2011-01-05 GORO Initiation Report

January 5, 2011
Industrials Gold Resource Corp. (AMEX: GORO)

Metals & Mining
Low Cost Growth with a Dividend Kicker - Initiate with
United States of America a Buy Rating
Investment Summary
Gold Resources, an emerging gold and silver mining producer, has a
strong production growth and cash flow profile. Its founders, who
have experienced a long and successful career in discovering,
developing and monetizing precious metals deposits, control multiple
Initiating Coverage high-grade deposits in southern Mexico.
Rating: BUY Event

Price: $27.60 We are introducing research coverage of Gold Resources
Price Target: $45.00 Corporation (GORO) with a Buy rating and a $45 price target - a top
Bloomberg: AMEX: GORO small cap pick in our universe. In September 2010, Jefferies acted as
sole placement agent for Private Investment in Public Equity (PIPE)
Market Data for GORO.
52-Week Range: $29.90-$9.43
Total Entprs. Value (MM): $1,407.9
Key Points
Market Cap. (MM): $1,462.8 • Low Cost Gold and Silver Production Growth – We are
Insider Ownership: 20.0% forecasting annual gold equivalent production of 15,000 ounces
Institutional Ownership: 48.0% during 2010, 90,000 ounces during 2011 and 160,000 ounces
Shares Out. (MM): 53.0 during 2012. Management's annualized output target of 200,000
Float (MM): 27.5 ounces could be reached by 2013. Given near current base metals
Avg. Daily Vol.: 217,096 prices, copper, lead and zinc revenues net of recoveries and
Financial Summary smelter charges, by-product revenues could offset operating costs
Net Debt (MM): ($54.9)
once operations are optimized.
USD 2009A 2010E 2011E 2012E • Intriguing Resource Expansion Potential – In addition to its
Rev. (MM) 0.0 21.3 135.2 275.3 producing El Aguila and La Arista deposits, Gold Resources
EV/Rev. NM 66.1x 10.4x 5.1x controls various properties stretching over 16 kilometers of a gold
EPS and silver mineralized trend along a lineament in southeastern
Mar (0.19) (0.15)A — — Oaxaca. Management is working towards gold and silver resource
Jun (0.25) (0.12)A — — expansion potential along strike and at depth below the current duel
Sep (0.21) (0.03)A — — vein systems at La Arista, which could double its current resource
Dec (0.14) (0.05) — — estimate.
FY Dec (0.78) (0.35) 1.25 2.50
FY P/E NM NM 22.1x 11.0x • Unique Business Model – We find GORO's business model quite
unique in the mining sector. Founders/insiders, who own 20% of the
Michael S. Dudas, CFA company, have developed an internal philosophy that targets high
(212) 284-2383, mdudas@jefferies.com return on capital and measured, growing excess cash distribution to
Satyadeep Jain shareholders in the form of dividends. Management has stated that
(212) 284-2227, satyadeep.jain@jefferies.com its goal is to distribute at least one-third of excess cash flow to
common shareholders on a regular basis. Rarely has the market
seen such an emerging mining company focus on returns on and
returns of capital for shareholders.
Valuation/Risks
We support our $45 price target through a blend of NAV, relative
cash flow and dividend yield valuation metrics. We note that the
shares are suitable for small cap investors who understand price
volatility. Risks include a turnaround in recent precious metals pricing
levels, ability to coordinate and ramp up production at its flagship
underground mine, tangible progress towards publishing resource
study and not achieving the expected resource potential at La Arista.
Please see important disclosure information on pages 30 - 33 of this report.

GORO
Executive Summary
Based in Denver, Colorado, Gold Resource Corporation is one of the most interesting emerging gold and silver mining
companies. Its founders, who have experienced a long and successful career in discovering, developing and
monetizing precious metals deposits, may have developed a sizeable potential mine and possible mining district in the
Mexican state of Oaxaca. Gold Resources exhibits a potential rapid production growth profile at very low capital and
operating costs. Its 100% controlled ore bodies encompass very high grades and host an attractive amount of base
metals. At current metals prices, Gold Resource could produce gold and silver at negative cash costs. We believe
management has followed a very focused and unique strategy among global precious metals producers — set and
exceed high return hurdle rates and distribute a healthy level of excess cash to shareholders through dividend
payments. Given the upside potential in its resource and land positions, Gold Resource could be a long-term growth
vehicle with an attractive and increasing relative dividend yield. Since July 2010, the board has declared and paid five
consecutive monthly dividends of $0.03 as high margined production from its newly commissioned processing facilities
ramps through the start-up phase.
We are targeting at least 200,000 ounces of gold equivalent output from Gold Resources assets by 2013. Continued
positive drilling results and excess milling capacity could drive longer-term annual output to the 300,000+ gold
equivalent levels during the mid part of this decade. These levels could be achieved at net operating costs
approaching zero. We believe Gold Resources current financial profile, capital availability and expected free cash flow
generation potential should allow for its growth profile to be achieved without any owner dilution.
At current levels, we believe Gold Resources shares provide an opportunity to outperform other small cap metals
equities as gold and silver prices remain at elevated levels and management’s internal production, grade and costs
targets are met during the next 12–18 months.
Valuation
We believe Gold Resources’ profile as a fast-growing, low-cost primary precious metal producer given its high-grade
gold and silver output generated by its La Arista underground deposit should allow for a premium multiple going
forward relative to other small cap metals equities. Its transformation from an exploration driven into an emerging and
high growth precious metals company with resource expansion potential and strong unhedged exposure to gold and
silver prices should help, as well. We have introduced an initial $45 per share target reflecting a blend of three
valuation metrics — NAV, OCF and dividend yield. As depicted in Exhibits 1–3, we have applied targeted multiples
within various comparables on our 2012 cash flow and net asset value estimates while we have assumed a current
annualized yield relative to our expectations of possible annualized dividend improvement. We arrive at our price
target of $45 for GORO by applying 2.0x multiple on NAV and 16x multiple on our 2012 CFPS estimate of $2.80. We
note that during the recent pricing cycle, major and mid-tier precious metals producers have shifted excess capital
generation towards dividend allocations, raising yields towards 1%. As operations and resources mature for Gold
Resources, we believe such a target could be achievable on a sustainable basis. We believe GORO could generate
more than $200 million in operating cash flow (before taxes) through 2012E and could distribute one-third of it as
dividends to shareholders.
As consolidation occurs throughout the mining sector, we should continue to witness healthy acquisition prices for
prospective and emerging deposits. We found the recent purchase of Andean Resources by Goldcorp as an intriguing
transaction given Andeans’ high grade resources at its Cerro Negro deposits. Andean had similar resource estimates
and high gold equivalent grades (although not as high as GORO); Goldcorp paid $3.4 billion for Andean’s shares. As
sustainable growth mine districts become more controlled and more difficult to exploit, small-to mid tier companies like
GORO could benefit.
Risks
Risks include a turnaround in recent precious metals pricing levels, ability to coordinate and ramp up production at its
flagship underground mine, tangible progress towards publishing resource study and not achieving the expected
resource potential at La Arista.

Michael S. Dudas, CFA, mdudas@jefferies.com, (212) 284-2383 Page 2 of 33
GORO
EXHIBIT 1: VALUATION – P/NAV ($1200 GOLD PRICE, 6.0% DISCOUNT RATE)
Properties (US $ thousands) (Per Share)

El Aguila 1,210,483 $22.01
Total 1,210,483 $22.01
Other Balance Sheet Items (US $ thousands) (Per Share)

Debt $0.00 $0.00
Cash $54,862 $1.00
Total $54,862 $1.00
Valuation NAV ($thousands) Multiple Value/Share
Properties $1,210,483 2.0x $44.02

Other Balance Sheet Items $54,862 1.0x $1.00
Others $0 1.0x $0.00
Implied Valuation $45.02
Source: Company reports, First Call, Jefferies & Co. Inc. estimates
EXHIBIT 2: VALUATION –P/CFPS
Price Mkt. CFPS P/CFPS

Company TKR Rating 1/4/2011 Cap ($mm) 2007 2008 2009 2010E 2011E 2012E 2007 2008 2009 2010E 2011E 2012E
Developers
Greystar Resources TSE: GSL NC $3.91 $329 -$0.35 -$0.38 -$0.36 -$0.36 -$0.18 $0.05 NM NM NM NM NM 78.2x
Osisko Mining TSE: OSK NC $14.20 $5,245 -$0.09 $0.01 -$0.04 -$0.04 $0.83 $1.32 NM NM NM NM 17.1x 10.8x
Junior Producers
Alamos Gold TSE: AGI NC $18.74 $2,170 $0.22 $0.68 $0.75 $0.79 $0.97 $1.35 25.5x 10.0x 15.9x 23.7x 19.3x 13.9x
Aurizon Mines AZK NC $6.94 $1,108 $0.28 $0.24 $0.43 $0.35 $0.68 $0.71 13.7x 13.3x 10.5x 19.8x 10.3x 9.8x
Gammon Gold GRS NC $7.96 $1,102 -$0.51 $0.45 $0.53 $0.69 $1.00 $1.16 NM 12.2x 20.9x 11.5x 8.0x 6.9x
Gold Resource Corporation GORO BUY $27.60 $1,463 -$0.24 -$0.67 -$1.03 -$0.15 $1.50 $2.80 NM NM NM NM 18.3x 9.9x
Golden Star Resources GSS NC $4.35 $1,123 $0.10 $0.13 $0.44 $0.46 $0.73 $0.82 31.6x 7.9x 7.1x 9.5x 6.0x 5.3x
Jaguar Mining JAG NC $6.91 $582 -$0.03 $0.14 $0.59 $0.39 $0.88 $1.51 NM 38.7x 19.1x 17.7x 7.9x 4.6x
Minefinders Corp. Ltd MFN NC $10.82 $866 -$0.28 -$0.57 $0.16 $0.37 $1.04 $1.12 NM NM 64.4x 29.2x 10.4x 9.7x
New Gold, Inc. NGD NC $9.46 $3,705 -$0.24 $0.17 $0.26 $0.40 $0.53 $0.66 NM 8.4x 14.2x 23.7x 17.8x 14.3x
Northgate Minerals Corporation NXG NC $3.08 $896 $0.50 $0.26 $0.71 $0.45 $0.46 $0.58 6.1x 3.2x 4.3x 6.8x 6.7x 5.3x
Average Junior Producers $95.86 $13,014.77 0 -$0.20 $0.83 $2.84 $3.75 $7.79 $10.71 NM 39.5x 24.7x 25.6x 12.3x 9.0x
Mid-tier Producers
Agnico Eagle Mines AEM BUY $71.97 $12,091 $1.83 $0.81 $0.73 $3.00 $4.00 $4.83 29.8x 63.4x 74.4x 24.0x 18.0x 14.9x
Eldorado Gold Corp EGO NC $17.85 $9,782 $0.19 $0.36 $0.49 $0.63 $0.97 $1.17 30.5x 22.1x 28.7x 28.3x 18.4x 15.3x
Yamana Gold AUY NC $12.22 $9,055 $0.72 $0.76 $0.80 $0.95 $1.15 $1.20 18.0x 10.2x 14.2x 12.9x 10.6x 10.2x
Source: CapitalIQ, company reports, First Call, Jefferies & Co. Inc. estimates. Consensus estimates used for NC companies and for AEM’s 2012E
earnings.

