Gold Resource Corporation Reports Sixth Consecutive Year of Profitability With 2016 Net Income of $4.4 Million, or $0.08 per Share; Provides 2017 Production Outlook

COLORADO SPRINGS, CO--(Marketwired - Feb 28, 2017) - Gold Resource Corporation ( NYSE MKT : GORO ) (the "Company" or "GRC") today announced a sixth consecutive year of profitability reporting $4.4 million in net income or $0.08 per share. The Company also confirmed its previously announced 2016 annual mill production of 27,628 gold ounces and 1,857,658 silver ounces for 53,023 precious metal gold equivalent ounces (at a realized 73.1:1 silver-to-gold ratio). The Company announced its 2017 precious metal Outlook targeting a plus or minus 5 percent production range consisting of 27,500 ounces gold and 1,850,000 ounces silver. Gold Resource Corporation is a gold and silver producer, developer and explorer with operations in Oaxaca, Mexico and Nevada, USA. The Company has returned $109 million to its shareholders in monthly dividends since commercial production commenced July 1, 2010, and offers its shareholders the option to convert their cash dividends into physical gold and silver and take delivery.

"I am very proud to announce that 2016 delivered Gold Resource Corporation's sixth consecutive year of profitability, four years of which were in a difficult bear market," stated Gold Resource Corporation CEO and President, Mr. Jason Reid. "Our Company posted annual net income of $4.4 million or $0.08 per share, returned $1.7 million back to our shareholders through dividends, and continued to invest in the Company's future growth in both Mexico and Nevada while adding cash from operations to our bank account. Our numerous successes during 2016 were accomplished without raising money, without diluting shareholders through equity sales and without going into debt."

For the year ended December 31, 2016, the Company sold 48,725 precious metal gold equivalent ounces at a total cash cost of $548 per gold equivalent ounce. Realized 2016 average sales prices were $1,256 per ounce gold and $17.18 per ounce silver. The Company recorded revenues of $83.2 million, mine gross profit of $22.4 million, and net income of $4.4 million, or $0.08 per share. Base metal production generated $37.8 million in revenue for 2016.

The calculation of our cash cost per ounce contained in this press release is a non-GAAP financial measure. Please see "Management's Discussion and Analysis and Results of Operations" contained in the Company's most recent Form 10-K for a complete discussion and reconciliation of the non-GAAP measures.

The following Production and Sales Statistics table summarizes certain information about our mining operations for the three and twelve months ended December 31, 2016 and 2015:

The Company is targeting 2017 annual production (with ranges based on plus or minus 5%) of 27,500 ounces gold and 1,850,000 ounces silver. The target range was estimated based on the Company's 2017 mine plan, the area of the deposit scheduled to be mined during the upcoming year, planned development during 2017 of the Switchback vein system and estimated grade fluctuations.

In 2017, the Company remains focused on mining tonnes based on net smelter return ("NSR") values per tonne of all metals to maximize cash flow. The Company will continue to focus on its overall margin from both precious and base metal production. Base metal production results in lower production costs per tonne and per ounce when used as a credit against production costs. The Company targets sufficient precious and base metal production in 2017 to support its plans for capital expenditures, exploration, dividends, taxes and future growth.

The Company recently updated its 2016 Oaxaca Mining Unit Proven and Probable ("P&P") Reserve Report as of December 31, 2016 in which it not only replaced the tonnes mined during 2016, but increased reserve tonnage by 15% to 1,891,500 tonnes grading 2.75 grams per tonne ("g/t") gold and 165 g/t silver. The updated report shows gold grades increased by 14%, gold ounces increased by 31%, silver grades increased by 2% and silver ounces increased by 17%. Mine life based on P&P at the Company's Oaxaca Mining Unit has been increased from approximately three to more than four years, assuming 2016 annual processing levels. For historical reference, the Company was in production for three and one half years prior to completing its first P&P reserve report in 2014 and has consistently replaced reserve tonnes year over year in reserve reports since. Not included in the four-year mine life calculation based on P&P is the report's over 2 million tonnes of mineralized material, of which the Company targets to convert into proven and probable reserves over time and with further delineation drilling. For additional details on the updated reserve report, please view the P&P press release dated February 21, 2017. The updated full reserve report will be available on the Company's website in the near future. Third party Proven and Probable gold ounces from the Company's Isabella Pearl development Project in Nevada, U.S.A. are not included in this December 31, 2016 reserve report.

