What changed in GOLD RESOURCE CORP's 10-K — 2022 vs 2023

Metal prices are estimated based on conservative estimates which closely approximate the 12-month low for the metal price as per published exchanges (Comex for precious metals and London Metal Exchange (“LME”) for base metals).

Reclamation costs are allocated to expense over the life of the related assets and are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation and remediation costs.

QUANTITATIVE AND QUALITATIV E DISCLOSURES ABOUT MARKET RISK Our exposure to market risks includes, but is not limited to, the following risks: changes in commodity prices, foreign currency exchange rates, provisional sales contract risks, changes in interest rates, and equity price risks.

We do not use derivative financial instruments as part of an overall strategy to manage market risk; however, we may consider such arrangements in the future as we evaluate our business and financial strategy.

Commodity Price Risk The results of our operations depend in large part upon the market prices of gold, silver, and base metal prices of copper, lead, and zinc. Gold and silver prices fluctuate widely and are affected by numerous factors beyond our control.

The level of interest rates, the rate of inflation, the state of the global or national economies, the stability of exchange rates, the world supply of and demand for gold, silver, and other metals, among other factors, can all cause significant fluctuations in commodity prices.

Such external economic factors are in turn influenced by changes in international investment patterns, monetary systems, and political developments. The price of gold and silver has fluctuated widely in recent years, and future price declines could cause a mineral project to become uneconomic, thereby having a material adverse effect on our business and financial condition.

We have not entered into derivative contracts to protect the selling price for gold or silver. We may in the future more actively manage our exposure through derivative contracts or other commodity price risk management programs.

Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations 59 ​ ​ Table of Contents ​ ​ Effective May 18, 2021, the Company entered into a Trading Agreement with Auramet International LLC that govern non-exchange traded, over-the-counter, spot, forward, and option transactions on both a deliverable and non-deliverable basis involving various metals and currencies.

Subsequently, the Company entered into zinc zero cost collars. These derivatives are not designated as hedges. The zero cost collars are used to manage the Company’s near-term exposure to cash flow variability from zinc price risks. We do not currently use financial instruments with respect to any of the other base metal production.

In addition to materially adversely affecting our reserve estimates, results of operations and/or our financial condition, declining gold and silver prices could require a reassessment of the feasibility of a project. Even if a project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause delays in the implementation of a project.

Foreign Currency Risk Foreign currency exchange rate fluctuations can increase or decrease our costs to the extent that we pay costs in currencies other than the U.S. dollar. We are primarily impacted by Mexican peso rate changes relative to the U.S. Dollar, as we incur approximately 56% of costs in peso in Mexico.

When the value of the peso rises in relation to the U.S. Dollar, some of our costs in Mexico may increase, thus affecting our operating results. Alternatively, when the value of the peso drops in relation to the U.S. Dollar, peso-denominated costs in Mexico will decrease in U.S. Dollar terms.

These fluctuations do not impact our revenues since we sell our metals in U.S. dollars. Future fluctuations may give rise to foreign currency exposure, which may affect our financial results. As of December 31, 2022, we held 3.9 million Mexican Pesos ($0.2 million) and 0.1 million Canadian Dollars ($0.1 million).

We have not utilized market-risk sensitive instruments to manage our exposure to foreign currency exchange rates but may in the future actively manage our exposure to foreign currency exchange rate risk. Provisional Sales Contract Risk We enter into concentrate sales contracts which, in general, provide for a provisional payment to us based upon provisional assays and prices.

The provisionally priced sales contracts contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of concentrates determined at the quoted metal prices at the time of shipment.

The embedded derivative, which does not qualify for hedge accounting, is adjusted to market through revenue each period prior to settlement. Changes in the prices of metals between the shipment and the final settlement date will result in adjustments to revenues related to the sales of concentrate previously recorded upon shipment.

Please see Note 14— Derivatives in Item 8—Financial Statements and Supplementary Data for additional information. Interest Rate Risk None. Equity Price Risk We have in the past, and may in the future, seek to acquire additional funding by sale of common stock and other equity.

The price of our common stock has been volatile in the past and may also be volatile in the future.

As a result, there is a risk that we may not be able to sell our common stock at an acceptable price should the need for new equity funding arise. ​ ​ Gold Resource Corporation—Management’s Discussion and Analysis of Financial Condition and Results of Operations 60 ​ ​ Table of Contents ​ ​ ​ ITEM 8 .

FINANCIAL STATEMENTS AND SUPPLEMENTAR Y DATA ​ ​ ​ ​ ​ Page Index to Financial Statements: ​ ​ ​ ​ ​ ​ Report of Independent Registered Public Accounting Firm (BDO USA, LLP; Spokane, Washington; PCAOB ID#243) ​ 62 ​ Report of Independent Registered Public Accounting Firm (Plante & Moran, PLLC, Denver, Colorado, PCAOB ID#166) ​ 64 ​ Consolidated Balance Sheets at December 31, 2022 and 2021 ​ 65 ​ Consolidated Statements of Operations for the years ended December 31, 2022 and 2021 ​ 66 ​ Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2022 and 2021 ​ 67 ​ Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021 ​ 68 ​ Notes to Consolidated Financial Statements ​ 69 ​ ​ Gold Resource Corporation—Audited Consolidated Financial Statements and Notes 61 ​ ​ Table of Contents ​ ​ Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors Gold Resource Corporation Denver, Colorado Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of Gold Resource Corporation (the “Company”) as of December 31, 2022, the related consolidated statements of operations, changes in shareholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022, and the results of its operations and its cash flows for the year then ended , in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated March 13, 2023 expressed an unqualified opinion thereon.

Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Asset Retirement Obligation As discussed in Notes 1 and 11 to the consolidated financial statements, the Company recorded $8.4 million in asset retirement obligation as of December 31, 2022, with a $6.4 million change in estimate during 2022.

Reclamation costs are allocated to expense over the life of the related assets and are periodically adjusted to reflect changes in the estimated Gold Resource Corporation—Audited Consolidated Financial Statements and Notes 62 ​ ​ Table of Contents ​ ​ present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation and remediation costs.

We identified the estimation of the asset retirement obligation as a critical audit matter, specifically the assumptions used in the change in estimate for 2022. These assumptions included (i) future reclamation and remediation costs expected to be incurred, (ii) discount rate, and (iii) estimated inflation.

Auditing these assumptions involved especially challenging and subjective auditor judgment due to the nature and extent of audit effort required to address these matters.

The primary procedures we performed to address this critical audit matter included: ● Obtaining an understanding of management’s process to develop their asset retirement obligation estimate. ● Testing management’s assumption for future reclamation and remediation costs expected to be incurred by agreeing the amounts to the Company’s asset retirement obligation cost analysis and evaluating management’s experts. ● Performing sensitivity analyses around the discount rate and estimation for inflation, including evaluating contradictory evidence. /s/ BDO USA, LLP We have served as the Company's auditor since 2022.