GORO
EXHIBIT 3: VALUATION – DIVIDEND YIELD
Share Recent Annual Dividend

Ticker Price Dividend Frequency Dividend Yield
Gold Producers
Alamos Gold TSE: AGI $18.74 $0.04 2 $0.08 0.43%
Agnico Eagle Mines AEM $71.97 $0.16 4 $0.64 0.89%
Eldorado Gold Corp EGO $17.85 $0.05 1 $0.05 0.28%
Yamana Gold AUY $12.22 $0.03 4 $0.12 0.98%
Barrick Gold ABX $51.67 $0.12 4 $0.48 0.93%
Newmont Mining NEM $59.08 $0.15 4 $0.60 1.02%
Goldcorp GG $44.53 $0.03 12 $0.36 0.81%
Kinross KGC $18.19 $0.05 2 $0.10 0.55%
Randgold GOLD $80.68 $0.17 1 $0.17 0.21%
Compania de Minas Buenaventura BVN $46.22 $0.16 2 $0.46 1.00%
AngloGoldAshanti AU $46.88 $0.09 2 $0.18 0.38%
Gold Fields Limited GFI $17.49 $0.10 2 $0.16 0.91%
Average Gold Producers $0.10 $0.28 0.70%
Global Diversified Mining Companies

Freeport McMoran Copper and Gold Inc FCX $118.75 $0.50 4 $2.00 1.68%
Rio Tinto RIO $71.08 $0.45 2 $0.90 1.27%
BHP Billiton BHP $91.34 $0.90 2 $1.80 1.97%
Average Global Diversified Mining Companies $0.62 $1.57 1.64%
GORO GORO $27.60 $0.03 12 $0.36 1.30%
Source: Company reports, Yahoo finance, CapitalIQ, Jefferies & Co., Inc.

GORO
Reasons to Invest
Low-Cost Growth – We are forecasting annual production growth of 15,000 gold equivalent ounces during 2010,
90,000 ounces during 2011 and 160,000 ounces during 2012, shown in Exhibit 4. Management’s annualized output
target of 200,000 ounces should be reached by 2013. Given near current base metals prices, copper, lead and zinc
revenues net of recoveries and smelter charges, by-product revenues could offset operating costs. While many
precious metals producers have benefited from higher by-product prices, very few precious metals producers
encompass the combination of strong production growth and such a potential operating cost profile. Management
plans to run highest grade material through the mill when prices are high.
EXHIBIT 4: GOLD RESOURCE CORPORATION PRODUCTION GROWTH
350,000
300,000
300,000
250,000
Potential Expansion/Acceleration
Gold Equivalent Ounces
200,000
200,000
160,000
Mill's Current Capacity

150,000
100,000 90,000
50,000
15,000
Source: Company reports, Jefferies & Co., Inc. estimates
Resource Expansion Potential – In addition to its producing El Aguia and La Arista deposits, Gold Resource controls
properties stretching over 16kms of a mineralized trend along a lineament trending from NW to SE depicted in Exhibit
5. Management sees resource expansion potential along strike and at depth below the current duel vein systems at La
Arista, which could double its 1.5 million ounce resource estimate. GORO controls other early stage exploration
properties (El Rey, El Aire, Alta Gracia, Las Margaritas) that are within 60 kms of its milling facilities (More than 99% of
its total land concessions have yet to be fully explored.)

GORO
EXHIBIT 5: GOLD RESOURCE LAND PACKAGE AND EXPLORATION
Source: Gold Resources Corp
Strong Financial Position – Management has been quite methodical and calculated in its development plan,
stressing focus on cash flow, less than one-year investment payback and to limit shareholder dilution. Its recent equity
offering was targeted to accelerate near-mine exploration and underground development, which we estimated moved
forward potential targets by 9–12 months. Management was able to build a brand new milling facility for only $35
million; a budget that we estimate was 50%–60% of what other companies could have provided. GORO has no debt
and should generate more than $50 million of free cash flow during the next 12 months.
Unique Business Model – We find GORO’s business model quite unique in the sector. Founders/insiders, who own
around 20% of the company, have developed an internal philosophy that targets high return on capital and measured,
growing excess cash distribution to shareholders in the form of dividends. Management expects that at least one-third
of excess cash flow will be distributed to shareholders on a regular basis (the other two-thirds covering taxes and
maintenance/growth capital needs). As the market increasingly focuses on companies that look to sustain and grow
dividends, we believe GORO could find support from a broader range of investors who desire exposure to metals.
Higher Gold and Silver Prices – We continue to expect gold and silver prices will achieve higher highs and higher
lows during 2011. Continued monetary accommodativeness by US and European central banks, emerging economies’
desires to diversify reserve base away from developed nation currencies, low real interest rates, prospect of improved
global economic demand for commodities should be supportive for pricing.

GORO
Potential Concerns
The major risks to Gold Resources include:
Lack of Published Reserve Calculations - While Gold Resources has successfully developed and started up its
mining operations during 2010, management has not produced an SEC proven and probable reserve or a 43-101
compliant resource study. According to the SEC, reserves cannot be considered proven and probable until they are
supported by a feasibility study, indicating that the reserves have had the requisite geologic, technical and economic
work performed and are economically and legally extractable at the time of the reserve determination. Given the
extremely high grade deposits and elevated gold and silver prices, management decided to focus on obtaining
necessary governmental, operating permits, continued drilling, mine development rather than shift attention to such
studies. Drill hole spacing consistent with P&P categories, economic progress, proper permit accumulation and
geologic data compiled by the company that shows 23 grams per tonne of gold equivalent material should support
SEC definitions. However, we first expect management to work towards delivering to the market a 43-101 feasibility
study (Canadian) by mid-year 2011.
Significant Management and Third-Party Share Ownership - We estimate founders/insiders control 20% while
Hochschild Mining, a Latin America based mining company, controls 28% of Gold Resources’ 53 million common
shares outstanding. Hochschild was an early and consistent investor and capital provider to Gold Resources. Since
establishing a strategic alliance with Gold Resource during 2008, Hochschild has invested $65 million; at current
market prices Hochschild’s investment exceeds $400 million. At times, the market may be weary of the Hochschild
ownership and monetization potential.
Resource Conversion - The recent move in the shares has reflected stronger metals prices, but a more visible
production profile after start-up. Management believes GORO’s orebodies could potentially double in size with
additional drilling and modeling. While we concede that GORO’s land positions could provide resource growth potential
given early drill results, the market will need to become more comfortable with resource growth potential to support
higher production, cash flow and dividend profiles.
Execution - GORO has begun mining ores from its underground deposit at La Arista. A key to feeding the mill
efficiently will be management’s ability to keep up with mine development and establish a reasonable amount of
working faces through the two vein systems. Stockpiled open pit ore from El Agulia deposit needs to be replaced.
Timing and limiting grade dilution will be important as to meeting targets. The key will be management’s ability to feed
the mill with ore and grades that would justify growth in dividend payments.
Deflation - If global central banks judge that the economic growth risks of inflation merit withdrawal of liquidity
throughout the monetary system, we would see investors look to liquidate commodity investments and commodity-
based equities, such as Gold Resources. Also, given GORO’s base metal profile (copper, lead and zinc by-products),
potential industrial metal volatility could have negative impacts to valuations.

GORO
Company Details
“Unique” Aspect of the Company

We believe Gold Resource is unique because of its extremely high-grade 100% controlled deposits and management’s
focus on return on capital and commitment to a sustaining and potentially growing dividend. Gold and silver contributes
nearly 85% of expected revenues with the remaining 15% generated by base metals.
GORO’s control of highly prospected, under analyzed land packages along a NW trend from its highly valuable La
Arista underground orebody could generate a multi-year program of resource and production growth. Also, Mexico has
one of the most supportive mining governments and cultures among metal-dominant countries; Mexico leads the world
in primary silver production.
Stock Price Discussion

GORO’s share price has been impacted by gold and silver price expectations as well as success in its initial mine
development, overall money flow through the commodity equity space, and margin expectations. As shown in Exhibit
6, GORO reacted quite favorably during 2010 as metals prices trended higher, but also as the company was coming
closer to commencing production of ore from its El Aguila open pit deposit through its brand new mill. We have
highlighted key milestones achieved by the company in Exhibit 7.

GORO
EXHIBIT 6: STOCK PRICE CHART – GOLD RESOURCES
$35 2.5
Millions
$30
(23)
$25
(20)
GORO Trading Volume

1.5
GORO Share Price
$20
(19)
(18)
$15 (14)
1
(11)
(12)
(9) (10)
$10 (13)
(6) (8)
(2) (4) 0.5
(5)
$5 (3)
(1)
$0 0
GORO Trading Volume GORO Share Price
Source: CapitalIQ, Jefferies & Co., Inc.
EXHIBIT 7: GOLD RESOURCE KEY COMPANY MILESTONES 2006-2010
(1) 14-Sep-06 Gold Resource begins trading on OTC Bulletin Board after completing its IPO in August 2006
(2) 12-Jun-08 GORO gets federal permission to construct the El Aguila Project mill
(3) 10-Dec-08 GORO forms strategic alliance with Hochschild through $5 million private placement
(4) 26-Feb-09 Hochschild exercises option to purchase 4.33 million additional shares at $3.00 per share
(5) 30-Jun-09 Hochschild completes $20 million private placement of 5 million restricted shares of GORO at $4.00 per share
(6) 13-Aug-09 GORO gets federal permission to mine at its El Aguila open pit deposit
(7) 9-Dec-09 Commissioning of the initial floatation cicrcuit is underway at its El Aguila Project mill
(8) 14-Dec-09 El Aguila Project gets approval to develop the underground high-grade Arista deposit
(9) 18-Dec-09 Hochschild invests $16 million in a private placement
(10) 3-Feb-10 GORO announces first concentrate produciton at its El Aguila Project Mill
(11) 9-Mar-10 Hochschild increases its holding in the company to 28.7%
(12) 26-May-10 Hochschild increases its holding in the company from 28.7% to 29.6%
(13) 1-Jul-10 GORO announces Commerial production at its 100% owned El Aguila high-grade gold and silver project.
(14) 8-Jul-10 GORO gets approval for listing of its common stock on NYSE: AMEX
(15) 29-Jul-10 GORO announces initial special cash dividend of $0.03 per common share
(16) 30-Aug-10 GORO begins trading on AMEX
(17) 31-Aug-10 GORO announces second special dividend of $0.03 per common share
(18) 3-Sep-10 GoldCorp makes $3.4 billion bid for Andean Resources
(19) 27-Sep-10 GORO holds conference call; draws similarities between Andean Resources and GORO
(20) 20-Sep-10 GORO executes $55.6 million private placement to accelerate produciton profile and exploration
(21) 30-Sep-10 GORO declares third special dividend of $0.03 per common share
(22) 29-Oct-10 GORO declares fourth special dividend of $0.03 per common share
(23) 23-Nov-10 GORO commences mining Arista Vein system
(24) 30-Nov-10 GORO declares fifth special dividend of $0.03 per common share
(25) 30-Dec-10 GORO declares sixth special dividend of $0.03 per common share
Source: Company reports, Jefferies & Company, Inc.

