Gold Resource Corporation

Good morning and welcome to the Gold Resource Corporation Full Year 2022 Financial and Operating Results Conference Call. At this time, all participants are in a listen-only mode. Following management's presentation, there will be a question and answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, please press star followed by zero for operator assistance at any time. I would like to remind everyone that this conference call is being recorded today, March 3rd, 2023, at 8 a.m. Mountain Time. I will now turn the conference over to Kim Perry, Gold Resource Corporation's Chief Financial Officer. Please go ahead.

Thank you, Julie. And good morning, everyone. On behalf of the Gold Resource team, I would like to welcome you to our conference call covering our full year 2022 results. Before we begin the call, there are a couple of housekeeping matters I would like to address. Please note that certain statements to be made today are forward-looking in nature and as such are subject to numerous risks and uncertainties as described in our 2021 Annual Report on Form 10-K and other SEC filings. All financial measures are unaudited. Audited financial statements will be presented in our 2022 Form 10-K which will be filed at a future date, but no later than March 15th, once our audit firm completes their audit procedures. Please note, all amounts referenced during this presentation are in U.S. dollars, unless otherwise stated. Joining me on the call today is Alan Palmier, our President and CEO, and Alberto Reyes, our Chief Operating Officer. Following Alan, Alberto, and my prepared remarks, we will be available to answer questions. This conference call is being webcast, For those of you joining us on the webcast, you can download a PDF copy of the conference call slides. The event will also be available for replay on our website later today. Yesterday's news release issued following the close of the market and the accompanying updated technical summary report have been filed with the SEC and EDGAR and are also available on our website at www.goldresourcecorp.com. I will now turn the call over to Alan.

Thank you, Kim, and good morning, everyone. I want to thank the listeners for taking the time to join us on this call. While we exceeded production guidance in 2022, the expected production results for 2023 are expected to decline approximately 25%, driven almost entirely by grade. The forecast for 2023, while generating cash flow sufficient to main our capital needs, in Mexico and cover our anticipated expenditures elsewhere is tight. We took a very difficult decision to pause the dividend to protect our debt-free balance sheet. Admittedly, it is a conservative stance, but we are strongly of the belief the best way to create long-term value is to preserve our cash to ensure that we can unlock the value in the Don David gold mine. Our values underscore transparency, and as such, we strive to ensure we keep our investing community fully apprised of information as soon as it is available. Later in the call, Kim will share more details about our 2023 guidance. We are focused on improving our cash flow through productivity improvements, assessing our level of staffing, and hopefully through exploration success, which will be discussed in just a moment. A little teaser for the readers, we will publish our inaugural ESG report next week, which highlights the many ESG programs aimed at not only compliance, but also at maintaining our social license to operate by being a good neighbor to our host communities and steward of the environment. After an update on our Don David Gold operations by Alberto and prepared remarks by Kim on our financials, I'd like to provide an update on our Back 40 project. Lastly, we'll provide a few closing remarks and then we'll take questions from participants. Now, please turn to slide four and I'll provide an update on our Q4 exploration results. Our number one priority is to continue to fund the capital programs at DDGM, including our infill and expansion exploration programs in Mexico. These programs have only been constrained by available drill sites. and this remains true this year. We have never withheld capital for drilling. Unfortunately, we encountered delays in our exploration development during 2022, which resulted in being approximately six months behind in our drilling program. These delays involved ventilation and ground support, and as they impacted working conditions and the safety of our employees, they were not something that could be ignored and resulted in a delay. The technical issue is resolved in the fourth quarter, and we're currently drilling in the highly prospective areas to the southeast of Switchback, the Three Sisters, and the Morena target parallel to the Aresta Vane system. As you will have seen from our press release on Tuesday, the initial results are very encouraging and give us confidence in the potential for additional high-grade results. While it takes time to develop a resource from initial drilling, We're excited about the future, and it's our objective to increase our resources and reserves this year through exploration and infill drilling programs. On slide five, you can see that our commitment to exploration spending since 2021 has been significant. While 2023 appears to decline from 2022, this is largely due to the development work I mentioned earlier, largely conducted in 2022. We are now in a position with drill stations and drilling has commenced. We will still have additional development requirements in 2023. However, they are not as significant as 2022. As you can see from the graph, the significant spend in 2023 relates to underground exploration, expansion, and infill drilling. Turning to slide six, we are confident in the long term at DDGM as you will see in the updated technical summary report filed yesterday with R8K. In the 1231-22 resource model, excluding inferred material and not including the recent drill results represents more than a six-year mine life. We were able to replace 88% of our resources by performing infill drilling, a comprehensive view of our geological database and interpretation of the mineralization, and the block models derived from them. On slide 7, you'll see that we were able to replace reserves to the extent of 74%. The largest contributing factor to the 26% decline was the depletion of the reserves by half a million tonnes relating to 2022 mining activities, offset by additions due to the reclassification of measured and indicated material mineral resources to prove an improbable reserves as a result of detailed engineering. I'll now pass the presentation over to Alberto to discuss the Don David Gold's full year operational results.