Project Update

In 2016 mine production was centered in the Arista vein system between levels 16 and 20 with additional mill feed coming from the Aguila pit. Mine development accessed the Switchback vein system during the fourth quarter of 2016, and significant underground infrastructure including power, ventilation and pumping has been established for this new section of the Arista mine. In 2016, the Company averaged 1,295 tonnes per day milled or 450,221 tonnes for the year, a 9% increase over 2015 tonnages of 1,220 tonnes per day or 413,626 tonnes per year. The nominal design capacity at the Aguila mill is 1,500 tonnes per day.

The Arista vein system's primary decline ramp development has reached level 23 with continued stope development on multiple levels. Infill and step-out drilling continues to expand the mineralized horizon of the Arista deposit with continued plans to drill vein extensions along strike, at depth and parallel to the deposit.

During the fourth quarter of 2016, Arista Mine ramp development advanced to crosscut the Switchback vein system on level 24. In 2017 the Company plans to develop the Switchback vein system between levels 23 and 27 in preparation for mining in 2018. The Company targets long-term production from Switchback by developing and preparing numerous ore blocks over the next year for future bulk tonnage mining targeted for 2018. A modest amount of Switchback development ore is scheduled to be processed in the mill during 2017.

In October 2016, the Company announced it had received the final mine permit to begin development and production from the Mirador Mine, located at the Oaxaca Mining Unit's Alta Gracia Project. Development is underway and first production is expected from this new mine by the end of the first quarter 2017.

The Company's Nevada Mining Unit acquired 100% interest in two properties located in Mineral County, Nevada, U.S.A. in August 2016. The Isabella Pearl gold project, which contains a third party Proven and Probable Reserve of over 191,000 gold ounces grading 2.18 g/t gold, is in advanced engineering, design and mine permitting. The Company targets first Nevada gold production from Isabella Pearl at the earliest possible point in time subject to receiving a final mine permit, construction timing and funding. The Company also acquired the Mina Gold exploration property with a historic mineralized material estimate of 1,606,000 tonnes grading 1.88 g/t gold.

Exploration Program

The highlight of 2016's Oaxaca Mining Unit's exploration program was the continued expansion and delineation of the Arista Mine's Switchback vein system. Infill drilling at the Switchback vein system was successful in upgrading a significant portion of mineralized material into the proven and probable category. Step-out drilling at Switchback was also successful in expanding the vein system along strike as well.

A total of two exploration drills are currently in operation at the Company's Oaxaca Mining Unit, one underground at the Arista deposit and the other on surface at the Alta Gracia Project. The main exploration focus for 2017 continues to be the extensions of the Arista Mine's Arista vein system and the Switchback vein system, both polymetallic epithermal vein systems which remain open along strike and at depth. Exploration drilling at the Alta Gracia Project is being conducted in and around the Mirador Mine. The Company has budgeted approximately $4.3 million for exploration at its Oaxaca Mining Unit for 2017.

In 2016, the Company completed three successful phases of drilling at its Nevada Mining Unit's Gold Mesa property. High-grade gold was intercepted at or near surface in multiple drill holes at Gold Mesa. The Company plans a fourth phase of drilling at Gold Mesa for spring 2017 with a goal of expanding known mineralization. The Company also completed its first exploration and delineation drill program at the Mina Gold property in December 2016. A phase two drill program is planned at Mina Gold for spring 2017. The Company anticipates spending approximately $2.2 million on exploration in Nevada during 2017, primarily for surface drilling at its Gold Mesa and Mina Gold properties.