GORO
EXHIBIT 8: SHARE PERFORMANCE RELATIVE TO GLD, SLV
260
240
220
200
180
160
140
120
100
80
GORO GLD SLV
Source: Bloomberg, Baseline, Jefferies & Co., Inc.
EXHIBIT 9: SHARE PERFORMANCE RELATIVE TO XAU, GDXJ
260
240
220
200
180
160
140
120
100
80
GORO XAU GDXJ
Source: Bloomberg, Baseline, Jefferies & Co., Inc.
Note: XAU Index is Philadelphia Gold and Silver Index, GDXJ is Market Vectors Junior Gold Miners Index

GORO
EXHIBIT 10: SHARE PERFORMANCE SINCE 2007
2010 2009 2008 2007

Mkt. % % % %
Company TKR Rating Cap ($mm) Change Change Change Change
Developers
Greystar Resources TSE: GSL NC $341 -26.5% 253.2% -75.5% -22.0%
Osisko Mining TSE: OSK NC $5,363 70.8% 200.0% -52.4% 37.0%
Junior Producers
Alamos Gold TSE: AGI NC $2,231 61.0% 75.5% 23.3% -33.6%
Aurizon Mines AZK NC $1,108 0.0% 125.9% -16.7% 23.9%
Gammon Gold GRS NC $1,102 -25.6% 101.3% -31.7% -50.8%
Gold Resource Corporation GORO BUY $1,463 161.3% 221.4% -21.3% 147.2%
Golden Star Resources GSS NC $1,123 47.1% 212.0% -68.4% 7.1%
Jaguar Mining JAG NC $582 -36.3% 114.0% -56.2% NM
Minefinders Corp. Ltd MFN NC $866 7.2% 100.0% -54.4% 27.0%
New Gold, Inc. NGD NC $3,705 168.1% 154.5% -71.9% -33.1%
Northgate Minerals Corporation NXG NC $896 3.9% 271.1% -72.6% -12.9%
Average Junior Producers 43.0% 152.9% -41.1% 9.3%
Mid-tier Producers
Agnico Eagle Mines AEM BUY $12,091 42.0% 5.2% -6.0% 32.5%
Eldorado Gold Corp EGO NC $9,782 31.1% 78.2% 37.1% 7.4%
Yamana Gold AUY NC $9,055 12.5% 47.4% -40.3% -1.8%
Source: Baseline, Jefferies & Co., Inc.
Operations Discussion
Gold Resource Corporation is a mining company focused on production and pursuing development of select, high-
grade gold and silver projects that feature low operation costs and produce high returns on capital.
Company History – Gold Resources completed its IPO in September 2006. William and David Reid co-founded the
company with expectations of developing high grade precious metals deposits. They took a disciplined approach to
creating value while focusing on rapid project execution and attaining a goal of meaningful dividend distributions. The
Reids have been very active and visible forces within the North American mining sector. The Reids co-founded U.S.
Gold Corporation (USGL) and ran that company from 1977 through August of 2005. During the 28 years USGL
operated under the Reid's management, US Gold developed six producing precious metals mines. In 2005 the Reids
sold their interests to Rob McEwen, who became the US Gold’s largest shareholder and chief executive. The Reids
have developed a demonstrated track record of project development and operational experience.
The Reids became interested in the mining district southeast of Oaxaca City in the early 2000s. GORO staked claims
on properties once explored by Apex Silver. Also, Apex took 2000 samples. Of those gathered, the highest 115 had
indications of average of 0.4 ounce per ton material sporadically over an 8km stretch of land. Apex also drilled 10
holes, one in Agula pit, others didn’t fit. Ignored by larger companies, GORO focused on these concessions.
GORO now controls 100% interest in five high-grade gold and silver deposits in Mexico's southern state of Oaxaca.
Gold Resources’ flagship property, its El Aguila Project, commenced mill operations during the summer.
Oaxaca mining unit

The El Aguila Complex consists of very high-grade gold and silver deposits that host significant copper, lead and zinc
mineralization. Management declared commercial production from the El Aguila project during the summer of 2010.
During the past few years, management has discovered three high-grade poly-metallic deposits at its El Aguila Project.
The high-grade open pit deposit (El Aguila), which has been the initial feeder ore to the mill, the La Arista high-grade
poly-metallic dual vein system and El Aire high-grade poly-metallic vein system.

GORO
Exhibit 11 shows a cross section of the El Aguila open pit deposit. An added benefit from the mine was GORO’s
requirement of 2 million tons of waste rock in order to build its two tailings impoundments next to the mill. As such,
along with an estimated 330,000 tonnes of mineralized material and the healthy average grades of 7.5 g/t gold and 63
g/t silver, El Aguila became the cash flow generator deposit helping to fund the development of La Arista. Management
believes a feeder vein at bottom of pit could be lurking below the pit, which provides additional targets for more higher-
grade ore.
EXHIBIT 11: EL AGUILA OPEN PIT
Source: Gold Resource Corporation
La Arista – The Company Maker

The dual parallel veins systems called Arista and Baja are approximately 30 meters apart. When management fully
develops the targeted working faces (5-6 meter wide blocks generating 200-240 tonne blasts), the mine could
generate 1600–2000 tonnes per day of ore. Currently, the dual vein systems remain open on strike and depth. The
ores from the deposit require much less grinding that the El Aguila open pit ores, which will help improve mill
performance and output. Initial plan is to mine to the 500 meter level. However, management believes that the vein
systems could extend to at least 1000 meters. We could see a potential epithermal deposit forced into a deep copper
gold skarn deposit or porphory system. We expect accelerated drilling to delineate its expectations. In addition, its El
Aire target will be accessed for drilling as management drifts off the spiral.
EXHIBIT 12: LA ARISTA DEPOSIT DUAL VEIN SYSTEMS
Source: Gold Resource Corporation

GORO
As depicted in Exhibit 13, La Arista gold and silver grades are among the highest relative to other important gold/silver
mines in the region. The deposit is estimated to contain 2.9 million tonnes of mineralized material at 6.5g/t gold and
506 g/t silver, generating over 15 g/t or about 0.5 ounce per ton of gold equivalent metal. Its current mine life at a
targeted 200,000 ounce per year rate hovers around eight years. The mill is located only 2 km from the mine portal.
What we believe separates La Arista from the other deposits is the large base metal by-product revenue potential.
Base metal contributions after recoveries and smelter charges should fluctuate between $125-175 per ton, with
expected mining and milling costs of $75–$90 per ton. Also, the El Aire target most likely will be accessed for drilling
by drifting off the spiral. As shown in Exhibit 12, mining of the Arista and Baja veins will be off the decline with
horizontal stopes shooting off for production and development.
EXHIBIT 13: ORE GRADE COMPARISON AMONG SELECTED DEPOSITS
Gold (Au) Silver (Ag) Copper (Cu) Lead (Pb) Zinc (Zn) Gold Equivalent
Company Mine Name g/t g/t % % % Grade g/t
Agnico Eagle LaRonde 2.8 68 0.35 3.65 6.29

Pinos Altos 3.01 86 4.45
GoldCorp Penasquito 0.44 29 0.33 0.72 1.43
Yamana Chapada 0.24 0.34 0.77

El Penon 6.64 280 0.15 11.31
Minera Florida 4.51 37 5.13
Gold Resource Corp La Arista 6.5 506 0.6 2.24 6.75 20.26
Source: Gold Resource Corp, Company reports, Goldminerpulse.com, Jefferies & Co. Inc.
El Aguila Mill – Flexible and New

The El Aguila mill was commissioned during the second quarter of 2010. Flexibility in the mill design was a key feature
as management’s objective appears to support having multiple mines feeding ore to its strategically located mill at El
Agullia. The Flotation circuit can produce gold/silver concentrates or has three circuits for poly-metallic concentrates —
copper, lead and zinc — gold associates with copper, silver with the lead. There is also an agitated leach circuit that
could produce dore which is sold to a refinery offsite.
Management constructed the mill for a total of $35 million — inclusive of power, infrastructure, roads and Phase 1 of
the tailings impoundment. The milling facility was built with all new equipment except for refurbish ball mills. The mill
has the capacity to process 1,200 tons per day of the softer underground ore. Management has targeted processing
800 tons per day (given the harder Aguila open pit ore) during the fourth quarter and through 2011 which should allow
achievement of the 90,000 ounce target. The Phase 1 of the tailings impoundment will allow for operation through
2013, while Phase 2 will provide ten years (each with double liners). Mill optimization will be a key focus during 2011
as optimization and ramp-up are still underway as management targets a 90% recovery rate. Grades should improve
as the start up phase wanes.
Exploration Potential – Along the Lineament

The land package GORO controls appears to be the youngest geologic district in Mexico. It is estimated that the
district is only 15 million years old, while many of the prolific northern Mexico districts are aged between 25 and 30
million years old. Therefore, the southern districts have not witnessed enough weathering and erosion and encouraged
much less historical development. Many geologists and prospectors missed this mineralization. There have been some
local workings, but no drilling. The deposits are 100–200 meters below the surface. The 16 kilometers controlled by
GORO are of this young age, providing some geologic potential to expand resources.
El Rey consists of a high-grade gold vein system. Drill results were encouraging, with several drill holes showing
average grades near one ounce per ton and ore within 100 meters of the surface. Management considering a ramp
decline to develop and mine this material. The deposit could provide 100–200 tons per day of ore to the mill. We could

