Thank you for joining Gold Resource Corporation’s Third Quarter Conference Call. Mr. Jason Reid, CEO, will be hosting today’s call. Following Mr. Reed’s opening remarks, there will be a question-and-answer period. As a reminder, today’s call is being recorded. Please go ahead, Mr. Reid.

Thank you. Good morning, everyone, and thank you for joining Gold Resource Corporation’s 2015 third quarter conference call. I expect my comments to run approximately 20 minutes, followed by the Q&A. Joining me on the call today for the Q&A portion will be Mr. John Labate, our Chief Financial Officer. Let me remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements. These statements are subject to numerous risks and uncertainties as described in our Annual Report on Form 10-K and other SEC filings, which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued yesterday, along with the comments on this call are made only as of today, November 4, 2015, and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find a reconciliation of non-GAAP financial measures referred to in our remarks in our Form 10-K filed with the SEC for the year ended December 31, 2014. The company saw improvements during the third quarter in mine development, water management and mining conditions, which were all prior second quarter challenges. However, overall production for the third quarter was less than targeted largely due to the lower than projected grades and higher mining dilution sustained primarily during the month of August. Before I walk you through the third quarter narrative and what we plan to do in response, let's break down the third quarter production numbers. Third quarter production from the Arista Mine totaled 6,825 ounces of gold, 561,985 ounces of silver, 343 tons of copper, 1,114 tons of lead, 3,499 tons of zinc before payable metal deductions. Calculating the gold and silver as a precious…

[Operator Instructions] And we'll move to our first question.

Hi. I'm a stockholder, primarily for the dividend and wanted to ask a few questions. It looks like you guys earned about 5 million to 7 million in cash in the third quarter and had about 14 million left in the bank. How many quarters more can you guys continue to pay the dividend and then also can you give CapEx guidance for Q4 as well as 2016 and then when we will see a revised resource statement and how many obstacles are located in the Switchback deposit? Thanks.

Okay. Had a lot of questions there. What is your name?

Sure. It’s Clay Jones. I'm an independent investor.

Clay Jones. Okay. Clay, thanks for the questions. I tried to jot down many of them, you first started up by referencing our cash position now that fluctuates, we’ve seen it go down I think last year to 10 million and back up. Our cash position varies dramatically quarter-on-quarter again, based on what we have going on, the CapEx spend, the dividend, taxes, all these things constantly come to bear on cash in any one particular point in time. We have and I'm sure you have noticed this last year we spent over $22 million in the last nine months on investing activities in large part, the tailings, the mine development towards Switchback, the exploration drilling. We have deployed a lot of capital to advance this company forward during a very difficult time in the market where most companies are pulling back their clause. So I'd like to highlight that first and foremost. As it relates to the dividend, how much longer we can pay that, we make no guarantee on the dividend and never have. We’ve paid consecutive monthly dividends for five years now and I remember the criticism we took when we paid for first, second and third dividend. People thought it was one off gimmick, after five years of consecutive monthly dividends, I think we have shown that if we can it we will but I made no guarantee, we made no guarantees on that dividend. It’s a balancing act, it’s very difficult and it’s something that we put on the forefront as trying to do but if we can’t and we need to deploy that capital elsewhere we reserved the right to do so. Obviously I can’t speak more to that, I mean if we modify we modify it, but people take us very seriously after…

Sure, not a problem. The Capex Guidance for the fourth quarter as well as 2015?

We don't typically break out guidance on CapEx especially in metals market. Our game plan going into every quarter changes by the end of every quarter as a function of where metal price keeps falling. And so over the last two years the metal prices are falling consistently. So that changes your game plan every single month, every single quarter, so I don't to give specifics of that but I do want to try to shed as much light as I can on it. And that is one of the biggest Capex this year was a tailings facility, it took all year and it was constant drain on our capital. That's done, I was down there last week, it's beautiful. And now we're just finishing the piping for it and effectively there is no more Capex for that. And that will hold another two years. Next year, as it means to consider cash, I don't want to go with the next list, I'm going to wait the following year for the construction of the next list on that particular dam. So I don't expect additional Capex for that big project even next year, let along the balance of this year. We've also in a cash conservation mode as I mentioned on the call, stopped surface exploration drilling in the order of magnitude of $600,000. We will continue to drill underground. We are looking for cost cutting measures right and left. But the Capex just to reiterate and underscore and I’m not avoiding your question whatsoever. Our Capex various month to month based on where the metal prices keep beating us up and we have to adjust our game plan accordingly. There was one other question, I think you had five questions for me.

