Thank you for joining Gold Resource Corporation's 2017 Year-End Earnings Conference Call. Mr. Jason Reid, President and Chief Executive Officer, will be hosting today's call. [Operator Instructions] As a reminder, today's call is being recorded. Please go ahead, Mr. Reid.

Thank you. Good morning. Thank you for joining Gold Resource Corporation's 2017 Fourth Quarter and Year-End Conference Call. I expect my comments to run approximately 10 minutes, followed by a question-and-answer period. 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, March 9, 2018, 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, 2017. In an effort to streamline quarterly conference calls, while still being available to take shareholder questions, I'm going to take a different approach to conference calls this year. I'm not going to just [ regularly take ] the quarterly numbers than anyone can read in the 10-K or quarterly reports. I'm going to hit the highlights, give color to updates and address problems or issues that may need to be addressed, and then turn the call over for questions. This hopefully will benefit everyone attending the call by making them shorter and more efficient. 2017 was another great year for Gold Resource Corporation. I am very proud that the company delivered its seventh consecutive year of profitability.…

[Operator Instructions] We will take our first question.

Mark Smith, personal investor. You might recall, I was a little bit skeptical of your attaining your production goals. But bravo, and thank you for a really great job of getting those production goals met. That was astonishing in the fourth quarter, the way it all came together. Having said that, I have about 4 different questions. Some of them might take a little longer than others. But the first one is, how much development or are you running through the plant down there from the development of the Switchback? And do you have any more to go?

Well, yes, we'll always have a certain percentage of development arcs. We're going to continue the development. And we spent over a year developing this. So that we could move away from the hand-to-mouth mining that we have been doing up until this point. Now you may have caught in my comments that yes, we did reach our goal of an entire year, it's over a year of development. But we did start in February, and we are currently stoping the Switchback. So going forward, you're going to see a lot more stoped ore coming out of the Switchback. You'll always see a certain percentage of development. And I can't give you the exact amount of development tonnage we are going to be pushing through in any given month. But what you are going to see, and more importantly, is you are going to see cut-and-fill and open stope ore throughput. So it's an exciting time for us because we've worked really hard, been very diligent to not do this until we're ready to pull the trigger, and we did that this year. So -- yes.

Okay. Secondly, you guys had an earthquake down there. And was the ground -- what did the miners report that happened or maybe being the mine? Is the ground good there? And was that -- was the earthquake all that close to your operation?

Well, first of all, this area has numerous earthquakes. And they're small and it's going on all the time and actually, that's what you want. You want very small ones happening on a regular basis. What you don't want is hiatus, because that's when you typically get a bigger one. The bigger earthquake that recently hit, we were not impacted at all. In fact, there are many of the operation that didn't feel it. There was a earthquake prior, several months prior where we did feel it, but it didn't impact anything. In fact, the ball mill kept running and nothing -- things shook, but nothing -- there is no impact. And I credit that to the fact that going into this, we built this with the -- that in mind and the amount of rebar that went into our steel foundations where one could accuse us of being overkilled when you look at it while it was built. But we are glad we did that because we've sustained it. So we haven't been impacted by them. If we are in an earthquake area that's why these deposits are there because there is so much activity in. But yes, people have noticed in the last -- people...

Excellent. Now regarding the actual ground on there, do you guys employ a lot of short creeks as in some underground operations? Or is that rock, that stable, in general, down there?

Now it's a good question. We do and we are doing more of that. We are doing a lot more ground support. So yes, we are very diligent about that and increasing the ground support just out of an additional safety level.

Now you've got another quarter and period of time under your belt with regard to the Isabella Pearl. You've been deploying capital toward those big lead time items, et cetera. How much in a range, and I won't hold you to the penny, obviously, how much in a range do you have to go to bring that onto production now do you think, in capital?

