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Commercial Production at Gold Resource Corporation’s Isabella Pearl Gold Mine, Nevada

Gold Resource Corporation recently stated that its Isabella Pearl gold mine, situated in Mineral County, Nevada, has attained commercial production levels.

This announcement on commercial production is based on mining rates, ore placement on the heap leach pad, production ramp-up, mining and process costs, and reaching positive operational cash flow during September 2019.

The company’s first gold dore from the project was produced in late April 2019 and more developments are expected as the project continues through the ramp-up phase. Gold Resource Corporation—a producer, explorer, and developer of gold and silver—operates in Oaxaca, Mexico and Nevada, United States.

Since July 2010, the company has returned $112 million to its shareholders in successive monthly dividends. The company also gives its shareholders the option to exchange their cash dividends for physical silver and gold and take delivery.

At the Isabella Pearl mine, gold production levels have been building up since the first dore bar was yielded in late April 2019. Initial September production of gold loaded to carbon and dore generated equaled over 2000 oz.

The company aims to update its 2019 global gold production outlook in the forthcoming third-quarter preliminary production statement to include estimated gold ounces aimed at its Isabella Pearl project for the fourth quarter.

Although it is quite early in the project ramp-up phase, 2,000 oz of gold production every month at Isabella Pearl is projected to continue, creating positive cash flow by covering operational costs at the project with a presumed gold rate of $1450 per oz. The 2020 yearly production outlook of the company for Nevada, United States and Oaxaca, Mexico will be published in early 2020.

The construction of the ADR process facility of the Isabella Pearl project has been completed with final commissioning taking place over the next few weeks to allow on-site dore production. Off-site processing of the gold-infused carbon into dore will proceed until the on-site dore facility is completely enhanced.

I am very pleased to report the Isabella Pearl mine, which broke ground and produced first dore in just ten months, has reached commercial production levels just sixteen months after breaking ground on the project in June 2018. Our team has worked extremely hard these past few months navigating the challenges of mine commissioning, managing construction contractor difficulties and the typical production ramp up of a new mine.

Jason Reid, CEO and President, Gold Resource Corporation

Jason Reid continued, “I am very excited that during the month of September the Isabella Pearl mine moved into a phase where mining and processing rates and ore placement are now expected to generate positive cash flow on a consistent basis. This is a milestone for any mining project and should have a significant impact on the Company’s overall revenues and net income moving forward.”

Over the next year, the Isabella Pearl ramp-up phase will proceed as the deposit is composed of two key ore bearing areas, the Isabella and the Pearl with the former mineralization outcropping at the surface and the latter higher-grade mineralization situated deeper inside the deposit. About 80% of the ore in this deposit is in the Pearl structure, and the company continues taking away overburden to realize this high-grade area targeted in 2020.

There will most likely be unforeseen additional challenges as there always are in the mining industry, but given where we were sixteen months ago putting the first shovel in the ground to where we are today, loading the pad with Isabella ore and having reached positive cash flow in September, I am very pleased and excited at our progress at the Isabella Pearl mine.

Jason Reid, CEO and President, Gold Resource Corporation

Jason Reid added, “With this positive cash flow development, I believe we are very close to reaching the inflection point of a near-term shareholder dividend increase.”

The ‘at-the-market’ ATM facility used to help finance the project’s completion is still in place and is expected to remain in place going forward as optionality for the Company if and when needed. I am pleased to report the Company has not used the ATM since July 30, 2019. While the Company reserves the right to further utilize the ATM, we currently do not foresee the need to do so.

Jason Reid, CEO and President, Gold Resource Corporation


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