No, that's okay. I'm actually off that this was very helpful. Thank you

Appreciate it and thanks for calling in.

[Operator Instructions] We'll move to our next question.

Good morning Jason, Mark Smith, private investor. I always liked these calls; they’re very insightful, I appreciated it. Love your management style. This is mostly a question I suppose for the new CFO. I see this happen time to time, but this lump in your accounts payable and accrued expenses $5.5 million. Is that normal lumpiness, I've asked this question before, is that normal lumpiness?

I’m going to turn this over to John, generally speaking, in my point of view its timing issue and cash conservation but John take this call or take this question.

The increase this quarter was mainly timing, payables did increase by $2.5 million, but net of the receivables increased just about $1 million. We at a lower right now that we think is sustainable, again certainly manageable and result of timing, which was since been modified by prior - post quarter payments.

Okay, you're netting that increase in accounts payable against your accounts receivable. I suppose that's reasonable, because you have money that’s going to become against what you need to pay, okay. I will consider that when I see those lumps happening from now on. But that's all I have. Thanks a lot Jason; you're doing a great job. Hang in there with this price.

Hey Mark, thanks for your call and your continued support, yeah, it’s difficult as we all know in this space, the investors and management of the companies alike, tough time in this industry.

And we will move to our next question.

Hey, Jason can you hear me; this is Bob [indiscernible].

Hi, Bob, how are you today?

I'm doing good. Listen Jason, can you refresh my memory about, which isn't very good about how many - what's your mill capacity, what is the capacity you guys could mill down there?

You're looking at about 1,500 tons per day mill capacity. We are quite away from that, we are 1,100 to 1,200. So we have some room, quite a bit of room to move and to grow. Like any underground mine its’ always feeding it and having the development in front of you from which to have many working phases to pull enough tons to feed it and so that's where we are. There is no bottleneck at the mill.

I thought you had addressed in the past, but I just couldn't remember the number, but 1,500 gives you a lot of growth for Switchback.

No, Bob, I appreciate the question that's a great question, and it's also good to put that in perspective on the back of Clay Jones’ first question on Capex. Several years ago, we deployed a lot of our capital to increase that mill because we looked at time several years down the road and saw yeah, at some point that’s going to be a bottleneck and you know we on a 1,000, 1,100, 1,200 back then, and so we took the capital from cash flow, deployed and allocated it to increasing the mill capacity and I'm glad we did it because now we're at - we would have exceeded the maximum capacity at this point, but we did all that with cash flow back then and back then, we depleted our cash during those years as well or during those quarters specifically. Cash fluctuates as a function of what programs, projects we have going on.

Well, I'd like to make two comments here and close myself out; you don't have to respond them. Number one, you shouldn't feel bad at all about deploying capital on a timely basis to make the mine work going forward. You guys have done that and met your dividend obligation year-after-year with no compliance out of management that I can see and the other people in this space aren't paying dividends, aren't keeping up with development any better than you are and have lower grades by and large. The second thing I want to say is that while you guys are out looking at acquisitions and potential merger candidates, I would hope that you make a strong pitch to whoever you’re talking to that your unique method of paying dividends in time is something that none of these other companies have and you guys have gone through all that headache and that is sure selling point of your company in making proposed mergers with potentially large shareholders who could benefit greatly by that exposure. So I am more satisfied with the company and thank you.

