THE TIMELESS PRECIOUS METAL FUND

THE TIMELESS ENERGY FUND

SIERRA MADRE GOLD & SILVER VENTURE CAPITAL FUND

OCTOBER 19, 2011

Home page of Gold Resource Corp.

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ON THE ROAD TO PRODUCING 200,000 OUNCES OF GOLD EQUIVALENT IN OAXACA, MEXICO, AT LESS THAN USD 200 CASH COST PER OUNCE

Business Summary

Gold Resource Corporation's objective is to create shareholder value by establishing production and generating superior financial performance through the development of gold and silver projects that feature low operating costs and produce high returns on capital. Management's commitment to shareholder value is reflected in the disciplined approach it has taken to the Company's capital structure, its focus on rapid project execution and its goal of meaningful dividend distributions.

GRC's initial exploration efforts have been focused on the El Aguila project, a property featuring high-grade gold and silver mineralization located in Oaxaca, Mexico. Recent discoveries indicate the project is well suited for GRC's performance targets.

An independent scoping study indicated cash production costs of approximately $100 per ounce of gold, and an annual return-on-capital of greater than 100%, indicating a capital payback of less than one year.

Management has established an aggressive schedule for the El Aguila project, initially targeting production mid-2009.  In actual fact, GRC began producing in January 2010, delivering on what was still a quite tight schedule.

Three additional project opportunities have been established in relatively close proximity to El Aguila: the Las Margaritas silver property, the El Rey gold property, and the Solaga silver property. Collectively, they provide the Company with a pipeline of potential projects that would expand and diversify the Company's precious metal production profile. The Company plans to have four high-grade properties feeding one mill.

Why Mexico?

Mexico is one of the world's leading venues for mineral potential and has a 500-year history of mining. The Fraser Institute's 2004/2005 Mining Survey ranked Mexico fifth out of 64 worldwide venues in current mineral potential. Additionally, Mexico ranked eighth in the same survey for composite policy and mineral potential.

El Aguila Project

Exploration: El Aguila cross section

The El Aguila Project, located 120 kilometers southeast of the capital city of Oaxaca, Mexico, is a significant, newly discovered high-grade gold and silver system. The property has yielded several exceptional gold and silver surface samples, including a 36 grams-per-ton (g/t) gold sample and a 3,100 g/t silver sample. *

The first drill hole initiated from the area of these surface samples resulted in the discovery of 16 meters of mineralization at 6.56 g/t of gold. Subsequent drilling identified a shallow, sub-horizontal mineralized zone (manto) with an inferred grade of 7.43 g/t of gold and 63 g/t of silver. The Company believes the discovery can be mined via an economical, shallow open pit.

The second round of drilling confirmed and expanded this initial mineralization and established the possibility of additional vein mineralization at El Aire, located 2 kilometers south east from El Aguila along the same important structural corridor, with the best intercept of 4 meters of 1.9 g/t of gold and 755 g/t of silver.

Management believes this limited, early work on one very small portion of the property is an encouraging indicator, as there are numerous additional areas along this important structural corridor where high-grade surface samples exist, such as Turkey Hill (up to 20.9 g/t of gold), Cerro Colorado (up to 18.9 g/t of gold) and Andesite Hill, where the highest-grade surface samples of both gold (35.2 g/t) & silver (3,170 g/t) occur.

The gold and silver mineralization at the El Aguila Project is of classic low-sulfidation, epithermal character. These types of deposits form some of the richest, most sought-after deposits in the world.

An exploration program designed to expand the known mineralization and test the many additional targets of high-grade surface samples over 4 kilometers is underway. Management's objective is to define sufficient mineralization to justify mine development at El Aguila.

Las Margaritas Project

Las Margaritas is a high-grade silver property in which GRC holds a 100% interest. It comprises the four northwest kilometers of the important N 70 W structural corridor, which is an extension of the El Aguila system. In addition, Las Margaritas occupies ground within an inferred caldera (collapsed volcanic center).

Historical records from a 1905 Mexican Government-authorized report titled The Mines of Mexico described the Las Margaritas mining district as, "...the place in which has been found some of the richest ores in Mexico, some of the ores having reached the value of 18,000 ounces to the ton, and ores are frequently found which assay 4,000 and 5,000 ounces to the ton."

Though mineralization at these levels is rare, the important point is that the Las Margaritas property shows indications of potentially significant silver mineralization. Surface samples taken by GRC have yielded silver mineralization as high as 1,200 g/t.

El Rey Project

El Rey is a high-grade gold property in which GRC has a 100% interest. While the site has been mined previously, very little information is known about the property.

GRC intends to explore this property as a potential high-grade gold vein. If it were mined, material could be trucked to the prospective El Aguila mill for processing.

