors of Aquila on account of directors’ fees accruing until the Effective<br>Date, consistent with Aquila’s past practice for compensating its directors; or
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(iv)	take-over bid, issuer bid or exchange offer for any securities of Aquila that, if consummated, would result<br>in a person or group of persons beneficially owning 20% or more of any class of voting or equity securities of Aquila or any of its subsidiaries

(each of the foregoing (i) through (iv), an “AlternativeTransaction”);

(c)	not make, initiate, solicit, facilitate or knowingly encourage, or enter into or otherwise participate<br>or engage in any discussions or negotiations regarding, an Alternative Transaction or any inquiry, proposal, offer or public announcement<br>of an intention in respect of an Alternative Transaction (any of the foregoing being referred to herein as an “Alternative Proposal”),<br>provide any information to any third party with respect to any Alternative Proposal, or otherwise co-operate in any way with or knowingly<br>assist, participate in, facilitate or encourage any attempt by any other person to do or seek to do any of the foregoing (in each case<br>other than Gold Resource or its Representatives);
(d)	immediately cease and terminate any solicitation, facilitation, knowing encouragement, discussions, negotiations<br>or other activities (including the provision of access to non-public information regarding Aquila, whether in a data room or otherwise)<br>commenced prior to the date hereof with any person (other than Gold Resource and its Representatives) with respect to any Alternative<br>Transaction or Alternative Proposal; or
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(e)	approve or recommend any Alternative Proposal or any Alternative Transaction.
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For purposes of this Agreement, a party’s “Representatives” shall consist of such party’s subsidiaries and its and their respective directors, officers, employees, advisors, representatives and agents.

During the Exclusivity Period, Aquila shall notify Gold Resource promptly (and in any event within 24 hours) upon receipt by it or by any of Aquila’s Representatives, whether oral or written, of (i) an Alternative Proposal, including its material terms, (ii) any request for non-public information relating to Aquila, and (iii) any inquiry or request for discussion or negotiations regarding any Alternative Transaction. Such notice shall include the identity of the person or group of persons making such Alternative Proposal, inquiry or request and copies of all agreements and documents received in respect thereof, from or on behalf of any such person or group of persons.

Gold Resource and Aquila may extend the Exclusivity Period by mutual agreement, with neither party unreasonably withholding approval of an extension if both Gold Resource and Aquila are working diligently and in good faith towards the successful completion of the Transaction.

Aquila agrees that irreparable harm would occur in the event that any of the provisions of this Section 6 were not performed in accordance with their specific terms or were otherwise breached, for which money damages would not be an adequate remedy at law. It is accordingly agreed that Gold Resource will be entitled to an injunction and/or other equitable relief to prevent breaches of this Section 6, any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief hereby being waived, this being in addition to any other remedy to which Gold Resource may be entitled at law or in equity.

7.	Transaction Expenses

Subject to this Section 7, each of Gold Resource and Aquila will be responsible for and will bear all of its respective costs and expenses incurred in connection with its due diligence investigations and the negotiation and implementation of the Transaction. Notwithstanding the foregoing, in the event that all of the following occur:

(a)	at any time during the Exclusivity Period, an Alternative Proposal, whether oral or written, is received<br>by Aquila or any of Aquila’s Representatives in writing or is publicly announced or otherwise publicly disclosed by any person;
(b)	immediately prior to the end of the Exclusivity Period (or any extension thereof), the parties have not<br>entered into an Arrangement Agreement, and Aquila does not agree to extend the Exclusivity Period following a written request by Gold<br>Resource for such an extension, with the result that this Agreement is terminated; and
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(c)	prior to the date which is 180 days following such termination of this Agreement, Aquila or any of its<br>subsidiaries enters into a binding agreement (other than a confidentiality agreement) with respect to an Alternative Transaction,
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then within two (2) business days following the receipt by Aquila from Gold Resource of supporting documentation in the form of the relevant invoices and receipts, Aquila shall pay to Gold Resource, by wire transfer of immediately available funds to an account specified by Gold Resource, the amount of all out-of-pocket costs and expenses (including the fees and expenses of legal counsel and financial, technical, accounting and tax advisors) incurred by Gold Resource during the Exclusivity Period in connection with this Agreement or the proposed Transaction, to a maximum of US$500,000 (the “GORO Expense Reimbursement Amount”). Aquila shall provide prompt written notice to Gold Resource of any event referred to in Section 7(a) or 7(c) above which is not publicly announced.