GORO
see some ore to the mill late in 2011 or first half of 2012. The site has been mined previously on a very small scale but
very little historical information is known about the property. GORO has taken two selective grab samples from the
dump material around the original shaft. The two samples assayed 80 and 85 g/t of gold, indicating that the samples
are of potential vein material.
Las Margaritas looks to be a high-grade silver property comprised of four northwest kilometers of the important N 70 W
structural corridor, which is an extension of the El Aguila system. In addition, Las Margaritas occupies ground within an
inferred caldera (collapsed volcanic center). Though mineralization at these levels is rare, the important point is that
the Las Margaritas property shows indications of potentially significant silver mineralization. Surface samples taken by
GORO have yielded silver mineralization as high as 1,200 g/t. Alta Gracia is a high-grade silver and gold property.
Expect to start drilling in first half targeting 100-200 meters below surface. The site has been mined previously on a
very limited scale in the 1970's but very little historical information is known about the property. GORO has taken rock
chip surface samples from the property with the highest silver assayed in excess of 1.4 kilos per tonne of silver. Solaga
is a high-grade silver property which was previously mined in the 1980s. Initial high-grade selective sampling ran 15
kilo's (15,000 grams / tonne or 488 oz/ton or 1.5%) silver per tonne. Also, any ore from either of these deposits could
be transported to the El Aguila mill for processing.
We expect management to continue efforts into acquiring the concessions along the 45km lineament running east of El
Rey to the La Arista underground mine. We believe a good portion of the excess cash flow generated by the
operations will be allocated towards exploration and district development.

GORO
EXHIBIT 14: GORO GOLD PRODUCTION VOLUME GROWTH EXHIBIT 15: SILVER PRODUCTION VOLUME GROWTH
160,000 12,000,000
140,000 10,840,000
140,000
10,000,000
Silver Production (Ounces)

Gold Production (ounces)
120,000
8,000,000
100,000 90,000 6,900,000
80,000 70,000 6,000,000 5,240,000

60,000
40,000 4,000,000
2,800,000
40,000
15,000 2,000,000
20,000
-
- -
Source: Company reports, Jefferies & Co., Inc. estimates Source: Company reports, Jefferies & Co., Inc. estimates
EXHIBIT 16: COPPER PRODUCTION VOLUME GROWTH EXHIBIT 17: LEAD PRODUCTION VOLUME GROWTH
9,000,000 8,200,000 35,000,000

30,630,000
8,000,000
30,000,000
Copper Production (Pounds)
Lead Production (Pounds)

7,000,000
25,000,000
6,000,000 5,220,000 19,490,000
5,000,000 20,000,000
4,100,000 15,310,000
4,000,000 15,000,000
3,000,000
10,000,000
2,000,000 6,190,000
1,190,000
1,000,000 5,000,000
208,000 1,178,000
- -
Source: Company reports, Jefferies & Co. Inc. estimates Source: Company reports, Jefferies & Co. Inc. estimates
EXHIBIT 18: ZINC PRODUCTION VOLUME GROWTH EXHIBIT 19: GORO 2012E REVENUE BREAKDOWN BY METAL
100,000,000 92,300,000
90,000,000
80,000,000 Base
Zinc Production (Pounds)
Metals
70,000,000 Gold
58,730,000 18%
60,000,000 35%
50,000,000 46,150,000
40,000,000
30,000,000
20,000,000 13,570,000
10,000,000 1,178,000 Silver
- 47%
Source: Company reports, Jefferies & Co. Inc. estimates Source: Company reports, Jefferies & Co. Inc. estimates

GORO
Financial Outlook
2010–2013 Earnings
We expect strong earnings and cash flow growth for Gold Resources from 2010–2013 driven by production ramp-up at
its Oaxaca Mining Unit, full production at La Arista, increasing silver and gold prices, and controlled production costs
given pricing for copper, lead, zinc. While the market price of gold and silver is one of the most significant factors in
determining any precious metals company’s profitability (we forecast an average price per ounce of $1,350 for gold
and $23 per ounce for silver in 2011, up from average price in 2010 of $1,225 per ounce for gold and $20 per ounce
for silver). We note that a 5% increase/decrease in gold/silver prices impacts revenues by roughly $6 million assuming
2011 production of 90,000 gold-equivalent ounces, or EPS by 7%. Increasing gold and silver price realizations,
relatively smooth improvement in mill feed, and well-managed production costs should expand margins and generate
free cash flow for the company. As the company produces gold and silver at higher price levels, we believe improving
realized prices and production growth will outweigh any potential negative impact on consumables (diesel fuel,
commodities, other production related costs) or if base metal prices decline. We are forecasting 2012 cash flow (before
taxes) of more than $200 million, of which nearly 30% could be released as dividends to shareholders. Our cost
forecasts are near zero given $3.00, $0.90, $0.95 copper, lead and zinc realizations net of recoveries and smelter
charges.
Balance Sheet, Cash Flow
At September 30, 2010, Gold Resources had no debt outstanding and cash and cash equivalents balance of $55
million. During September, management completed a private placement of equity securities (3,475,000 shares at
$16.00) that realized $51.9 million net of fees. Proceeds expected to accelerate underground mine development at La
Arista, exploration and ore development drilling among its key exploration targets, allow more efficient supply and
equipment ordering to better manage growth and potential to ramp up mill throughput by 50%. Since 2008, Hochschild
Mining has been investing in GORO shares and now controls 28%. We expect cash flow to grow as production ramps
up through 2011-2012, limited by the amount of underground ore production brought to the mill. Going forward, we do
not expect any external acquisition activity as we believe GORO has enough prospective targets and medium term
production growth potential. Besides, we do not see any regional targets that would have anywhere near the grades
and metallurgy controlled by GORO.
We expect GORO balance sheet to strengthen and liquidity to continue improving in 2011–12 as the company realizes
higher prices and generates positive cash flow. We expect GORO to incur $20-$30 million on capital expenditure in
2011. GORO’s restricted cash account set aside for underground development and exploration should exhaust in Q1
2011. Cash dividend payments are currently declared monthly. Management has indicated a desire to allow investors
who control a certain level of shares the ability to choose to receive their dividends in either cash or physical gold and
or silver coins; management has contracted a designer who has coinage experience. We may hear more about this
concept during the next few months. In the meantime, the board declared an initial special cash dividend of $0.03 per
share on July 29, 2010 and has declared subsequent $0.03 per share dividends each month since its initial
declaration.
If resource expansion goes as planned, mill capacity could be expanded to accommodate an additional 100,000
ounces of annual gold equivalent output beginning in 2014. Management targets a ten-year optimal mine life profile, so
attaining gross resource of around three million ounces would justify such an expansion. The mill was designed to add
power, machinery and infrastructure quite easily for minimal expense.
EXHIBIT 20: GORO - SENSITIVITY ANALYSIS ON NAV/SHARE
Gold Price ($/oz.)

$22.01 $800 $1,000 $1,200 $1,400 $1,600
2.0% $22.42 $24.61 $26.64 $28.58 $30.47
Discount Rate
4.0% $20.39 $22.35 $24.17 $25.91 $27.60

6.0% $18.61 $20.37 $22.01 $23.57 $25.09
8.0% $17.04 $18.63 $20.11 $21.52 $22.88
10.0% $15.66 $17.09 $18.42 $19.70 $20.94
Source: Jefferies & Company

GORO
EXHIBIT 21: GORO VALUATION-P/NAV
Valuation NAV ($thousands) Multiple Value/Share
Properties $1,210,483 2.0x $44.02

Other Balance Sheet Items $54,862 1.0x $1.00
Others $0 1.0x $0.00
Implied Valuation $45.02

Source: Company reports, Jefferies & Company estimates
Management
Mr. William W. Reid, Co-Founder, Chairman and Chief Executive Officer

Mr. William Reid has been Chief Executive Officer of Gold Resource Corp. since 1998. He co-founded Gold Resource
Corp. on August 24, 1998 and serves as its Chairman. He founded and served as the Chief Executive Officer of U.S.
Gold Corporation (USGL) from 1977 to August 18, 2005. During his tenure with U.S. Gold, the company built or
participated in six producing mines.
Mr. David C. Reid, Co-Founder, Secretary and Treasurer
Mr. David Reid co-founded Gold Resource Corp. in August 24, 1998 and serves as its Secretary and Treasurer. Mr.
Reid served as Vice President of Gold Resource Corp. since 1998. He served as Consultant of US Gold Corporation
from August 19, 2005 to September 30, 2005 and Vice President of Exploration from January 1, 1994 to August 18,
2005.
Mr. Jason D. Reid, President
Mr. Jason Reid has been President of Gold Resource Corp. since July 1, 2010. Mr. Reid served as Vice President of
Corporate Development of Gold Resource Corp. from January 2008 to July 2010. He was responsible for formulating
corporate growth strategies, retail and institutional marketing, raising capital and overseeing investor relations
programs. Prior to Gold Resource, Mr. Reid operated two businesses founded by him, one in the equine industry and
one in the construction industry.
Mr. Frank L. Jennings, Chief Financial Officer and Principal Accounting Officer
Mr. Jennings has been Chief Financial Officer of Gold Resource Corp. since June 20, 2006 and also serves as its
Principal Accounting Officer. He is responsible for maintaining the company's system of controls over accounting and
financial reporting. For the past 10 years, he has served as an executive officer and director of several public
companies, including American Educational Products, Global Casinos and OnSource. He received his BA degree in
Economics from Austin College and an MBA in Finance from Indiana University.