Spokane, Washington March 13, 2023 ​ Gold Resource Corporation—Audited Consolidated Financial Statements and Notes 63 ​ ​ Table of Contents ​ ​ Report of Independent Registered Public Accounting Firm ​ To the Stockholders and Board of Directors of Gold Resource Corporation ​ Opinion on the Financial Statements ​ We have audited the accompanying consolidated balance sheet of Gold Resource Corporation (the “Company”) as of December 31, 2021 and the related consolidated statements of operations, shareholders’ equity, and cash flows for the year ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). ​ In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. ​ Basis for Opinion ​ These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion. ​ ​ /s/ Plante & Moran, PLLC ​ We have served as the Company’s auditor from 2016 to 2022. ​ Denver, Colorado March 10, 2022 Gold Resource Corporation—Audited Consolidated Financial Statements and Notes 64 ​ ​ Table of Contents ​ ​ GOLD RESOURCE CORPORATION CONSOLIDATED BALANCE SHEET S (U.S. dollars in thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ As of ​ ​ December 31, ​ December 31, ​ Note 2022 ​ 2021 ASSETS ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 23,675 ​ $ 33,712 Accounts receivable, net ​ ​ 5,085 ​ ​ 8,672 Inventories, net 4 ​ 13,500 ​ ​ 10,361 Promissory note 3 ​ - ​ ​ 3,885 Prepaid expenses and other current assets 6 ​ 3,839 ​ ​ 2,285 Total current assets ​ ​ 46,099 ​ ​ 58,915 Property, plant and mine development, net 7 ​ 152,563 ​ ​ 156,771 Other non-current assets 8 ​ 5,509 ​ ​ 76 Total assets ​ $ 204,171 ​ $ 215,762 LIABILITIES AND SHAREHOLDERS' EQUITY ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 13,329 ​ $ 13,308 Income taxes payable, net ​ ​ - ​ ​ 6,801 Mining royalty taxes payable, net ​ ​ 3,945 ​ ​ 2,975 Zinc zero cost collar 17 ​ - ​ ​ 1,844 Contingent consideration 12 ​ 2,211 ​ ​ - Accrued expenses and other current liabilities 9 ​ 5,197 ​ ​ 4,731 Total current liabilities ​ ​ 24,682 ​ ​ 29,659 Reclamation and remediation liabilities 11 ​ 10,366 ​ ​ 3,112 Gold and silver stream agreements liability 10 ​ 43,466 ​ ​ 42,560 Deferred tax liabilities, net 5 ​ 9,224 ​ ​ 13,126 Contingent consideration 12 ​ 2,179 ​ ​ 4,603 Other non-current liabilities 9 ​ 2,490 ​ ​ 1,952 Total liabilities ​ ​ 92,407 ​ ​ 95,012 Shareholders' equity: ​ ​ ​ ​ ​ ​ Common stock - $0.001 par value, 200,000,000 shares authorized: ​ ​ ​ ​ ​ ​ 88,398,109 and 88,338,774 shares outstanding at December 31, 2022 and December 31, 2021, respectively ​ ​ 89 ​ ​ 89 Additional paid-in capital ​ ​ 111,024 ​ ​ 110,153 Retained earnings ​ ​ 7,706 ​ ​ 17,563 Treasury stock at cost, 336,398 shares ​ ​ (5,884) ​ ​ (5,884) Accumulated other comprehensive loss ​ ​ (1,171) ​ ​ (1,171) Total shareholders' equity ​ ​ 111,764 ​ ​ 120,750 Total liabilities and shareholders' equity ​ $ 204,171 ​ $ 215,762 ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ Gold Resource Corporation—Audited Consolidated Financial Statements and Notes 65 ​ ​ Table of Contents ​ ​ GOLD RESOURCE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS for the years ended December 31, 2022 and 2021 (U.S. dollars in thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ ​ December 31, ​ Note ​ 2022 ​ 2021 ​ ​ ​ ​ ​ ​ ​ ​ Sales, net 2 ​ $ 138,724 ​ $ 125,196 Cost of sales: ​ ​ ​ ​ ​ ​ ​ Production costs ​ ​ ​ 80,949 ​ ​ 72,234 Depreciation and amortization ​ ​ ​ 27,226 ​ ​ 15,996 Reclamation and remediation ​ ​ ​ 801 ​ ​ 219 Total cost of sales ​ ​ ​ 108,976 ​ ​ 88,449 Mine gross profit ​ ​ ​ 29,748 ​ ​ 36,747 Costs and expenses: ​ ​ ​ ​ ​ ​ ​ General and administrative expenses ​ ​ ​ 8,048 ​ ​ 6,900 Mexico exploration expenses ​ ​ ​ 4,244 ​ ​ 4,831 Michigan Back Forty Project expenses ​ ​ ​ 8,805 ​ ​ 55 Restructuring expenses ​ ​ ​ - ​ ​ 2,423 Stock-based compensation 16 ​ ​ 1,955 ​ ​ 875 Realized and unrealized loss on zinc zero cost collar 17 ​ ​ 170 ​ ​ 3,000 Other expense, net 18 ​ ​ 4,288 ​ ​ 1,020 Total costs and expenses ​ ​ ​ 27,510 ​ ​ 19,104 Income before income taxes ​ ​ ​ 2,238 ​ ​ 17,643 Provision for income taxes 5 ​ ​ 8,559 ​ ​ 9,615 Net (loss) income ​ ​ $ (6,321) ​ $ 8,028 Net (loss) income per common share: ​ ​ ​ ​ ​ ​ ​ Basic and diluted net (loss) income per common share 19 ​ $ (0.07) ​ $ 0.11 ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding: ​ ​ ​ ​ ​ ​ ​ Basic 19 ​ ​ 88,368,250 ​ ​ 75,301,253 Diluted 19 ​ ​ 88,368,250 ​ ​ 75,608,627 ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ Gold Resource Corporation—Audited Consolidated Financial Statements and Notes 66 ​ ​ Table of Contents ​ ​ GOLD RESOURCE CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUIT Y for the years ended December 31, 2022 and 2021 (U.S. dollars in thousands, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Common Shares ​ Par Value of Common Shares ​ Additional Paid- in Capital ​ Retained Earnings ​ Treasury Stock ​ Accumulated Other Comprehensive Loss ​ Total Shareholders' Equity Balance, December 31, 2020 ​ 74,713,356 ​ $ 75 ​ $ 84,865 ​ $ 12,653 ​ $ (5,884) ​ $ (1,171) ​ $ 90,538 Stock-based compensation ​ - ​ ​ - ​ ​ 671 ​ ​ - ​ ​ - ​ ​ - ​ ​ 671 Net stock options exercised ​ 237,719 ​ ​ - ​ ​ 288 ​ ​ - ​ ​ - ​ ​ - ​ ​ 288 Common stock issued for vested restricted stock units ​ 75,262 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - Dividends declared (1) ​ - ​ ​ - ​ ​ - ​ ​ (3,118) ​ ​ - ​ ​ - ​ ​ (3,118) Issuance of stock, net of issuance costs ​ 13,714,630 ​ ​ 14 ​ ​ 24,536 ​ ​ - ​ ​ - ​ ​ - ​ ​ 24,550 Surrender of stock for taxes due on vesting ​ (65,795) ​ ​ - ​ ​ (207) ​ ​ - ​ ​ - ​ ​ - ​ ​ (207) Net income ​ - ​ ​ - ​ ​ - ​ ​ 8,028 ​ ​ - ​ ​ - ​ ​ 8,028 Balance, December 31, 2021 ​ 88,675,172 ​ $ 89 ​ $ 110,153 ​ $ 17,563 ​ $ (5,884) ​ $ (1,171) ​ $ 120,750 Stock-based compensation ​ - ​ ​ - ​ ​ 1,240 ​ ​ - ​ ​ - ​ ​ - ​ ​ 1,240 Stock options exercised - settled in cash ​ - ​ ​ - ​ ​ (331) ​ ​ - ​ ​ - ​ ​ - ​ ​ (331) Common stock issued for vested restricted stock units ​ 80,169 ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - ​ ​ - Dividends declared (1) ​ - ​ ​ - ​ ​ - ​ ​ (3,536) ​ ​ - ​ ​ - ​ ​ (3,536) Cancellation of shares related to the Aquila acquisition (2) ​ (16,249) ​ ​ - ​ ​ (29) ​ ​ - ​ ​ - ​ ​ - ​ ​ (29) Surrender of stock for taxes due on vesting ​ (4,585) ​ ​ - ​ ​ (9) ​ ​ - ​ ​ - ​ ​ - ​ ​ (9) Net loss ​ - ​ ​ - ​ ​ - ​ ​ (6,321) ​ ​ - ​ ​ - ​ ​ (6,321) Balance, December 31, 2022 ​ 88,734,507 ​ $ 89 ​ $ 111,024 ​ $ 7,706 ​ $ (5,884) ​ $ (1,171) ​ $ 111,764 ​ (1) Cash dividends declared per share was $0.04 for both 2022 and 2021.