In addition, in the event that the circumstances in the immediately preceding paragraph of this Section 7 do not apply, and immediately prior to the end of the Exclusivity Period (or any extension thereof), the parties have not entered into an Arrangement Agreement, and either of Gold Resource or Aquila (the “RefusingParty”) does not agree to extend the Exclusivity Period following a written request by the other party (the “RequestingParty”) for such an extension, with the result that this Agreement is terminated, then within two (2) business days following the receipt by the Refusing Party from the Requesting Party of supporting documentation in the form of the relevant invoices and receipts, the Refusing Party shall pay to the Requesting Party, by wire transfer of immediately available funds to an account specified by the Requesting Party, the amount of all out-of-pocket costs and expenses (including the fees and expenses of legal counsel and financial, technical, accounting and tax advisors) incurred by the Requesting Party during the Exclusivity Period in connection with this Agreement or the proposed Transaction, to a maximum of C$250,000 (the “Reciprocal Expense Reimbursement Amount”).

Each of the parties agrees that each of the GORO Expense Reimbursement Amount and the Reciprocal Expense Reimbursement Amount represents a genuine pre-estimate of the damages that Gold Resource or Aquila, as the case may be, will suffer as a result of the circumstances giving rise to the obligation of the other party to make such payment, and is not a penalty. Each of Aquila and Gold Resource irrevocably waives any right it may have to raise as a defense that the applicable amount payable by it is excessive or punitive.

8.	Public Announcements and Confidentiality

Promptly upon the execution of this Agreement by the parties, the parties will issue a joint press release announcing the entering into of this Agreement. The parties agree and acknowledge that (i) all discussions and negotiations between them pursuant to this Agreement are subject to the terms and conditions of the mutual confidentiality agreement between the parties dated July 6, 2021 (the “Confidentiality Agreement”), and (ii) in the event that either party determines that public disclosure with respect to the Transaction is required by reason of applicable securities laws or stock exchange requirements, it will promptly provide the other party with prior notice thereof and consult with the other party regarding the form of any such disclosure.

9.	Nature of Agreement & Termination

This Agreement shall be binding on and enforceable by the parties and their respective successors and shall not be assignable by either party without the prior written consent of the other party.

This Agreement shall terminate upon the conclusion of the Exclusivity Period. Upon such termination, the provisions of this Agreement shall be of no further force or effect and neither party shall have any liability to the other party hereunder, except in relation to breaches of any of the provisions of this Agreement that occurred prior to such termination, except that the provisions of Sections 7 and 8 shall survive the termination of this Agreement.

10.	Other Matters

This Agreement will be governed and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. Each of the parties hereby irrevocably attorns to the non-exclusive jurisdiction of the courts of the Province of Ontario in respect of all matters arising under and in relation to this Agreement and waives, to the fullest extent possible, the defense of an inconvenient forum or any similar defense to the maintenance of proceedings in such courts.

No amendment to this Agreement will be valid or binding unless set forth in writing and duly executed by each of the parties hereto. No waiver of any breach of any provision of this Agreement will be effective or binding unless made in writing and signed by the party purporting to give the same and, unless otherwise provided, will be limited to the specific breach waived.

If any provision of this Agreement is determined to be invalid, illegal or unenforceable in any respect, all other provisions of this Agreement will nevertheless remain in full force and effect and the parties will negotiate in good faith to replace any provision that is invalid, illegal or unenforceable with such other valid, legal and enforceable provision as most closely replicates the economic effect and rights and benefits of such impugned provision.

This Agreement may be executed and delivered in any number of counterparts (including by facsimile or electronic transmission), each of which will be deemed to be an original and all of which taken together will be deemed to constitute one and the same instrument.

* * * * * * * *

Gold Resource has invested significant time and resources in considering this Transaction to date, and is committed to working expeditiously towards executing definitive agreements and implementing the Transaction. Gold Resource has engaged the services of Beacon Securities Limited as financial advisor, Fasken Martineau DuMoulin LLP as Canadian legal counsel and Davis Graham & Stubbs LLP as U.S. legal counsel to complement our experienced management team. We understand that you have engaged the services of Scotia Capital Inc. as financial advisor and Goodmans LLP as Canadian legal counsel. We and our advisors look forward to working with you and your advisors in implementing this Transaction to the benefit of both parties and their shareholders.

[Signature page follows.]