GORO
Gold – Investment Summary
We believe the combination of macro, micro and technical drivers should allow gold prices to achieve higher highs and
higher lows during the next 12–18 months. As investors continue to discount a higher perceived price for gold and
silver, given its monetary and historic value storage profile, we anticipate gold-related equities to better reflect
realizations and scarcity value.
Macro news flow should continue to support prices, especially as domestic economic trends, unemployment,
deflationary fears, global currency volatility and concerns keep investor attention on gold and silver. Micro factors
surrounding central bank purchases of gold, growing ETF accumulation and solid coinage demand should also help
pricing continue to seek new highs.
EXHIBIT 22: DOLLAR GOLD PRICE 1970–2010
$1,500 Crisis
$1,400 Oil Shock 2
$1,300
$1,200 Inflation
$1,100
$1,000 Disinflation
$900 Volcker at Fed Irrational
$800 Exuberance
$700
$600 Oil Shock 1
$500
$400 Oil Shock 3
$300
$200 Deflation Reflation
$100 Plaza Accord September 11
$0
Source: Bloomberg, Jefferies & Co., Inc.
While monetary stimulus and global investor perception regarding currency values and direction should allow global
gold prices to sustain higher than historic pricing levels, well capitalized North American-based precious metal
producers will recognize the full benefit of the increased value placed on gold during the next three to four years
despite fighting geologic, metallurgy, and capital cost challenges.
We believe precious metal shares should continue to trade higher during 2011 as economic, policy and political
uncertainty combined with global currency devaluation fears continue to support metals prices.

GORO
EXHIBIT 23: GOLD PRICES VERSUS NORTH AMERICAN GOLD EQUITIES 1985-2010
450
400
350
300
250
200
150
100
50
0
XAU Price of Gold
Source: Bloomberg, Jefferies & Company
Gold Price Forecast

Our positive bias towards gold price level and direction reflects our belief that excess liquidity will continue to be
recognized in the price of commodities in general and gold in particular. We characterize the gold market as a “stock”
rather than a “flow” market. We contend global investor and policy sentiment as well as currency perception drives
gold price movements rather than traditional supply-demand analytics. The exhibit below highlights our average price
forecasts and ranges.
EXHIBIT 24: JEFFERIES GOLD PRICE EXPECTATIONS
2005 2006 2007 2008 2009 2010 2011E

Average $445.42 $604.65 $697.09 $872.25 $974.00 $1,227.00 $1,350.00
High $528.00 $714.80 $840.50 $1,002.95 $1,216.00 $1,424.00 $1,400.00

Low $412.70 $516.88 $607.40 $712.30 $812.00 $1,063.00 $1,200.00
Source: Bloomberg, Jefferies & Company, Inc.
EXHIBIT 25: JEFFERIES SILVER PRICE EXPECTATIONS
2005 2006 2007 2008 2009 2010 2011E

Average $7.32 $11.59 $13.39 $14.97 $14.70 $20.24 $23.00
High $9.00 $14.83 $15.60 $20.82 $19.24 $30.91 $30.00

Low $6.42 $8.74 $11.62 $8.97 $10.59 $15.00 $20.00
Source: Bloomberg, Jefferies & Company, Inc.

GORO
Risks
For the Commodity
Deflation – Gold’s value as a store of value should allow for relative outperformance in inflation and deflationary
periods. However, the perceived overcapacity among the capital and labor stock may allow for continued liquidity
support, which should lead to higher prices once economies recover. If expectations of asset deflation take hold, the
nominal dollar price of gold would likely decline, as would equities.
Dollar Strength - As a global commodity, we would typically see negative price correlation relative to the foreign
exchange value of the U.S. dollar. The global market prices gold, as well as most other commodities, in dollars. A
significant strengthening of the value of the U.S. dollar relative to European or Asian currencies could pressure gold
prices.
Energy Prices – Gold prices have been sensitive to price changes in oil prices. Historically, gold priced in oil averaged
between 10–15 barrels. Today, the ratio hovers above 15 barrels. Gold may compete with commodity fund flows into
other commodities, such as oil. A sustained fall in crude oil prices would further injure sentiment and risk profiles in our
view. The market can be quite swift in discounting lower energy prices among other commodities.
Central Bank Withdrawals of Excess Liquidity – We believe the massive monetary response provided by the U.S.
Federal Reserve Board as well as other developed country central banks has been quite helpful in arresting a serious
financial panic. As structural and cyclical issues weigh down efforts by policy makers in reviving global economic
activity, bankers may continue to maintain very aggressive liquidity posture. If bankers look to drain the liquidity from
the system sooner than required, deflation fears could return, removing support for commodities in general and gold in
particular.
Investor Liquidation – Any material slowdown in emerging economies such as China and India or aggressive
increase in global interest rates — encouraging hedging or creating higher hurdle rates to hold very low interest-
bearing gold — could drive a de-stocking of gold inventories held within ETFs. The gold held within these relatively
long-leaning accounts could provide an overhang to the market if hard-asset investor sentiment wanes.
For the Equities
Margin Squeeze – During 2007–08 gold lagged energy and hard rock commodities. The demand placed on available
geologists, metallurgists, mining equipment, contractors, foundry space, consumable product helped push mining
costs higher, aiding a squeeze in expected margin generation.
Resource Development – Gold mines are hard to find, develop and effectively operate in varied geopolitical,
environmental and social environments. Mature gold producers deplete between 8%–12% of gross proven/probable
reserves each year. The need to replenish and grow will accelerate as overall discovery success appears muted.
Either these companies shrink or need to purchase smaller companies with less-developed, but prospective resources.
Dilution may enter into investor calculus.
Compression of Relative Multiple - We contend that investors could continue to reduce the historical premium
accorded gold equity valuations relative to diversified miners. The advent of the ETF has contributed to this trend. Gold
producer managements must be able to generate growth and investment opportunities to offset the concentrated
price-taking aspect of its business and exhibit a level of capital efficiency.
Niche Appeal – As global capital flows towards the basic infrastructure and resource needs of developing nations and
global mega resource companies grow through acquisition and price realizations, gold producers may find stronger
competition for investment and recognition from money management and capital firms.

GORO
Quantitative Easing -2
After cutting the Fed Funds rate to near zero during the credit crisis, the Fed turned to its balance sheet as a primary
tool of monetary policy. The Fed’s total assets, which include loans and securities other than those used for monetary-
policy operations, have risen to more than $2 trillion from $878 billion at the start of 2007.
On November 3, the Federal Reserve announced it will buy an additional $600 billion worth assets by the end of June.
This monetary policy response has been dubbed QE2. This latest stimulus follows the August 2010 announcement,
where Fed decided to use cash received from maturing mortgage bonds to buy new mortgage or Treasury bonds. The
decision underscored the Committee's intent to maintain accommodative financial conditions as needed to support the
recovery.
We believe the added monetary liquidity provided by the Federal Reserve, which started slowly in August 2007 and
accelerated dramatically in the fourth quarter of 2008, the subsequent expansion of its balance sheet and monetizing
debt will continue to be reflected in monetary metrics as well as a lower relative value of the US currency. We expect
central bankers to err on the side of too much monetary accommodation without tangible evidence of a sustained, job-
creating economic recovery.
EXHIBIT 26: ADJUSTED MONETARY BASE JUNE 2000-2010
$2,500
$2,000
$1,500
$ billions
$1,000
$500
$0
Adjusted Monetary Base
Source: Federal Reserve Bank of Saint Louis
The money stock remains excessive, especially relative to the value of US gold reserves. If monetary velocity ever
accelerates, inflation expectations could accelerate prior to a defined monetary exit strategy unfolding.

GORO
EXHIBIT 27: M2 VELOCITY OF MONEY (NOMINAL GDP DIVIDED BY M2 MONEY SUPPLY)
2.2
2.1
1.9
1.8
1.7
1.6
M2 Velocity of Money
The projected budget deficits in the Administration projections never fall below $438 billion, and will generate
cumulative budget deficits of more than $6 trillion from 2011 through 2020. Over the course of the budget horizon,
annual outlays will increase from $3.714 trillion in 2011 to, gasp, $5.541 trillion in 2020, a 50% increase! The
Congressional Budget Office estimates annual debt increases of nearly $600 million annually through 2020. By 2020
the total U.S. national debt held by public is projected to be more than $16 trillion. We believe the certainty of added
Treasury debt issuance may continue to cast uncertainty over the U.S. ability to support its currency.
EXHIBIT 28: FEDERAL DEFICIT AS A PERCENT OF GDP
30
25
20
15
10
0
1900
1904
1908
1912
1916
1920
1924
1928
1932
1936
1940
1944
1948
1952
1956
1960
1964
1968
1972
1976
1980
1984
1988
1992
1996
2000
2004
2008
-5
-10
US Federal Deficit as a % of GDP
Source: CBO

GORO
European Debt Crisis
The debt crisis in Europe has escalated recently as investors fear that Ireland's debt problems, despite the EU
approving an emergency aid package, could spread to other countries such as Portugal and Spain. Borrowing costs of
countries such as Spain, Italy, Portugal and Belgium have shot higher. Gold has rallied as euro zone's debt crisis has
prompted investors to buy gold to hedge against currency and economic uncertainties.
Central Bank Buying
Central banks purchased 222 tonnes of gold from the IMF. India bought 200 tonnes, Sri Lanka 10 tonnes and
Mauritius 2 tonnes. Thailand imported 45 million tonnes of gold in July 2010 (more than 13x June imports); Bank of
Thailand is expected to have played a major role in these gold imports as it is looking to diversify its forex reserves.
The International Monetary Fund has now sold 403.3 metric tons, or 13 percent of its reserves, and has announced
that it has completed the planned sale of some of its bullion reserves, a program that began in September 2009.
We believe the dollar will remain the world’s reserve currency for the foreseeable future. However, the increase in non-
U.S. holdings of government debt and an over-weighted dollar based position among developing economies reserves
along with heightened uncertainty of Euro’s ability to effectively weather the crisis should move gold up in the ranks of
global reserve assets. Given our expectations of declining mine production, increased investor access, and global
currency volatility, we expect Asian central banks or governments to remain active in net adding to gold reserves.
Asian central banks or governments could look to directly invest or enter into off-take agreements.
Dollar Direction – Gold in FX
Historically, dollar price gold has generated an inverse correlation to changes in the value of the dollar, as depicted in
the exhibit below. During 2008, the dollar weakened quite dramatically as the market accelerated purchase of
commodities and the Fed was too dovish. After the commodity prices peaked and the impact of the global liquidity and
confidence crises accelerated, gold prices fell hard as risk-averse investors globally turned toward dollars and U.S.
government supported bonds. Since Ben Bernanke’s Jackson Hole speech in August 2009, dollar gold prices had
been negatively tracking the dollar’s direction. However, since mid November, when European debt concerns surfaced
again, gold prices and dollar have moved in the same direction.
EXHIBIT 29: DOLLAR GOLD PRICE VS. VALUE OF U.S. DOLLAR
$1,600 $180
$1,400
$160
Price of Gold (1 ounce)
$1,200
$140
$1,000
$800 $120
DXY
$600
$100
$400
$80
$200
$0 $60
Price of Gold DXY


