Business Context and Reporting Period
Company: Gold Resource Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: December 17, 2009
Event: Entry into a Material Definitive Agreement and Unregistered Sales of Equity Securities.
Key Financial Metrics
This filing reports a specific equity financing transaction rather than periodic financial performance metrics (revenue, profit, cash flow, or margins). The filing text does not provide a clear value for the company's overall debt, liquidity, or operating results for the period.
| Metric | Value |
|---|---|
| Shares Sold | 1,954,795 |
| Price Per Share | $8.185 |
| Gross Proceeds | $15,999,997.10 |
| Purchaser | Hochschild Mining Holdings Limited |
Material Changes and Fund Allocation
The Company entered into a Subscription Agreement with Hochschild Mining Holdings Limited, exercising a right of first refusal under a Strategic Alliance Agreement dated December 5, 2008. The proceeds are subject to specific restrictions:
- Underground Development ($8,000,000): Reserved solely for the construction of a decline ramp, drifts, crosscuts, and surface facilities for the La Arista vein. These funds are held in a restricted bank account requiring joint signatures from the Company and Hochschild for withdrawal.
- Exploration Expenses ($1,500,000): Placed in a restricted account to replenish funds previously expended. This account also requires joint signatures for withdrawal.
- General Development: Remaining proceeds are intended for the continued development of the mill and mine at the El Aguila Project in Mexico.
Guidance, Risks, and Unusual Items
Transaction Structure: The sale was conducted as a private placement outside the United States in reliance on Regulation S of the Securities Act. No underwriter or placement agent was involved. The securities are subject to transfer restrictions and legends noting compliance with Regulation S.
Risks and Contingencies: The filing includes a Safe Harbor statement regarding forward-looking statements. Key risks cited include:
- Results of continuing exploration programs.
- Decisions of third parties over which the Company has no control.
- Commodity price fluctuations.
- Environmental and government regulations.
- Availability of financing and judicial proceedings.
Investor Verification Checklist
- Verify the execution of the Subscription Agreement (Exhibit 10.1) and the establishment of the restricted bank accounts for the $8,000,000 and $1,500,000 allocations.
- Confirm the status of the La Arista vein underground development project and the El Aguila Project in Mexico.
- Review the Strategic Alliance Agreement filed on December 11, 2008, to understand the full scope of the relationship with Hochschild.
- Monitor future filings for updates on the utilization of restricted funds and any changes to the exploration or development timeline.