Dividends

The Company maintained its instituted $0.02 per share annual dividend during the 2016 year, with dividends being distributed on a monthly basis. In November 2016, the Company's Board of Directors approved a "special" one time dividend of $0.01 per share, which was paid in December 2016. Total dividend distributions for 2016 totaled $1.7 million, or $0.03 per share. The Company has now distributed more than $109 million in dividends back to shareholders since July 2010.

About GRC:

Gold Resource Corporation is a mining company focused on production and pursuing development of gold and silver projects that feature low operating costs and produce high returns on capital. Gold Resource Corporation is a gold and silver producer, developer and explorer with operations in Oaxaca, Mexico and Nevada, USA. The Company has 56,839,823 shares outstanding, zero warrants, zero debt and has returned over $109 million back to its shareholders since commercial production commenced July 1, 2010. Gold Resource Corporation offers its shareholders the option to convert their cash dividends into physical gold and silver and take delivery. For more information, please visit GRC's website, located at www.Goldresourcecorp.com and read the Company's 10-K for an understanding of the risk factors involved.

Cautionary Statements:

This press release contains forward-looking statements that involve risks and uncertainties. The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. When used in this press release, the words "plan," "target," "anticipate," "believe," "estimate," "intend" and "expect" and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, without limitation, the statements regarding Gold Resource Corporation's strategy, future plans for production, future expenses and costs, future liquidity and capital resources, and estimates of mineralized material. All forward-looking statements in this press release are based upon information available to Gold Resource Corporation on the date of this press release, and the company assumes no obligation to update any such forward-looking statements. Forward looking statements involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. The Company's actual results could differ materially from those discussed in this press release. In particular, there can be no assurance that production will continue at any specific rate. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the Company's 10-K filed with the SEC.

See Accompanying Tables

The following information summarizes Gold Resource Corporations financial condition at December 31, 2016 and 2015, its results of operations including the years ended December 31, 2016, 2015 and 2014, and its cash flows for the years ended December 31, 2016, 2015 and 2014. The summary data for the years ended December 31, 2016 and 2015 is derived from our audited financial statements contained in our annual report on Form 10-K for the year ended December 31, 2016, but do not include the footnotes and other information that is included in the complete financial statements. Readers are urged to review the Company's Form 10-K in its entirety, which can be found on the SEC's website at www.sec.gov.

The calculation of our cash cost per precious metal gold equivalent per ounce, total all-in sustaining cost per precious metal gold equivalent per ounce and total all-in cost per precious metal gold equivalent per ounce contained in this press release are non-GAAP financial measures. Please see "Management's Discussion and Analysis and Results of Operations" contained in the Company's most recent Form 10-Q and Form 10-K for a complete discussion and reconciliation of the non-GAAP measures.



GOLD RESOURCE CORPORATION
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share and per share amounts)

			December 31,			December 31,
			2016			2015

ASSETS
Current assets:
	Cash and cash equivalents		$	14,166		$	12,822
	Gold and silver rounds/bullion			3,307			2,988
	Accounts receivable			630			321
	Inventories			8,946			8,753
	Income tax receivable			626			3,794
	Prepaid expenses and other current assets			1,605			3,904
		Total current assets		29,280			32,582
Property, plant and mine development, net				70,059			51,637
Deferred tax assets				17,580			21,064
Other non-current assets				1,542			1,216
		Total assets	$	118,461		$	106,499
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$	5,383		$	11,600
	Mining royalty taxes payable			2,033			230
	Accrued expenses and other current liabilities			1,544			3,036
		Total current liabilities		8,960			14,866
Reclamation and remediation liabilities				2,425			2,815
		Total liabilities		11,385			17,681
Shareholders' equity:
	Preferred stock - $0.001 par value, 5,000,000 shares authorized:
		no shares issued and outstanding		-			-
	Common stock - $0.001 par value, 100,000,000 shares authorized:
		56,903,272 and 56,566,874 shares issued and outstanding, respectively, at December 31, 2016 and 54,603,104 and 54,266,706 shares issued and outstanding, respectively, at December 31, 2015		57			55
	Additional paid-in capital			112,034			96,766
	Accumulated retained earnings (deficit)			2,040			(948	)
	Treasury stock at cost, 336,398 shares			(5,884	)		(5,884	)
	Accumulated other comprehensive loss			(1,171	)		(1,171	)
		Total shareholders' equity		107,076			88,818
		Total liabilities and shareholders' equity	$	118,461		$	106,499