Yours very truly,
GOLD RESOURCE CORPORATION
By:	/s/ Allen Palmiere
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Name:	Allen Palmiere
Title:	CEO, President and Director
Accepted and agreed this 7^th^ day of September, 2021.
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AQUILA RESOURCES INC.
By:	/s/ Guy Le Bel
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Name:	Guy Le Bel
Title:	President & CEO, Director

[Signature Page to Letter Agreement]

Exhibit 99.1

FOR IMMEDIATE RELEASE

GOLD RESOURCE CORPORATION TO ACQUIRE AQUILARESOURCES INC. TO FORM DIVERSIFIED NORTH AMERICAN PRECIOUS AND BASE METALS PRODUCER

DENVER, COLORADO – September 7,2021 – Gold Resource Corporation ( “GORO” or the “Company”)) (NYSE American: GORO) is pleased to announce that it has entered into a binding letter agreement (the “Letter Agreement”) with Aquila ResourcesInc. (“Aquila”) (TSX:AQA; OTCQB:AQARF) setting out certain key terms of a proposed acquisition by GORO of all the issued and outstanding common shares of Aquila by way of a plan of arrangement under the Business Corporations Act (Ontario) (the “Transaction”).

Pursuant to the Transaction, which is subject to the entering into of a definitive arrangement agreement (the “Arrangement Agreement”), GORO will acquire all the issued and outstanding Aquila shares for 0.0399 of a GORO share per Aquila share (the “Exchange Ratio”). Based upon the 20-day volume-weighted average price (“VWAP”) of GORO’s shares on the NYSE American stock exchange on September 3, 2021, being the last trading day prior to the date of the Letter Agreement, the Exchange Ratio represents a 29% premium to the 20-day VWAP of Aquila’s shares on the Toronto Stock Exchange as of such date. The Exchange Ratio represents consideration of C$0.09 per Aquila share (the “Per Share Price”), reflecting a premium of 12.5%, based upon the closing prices of the Aquila shares and the GORO shares on September 3, 2021. The Per Share Price implies an aggregate acquisition price for 100% of the outstanding Aquila shares of approximately C$30.9 million.

Upon closing of the Transaction, the existing GORO and Aquila shareholders will own approximately 85.1% and 14.9%, respectively, of the combined company on a fully diluted basis.

Strategic Rationale for the Transaction

Commenting on the entering into of the Letter Agreement, Allen Palmiere, President and Chief Executive Officer of GORO, said: “This proposed business combination offers an attractive opportunity to the shareholders of both GORO and Aquila. By combining our complementary assets, we will enhance our mineral inventory and add jurisdictional diversification to our project portfolio. The combined company will become a new intermediate gold producer following the commencement of production at Aquila’s Back Forty Project, and its shareholders can look forward to the potential of a company that is expected to benefit from a peer leading growth profile, underpinned by a healthy balance sheet and strong cash flow capable of supporting the development of the Back Forty Project. We look forward to entering into the Arrangement Agreement with Aquila and successfully completing the Transaction.”

Further details of the benefits of the Transaction to GORO and Aquila shareholders include the following:

·	Immediate and Significant Premium to Aquila Shareholders. Based on the 20-day VWAPs of the GORO<br>shares and the Aquila shares, the Transaction offers an immediate and significant premium to Aquila’s shareholders of 29%. Given<br>the current market environment and lack of liquidity for the shares of Aquila, GORO believes that this a compelling value proposition.
·	Accretive Transaction for GORO Shareholders in the Short and Medium Term. The Transaction is expected<br>to be immediately accretive to GORO shareholders on a net asset value basis, and to be similarly accretive to GORO shareholders upon the<br>commencement of production at the Back Forty Project, which is anticipated to occur in late 2024.
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·	Enhanced Market Presence and Re-Rating Potential. GORO currently benefits from inclusion in the<br>VanEck Junior Gold Miners ETF (the “GDXJ”) and from an average daily trading volume of approximately 1 million shares,<br>trailing three months. The Transaction is intended to result in the Back Forty Project being placed into production on a more accelerated<br>basis, funded by cash flow generation, thus elevating the combined company to intermediate producer status. Following the completion of<br>the Transaction, GORO is expected to continue to be included in the GDXJ and to benefit from an enhanced capital markets profile in the<br>United States and Canada, as well as increased trading liquidity and broadened appeal to global index, resource, and generalist investors.<br>This offers the potential for a re-rating to a multiple more in line with other intermediate gold producers.
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·	Enhanced Project and Jurisdictional Diversification. Each of GORO and Aquila is currently a single-asset,<br>single-jurisdiction company. Through the Transaction, GORO and Aquila shareholders will have the opportunity to participate in the ongoing<br>growth of a multi-jurisdictional, diversified precious and base metal producer with exposure to gold, silver, zinc, copper and lead through<br>GORO’s producing Don David Gold Mine in Oaxaca, Mexico and Aquila’s Back Forty Project in Menominee County, Michigan. It is<br>anticipated that Aquila’s previously announced sale of its Bend and Reef exploration properties will be completed prior to the completion<br>of the Transaction.
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·	Growth Profile and Financial Strength of Combined Company. The combined company is expected to<br>benefit from a peer leading growth profile, a robust balance sheet with no debt and cash of US$30.2 million at June 30, 2021, free<br>cash flow generation from its Don David Gold Mine and the synergies that generally accrue from scale in the areas of general and administrative<br>expenses, from less duplication of salaries, wages and other public company expenses, improved concentrate sales and marketing and supply<br>chain efficiencies. Its position of financial strength is expected to result in an improved ability to access required additional financing<br>to fund the Back Forty Project’s capital expenditures.
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·	Significantly Improved Gold Resource Profile. Based upon the parties’ respective public disclosure<br>and GORO’s technical due diligence to date on the Back Forty Project, GORO anticipates that its gold resources have the potential<br>to increase by in excess of 500% upon completion of the Transaction.
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·	Experienced Management Team. The combined company will benefit from GORO’s and Aquila’s<br>technical and operational teams’ expertise in polymetallic open pit and underground mines. The GORO executive team has a demonstrated<br>record of success in developing and operating mining projects in the Americas.
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·	Demonstrated Consistent Dividend History. Post-Transaction, GORO intends to continue to pay dividends<br>in accordance with its past practice. The next quarterly dividend of US$0.01 per GORO share, payable to shareholders of record on September 15,<br>2021, represents more than ten years of consistent dividend payments by GORO to investors.
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Support for the Transaction from Key AquilaStakeholders

Aquila’s largest shareholder, Orion Mine Finance (“Orion”), which holds 28.6% of the issued and outstanding Aquila shares, has confirmed to GORO that it is supportive of the Transaction. Subject to its review of the proposed Arrangement Agreement, Orion has indicated its intention to enter into a voting support agreement in favor of the Transaction, on terms to be agreed between GORO and Orion, contemporaneously with the execution of the Arrangement Agreement. The Letter Agreement also provides for the delivery of voting support agreements by each of Aquila’s directors and officers at such time (together with the aforementioned Orion agreement, the “Support Agreements”).

Osisko Gold Royalties, which is a party to gold and silver stream agreements with Aquila relating to the Back Forty Project, has also confirmed that it considers GORO to be an approved purchaser under those agreements, and that it is supportive of the proposed Transaction.

Board Approvals

The Letter Agreement has been unanimously approved by the boards of directors of both GORO and Aquila. The Aquila board’s approval of the Letter Agreement was based in part on the unanimous recommendation of a special committee of independent directors of Aquila which was appointed to consider the Transaction.

Arrangement Agreement and Transaction Approvals

The Letter Agreement provides for a period of up to 45 days of exclusive negotiations by Aquila with GORO (the “Exclusivity Period”) with a view to entering into a mutually acceptable Arrangement Agreement and provides that the Arrangement Agreement will reflect the Exchange Ratio and other economic terms set out in the Letter Agreement. The Arrangement Agreement will contain customary representations and warranties, covenants, closing conditions and deal protection mechanisms for a transaction of this nature, including a break fee payable by Aquila to GORO equal to 4.0% of the total Transaction value in the event of termination of the Arrangement Agreement under certain circumstances.

The entering into of the Arrangement Agreement is subject to certain conditions set out in the Letter Agreement, including (i) the satisfaction of each of GORO and Aquila with its respective ongoing due diligence investigations, (ii) the receipt by Aquila’s board of directors of a written fairness opinion from its financial advisor that as of the date of the Letter Agreement, the consideration proposed to be received by the Aquila shareholders pursuant to the Transaction is fair, from a financial point of view, to the Aquila shareholders, (iii) the approval of the Arrangement Agreement by the boards of directors of each of GORO and Aquila, and (iv) the entering into of the Support Agreements and certain other arrangements with third parties under certain of Aquila’s material contracts on a basis acceptable to GORO. The Letter Agreement also provides that if the Arrangement Agreement is not entered into in certain circumstances, Aquila will reimburse GORO for certain of its expenses incurred in connection with the proposed Transaction.