Yes. Now that's a good question. I mean you have your CapEx and then your working capital. And we -- let's just say for the time being, say, it's $30 million. We've deployed either through short-term equipment loans or using our own cash like with the ADR committed to about $10 million of that. So that gives you a range of $15 million to $20 million is what we have to go, depending on all that you throw at that number. Having said that, it's like, I've said in the past, it's always been Plan A to do it with cash flow, if we can. And what's very positive is you're seeing our cash balance increase. You're seeing this huge cash to -- for instance, like the ADR. If we can bootstrap this thing, that would be great. If we can pay to the whole thing. May not be able to -- and if we can't, then we'll consider other means, whether that's debt, whether that's equity combination of that or what, but Plan A would be great if we could pull it off, but it's a tough road to hold.

Absolutely. And you've indicated that on numerous occasions going back on these calls, it could be any combination of things. I was thinking about this last night. And I wanted to encourage you to, if you decide to do an equity offering to offer it to existing shareholders first, and see how many of us would like to participate directly, thereby not directly diluting shareholders. Do you understand? I just like that, encourage you on that front.

No, I understand. I understand what you're saying. And yes that is a very shareholder friendly approach. That can add tremendous overhang on your stock, if you're coming out there [indiscernible] saying here who wants to put money to work here in short interest come out pummel you and then you're diluting even more than when you move forward. In the past, we've done mostly private placements and in that situation, the private placement hits and the market digest it moves on. As opposed to more a shopping as if -- from what you're suggesting. I get it. That's I'm not saying, we won't consider that approach. We are considering everything. Right now, we're looking at -- I'm working with a group, looking at debt. I'm working with 2 groups, looking at equity, I'm looking at mainly trying to do this with cash. And right now, we had a really good year and if these base metal prices hold up in the particular area in the mine that we are in now. We are producing a lot of base metals and that's why you are seeing this revenue exceed our expectations. And I can't tell you we're ahead on revenue budget-wise already this year. So if that trend continues, if that trend continues, there is a chance and it's just a chance, but it's a chance we could do with cash flow.

Yes. Well, I really do appreciate the management, the style you have employed. I have been a shareholder for quite a little while not from the beginning, but -- and just go forward.

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

This is [indiscernible] Advisers. Had the opportunity to being introduced to your company here at a recent conference. Greg, you're probably listening or there, so hello. I was just wondering if you could address at all any issues you might have down in the Oaxaca area. I know the labor, Greg had indicated that labor relations are very good. Is there anything down there that is developing or not developing, as far as any problems with the local populations?

Yes, no. Not at this time. We've been down there a lot of years. And over the years, we do occasionally have pushback from the union and we pushback on them and that can have short-term effects on us. But right now, we don't have anything as far as the local population. So I'm not sure that -- I guess, that answers your question.

Yes, yes, yes. I mean, I'm familiar with that area. I know that, that could be an issue from time to time. So...

What is your point -- to your point, the lot of the questions we get from the industry is, how do you guys operate in Southern Mexico, it's so hard down there. And from other industry associates that have worked down there have tried. And I think in large part because we don't treat them like "Hey, we are the mining company. We are here, and you're going to do what we say." We treat them like they're our true partners because they are. We need them. We are in the middle of nowhere in Mexico. And we need these people. They need our jobs. We brought a lot of people, especially years ago, when the housing bubble is going on in the U.S., and there is a lot of people from the little town that we operate in that we're building houses up in the U.S. and we brought them back. So I mean, we are very much the economy down there and they need us, but we also very much need them. And we treat them with utmost respect. And I think that's why, yes, you always have issues, but why we haven't had major ones.

Right. That's always a good policy to treat people the way you want to be treated yourself. So I commend you on that. Looking forward to continuing to follow and good luck this year in your efforts.

And at this time, we have no further questions in the queue. I would like to turn the call back to over to Jason Reid for any additional or closing remarks.

Well, thank you, everybody, who joined the call. Thanks for the questions. And we'll talk to you next quarter. Have a good day.

This does conclude today's conference. We thank you for your participation. You may now disconnect.