GORO
Exchange Traded Fund (ETF)
We believe the advent of the ETF has been the most significant change to the investment profile and market visibility
this decade. Prior to 2005, investors who wished to own or control physical gold, the choices surrounded more
cumbersome (coins, bars, bullion) and financially levered (futures, options, gold-related equities or gold/natural
resource mutual funds) ways to participate in the potential in the perceived value of gold. The ETF was created to
allow ownership of physical gold through one-for-one backing of a share of the ETF. So when an investor owns a
share of the gold ETF, a tenth of an ounce of gold is purchased and transferred to a depository. When an investor sells
its share of ownership in the ETF, the gold is sold out of the depository into the market. Since 2005, over 1,300 tonnes
of gold have been accumulated, despite price volatility ranging from $500–$1400 per ounce. We tend to identify the
ETF ownership as another “central bank,” or large controller of inventoried gold. This ownership has tended to be
sticky and supportive to the gold market during most periods, in our view.
But, the advantages of gold ownership through the ETF, along with the added visibility brought to the global gold
market, have provided disadvantages for gold equities. The ETF has shifted investment and support for gold equities
in general. Institutional investors had looked at well-capitalized gold producers as a proxy for gold price expectations.
However, retail and institutional investors have shied away from investment, in our view.
EXHIBIT 30: ACCUMULATION OF GOLD WITHIN GLOBAL ETFS AND GOLD PRICES
1400
1200
1000
Tonnes of Gold
800
600
400
200
Total Tonnes
Source: Global Trust, Bloomberg

GORO
EXHIBIT 31: INVESTORS’ NET POSITIONS IN COMEX GOLD FUTURES
300,000 $1,600
250,000 $1,400
200,000 $1,200
Net Positions (Contracts, thousands)
150,000 $1,000
Gold Price ($/ounce)

100,000 $800
50,000 $600
0 $400
-50,000 $200
-100,000 $0
Investors' Net Positions in Comex Gold Futures Gold Price
Source: CFTC, Bloomberg, Jefferies & Company
China’s Gold ETF Move
China recently allowed mainland Chinese to invest in foreign exchange-traded gold funds for the first time. Chinese
investors face negative real interests on bank deposits, and this new announcement could generate strong interest in
Gold ETFs from these investors who are concerned about inflation and are looking to gold as a store of value.
This move to approve foreign ETFs is the latest step in the expansion of the gold market in China. A few months ago
China announced an increase in the number of commercial banks allowed to import and export gold. The central bank
also announced China would "actively push forward the building of infrastructure for gold trading and reserves to fend
off disasters." China is also creating many new gold-backed products and is urging retail investors to buy gold.
We note China is the world’s second largest gold consumer behind India. Underlining China's growing importance to
the precious metal markets was the recent news that Chinese imports have surged by more than 500% due to
increased investment demand. In the first ten months of 2010, Chinese gold imports hit 209 tonnes compared to 45
tonnes for all of 2009, according to the Shanghai Gold Exchange.
Considering China’s burgeoning middle class and ever-increasing demand for gold (driven mainly by jewelry demand
so far), we view these developments as strongly positive for gold demand and prices.

GORO
APPENDICES
EXHIBIT 32: COMPARABLES – EV/EBITDA
2007 2008 2009 2010E 2011E 2012E

Price EBITDA Current EBITDA Current EBITDA Current EBITDA Current EBITDA Current EBITDA Current
Company TKR Rating 1/4/2011 (MM) EV/EBITDA (MM) EV/EBITDA (MM) EV/EBITDA (MM) EV/EBITDA (MM) EV/EBITDA (MM) EV/EBITDA
Developers
Greystar Resources TSE: GSL NC $4.05 -$16 NM -$19 NM -$26 NM -$26 NM -$11 NM $27 8.6x
Osisko Mining TSE: OSK NC $14.52 -$12 NM -$10 NM -$14 NM -$26 NM $332 15.1x $561 9.0x
Junior Producers
Alamos Gold TSE: AGI NC $19.27 $18 99.1x $60 30.0x $100 19.4x $121 17.0x $153 13.4x $209 9.8x
Aurizon Mines ARZ NC $6.94 $39 27.3x $44 23.5x $83 12.1x $69 14.4x $128 7.7x $119 8.3x
Gammon Gold GRS NC $7.96 -$18 NM $54 18.4x $69 14.5x $106 9.8x $205 5.0x $207 5.0x
Gold Resource Corporation GORO BUY $27.60 -$8 NM -$26 NM -$34 NM -$16 NM $80 18.2x $200 7.3x
Golden Star Resources GSS NC $4.35 $7 153.1x $18 61.2x $130 8.4x $123 8.7x $222 4.8x $272 3.9x
Jaguar Mining JAG NC $6.91 $4 112.3x $21 23.6x $55 10.6x $56 11.9x $107 6.2x $165 4.0x
Minefinders Corp. Ltd MFN NC $10.82 -$17 NA -$22 NM $15 47.9x $20 46.0x $85 10.8x $91 10.1x
New Gold, Inc. NGD NC $9.46 -$7 NM $17 120.8x $110 33.3x $202 17.5x $302 11.7x $345 10.3x
Northgate Minerals Corporation NXG NC $3.08 $68 8.3x $78 10.0x $173 4.5x $138 5.4x $127 5.9x $156 4.8x
Average Junior Producers $86 92.4x $243 41.1x $701 17.2x $819 15.2x $1,409 8.9x $1,764 7.1x
Mid-tier Producers
Agnico Eagle Mines AEM BUY $71.97 $223 44.2x $57 195.6x $250 47.0x $650 19.4x $900 14.0x $1,022 12.4x
Eldorado Gold Corp EGO NC $17.85 $77 80.0x $140 46.2x $184 51.6x $433 22.2x $663 14.5x $813 11.8x
Yamana Gold AUY NC $12.22 $412 20.5x $457 20.5x $661 14.1x $870 10.7x $1,182 7.9x $1,273 7.3x
Source: Company reports, Reuters, Yahoo finance, CapitalIQ, Jefferies & Co., Inc. estimates. Consensus estimates used for NC companies and for
AEM’s 2012E earnings.
EXHIBIT 33: COMPARABLES – P/E
Price Mkt. EPS P/E

Company TKR Rating 1/4/2011 Cap ($mm) 2007 2008 2009 2010E 2011E 2012E 2007 2008 2009 2010E 2011E 2012E
Developers
Greystar Resources TSE: GSL NC $3.91 $329 -$0.35 -$0.39 -$0.41 -$0.26 -$0.10 $0.07 NM NM NM NM NM 55.9x
Osisko Mining TSE: OSK NC $14.20 $5,245 -$0.09 $0.01 -$0.08 -$0.06 $0.61 $0.99 NM 352.5x NM NM 23.3x 14.3x
Junior Producers
Alamos Gold TSE: AGI NC $18.74 $2,170 $0.03 $0.30 $0.51 $0.54 $0.69 $0.94 184.3x 22.7x 23.5x 34.7x 27.2x 19.9x
Aurizon Mines ARZ NC $6.94 $1,108 $0.13 $0.05 $0.20 $0.13 $0.42 $0.48 29.5x 66.1x 22.6x 53.4x 16.5x 14.5x
Gammon Gold GRS NC $7.96 $1,102 -$0.90 $0.11 $0.01 $0.30 $0.63 $0.62 NM 49.7x NM 26.5x 12.6x 12.8x
Gold Resource Corporation GORO BUY $27.60 $1,463 -$0.28 -$0.76 -$0.78 -$0.35 $1.25 $2.50 NM NM NM NM 22.1x 11.0x
Golden Star Resources GSS NC $4.35 $1,123 -$0.06 -$0.21 $0.07 $0.04 $0.34 $0.30 NM NM NM NM 12.8x 14.5x
Jaguar Mining JAG NC $6.91 $582 -$0.13 -$0.03 -$0.10 -$0.20 $0.31 $0.78 NM NM NM NM 22.3x 8.9x
Minefinders Corp. Ltd MFN NC $10.82 $866 -$0.39 -$0.58 -$0.07 $0.02 $0.80 $0.77 NM NM NM NM 13.5x 14.1x
New Gold, Inc. NGD NC $9.46 $3,705 -$0.24 $0.37 $0.09 $0.24 $0.36 $0.42 NM 3.9x 40.4x 40.3x 26.3x 22.5x
Northgate Minerals Corporation NXG NC $3.08 $896 $0.22 $0.00 $0.28 $0.06 $0.11 $0.21 13.8x NM 11.0x 51.3x 28.0x 14.7x
Average Junior Producers $95.86 $13,014.77 -$1.62 -$0.75 $0.21 $0.77 $4.91 $7.02 NM NM 90.8x 124.3x 19.5x 13.7x
Mid-tier Producers
Agnico Eagle Mines AEM BUY $71.97 $12,091 $1.28 -$0.03 $0.65 $1.85 $2.50 $3.11 42.6x NM 83.1x 38.9x 28.8x 23.1x
Eldorado Gold Corp EGO NC $17.85 $9,782 $0.10 $0.28 $0.26 $0.40 $0.70 $0.82 58.0x 28.4x 54.5x 44.6x 25.5x 21.8x
Yamana Gold AUY NC $12.22 $9,055 $0.55 $0.40 $0.47 $0.59 $0.75 $0.76 23.5x 19.3x 24.2x 20.7x 16.3x 16.1x
(1)
S&P 500 Index SPX $1,270.20 $85.12 $65.47 $59.63 $79.93 $92.01 $94.55 17.3x 13.8x 18.7x 15.9x 13.8x 13.4x
Source: Company reports, Reuters, Yahoo finance, CapitalIQ, Jefferies & Co., Inc. estimates. Consensus estimates used for NC companies and for
AEM’s 2012E earnings.