Cash dividends paid per share was $0.04 and $0.0433 for 2022 and 2021, respectively. Dividends declared and dividends paid to stockholders differed in 2021 due to timing of payments of some dividends declared in 2020. In December 2020, a $0.0033 per share dividend was declared, which was paid to shareholders only in 2021.

(2) Aquila formerly issued shares related to RebGold/BacTech Mining Arrangement Agreement that expired in 2020.

As these shares were not redeemed prior to expiration, the shares should have been struck by Aquila’s transfer agent prior to issuing GRC shares on December 10, 2021 in connection with the acquisition by GRC. ​ The accompanying notes are an integral part of these consolidated financial statements. ​ Gold Resource Corporation—Audited Consolidated Financial Statements and Notes 67 ​ ​ Table of Contents ​ ​ GOLD RESOURCE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOW S for the years ended December 31, 2022 and 2021 (U.S. dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ Note 2022 ​ 2021 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net (loss) income ​ $ (6,321) ​ $ 8,028 Adjustments to reconcile net (loss) income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ Deferred income tax benefit ​ ​ (3,545) ​ ​ (2,216) Depreciation and amortization, including amortization in reclamation ​ ​ 27,364 ​ ​ 16,147 Stock-based compensation ​ ​ 1,955 ​ ​ 875 Other operating adjustments 21 ​ 44 ​ ​ 2,707 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Accounts receivable ​ ​ 3,587 ​ ​ (4,446) Inventories ​ ​ (2,550) ​ ​ (708) Prepaid expenses and other current assets ​ ​ (724) ​ ​ (263) Other noncurrent assets ​ ​ 249 ​ ​ (8) Accounts payable and other accrued liabilities ​ ​ 284 ​ ​ 5,930 Mining royalty and income taxes payable, net ​ ​ (6,186) ​ ​ 8,737 Net cash provided by operating activities ​ ​ 14,157 ​ ​ 34,783 ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ Capital expenditures ​ ​ (18,233) ​ ​ (20,610) Equity investment ​ ​ (1,743) ​ ​ - Cash acquisition costs, net of cash acquired ​ ​ - ​ ​ (2,363) Proceeds from the sale of gold and silver rounds ​ ​ 533 ​ ​ - Net cash used in investing activities ​ ​ (19,443) ​ ​ (22,973) ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ (Cash settlement of) proceeds from stock options exercise ​ ​ (376) ​ ​ 300 Dividends paid ​ ​ (3,536) ​ ​ (3,366) Other financing activities ​ ​ - ​ ​ 3 Net cash used in financing activities ​ ​ (3,912) ​ ​ (3,063) Effect of exchange rate changes on cash and cash equivalents ​ ​ (839) ​ ​ (440) ​ ​ ​ ​ ​ ​ ​ Net (decrease) increase in cash and cash equivalents ​ ​ (10,037) ​ ​ 8,307 Cash and cash equivalents at beginning of period ​ ​ 33,712 ​ ​ 25,405 Cash and cash equivalents at end of period ​ $ 23,675 ​ $ 33,712 ​ ​ ​ ​ ​ ​ ​ Supplemental Cash Flow Information ​ ​ ​ ​ ​ ​ Interest expense paid ​ $ - ​ $ - Income and mining taxes paid ​ $ 18,594 ​ $ 4,939 Non-cash investing activities and financing: ​ ​ ​ ​ ​ ​ Change in capital expenditures in accounts payable ​ $ (410) ​ $ 684 Change in estimate for asset retirement costs ​ $ 6,384 ​ $ 7 Green Light Metals shares received for promissory note ​ $ 3,611 ​ $ - Issuance (cancellation) of shares related to the Aquila acquisition ​ $ (29) ​ $ 24,550 ​ The accompanying notes are an integral part of these consolidated financial statements.

Gold Resource Corporation 68 Table of Contents ​ ​ GOLD RESOURCE CORPORATION NOTES TO CONSOLIDATED F INANCIAL STATEMENTS December 31, 2022 and 2021 1. Nature of Operations and Summary of Significant Accounting Policies Nature of Operations Gold Resource Corporation (the “Company”) was organized under the laws of the State of Colorado on August 24, 1998.

