Gold Resource Corporation and Hochschild Mining plc Form Strategic Alliance

Gold Resource Corporation and Hochschild Mining plc Form Strategic Alliance

Gold Resource Corporation announce that it has formed a strategic alliance with Hochschild Mining plc (Hochschild) through a $5 million private placement of 1.67 million shares of GRC’s restricted common stock at $3.00 per share (no warrants). Hochschild is a world leading precious metals producer listed on the London Stock Exchange. Based in Lima, Peru, Hochschild is a mid-tier gold producer and the world’s 4th largest primary silver producer with mining projects in five countries in the Americas including Mexico.

Funding will be used for the continued construction and exploration of GRC’s El Aguila Project in Oaxaca, Mexico. GRC is focused on production of its El Aguila Project at the earliest possible date, currently targeting mid-2009, subject to obtaining remaining permits, regulatory approvals, equipment deliveries and construction schedules.

In addition to the $5 million private placement, Hochschild and Gold Resource Corporation will evaluate the possible advantages of accelerating development of GRC’s La Arista underground vein mineralization. This could include driving a decline ramp and underground development at this high-grade polymetallic deposit. The agreement provides that within the next 80 days Hochschild has the right to purchase from the Company an additional 4.3 million shares at $3.00 per share. If Hochschild completes the additional funding it may appoint one new, additional director to the GRC Board and for the two years following, Hochschild will be allowed to purchase shares in the open market to the extent that their total holding in GRC is not greater than 40%. If Hochschild owns 40% of GRC’s shares, it is entitled to a total of two out of five board nominations. After 2 years HOC is not precluded from purchasing additional shares in the market.

Gold Resource Corporation’s president, William W. Reid stated, “Hochschild can trace its mining roots back to 1911. Today they are a mid-tier gold producer, a leading silver producer and a recognized expert in underground mining. We believe that Hochschild’s corporate strategy is compatible with ours. Their philosophy emphasizes strong financial performance and low cash costs of production. We see our strategic alliance with Hochschild as an important milestone in the creation of value for our shareholders. This alliance promotes a common goal to achieve significant production at the Aguila Project at the earliest possible date. We believe Hochschild’s strategic investment in GRC underscores the significant potential of our El Aguila Project.”

Eduardo Hochschild, Executive Chairman of Hochschild Mining plc, commented, “We are delighted to announce this transaction which provides Hochschild access to high grade, profitable ounces with a near term production profile. We have operated in Mexico for over two years and are keen to strengthen our position in this mineral rich region of the Americas. Gold Resource Corporation has a highly experienced management team and we look forward to working with them to develop the significant potential of the El Aguila property as well as the other properties in their impressive project pipeline.”

Mr. Reid stated, “Our goal is and always will be to keep effective dilution to a minimum. This important strategic alliance with Hochschild results in approximately 5% dilution from the 1.67 million share purchase or a possible 15% total dilution if the additional 4.3 million shares are purchased. However, our recent 67% increase in our production targets of up to 200,000 gold equivalent ounces of precious metals per year more than offsets this dilution relative to per share value. With the additional funds we would accelerate development of our high-grade La Arista deposit.”

Mr. Reid continued, “Our excellent team in Oaxaca continues to move the Aguila Project forward on all fronts as we focus, at the earliest possible date, on emerging in the elite class of low cost gold producers. We believe the driving force behind Gold Resource Corporation on a going forward basis will be achieving cash flow with the potential to pay a meaningful dividend. We welcome Hochschild as a shareholder and believe their interest and investment in Gold Resource Corporation creates an alliance that strengthens our Company and its mission.”

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