GORO
EXHIBIT 34: COMPARABLES – EV/RESERVES AND RESOURCES
Gold ounces Gold Eq. ounces

Enterprise (Reserves and (Reserves and EV/Gold EV/Gold Eq.
Company Name Ticker Rating Value ($mm) Resources) Resources) Ounces Ounces
Developers
Greystar Resources TSE: GSL NC $231 11.00 12.17 $21.03 $19.01
Osisko Mining TSE: OSK NC $5,022 18.37 18.37 $273.37 $273.37
Junior Producers
Alamos Gold TSE: AGI NC $2,056 7.06 7.36 $291.18 $279.24
Aurizon Mines AZK NC $992 6.53 6.53 $151.84 $151.84
Gammon Gold GRS NC $1,034 6.30 9.56 $164.11 $108.17
Gold Resource Corporation GORO BUY $1,457 0.62 1.75 $2,332.87 $833.23
Golden Star Resources GSS NC $1,073 7.89 7.89 $136.09 $136.09
Jaguar Mining JAG NC $661 12.43 12.43 $53.21 $53.21
Minefinders Corp. Ltd MFN NC $919 7.32 12.70 $125.55 $72.36
New Gold, Inc. NGD NC $3,539 26.04 49.47 $135.93 $71.55
Northgate Minerals Corporation NXG NC $744 13.15 19.23 $56.54 $38.67
Average Junior Producers $1,386 $9.70 $14.10 $383.03 $193.82
Mid-tier Producers
Agnico Eagle Mines AEM BUY $12,624 34.82 37.55 $362.58 $336.22
Eldorado Gold Corp EGO NC $9,628 41.76 41.76 $230.54 $230.54
Yamana Gold AUY NC $9,298 28.08 74.78 $331.08 $124.33
Andean Resources AND NC $3,420 3.06 3.51 $1,116.55 $975.05
Source: Company reports, Goldminerpulse.com, Jefferies & Co., Inc. estimates
Note: GoldCorp announced acquisition of Andean Resources for $3.42 billion in September 2010
EXHIBIT 35: EV/RESERVES AND RESOURCES SCATTER PLOT
1,200
1,000 Andean
EV/ Gold Eq. Ounces
GORO
800
600
AEM
400
AGI EGO
OSK
200 GSS AZK AUY
NGD
GRS MFN
NXG
- GSL
0 10 20 30 40 50 60 70 80
Gold Eq. Ounces
Source: Company reports, Goldminerpulse.com, Jefferies & Co., Inc. estimates

GORO
EXHIBIT 36: INCOME STATEMENT ($ VALUES IN ’000S)
CY CY CY CY CY CY CY CY
2005 2006 2007 2008 2009 2010E 2011E 2012E
Income Statement
Revenue:
Sale of metals concentrate - - - - - 21,284 135,157 275,271
Production costs applicable to sales - - - - 5,916 20,477 35,404
Mine Gross Profit - - - - 15,368 114,680 239,866

Costs and Expenses:
Property Exploration and evaluation 740 529 5,732 8,171 7,811 6,439 10,000 12,000
Engineering and construction 104 100 - 14,501 20,994 17,378 15,000 15,000
Other operating expense - - - - - 34 - -
General and administrative 363 1,966 2,540 3,552 5,211 7,947 12,000 15,000
Depreciation 7 18 47 124 167 274 1,500 2,500
Total Costs and Expenses 1,213 2,613 8,319 26,349 34,184 32,119 38,500 44,500
Operating (loss) (1,213) (2,613) (8,319) (26,349) (34,184) (16,751) 76,180 195,366
Other Income:
Interest Income 6 57 243 334 54 329 200 1,000
(Loss) before income taxes (1,207) (2,556) (8,076) (26,015) (34,129) (16,422) 76,380 196,366
Provision for Income taxes - - - - - - 7,638 58,910
Net (Loss) (1,207) (2,556) (8,076) (26,015) (34,129) (16,422) 68,742 137,456
Net (loss) per common share

Basic and Diluted ($0.07) ($0.13) ($0.28) ($0.76) ($0.78) ($0.35) $1.25 $2.50
Weighted average shares outstanding

Basic and Diluted 16,165 20,219 28,645 34,394 43,765 50,029 55,000 55,000
Source: Jefferies & Company, Inc. equity research
EXHIBIT 37: BALANCE SHEET ($ VALUES IN ’000S)
Balance Sheet 2005 2006 2007 2008 2009 2010E 2011E 2012E
Assets
Cash and cash equivalents 176 7,660 22,007 3,535 6,752 45,040 77,782 176,738
Inventory - - - - - 1,775 6,143 10,621
Restricted Cash - - - - 11,436 5,995 5,995 5,995
Prepaid and refundable taxes 15 - - - 2,132 1,775 5,119 8,851
Other current assets - 206 44 203 381 - - -
Total Current Assets 191 7,866 22,051 3,737 20,701 58,084 113,759 228,737
Land and mineral rights - - - - 227 - - -

Property and equipment - net 54 96 505 1,039 1,726 4,000 4,000 4,000
Other assets 1 1 1 5 10 15,010 3,296 67,545
Total Assets 247 7,964 22,558 4,781 22,665 77,094 121,055 300,282
Liabilities - - - - - - - -
Accounts Payable and accrued expenses 34 451 768 1,753 724 3,652 2,133 10,115
Total Current Liabilities 34 451 768 1,753 724 9,652 2,133 10,115
Asset Retirement Obligation - - - - 1,992 2,137 2,137 2,137
Shareholder Equity - - - - - - - -
Preferred Stock - - - - - - - -
Common Stock 18 28 34 36 48 53 53 53
Additional Paid in Capital 4,105 14,062 36,498 43,687 95,692 156,238 156,238 156,238
(Deficit) accumulate during exploraiton stage (3,910) (6,597) (14,673) (40,688) (74,818) (90,655) (39,275) 132,091
Other comprehensive income (loss) 0 20 (70) (7) (974) (291) (291) (291)
Currency Translation adjustment - - - - - - - -
Shareholders' Equity 213 7,513 21,789 3,028 19,948 65,345 116,724 288,091
Total Liabilities and Shareholders' Equity 247 7,964 22,558 4,781 22,665 77,133 120,994 300,343

GORO
EXHIBIT 38: CASH FLOW STATEMENT ($ VALUES IN ’000S)
Cash Flow 2005 2006 2007 2008 2009 2010E 2011E 2012E
Operating Activities
Net Income (1,218) (2,687) (8,076) (26,015) (34,129) (16,422) 68,742 137,456
- - -
Depreciation and amortization 7 18 47 124 167 321 1,500 2,500
Amortization of goodwill and intangibles - - - - - - - -
- - -
Share based compensation 408 627 730 1,999 2,844 - - -
Others 0 20 (90) 64 1,024 - - -
- - -
Changes in non-cash operating working capital - - - - - - - -
Receivables and other current assets - - - - - - - -
Inventories - - - - - - - -
Account payable and accrued liabilities 20 426 317 985 (1,029) - - -
Inc. Taxes - - - - (2,132) - (2,500) (1,000)
Other Net Operating Assets (396) (200) 162 (162) (11,619) 8,000 15,000 15,000
Cash generated by (used in) operations (1,179) (1,796) (6,909) (23,006) (44,875) (8,100) 82,742 153,956
Investing Activities - - - - - - - -
Capital Expenditures (62) (60) (456) (658) (1,204) (8,000) (25,000) (30,000)
Cash acquisitions - - - - - - - -
Divestitures - - - - - - - -
Invest. In Marketable and Eqyity Securities - - - - - - - -
Net Inc. Decrease in Loans originated/sold - - - - - - - -
Other investing activities - - - - - - - -
Cash used in investing activities (62) (60) (456) (658) (1,204) (8,000) (25,000) (30,000)
Financing Activities - - - - - - - -
Debt issued - - - - - - - -
Debt repaid - - - - - - - -
Issuance of common stock 1,408 9,846 22,234 5,191 49,174 63,393 - -
special dividend paid - - - - - (9,000) (25,000) (25,000)
other financing activities - (507) (522) - - - - -
Foreign exchange rate adjust. - - - - 123 - - -
Cash generated by financing 1,408 9,340 21,712 5,191 49,297 54,393 (25,000) (25,000)
Change in cash and cash equivalents 167 7,484 14,347 (18,473) 3,218 38,292 32,742 98,956
Cash at beginning of period 5 172 7,656 22,003 3,530 6,748 45,040 77,782
Cash and equivalents, end of year 172 7,656 22,003 3,530 6,748 45,040 77,782 176,738

GORO
Company Description
Gold Resource Corporation is engaged in the exploration for and production of gold and silver, primarily in Mexico's
southern state of Oaxaca. The Company holds a 100% interest in five properties, including the El Aguila property, the
Las Margaritas property, the El Rey property, the Solaga property and the Alta Gracia property. The Company's
flagship property, the El Aguila Project, recently commenced mill operations and initial production. The company was
founded in 1998 and is based in Denver, Colorado.
ANALYST CERTIFICATIONS
I, Michael Dudas, certify that all of the views expressed in this research report accurately reflect my personal views
about the subject security(ies) and subject company(ies). I also certify that no part of my compensation was, is, or will
be, directly or indirectly, related to the specific recommendations or views expressed in this research report.
I, Satyadeep Jain, certify that all of the views expressed in this research report accurately reflect my personal views
about the subject security(ies) and subject company(ies). I also certify that no part of my compensation was, is, or will
be, directly or indirectly, related to the specific recommendations or views expressed in this research report.
Important Disclosures
As is the case with all Jefferies employees, the analyst(s) responsible for the coverage of the financial instruments
discussed in this report receive compensation based in part on the overall performance of the firm, including
investment banking income. We seek to update our research as appropriate, but various regulations may prevent us
from doing so. Aside from certain industry reports published on a periodic basis, the large majority of reports are
published at irregular intervals as appropriate in the analyst's judgement.
In September 2010, Jefferies acted as sole placement agent for Private Investment in Public Equity (PIPE) for Gold
Resource Corporation.
Meanings of Jefferies & Company, Inc, Ratings

Buy - Describes stocks that we expect to provide a total return (price appreciation plus yield) of 15% or more within a
12-month period.
Hold - Describes stocks that we expect to provide a total return (price appreciation plus yield) of plus 15% or minus
10% within a 12-month period.
Underperform - Describes stocks that we expect to provide a total negative return (price appreciation plus yield) of 10%
or more within a 12-month period.
Our focus on mid-capitalization and growth companies implies that many of the companies we cover are typically more
volatile than the overall stock market, which can be amplified for companies with an average stock price consistently
below $10. For companies in this category only, the expected total return (price appreciation plus yield) for Buy rated
stocks is 20% or more within a 12-month period. For Hold rated stocks with an average stock price consistently below
$10, the expected total return (price appreciation plus yield) is plus or minus 20% within a 12-month period. For
Underperform rated stocks with an average stock price consistently below $10, the expected total return (price
appreciation plus yield) is minus 20% within a 12-month period.
NR - The investment rating and price target have been temporarily suspended. Such suspensions are in compliance
with applicable regulations and/or Jefferies & Company, Inc. policies.
CS - Coverage Suspended. Jefferies & Company, Inc. has suspended coverage of this company.
NC - Not covered. Jefferies & Company, Inc. does not cover this company.
Restricted - Describes issuers where, in conjunction with Jefferies engagement in certain transactions, company policy
or applicable securities regulations prohibit certain types of communications, including investment recommendations.
Monitor - Describes stocks whose company fundamentals and financials are being monitored, and for which no
financial projections or opinions on the investment merits of the company are provided.