The Company is a producer of doré containing gold and silver and metal concentrates that contain gold, silver, copper, lead, and zinc in Oaxaca, Mexico. The Company also has 100% interest in the Back Forty Project, an advanced Exploration Stage Property, located in Menominee County, Michigan, USA.

Acquisition On December 10, 2021, the Company completed the acquisition of all the issued and outstanding common shares of Aquila Resources Inc. Aquila’s principal asset is its 100% interest in the Back Forty Project located in Menominee County, Michigan, USA. The Back Forty Project has a polymetallic (gold, silver, copper, silver, lead, and zinc) Volcanogenic Massive Sulfide deposit.

The Back Forty Project controls surface and mineral rights through ownership, leases with the State of Michigan, and royalties with private parties. The Company considered the appropriate accounting treatment with regards to the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 805 Business Combinations and determined it was appropriate to account for this transaction as an asset acquisition.

Please see Note 23—Aquila Acquisition in Item 8—Financial Statements and Supplementary Data for additional information. Significant Accounting Policies Basis of Presentation The consolidated financial statements included herein are expressed in United States dollars and conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The consolidated financial statements include the accounts of the Company, its Mexican subsidiary, Don David Gold Mexico S.A. de C.V., and Aquila and its subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

Asset Acquisition The Company considers the appropriate accounting treatment with regards to the Financial Accounting Standards Board’s ASC 805 Business Combinations for all material merger and acquisition transactions as they occur. The facts and circumstances of each transaction are evaluated to determine the appropriate accounting.

Please see Note 23—Aquila Acquisition in Item 8—Financial Statements and Supplementary Data for additional information regarding the accounting for the Aquila Transaction that closed on December 10, 2021. Segment Reporting The Company has organized its operations into three geographic regions. The geographic regions include Oaxaca, Mexico, Michigan, U.S.A., and Corporate and Other.

Oaxaca, Mexico represents the Company’s only production stage property. Michigan, U.S.A. is an advanced exploration stage property. The Company’s business activities that are not considered production stage or advanced exploration stage properties are included in Corporate and Other . Gold Resource Corporation 69 Table of Contents ​ ​ Use of Estimates The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

The more significant areas requiring the use of management estimates and assumptions relate to Mineral Resources and Mineral Reserves that are the basis for future cash flow estimates utilized in impairment calculations and units-of-production depreciation calculations; asset and liability valuation related to acquisitions; accounting for asset acquisitions; future metal prices, especially as it relates to zinc zero cost collar; environmental remediation, reclamation and closure obligations; estimates of recoverable gold and other minerals in stockpiles; write-downs of inventory, stockpiles to net realizable value; valuation allowances for deferred tax assets and liabilities; valuation of contingent considerations and gold and silver stream agreements, provisional amounts related to income tax effects of newly enacted tax laws; and stock-based compensation.

Management routinely makes judgments and estimates about the effects of matters that are inherently uncertain and bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.

Reclassifications Certain amounts presented in prior periods have been reclassified to conform to the current period presentation. Starting in 2022, the Company stopped presenting Gold and Silver Rounds as a separate line item in the Consolidated Balance Sheets. Gold and Silver Rounds are now included within prepaid expenses and other current assets.

In 2021, accrued expenses and other current liabilities included the liability for the zinc zero cost collar, which is presented in a separate line on the Consolidated Balance Sheets in 2022. In 2021, exploration expenses included both the Don David Gold Mine (“DDGM”) exploration expenses and the Back Forty Project expenses.

In 2022, these are presented on separate lines in the Consolidated Statements of Operations. The reclassifications had no effect on the Company’s results of operations or financial condition. Cash and Cash Equivalents Cash and cash equivalents consist of all cash balances and highly liquid investments with a remaining maturity of three months or less when purchased.

Cash held in Mexican Pesos or Canadian Dollars is converted to U.S. Dollars at the closing exchange rate at year end.

Accounts Receivable, net Accounts receivable consists of trade receivables, which are recorded net of allowance for doubtful accounts from the sale of doré and metals concentrates, as well as net of an embedded derivative based on mark-to-market adjustments for outstanding provisional invoices based on forward metal prices.

Item 1A. Risk Factors , below for additional information. Competitive Business Conditions The acquisition of gold and silver properties is subject to intense competition. Identifying and evaluating potential mining prospects is a costly and time-consuming endeavor. In 2021, we successfully acquired the Back Forty Project as discussed above.

We expect to continue our significant investment in exploration and growth activities in the future; however, competition for acquiring mineral prospects will continue to be intense.

Government Regulations and Permits In connection with mining, milling, and exploration activities in Mexico, we are subject to Mexican federal, state, and local laws and regulations governing the protection of the environment, including laws and regulations relating to the protection of air and water quality, hazardous waste management, mine reclamation, as well as the protection of endangered or threatened species.

