Overview of Financial Performance

Gold Resource Corporation reported net sales of $8.2 million in Q1 2024, a 65% decrease compared to $21.5 million in Q1 2023. Net loss was $2.0 thousand in Q1 2024 compared to net income of $6.4 million in Q1 2023. The decrease in sales and swing to a net loss was primarily driven by lower production and sales volumes of gold.

Gold production decreased 65% to 3,983 ounces in Q1 2024 from 11,487 ounces in Q1 2023. The lower production was attributed to mining lower grade ore from the Civit Cat area while awaiting permit approval to access higher grade ore from the Pearl pit.

Financial Metric	Q1 2024	Q1 2023	Change
Net Sales	$8.2 million	$21.5 million	-65%
Net Income/(Loss)	($2.0 thousand)	$6.4 million	-100%
Gold Ounces Produced	3,983 oz	11,487 oz	-65%

Revenue and Profit Trends

Revenue decreased 65% in Q1 2024 compared to Q1 2023, driven by a 65% decrease in gold ounces sold partially offset by a 10% increase in average realized gold price. The average realized gold price was $2,072/oz in Q1 2024 compared to $1,889/oz in Q1 2023.

Mine gross profit fell 66% from $12.3 million in Q1 2023 to $4.2 million in Q1 2024. Lower sales volumes were the primary driver of the decreased profitability.

General and administrative costs were flat at $1.2 million in Q1 2024 compared to $1.1 million in Q1 2023. Exploration expenses remained high at $3.6 million in Q1 2024 compared to $3.7 million in Q1 2023, as the company continued investing in exploration programs at East Camp Douglas, County Line, Isabella Pearl, and other properties.

Strengths and Weaknesses

Key strengths demonstrated during the quarter:

• Strong balance sheet with $41.9 million in cash and $63.3 million in working capital as of March 31, 2024
• Progress on exploration programs at key properties
• Higher average realized gold price

The clear weakness during the quarter was the low production and sales volumes resulting from mining lower grade ore. Grade-related operational challenges present the biggest risk to profitability in coming quarters if permitting delays continue to prevent mining higher grade ore.

Future Outlook

The outlook commentary indicates Gold Resource Corp expects improved production and financial performance in coming quarters based on the following factors:

• Advancement of permitting to support mining higher grade ore at Isabella Pearl
• Ongoing exploration drilling at Scarlet trend near Isabella Pearl to expand production
• Exploration and drilling programs progressing at County Line, Golden Mile, East Camp Douglas and other properties
• Drilling expected to commence at newly acquired Dauntless property in Q2 2024

The company’s liquidity position remains strong with cash and working capital to fund budgeted operations, exploration, and capital programs over the next 12 months. However, the Biden administration’s mining policies, BLM permitting delays, inflationary pressures, and other risk factors present uncertainties around the timing and level of production and earnings growth.

Financial Tables

Three months ended March 31	2024	2023
Ore Mined (tonnes)	66,496	106,475
Ore Grade (g/t)	0.69	3.83
Gold Produced (oz)	3,983	11,487
Gold Sold (oz)	3,970	11,429
Average Gold Price	$2,072/oz	$1,889/oz
Total Cash Cost	$661/oz	$499/oz
AISC	$777/oz	$578/oz

Non-GAAP Reconciliations

Three Months Ended March 31, 2024
Total Cash Cost
Treatment/Refining Charges
Depreciation/Amortization
Reclamation/Remediation
Total Mine Cost of Sales

Capital Resources

• Cash balance of $41.9 million as of March 31, 2024
• Working capital of $63.3 million as of March 31, 2024
• Cash used in operations was $2.9 million in Q1 2024
• Cash used in investing activities was $1.1 million in Q1 2024
• Cash used in financing activities was $2.8 million in Q1 2024, primarily for dividends

The company believes its liquidity position is adequate to fund budgeted expenditures over the next 12 months. However, low production, permitting delays, inflationary pressures, and other risks remain as uncertainties.