GORO
Valuation Methodology
Jefferies' methodology for assigning ratings may include the following: market capitalization, maturity, growth/value,
volatility and expected total return over the next 12 months. The price targets are based on several methodologies,
which may include, but are not restricted to, analyses of market risk, growth rate, revenue stream, discounted cash flow
(DCF), EBITDA, EPS, cash flow (CF), free cash flow (FCF), EV/EBITDA, P/E, PE/growth, P/CF, P/FCF, premium
(discount)/average group EV/EBITDA, premium (discount)/average group P/E, sum of the parts, net asset value,
dividend returns, and return on equity (ROE) over the next 12 months.
Risk which may impede the achievement of our Price Target

This report was prepared for general circulation and does not provide investment recommendations specific to
individual investors. As such, the financial instruments discussed in this report may not be suitable for all investors and
investors must make their own investment decisions based upon their specific investment objectives and financial
situation utilizing their own financial advisors as they deem necessary. Past performance of the financial instruments
recommended in this report should not be taken as an indication or guarantee of future results. The price, value of, and
income from, any of the financial instruments mentioned in this report can rise as well as fall and may be affected by
changes in economic, financial and political factors. If a financial instrument is denominated in a currency other than
the investor's home currency, a change in exchange rates may adversely affect the price of, value of, or income
derived from the financial instrument described in this report. In addition, investors in securities such as ADRs, whose
values are affected by the currency of the underlying security, effectively assume currency risk.
Rating and Price Target History for: Gold Resource Corporation (GORO) as of 01-03-2011
32
24
16
0
Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1
2008 2009 2010 2011
Created by BlueMatrix

GORO
Rating and Price Target History for: Agnico-Eagle Mines Ltd. (AEM) as of 01-03-2011
08/28/09 02/19/10 07/30/10 10/05/10 10/28/10
I:B:$70 B:$75 B:$70 B:$80 B:$85
100
80
60
40
20
0
Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1
2008 2009 2010 2011
Created by BlueMatrix
Distribution of Ratings
IB Serv./Past 12 Mos.
Rating Count Percent Count Percent
BUY [BUY] 572 52.00 45 7.87
HOLD [HOLD] 476 43.30 24 5.04
SELL [UNPF] 51 4.60 5 9.80
OTHER DISCLOSURES
This material has been prepared by Jefferies & Company, Inc. a U.S.-registered broker-dealer, employing appropriate
expertise, and in the belief that it is fair and not misleading. The information upon which this material is based was
obtained from sources believed to be reliable, but has not been independently verified, therefore, we do not guarantee
its accuracy. Additional and supporting information is available upon request. This is not an offer or solicitation of an
offer to buy or sell any security or investment. Any opinion or estimates constitute our best judgment as of this date,
and are subject to change without notice. Jefferies & Company, Inc. and Jefferies International Limited and their
affiliates and their respective directors, officers and employees may buy or sell securities mentioned herein as agent or
principal for their own account. Upon request Jefferies & Company, Inc. may provide specialized research products or
services to certain customers focusing on the prospects for individual covered stocks as compared to other covered
stocks over varying time horizons or under differing market conditions. While the views expressed in these situations
may not always be directionally consistent with the long-term views expressed in the analyst's published research, the
analyst has a reasonable basis and any inconsistencies can be reasonably explained.
Additional information for UK and Canadian investors

This material has been issued by Jefferies & Company, Inc. ("JEFCO") and in the United Kingdom ("UK") is approved
and distributed by Jefferies International Limited ("JIL") which is authorized and regulated by the Financial Services
Authority ("FSA").
In the UK, this material is intended for use only by persons who have, or have been assessed as having, suitable
professional experience and expertise, or by persons to whom it can be otherwise lawfully distributed. For Canadian
investors, this material is intended for use only by professional or institutional investors. None of the investments or
investment services mentioned or described herein is available to other persons or to anyone in Canada who is not a
"Designated Institution" as defined by the Securities Act (Ontario). For investors in the Republic of Singapore, this
material is provided by JEFCO through Jefferies Singapore Limited ("JSL") pursuant to Regulation 32C of the Financial
Advisers Regulations. The material contained in this document is intended solely for accredited, expert or institutional
investors, as defined under the Securities and Futures Act (Cap. 289 of Singapore). If there are any matters arising

GORO
from, or in connection with this material, please contact JSL in Singapore at 80 Raffles Place #15-20, UOB Plaza 2,
Singapore 048624, telephone: +65 6551 3950.
The information set forth herein was obtained from sources believed to be reliable, but has not been independently
verified by JIL, JSL or JEFCO. Therefore, except for any obligation under the rules of the FSA we do not guarantee its
accuracy. Additional and supporting information is available upon request. This is not an offer or solicitation of an offer
to buy or sell any security or derivative instrument, or to make any investment. Any opinion or estimate constitutes the
preparer's best judgment as of the date of preparation, and is subject to change without notice. JIL, JSL, JEFCO, their
associates or affiliates, and their respective officers, directors, and employees may have long or short positions in, or
may buy or sell any of the securities, derivative instruments or other investments mentioned or described herein, either
as agent or as principal for their own account. Upon request JEFCO may provide specialized research products or
services to certain customers focusing on the prospects for individual covered stocks as compared to other covered
stocks over varying time horizons or under differing market conditions. While the views expressed in these situations
may not always be directionally consistent with the long-term views expressed in the analyst's published research, the
analyst has a reasonable basis and any inconsistencies can be reasonably explained.
This material does not constitute a personal recommendation or take into account the particular investment objectives,
financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in
this report is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax
advice. The price and value of the investments referred to herein and the income from them may fluctuate. Past
performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may
occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from,
certain investments.
JEFCO research reports are disseminated and available primarily electronically, and, in some cases, in printed form.
Electronic research is simultaneously available to all clients. This report or any portion hereof may not be reprinted,
sold or redistributed without the written consent of JEFCO. JIL has adopted a conflicts management policy in
connection with the preparation and publication of research, the details of which are available upon request in writing
to: The Compliance Officer, Jefferies International Limited, Vintners Place, 68 Upper Thames Street, London EC4V
3BJ; telephone +44 (0)20 7029 8000; facsimile +44 (0)20 7029 8010.
For Important Disclosure information, please visit our website at

https://jefferies.bluematrix.com/bluematrix/JefDisclosure or call 1.888.JEFFERIES.
Upon request Jefferies International Limited may provide specialized research products or services to certain
customers focusing on the prospects for individual covered stocks as compared to other covered stocks over varying
time horizons or under differing market conditions. While the views expressed in these situations may not always be
directionally consistent with the long-term views expressed in the analyst's published research, the analyst has a
reasonable basis and any inconsistencies can be reasonably explained.
© 2011 Jefferies & Company, Inc,


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January 5, 2011

Industrials Gold Resource Corp. (AMEX: GORO)

Rating: BUY Event

Please see important disclosure information on pages 30 - 33 of this report.

Please see important disclosure information on pages 30 - 33 of this report.

EXHIBIT 1: VALUATION – P/NAV ($1200 GOLD PRICE, 6.0% DISCOUNT RATE)

Properties (US $ thousands) (Per Share)

Total 1,210,483 $22.01

Other Balance Sheet Items (US $ thousands) (Per Share)

Valuation NAV ($thousands) Multiple Value/Share

Properties $1,210,483 2.0x $44.02

Implied Valuation $45.02

EXHIBIT 2: VALUATION –P/CFPS

Price Mkt. CFPS P/CFPS

Please see important disclosure information on pages 30 - 33 of this report.

EXHIBIT 3: VALUATION – DIVIDEND YIELD

Share Recent Annual Dividend

Average Gold Producers $0.10 $0.28 0.70%

Global Diversified Mining Companies

Average Global Diversified Mining Companies $0.62 $1.57 1.64%

GORO GORO $27.60 $0.03 12 $0.36 1.30%

Please see important disclosure information on pages 30 - 33 of this report.

EXHIBIT 4: GOLD RESOURCE CORPORATION PRODUCTION GROWTH

Mill's Current Capacity

Source: Company reports, Jefferies & Co., Inc. estimates

Please see important disclosure information on pages 30 - 33 of this report.

EXHIBIT 5: GOLD RESOURCE LAND PACKAGE AND EXPLORATION

Source: Gold Resources Corp

Please see important disclosure information on pages 30 - 33 of this report.

Please see important disclosure information on pages 30 - 33 of this report.

“Unique” Aspect of the Company

Stock Price Discussion

Please see important disclosure information on pages 30 - 33 of this report.

EXHIBIT 6: STOCK PRICE CHART – GOLD RESOURCES

GORO Trading Volume

GORO Trading Volume GORO Share Price

Source: CapitalIQ, Jefferies & Co., Inc.

EXHIBIT 7: GOLD RESOURCE KEY COMPANY MILESTONES 2006-2010

Source: Company reports, Jefferies & Company, Inc.

Please see important disclosure information on pages 30 - 33 of this report.

EXHIBIT 8: SHARE PERFORMANCE RELATIVE TO GLD, SLV

GORO GLD SLV

Source: Bloomberg, Baseline, Jefferies & Co., Inc.

EXHIBIT 9: SHARE PERFORMANCE RELATIVE TO XAU, GDXJ

GORO XAU GDXJ

Source: Bloomberg, Baseline, Jefferies & Co., Inc.

Please see important disclosure information on pages 30 - 33 of this report.

EXHIBIT 10: SHARE PERFORMANCE SINCE 2007

2010 2009 2008 2007

Average Junior Producers 43.0% 152.9% -41.1% 9.3%

Oaxaca mining unit

Please see important disclosure information on pages 30 - 33 of this report.

EXHIBIT 11: EL AGUILA OPEN PIT

Source: Gold Resource Corporation

La Arista – The Company Maker

EXHIBIT 12: LA ARISTA DEPOSIT DUAL VEIN SYSTEMS

Source: Gold Resource Corporation

Please see important disclosure information on pages 30 - 33 of this report.

EXHIBIT 13: ORE GRADE COMPARISON AMONG SELECTED DEPOSITS

Agnico Eagle LaRonde 2.8 68 0.35 3.65 6.29

GoldCorp Penasquito 0.44 29 0.33 0.72 1.43

Yamana Chapada 0.24 0.34 0.77

El Aguila Mill – Flexible and New