Solaga Project

Solaga is a high-grade silver property in which GRC holds a 100% interest. The 400 hectare property was previously mined in the 1980's. Initial high-grade selective sampling ran 15 kilo's (15,000 grams / ton or 488 oz/ton or 1.5%) silver per ton.

GRC intends to explore this property as a potential high-grade silver vein. If it were mined, material could be trucked to the prospective El Aguila mill for processing.

Solaga is in the early stages of exploration.

RECENT NEWS:

GOLD RESOURCE CORPORATION INCREASES THIRD QUARTER PRODUCTION BY 87%

Gold Resource Corporation confirms its record production forecast for the third quarter ended September 30, 2011 with preliminary production results of approximately 25,200 ounces precious metal gold equivalent (AuEq), which is the highest number of quarterly ounces produced to date and is approximately an 87% increase from the previous quarter.

Gold Resource Corporation is a low cost gold producer with operations in the southern state of Oaxaca, Mexico.

Gold Resource Corporation’s 87% production increase keeps it in line with the current annual target of 60,000 to 70,000 ounces AuEq for 2011. The level of production during the third quarter represents a current annual run rate of over 100,000 AuEq ounces. Continued mill optimization of metallurgical recovery and increasing average head grades from the Arista Mine contributed to these record production levels.

GOLD RESOURCE CORPORATION ANNOUNCES $20 MILLION STOCK REPURCHASE PROGRAM

September 27, 2011 – Gold Resource Corporation announced that its Board of Directors has approved a $20 million stock repurchase program.

“The Company has returned over $25 million to shareholders in monthly dividends since declaring commercial production July 1, 2010. Gold Resource Corporation, in response to the downward pressure on its stock, is implementing a share repurchase program. Under this program, the Company may repurchase its common shares from time to time in open market transactions at prevailing market prices. The program will be funded from available working capital. The timing and the amount of any repurchases will be determined by management based on evaluation of market conditions, share price, and other factors. This Board approved program is effective immediately, has no pre-established closing date, and may be suspended or discontinued at any time. The Company is not obligated to repurchase any dollar amount or specific number of shares of its common stock under the program.”

“Management believes that at current price levels the Company’s stock is undervalued and represents an attractive investment opportunity for the Company in addition to an opportunity to further reduce its already tight capital structure,” stated Gold Resource Corporation’s President, Mr. Jason Reid. “With only fifty-three million shares outstanding as a producer, in an industry where most producers have hundreds of millions of shares outstanding, this share buyback may further leverage our ability to distribute our meaningful monthly future dividends. This share repurchase program further demonstrates our commitment to deliver shareholder value.”

Fundamental Considerations

THE STOCK OF GOLD RESOURCES HAS RECENTLY BEEN UNDER PRESSURE – AS SO MANY OTHERS – BECAUSE SOME SHADY INDIVIDUALS CIRCULATED NEGATIVE REPORTS WHILE HOPING TO MAKE A PROFIT BY SELLING THE SHARES SHORT.

THE LATEST PRODUCTION FIGURES HOWEVER HAVE CONFIRMED THAT THE COMPANY IS ON TRACK WITH PRODUCTION HAVING PRODUCED 25,000 OUNCES IN Q3 LEADING TO AN ANNUAL PRODUCTION OF 100,000 OUNCES AT VERY LOW CASH COST.

WE ARE CONFIDENT THAT THE COMPANY WILL ACHIEVE ITS TARGET OF PRODUCING 200,000 ANNUALLY.

THE COMPANY HAS ALWAYS STATED THAT ONE THIRD OF PROFITS WILL BE PAID OUT IN DIVIDENDS AND MANAGEMENT HAS KEPT ITS WORD. THE DIVIDEND IS EXPEXTED TO DOUBLE OVER THE YEARS AT LEAST WHICH SHOULD LEAD TO A MASSIVELY HIGHER SHARE PRICE. THE DIVIDEND YIELDS IS ALREADY DOUBLE THAN THE PEER AVERAGE. 

Technical Considerations

Peter Zihlmann 

www.pzim.ch

invest@pzim.ch

+41 44 268 51 10

+41 79 379 51 57

SKYPE: peterzihlmann

THE TIMELESS PRECIOUS METAL FUND

is a shareholder in the company and will benefit from any increase in the company’s share price.

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Disclosure:

The author has not been paid to write this article, nor has he received any other inducement to do so.

Disclaimer:

The author’s objective in writing this article is to invoke an interest on the part of potential investors in this stock to the point where they are encouraged to conduct their own further diligent research. Neither the information nor the opinions expressed should be construed as a solicitation to buy or sell this stock.

Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions in the stock - or to use their own brains.

In our opinion, the best approach is to buy a diversified portfolio of stocks as represented in THE TIMELESS PRECIOUS METAL FUND or THE SIERRA MADRE GOLD & SILVER VENTURE CAPITAL FUND instead of shares of only a small number of companies.

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-- Posted Thursday, 20 October 2011 | Digg This Article