A copy of the Letter Agreement will be filed with the Securities and Exchange Commission on Form 8K and will be available on GORO’s website under the Reports and Filings tab located in the Investors section located here: https://goldresourcecorp.com/investors/reports-and-filings/.

Advisors

Fasken Martineau DuMoulin LLP and Davis Graham & Stubbs LLP are GORO’s Canadian and U.S. legal advisors, respectively, and Beacon Securities Limited is GORO’s financial advisor.

Conference Call and Live Webcast

Management of GORO will host a conference call and live webcast at 10:00 a.m. Toronto time / 8:00 a.m. Denver time on September 8, 2021, to discuss the Transaction. Please use the following information to access the call and/or webcast:

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 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://www.webcaster4.com/Webcast/Page/2361/42777

To join the call via telephone please use one of the following dial-in details:

Participant Numbers:

Toll Free: 844-602-0380

International: 862-298-0970

Replay Number: Toll Free: 877-481-4010

International: 919-882-2331

Replay Passcode: 42777

Please connect to the conference call at least 10 minutes prior to the start time using one of the connection options listed above.

About Gold Resource Corporation

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 a new board and senior leadership, the company’s focus is to unlock the significant upside potential of its existing infrastructure and large land position surrounding the mine. For more information, please visit GORO’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.

About Aquila Resources Inc.

Aquila Resources Inc. is a development-stage company focused on high grade and gold-rich projects in the Upper Midwest, USA. The company is currently focused on advancing pre-construction activities for its 100%-owned high grade and gold-rich Back Forty Project in Michigan.

Forward-Looking Information and otherCautionary Statements

This press release contains forward-lookingstatements that involve risks and uncertainties. The statements contained in this press release that are not purely historical are “forward-lookingstatements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities ExchangeAct of 1934. When used in this press release, the words “plan”, “target”, "anticipate", "believe", "estimate", "intend", “propose”, “potential” and "expect" and similar expressionsare intended to identify such forward-looking statements. Such forward-looking statements include, without limitation: statements regardingthe proposed Transaction (including the anticipated terms and conditions of the Arrangement Agreement and Support Agreements, and thereceipt of shareholder, court and regulatory approvals for the Transaction); the potential strategic benefits of the Transaction and expectationsregarding the combined company (including its growth profile and resource profile, the development of the Back Forty Project, cash flowgeneration from the Don David Gold Mine, its market presence and re-rating potential and expectations regarding the payment of dividends);and timing expectations for all of the foregoing. All forward-looking statements in this press release are based upon information availableto Gold Resource Corporation on the date of this press release, and the Company assumes no obligation to update any such forward-lookingstatements. Forward looking statements involve a number of risks and uncertainties, and there can be no assurance that such statementswill prove to be accurate. Such risks and uncertainties and other factors that could cause actual results and future to differ from thoseexpressed or implied by the forward-looking statements include, but are not limited to: the ability of the Company and Aquila to negotiatethe Arrangement Agreement and the satisfaction of the conditions precedent to the execution of the Arrangement Agreement (including thesatisfaction of each of GORO and Aquila with their respective due diligence investigations, the approval of the Arrangement Agreementby the boards of directors of each of GORO and Aquila, and the execution of the Support Agreements); the satisfaction of all conditionsprecedent to closing the Transaction (including the obtaining of all shareholder, court and regulatory approvals); inherent risks of miningexploration, development and production operations; economic factors affecting the Company and/or Aquila; the integration of the businessesof the Company and Aquila; political conditions and the regulatory environment in the United States and Mexico; and the scope, duration,and impact of the COVID-19 pandemic on mining operations, Company employees, and supply chains as well as the scope, duration and impactof government action aimed at mitigating the pandemic. Additional factors that could cause or contribute to such differences include,but are not limited to, those discussed in the periodic and current reports filed by the Company with the Securities and Exchange Commission,including the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

For further information please contact:

Gold Resource Corporation

Ann Wilkinson, VP, IR and Corporate Affairs

Phone: 720-459-3851

E-mail: Ann.Wilkinson@GRC-usa.com