GOLD RESOURCE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share amounts)

			Year ended December 31,
			2016		2015		2014

Sales, net			$	83,227	92,701		115,405
Mine cost of sales:
	Production costs			48,460	54,362		60,241
	Depreciation and amortization			12,169	7,974		4,293
	Reclamation and remediation			165	42		-
		Total mine cost of sales		60,794	62,378		64,534
Mine gross profit				22,433	30,323		50,871
Costs and expenses:
	General and administrative expenses			9,533	10,254		12,336
	Exploration expenses			4,314	7,150		6,947
		Total costs and expenses		13,847	17,404		19,283
Operating income				8,586	12,919		31,588
Other income (expense), net				560	(2,466	)	(322	)
Income before income taxes				9,146	10,453		31,266
	Provision for income taxes			4,759	7,391		16,230
Net income			$	4,387	3,062		15,036
Net income per common share:
	Basic		$	0.08	0.06		0.28
	Diluted		$	0.08	0.06		0.28
Weighted average shares outstanding:
	Basic			55,140,237	54,186,547		54,119,095
	Diluted			55,725,206	54,259,312		54,620,332


GOLD RESOURCE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)

				Year ended December 31,
				2016			2015			2014

Cash flows from operating activities:
		Net income		$	4,387		$	3,062		$	15,036
		Adjustments to reconcile net income to net cash from operating activities:
			Deferred income taxes		(1,555	)		5,133			3,771
			Depreciation, depletion and amortization		12,588			9,097			4,551
			Stock-based compensation		1,240			3,472			4,951
			Other operating adjustments		298			2,874			(107	)
		Changes in operating assets and liabilities:
			Accounts receivable		(309	)		1,095			891
			Inventories		(738	)		(430	)		206
			Prepaid expenses and other current assets		793			233			930
			Accounts payable and other accrued liabilities		(3,579	)		3,357			(2,832	)
			Mining royalty and income taxes payable/receivable		4,695			(7,721	)		10,256
			Other noncurrent assets		79			(2	)		-
		Net cash provided by operating activities			17,899			20,170			37,653
Cash flows from investing activities:
			Capital expenditures		(15,140	)		(26,685	)		(17,898	)
			Proceeds from the sale of equity investments		749			-			-
			Proceeds from sale of property, plant and mine development		-			30			1,763
			Proceeds from sale of subsidiary, net of distributions		-			-			1,291
			Purchase of investments		-			-			(1,805	)
			Acquisitions		(311	)		(122	)		-
			Other investing activities		9			37			32
		Net cash used in investing activities			(14,693	)		(26,740	)		(16,617	)
Cash flows from financing activities:
			Proceeds from the exercise of stock options		391			-			100
			Dividends paid		(1,670	)		(6,502	)		(6,494	)
			Repayment of capital leases		(606	)		(1,501	)		(1,469	)
		Net cash used in financing activities			(1,885	)		(8,003	)		(7,863	)
Effect of exchange rate changes on cash and cash equivalents					23			(146	)		(605	)
Net increase (decrease) in cash and cash equivalents					1,344			(14,719	)		12,568
Cash and cash equivalents at beginning of period					12,822			27,541			14,973
Cash and cash equivalents at end of period				$	14,166		$	12,822		$	27,541
Supplemental Cash Flow Information
	Interest expense paid			$	13		$	78		$	149
	Income and mining taxes paid			$	256		$	9,514		$	939
Non-cash investing activities:
		Common stock issued for the acquisition of Walker Lane Minerals Corp.		$	13,060		$	-			-
		Common stock issued for the acquisition of the Mina Gold property		$	850		$	-			-


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