Thank you for joining Gold Resource Corporation’s Second Quarter 2016 Conference Call. Mr. Jason Reid, CEO, will be hosting today’s call. Following Mr. Reid’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 2016 second quarter conference call. I expect this to be a short conference call with my comments running less than 10 minutes followed by 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, August 3, 2016, and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find a reconciliation of our non-GAAP financial measures referred to in our remarks in our Form 10-Q filed with the SEC for the quarter ended June 30, 2016. The second quarter of 2016 was the solid quarter. Comparing Q2 to Q1, we saw increased gold and silver grades, increased metallurgical recoveries and increased production of gold and silver. We also saw increases in net income, gross mine profit and cash in the bank. We accomplished this while decreasing payables, decreasing G&A, eliminating our capital equipment leases and lowering our cost per ounce. With the first half of 2016 behind us, we remain on track for our annual targeted production range. Let’s breakdown the quarterly production numbers. Second quarter production from the El Aguila project totaled 10,011 ounces of gold, 572,499 silver ounces, 320 tons of copper, 1,009 tons…

Thank you. [Operator Instructions] And we’ll take our first question from.

Hi Jason, it’s Harvey Wollman [ph].

Hi Harvey how are you?

I’m good, at last some good news. I’m sure you’re pretty psyched about the direction and the movement of metals prices in general not only gold and silver, but the base metals, as well.

Yes, it’s a welcome change.

Yes so welcome change indeed. So I have a few questions. I’m looking at the 10-Q. And toward the end of it, there is a paragraph entitled provisional sales contract risk. What is that? And what’s the meaning of the figures under the title under contract?

Okay I don’t have, I apologize, I don’t have the queue in front of me. John do you want to weigh in on this?

Sure, the provisional contract risk relates to the final pricing of our concentrates. Our counter party can elect to take either M plus one which is the one month in the future or M plus two, which would be two for final price settlement. So we have to book essentially a derivative amount at the end of the reporting period, based on the futures prices and those close according to the terms that really are agreed by us and our counter party. So there is risk on unsettled sales.

So the figures that are under contract, like gold ounces mentioned, those are amounts and prices at which you’re obligated to sell in the future or does this relate to second quarter sales?

No it relates to second quarter shipments that have been provisionally invoiced. And depending on the timing of the final settlements, it’s purely a price adjustment. We’re not committed to sell anything in addition to what we have already contracted to buy at the end of the reporting period.

Okay, I understand. Okay another question I have relating to Gold Mesa, you’re doing a lot of drilling at Gold Mesa exploratory drilling, I guess would be the term which you’re calling testing. When this testing moved to development?

Okay, testing will move to development when we have discovered and defined a deposit. So we have definitely intercepted some incredible high-grade mineralization, especially for an open pit heap leach situation which – this is what we’re looking for. But we have to find enough of it, we have to delineate this and find enough of it. And to justify moving it forward into a development phase or stage. So we’re still exploring there and will continue to do so until we find enough of it to warrant the production decision or development decision.

Based on what you’ve been drilling so far and your plans for the rest of the year, do you expect development to occur before the end of this year?

I would say probably not. It’s possible but typically when you’re on a property, it takes awhile to explore it and we fully expect that here. So I don’t want to give a timeframe on when that might trigger, but it really ultimately depends on the drill program. And the first drill program we had here was incredible. I mean that does real phenomenal grades and I listed some of them. One of it was just nine meters down hole. So you don’t have much overburden. So depending on how for instance that particular zone goes that could definitely expedite that process. However, mining is a long lead-time industry, a lot of work. And so I wouldn’t expect any kind of development decision this year, generally speaking. There’s a lot that goes into that, we have to delay any deposits. Then you have to justify whether it’s worth putting into production whether it's economic whether you're going to make any money. I mean there's a lot of work has to go into it. So I wouldn't expect anything like that any decision this year.

Okay. Thank you very much.

Harvey, thanks for your question. Good to talk to you as always.

Yes, indeed. Bye-bye.

Okay.

[Operator Instructions] We'll take our next question from.

Hi, Jason this is Paul Morland.

Paul, how are you?

Fine, thanks. Good to hear that everything is going better.

That’s a tough years of a bear market, so…

Oh, boy. Yes, nobody saw that coming. I had a question on El Rey is there any hope there obviously getting El Rey under production at some point?

There is hope there and we continue to work with the people there. But it is our most challenge property position that's for sure. That's not our focus because of that but we have not given up on it and it's got some really high grade there.