The government department responsible for environmental protection in Mexico is Secretaria de Medio Ambiente y Recursos Naturales (“SEMARNAT”). SEMARNAT has broad authority over environmental regulations and standards. Potential areas of environmental consideration for mining companies, such as ours, include but are not limited to acid rock drainage, cyanide containment and handling, contamination of water sources, dust, and noise.

For operations at our Don David Gold Mine, we have secured and continue to maintain various regulatory permits from federal, state, and local agencies.

These governmental and regulatory permits generally govern the processes being used to operate, the stipulations concerning air quality, water issues, hazardous and waste management, and the plans and obligations for reclamation of the properties at the conclusion of operations. These laws and regulations are continually changing and are generally becoming more restrictive.

Our production stage mines in Mexico have reclamation plans in place that we believe meet all applicable legal and regulatory requirements. As of December 31, 2022, $10.4 million has been accrued on our Consolidated Balance Sheets for reclamation costs relating to our production and exploration stage properties in Mexico.

The State of Michigan has been delegated authority under federal environmental law to issue all necessary environmental permits required for the Back Forty project.

The State of Michigan’s “Natural Resource Environmental Protection Act” provides rules and regulations for the State Department of Environment, Great Lakes and Energy (EGLE) to issue permits for mining, treated wastewater discharge, air emissions, and related environmental permits necessary for the project. Customers During the year ended December 31, 2022, two customers accounted for 84% of our revenue from DDGM.

In the event that our relationship with any of the customers is interrupted for any reason, we believe that we would be able to locate another entity to purchase our products in a timely manner on substantially similar terms. However, any interruption could temporarily disrupt the sale of our principal products and materially adversely affect our operating results.

We periodically review our options for alternative sales outlets to mitigate the concentration of risk in case of any unforeseen disruptions. Human Capital Resources We value excellence and recognize that embracing the diverse backgrounds, skills, and perspectives of the workforce will lead to a competitive advantage.

We are committed to leading by example and maintaining a fair and Gold Resource Corporation 10 ​ ​ Table of Contents ​ ​ inclusive work environment built on mutual respect and integrity.

Diversity means understanding, accepting, respecting, and valuing differences among people regardless of age, gender, race, ethnicity, culture, religion or spiritual practices, disabilities, sexual orientation, gender identity, family status, or veteran status. We believe we have good morale and a dedicated workforce.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing employees and new hires.

The principal purposes of our equity incentive plans are to attract, retain, and motivate selected employees and directors by granting stock-based compensation awards that align employee compensation with shareholder returns. ​ DDGM Employees ​ As of December 31, 2022, the Company had 16 full-time corporate employees, and three of them serve as executive officers.

Additionally, we had six full-time employees in Michigan who are fully dedicated to progressing the Back Forty Project. On April 23, 2021, the Federation’s Official Gazette published a decree that reformed labor outsourcing in Mexico. Operating companies can no longer source labor resources used to carry out their core business functions from service entities or third-party providers.

As a result of this transition, DDGM employed approximately 530 employees at the end of 2021 and 565 employees at the end of 2022. Under Mexican law, employees are entitled to receive statutory profit sharing (Participacion a los Trabajadores de las Utilidades or “PTU”) payments.

PTU payments for 2022 are expected to be approximately $2.2 million and be paid in the first half of 2023. Gold Resource Corporation 11 ​ ​ Table of Contents ​ ​ ITEM 1A . RISK FACTORS Our business, and the mining industry in general, is influenced by significant risks and uncertainties.

These risks include those described below and may include additional risks and uncertainties not presently known to us or that we currently deem immaterial. Our business, financial condition, and results of operations could be materially adversely affected by any of these risks, and the trading price of our common stock could decline by virtue of these risks.

These risks should be read in conjunction with the other information in this annual report on Form 10-K. Financial Risks Our results of operations, cash flows, and the value of our properties are highly dependent on the market prices of gold, silver, and certain base metals, and these prices can be volatile.

The profitability of our mining operations and the value of our mining properties are directly related to the market price of gold, silver, copper, lead, and zinc. The price of gold and silver may also significantly influence the market price of our common stock.

The market prices of these metals historically have fluctuated significantly and are affected by numerous factors beyond our control, including (i) global or regional consumption patterns; (ii) supply of and demand for silver and gold on a worldwide basis; (iii) speculative and hedging activities; (iv) expectations for inflation; (v) political and economic conditions; (vi) supply of, and demand for, consumables required for extraction and processing of metals, and (vii) general economic conditions worldwide.

Over the last five years, gold prices (as reported on the London Metal Exchange) have fluctuated from a low of $1,178 per ounce to a high of $2,067 per ounce, and silver prices have fluctuated from a low of $12.01 per ounce to a high of $29.59 per ounce.

On March 9, 2023, gold and silver prices were $1,831 per ounce and $20.12 per ounce, respectively. We do not currently use hedging transactions with respect to any of our gold and silver production, and we do not plan to do so. Accordingly, we are fully exposed to price fluctuations in precious metals.

