Gold Resource Corporation Says Despite production improving in the fourth quarter, the Company's inability to achieve its production estimates and lack of adequate liquidity has created substantial doubt about its ability to continue as a going concern.

Tonnes and grade, with respect to the Company's mining operations at DDGM, have declined during 2024 and are below guidance. There are several factors that caused these declines. The Company has encountered significant issues with equipment availability due to the age and condition of some of the critical mining equipment in use at the mine. Due to the continued challenges with equipment availability and the decreased cash due to prior production shortfalls, the Company was not able to maintain its projected timeline for the development of future production zones. As a result, the Company is currently mining only one face at a time in areas that are accessible. The current lack of other available production zones has placed additional pressure on the Company's ability to achieve its production estimates, as any problems encountered at the current production zone cannot be offset by production elsewhere in the mine. In addition, the mill also experienced some mechanical issues and wet ore handling difficulties due to unusually high rain fall during the year that resulted in lower throughput and a production shortfall. To minimize the mechanical issues and return the mine to a cash positive position, capital is necessary to replace some of the mining fleet and upgrade the mill.

The Company believes that the mine has significant potential to generate positive cash flow based on the information to date from the new areas of the Three Sisters, as well as other areas that have been discovered near the existing mining zones. In order to develop access and better define these new areas, an investment must be made for equipment and mine development. Without the addition of these areas to the life-of-mine plan, the Company does not believe that the mine will generate sufficient free cash flow in the near term.

Despite production improving in the fourth quarter, the Company's inability to achieve its production estimates and lack of adequate liquidity has created substantial doubt about its ability to continue as a going concern. The Company previously announced that it would require approximately $7.0 million to obtain additional mining equipment and for mill upgrades. Management is currently looking to reduce the amount necessary for mining equipment purchases by looking for good used equipment and/or using a third-party contractor that will provide its own equipment. The Company also expects to require approximately $8.0 million in working capital over the next 12 months in order to fund the initial development to access the Three Sisters and Splay 31 systems, although not all of this capital will be required immediately. Due to the 2024 production challenges described above, the Company does not believe that the mine will generate sufficient cash flow to fund these improvements. The Company is evaluating various financing options in order to fund this development in the near term. The Company raised $2.5 million through a registered direct offering in January 2025. Additionally, the Company raised $3.0 million through its ATM Program in January and February 2025 and plans to utilize it further to raise additional capital as needed throughout the year. Further, in February 2025, the Company sold its interest in Green Light Metals for approximately $0.9 million.

If the Company is unable to obtain this additional capital and successfully develop these new mining areas, the continued operation of the mine may not be possible beyond the first half of 2025. If continued operation of the mine is not possible, the Company may be compelled to place the mine on "care and maintenance" status, which would likely trigger significant severance and other costs, which the Company may not be able to pay.