Bob, I appreciate your comments, especially on deploying capital. It’s really easy for people outside looking in to criticize, but it is difficult in this industry when you try to set a game plan and in the market - and then market, and specifically the prices is going - silver drop-off [indiscernible] and then you have to revise that game plan, which usually and in our case and most everybody’s case is now predicated on fewer people that you can hire. And you know the difficulties are compound that this is a tough industry, so I appreciate you acknowledging that, not often do we have calls that actually acknowledge that. Yeah, the dividend set us apart and if we can continue to do it, we will do it, but if we can’t, we can’t. I’ve had several shareholders and feedbacks on the dividend where people say, you should just stop, you should just stop and deploy that capital elsewhere. That is one perspective and I don’t necessarily disagree with them on that, but we are very focused on the dividend. This company was created to pay a dividend, that's why we raised in the production, so we could have a tight capital structure, so we could pay a dividend shoulder-to-shoulder with majors and we make that I think compelling argument in one of the last slides in our corporate presentation where we're comparing ourselves with the majors and we stand up quite nicely to junior because of it. The M&A strategy, we are taking a lot of tires, I just had the whole team, boots on the ground, we have been to Chile, New Mexico, Arizona, Nevada, we are looking and we’ve kicked a lot and lot of tires, and we’ve come down to that final box and we couldn’t check that box and not walk away. I don’t want to do something just do it, I don't want to add ounces to just add ounces and trade dollars, I want to find something that's accretive and this is the time to do it. Back when gold is hitting its high, I had to watch everybody doing their M&A, of course they overpaid by billing the dollars and what they were doing, but that’s typical when all the deals happen, those fundamentals are high. Now is the time, and we are looking and we have a lot of irons in the fire, and hopefully, we can get a few of them closed, but we will see. Dividend in time separate us and we are the only company that’s been able to achieve that, so I appreciate your comments on that. So Bob, thanks, and as far as I am concerned, call in next time as well.

We’ll move to our next question.

Jason?

Yes, I can hear you. Who is this?

This is Dick Tilley [ph], stockholder. Thank you for taking my call. My question is this. Must Gold Resource Corporation pay extra money for police protection or security forces in order to safeguard the mine and its employees? Thank you so much.

Okay, wait before you leave, what do you mean, extra money? What do you or let me presume, how we operate, I guess. Go ahead, what do you mean by extra money?

Is there a cost of doing business, the security of the mine and people.

Okay. I presume all, maybe shouldn’t say that. In my opinion, all gold mine should have certain element of security. In Mexico, yes, we pay a security firm, a third-party security firm to safeguard our product, and this is a new firm. In the past, we have had several different firms and we had a couple of incidences where thieves took our product. We haven’t had any issues with this new firm and not kind of word of hope, not have any issues going forward. But you always have to watch out for that and that is the cost of doing business in a sense that, yeah, you have to hire security and we do have a very good security firm that services other large miners in Mexico and they are really good at what they do and again, not going - we haven’t had any more instances since we hired them.

Thank you so much, sir. Good luck.

Thanks for your question.

And we will move to our next question.

Jason, this is Vijay Marolia, Regal Point Capital. How are you?

I’m good. Vijay, good to talk to you. How are you doing?

Doing good man, can’t complain. Keep fighting the good side. I was just hoping, you could add a little bit of color on what we’re excited about which is what’s going on with the potential energy savings and the port opportunity?

Okay. Yes, these have been - good question, Vijay, these have been on the top of our list for over a year now, the energy and the port facility. The energy is my second largest cost, second to manpower. And as you heard on the call, I protested two manpower reductions to lower our largest cost and argued, but maybe a little too thin, but we know now kind of where we need to be. So on the manpower, we got in front of that one. Now, I want to attack the energy. We’ve been working on this for over a year, well over a year. I want to hook to the Federal Power Grid and back of the envelope calculations as we see it, we could maybe cut our energy into half. Now that may be a little too optimistic, but let’s shoot for that and if we come in even half of that we will be doing well. But hooking to the Federal Power grid is where we're trying to get to. We're working with the Federal Power Commission. We have to bring a power line across numerous different [00:40:29] which are agrarian communities. So they are and have helped us with negotiating this line that’s going to across all these different groups of people’s lands. And we're working with the Federal Power Commission at this point to try to get this thing moving forward. We have deployed a little bit of capital toward this, because we are going to try to stage it out over time, but hopefully next year we're in the position to deploy enough capital to get this thing done. On the order of magnitude, at this point, it's looking like 4 million, maybe be 5 million to do this, but the return on…

[indiscernible]

Yeah, I appreciate it. Thanks for your continued support. Let’s say it’s not much fun out here right now. It’d be nice if metal prices turn around and give all miners some breathing room, but unfortunately it just keeps going down. We keep having to adjust our business plan, so to speak, to deal with the prices, but it is what it is.

Well, I’d say the best things come to those who wait and so we are all being patient and patience is a virtue, so we will see what happens.

I appreciate it, thanks. Thanks for your questions.

[Operator Instructions] And we have no additional questions in the queue at this time.

Perfect. Okay. Well, with that we will close this conference call out. Thank you for everybody who have called in. Thank you for everybody who is listening and we'll talk to you next quarter. Thank you.

That does conclude today’s conference. Thank you for your participation.