Effective May 18, 2021, the Company entered into a Trading Agreement with Auramet International LLC that govern non-exchange traded, over-the-counter, spot, forward, and option transactions on both a deliverable and non-deliverable basis involving various metals and currencies. Subsequently, the Company entered into zinc zero cost collars, but as of the end of 2022, the current program concluded.

Management may restart the program in the future depending on the market. These derivatives were not designated as hedges. The zero cost collars were used to manage the Company’s near-term exposure to cash flow variability from zinc price risks. We do not currently use financial instruments with respect to any of the other base metal production.

In the event metal prices decline or remain low for prolonged periods of time, we might be unable to develop our exploration properties, which may materially adversely affect our results of operations, financial performance, and cash flows.

An asset impairment charge may result from the occurrence of unexpected adverse events that impact our estimates of expected cash flows generated from our mining operations or the market value of our non-producing properties, including a material diminution in the price of metals. We may not achieve profitability.

Our DDGM property is the only property we own that produces revenue, and it may not generate sufficient cash flow to cover our operating, development, exploration, general and administrative, and other costs due to certain risk factors .

Unexpected interruptions in our mining business may cause us to incur losses, or the revenue that we generate from extraction may not be sufficient to fund continuing operations, including exploration and mine development costs. Our failure to generate future profits may materially adversely affect the price of our common stock, and stockholders may lose all or part of their investment.

Metal prices have a significant impact on our profit margin, and there is no assurance that we will be profitable in the future.

See “ Risk Factors – Our results of operations, cash flows, and the value of our properties are highly dependent on the market prices of gold, silver, and certain base metals and these prices can be volatile .” Gold Resource Corporation 12 ​ ​ Table of Contents ​ ​ We may not have access to sufficient future capital.

We may be required to expend significant funds to determine if Mineral Reserves exist at any of our non-producing properties, continue exploration, and if warranted, develop our existing properties and identify and acquire additional properties to diversify our property portfolio.

Our ability to obtain necessary funding for these purposes, in turn, depends upon several factors, including our historical and prospective results of operations, the status of the national and worldwide economy, the price of gold, silver, and other metals, the condition of the debt and equity markets, the costs associated with extracting and acquiring minerals, and the market value for our common stock.

We may not be successful in generating or obtaining the required financing, or if we can obtain such financing, such financing may not be on terms that are favorable to us and our shareholders. We also may be unable to obtain funding by monetizing additional non-core exploration or other assets at an acceptable price.

We cannot assure you that we will be able to obtain financing to fund our general and administrative costs and other working capital needs to fund our continuing business activities in the future on favorable terms or at all.

Failure to obtain financing could result in delay or indefinite postponement of further mining operations, exploration, and construction, as well as the possible partial or total loss of our interest in our properties. Our ability to recognize the benefits of deferred tax assets is dependent on future cash flows and taxable income.

We recognize deferred tax assets when the tax benefit is more likely than not to be realized; otherwise, a valuation allowance is applied against deferred tax assets. Assessing the recoverability of deferred tax assets requires management to make significant estimates related to expectations of future taxable income.

Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, our ability to realize the deferred tax assets could be impacted.

Additionally, future changes in tax laws could limit our ability to realize the future tax benefits represented by our deferred tax assets. Our accounting and other estimates may be imprecise .

Item 2. Properties for additional information. Administrative Offices: Our principal executive offices are located at 7900 E. Union Ave, Suite 320, Denver, Colorado 80237, and our telephone number is (303) 320-7708. The Company maintains a website at www.goldresourcecorp.com .

Information on our website is not incorporated into this annual report on Form 10-K and is not a part of this report. The U.S. Securities and Exchange Commission (“SEC”) maintains an internet site (www.sec.gov) on which the reports that we file with the SEC are available to review. The SEC filings can also be accessed through our website.

Before the Aquila Transaction, Aquila’s common shares were traded on the Toronto Stock Exchange (“TSX”) under the ticker symbol AQA. Effective December 10, 2021, Aquila ceased to be a reporting issuer in British Columbia, Alberta, Saskatchewan, Ontario, and Nova Scotia.

At the same time, GRC became a reporting issuer in British Columbia, Alberta, Saskatchewan, Ontario, and Nova Scotia by virtue of the completion of the acquisition. As a Canadian Issuer, GRC is now required to file reports on the System for Electronic Document Analysis and Retrieval (“SEDAR”) in Canada.

All financial statements filed on SEDAR will conform to United States Generally Accepted Accounting Principles (“U.S. GAAP”). Gold Resource Corporation 7 ​ ​ Table of Contents ​ ​ 2022 Developments For the year ended December 31, 2022, the Company reported a net loss of $6.3 million.

The loss is mainly a result of the Company’s investment in the Back Forty Project and higher depreciation, depletion, and amortization at DDGM. Financial results for 2022 include revenue of $138.7 million and mine gross profit of $29.7 million.

The Company achieved solid production results for the year totaling 34,122 gold ounces, 1,213,404 silver ounces, 1,436 copper tonnes, 6,665 lead tonnes, and 17,943 zinc tonnes despite DDGM experiencing some ground support challenges.