Yes, I remember that.

Yes, that some day we were optimistic will be chasing. Having said that…

What have some change there in order for that to become a viable possibility.

Well, it's all about the local communities in that area. And this was this happened years ago and you probably remember this but we had one of our neighboring mining companies had an issue in which they had tremendous pushback from their local community which is close to El Rey. I won't mention what they did but it wasn't good and two weeks later the local community pushed back from on us for the first time ever and I think there was a correlation there that wasn't a coincidence. So we’ve spent the time since trying to differentiate ourselves between us and that other mining companies show them look we're different, we operate different. We don't have armed guards running around our operation forcing our way into doing things. We don't do that kind of thing. But it's taken a long time to try to convince them of that. So I think in large part our inability to operate there wasn’t our doing, it was our neighboring industry peer they caused that. And we're trying to overcome that challenge but we're not taking the approach of hey, we're the mining company we have every right to be here, move. And I think it's that attitude that got this whole situation escalate in the first place. And we're not going to take that approach. So we're – like we're going to – we expect to be here a very long time. And so we're just taking a step back and saying look okay, if you're not okay with this now wait at some point in the future you'll see we're different. And so that's the approach we're taking. So El Rey is definitely the most challenged of all our properties and not our focus but someday definitely we want to be back there. And I think we will but it's going to take a long time.

Okay. Well, yes, I understand the situation. And thanks for the update.

Sure. No, I appreciate the question, Paul. Good to hear from you.

[Operator Instructions] We will take our next question from…

Hi, this is Mark Smith, Private Investor. Forgive me, I just got on the call, I just heard Paul Vale Ray [ph] question and I was wondering if you had addressed dividends at all in the call up till now.

You know I really didn't.

Okay.

I made one statement that in the future we sure hope to increase that dividend and absolutely.

Okay.

It's just the timing issue in my opinion. I’m very optimistic that it will happen.

Okay.

What I do mean by timing, we still come out or we're coming out of – it feels like we're coming out of this long four-year bear market that beat everybody up in the industry, and many of our peers, many of the Gold Resource peers went under, went bankrupt during that time. We not only survived that four-year stretch, but we were profitable, albeit, by small amounts, but still profitable all four years.

Yes.

That was painful four years. And we had – you can’t dividend out what you don't make, so we had to cut our dividend. And as the metal prices went down, we had to cut our dividend and continue to cut it. We still pay dividend, showing that we're very committed to the dividend, and we've returned over $108 million. So I don't necessarily think I have to convince anybody how serious we are with the dividend this company was created to pay a dividend, and at some point in the future we want to increase it. Now what might – what's in front of us, what's stopping us now, we get the questions, hey, gold's up, why aren’t you increasing your dividend? Well, there's a lot going on. We still haven't fully recovered from the beating we took over the last four years. We were seeing some recovery, for instance in this Q, in the results of this Q. And so that's all positive and moves us toward that day in which we can increase the dividend. But we're also looking for other opportunities. I mean there’s window of opportunity to find properties and we picked up Gold Mesa during the downturn, we continue to look. At some point probably in the near future that window closes on us, and acquisitions won't be an option. So while it is an option, while that window is open, we'd like to have some cash in case we can find some opportunities. So there's a lot of push and pull, but, yes, at some point I fully expect to increase the dividend.

Okay. So, would it be a fair statement then to say that you're still committed to that roughly one-third, one-third, one-third plan that you’ve been talking about or have talked about in the past?

We're not doing the one-third, one-third now because we couldn't afford it.

Right.

Unturned metal price is dropping. So can we go back to that? Possibly, it would be great if we could. But to be clear, we are not doing the one-third, one-third, one-third right now.

Okay.

And if you run the numbers, you’d see that.

Okay.

But I think the best way to categorize our view on the dividends going forward is we will return as much back to the shareholders as soon as possible while balancing the needs of the operation. And that's what we've – I think done a pretty good job of it in the history of this company and I expect that trend to continue.

Okay. And we’ll a playback of this call then be up on the website for 48 hours or something?

It’s being recorded and soon as we receive it from the service, we’ll upload it to the website. You know we’d say three days, but sometimes it's up – but then shorter than that.

Thank you.

You’re welcome. Thanks, Mark.

We have no further questions in queue at this time.

Perfect. Well, thank you again everyone for listening to the second quarter conference call, and we will talk to you next quarter. Thank you.