Production, mine development, and exploration at the mine were temporarily slowed in the third and fourth quarters of 2022 to improve safety specific to ground support and ventilation. ​ Eighth consecutive ESR award ​ The Company published its 2022 inaugural Environmental, Social, and Governance (“ESG”) Report on March 8, 2023.

For the eighth consecutive year, the Don David Gold Mine received the prestigious ESR award from the Mexican Center for Philanthropy (“CEMEFI”). Awards are given to organizations that demonstrate a commitment to supporting social and environmental protection programs within their local communities.

Our 2022 exploration activities were focused on drilling at the Arista and Switchback vein systems in the Arista Mine. We completed 182 underground diamond drill holes totaling 34,829 meters, including 24 expansion drill holes totaling 11,969 meters and 158 infill drill holes totaling 22,860 meters inside the Arista mine during 2022.

During 2022, we completed 1,001 meters of drift development to position us for a successful 2023 drilling program. The Arista system drill program targeted the delineation of multiple high-grade narrow veins up- and down-dip of existing workings to define additional Mineral Reserves.

The Switchback drill program, including the Three Sisters vein system, targeted the expansion and delineation of multiple high-grade parallel veins to define additional Mineral Reserves and Mineral Resources.

For the Back Forty Project, work continued throughout 2022 on an optimized feasibility study. The engineering team continues to evaluate and improve all aspects of the project design and the basis of estimates. Trade-off studies, improved estimates, and improved metallurgical recovery work are ongoing and expected to be completed in the first half of 2023.

Pending favorable results, the Company will apply for all necessary permits. The Company continues to monitor a Petition by the Menominee Indian Tribe of Wisconsin (MITW) to have an area along the Menominee River, which includes a portion of the mine area, registered as a cultural landscape with the Keeper of the National Register of Historic Places.

We are also monitoring the U.S. Army Corps of Engineers’ review of a petition by the MITW to have the Menominee River designated as Navigable under Section 10 of the Rivers and Harbor Act.

Gold Resource Corporation 8 ​ ​ Table of Contents ​ ​ 2023 Guidance The Company’s focus continues to be on unlocking the value of the Arista mine, existing infrastructure, and large property position in Oaxaca, Mexico. Therefore, we plan to make significant investments for infrastructure and exploration in 2023.

Additionally, we will continue to work toward the delivery of the optimized feasibility study for the Back Forty Project and preparatory work for future submission of permit applications. ​ ​ Measure 2023 Guidance Payable Production 17,000 to 19,000 Gold Ounces 900,000 to 1,000,000 Silver Ounces 30,000 to 31,000 Gold Equivalent Ounces Cash Costs after co-product credits per gold equivalent AuEq ounce (1) $1,000 to $1,050 All-in Sustaining Costs after co-product credits per AuEq ounce (1) (2) DDGM: $1,250 to $1,350 Consolidated: $1,650 to $1,750 Capital Investment $6 to $7 million Exploration Commitment $3 to $4 million Sustaining Exploration $6 to $7 million Growth Exploration General and Administrative Costs (“G & A”) $8.5 to $9.5 million, excluding Stock-based Compensation (1) Calculations of cash cost after co-product credits per gold equivalent ounce and all-in sustaining cost after co-product credits per gold equivalent ounce are non-GAAP financial measures.

Please see the “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Measures” below for a complete reconciliation of the non-GAAP measures to U.S. GAAP. (2) Co-product credits directly impact the Cash Costs and AISC per AuEq ounce calculation.

Guidance is based on approximately 4,200 tonnes of lead sold at an $0.91 per pound metal price, approximately 1,200 tonnes of copper sold at a $3.80 per pound metal prices, and 11,200 tonnes of zinc sold at a $1.40 per pound metal price. The table above contains forward-looking projections about our financial condition, results of operations, and business.

These projections are subject to numerous assumptions, risks, and uncertainties, which are discussed in Item 1A. Risk Factors . Because these projections are subject to risks and uncertainties, actual results may differ materially from those expressed or implied. See Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Measures below for a discussion of the calculation of Cash Costs per Ounce and All-in Sustaining Costs per Ounce, which are non-GAAP measures. Dividends During 2022, we paid dividends of $0.04 per share.

In February 2023, we announced the suspension of our quarterly dividend until such time that it may become practicable to reinstate. Please see Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities for additional information regarding our Dividend Policy .

Insurance Our business is capital intensive and requires ongoing investment for the replacement, modernization, or expansion of equipment and facilities. For more information, please see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources , below.

We maintain insurance policies against Gold Resource Corporation 9 ​ ​ Table of Contents ​ ​ property loss and business interruption and insure against most risks that are typical in the operation of our business in amounts that we believe to be reasonable.

Such insurance, however, contains exclusions and limitations on coverage, particularly with respect to property loss, environmental liability, and political risk. There can be no assurance that claims would be paid under such insurance policies in connection with a particular event. Please see