As
filed
with the Securities and Exchange Commission on December 1 ,
2006
SEC
File
No. ____________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-8
Registration
Statement
Under
the
Securities Act of 1933
GOLD
RESOURCE CORPORATION
(Exact
name of registrant as specified in its charter)
Colorado
84-1473173
(State
or
other jurisdiction of (I.R.S.
Employer
incorporation
or organization) Identification
No.)
222
Milwaukee Street, Suite 301, Denver, Colorado 80206
(303)
320-7708
(Address
of Principal Executive Offices and Zip Code)
GOLD
RESOURCE CORPORATION
NON-QUALIFIED
STOCK OPTION AND STOCK GRANT PLAN
(Full
title of the plan)
____________
William
W. Reid, President
Gold
Resource Corporation
222
Milwaukee Street, Denver, Colorado 80206
(303)
320-7708
(Name,
address and telephone number of agent for service)
____________
With
a copy to:
David
J. Babiarz, Esq.
Jessica
M. Browne, Esq.
Dufford
& Brown, P.C.
1700
Broadway, Suite 2100
Denver,
Colorado 80290-2101
(303)
861-8013
Approximate
date of commencement of proposed sale to public: This Registration Statement
shall become effective immediately upon filing as provided in Rule 462 under
the
Securities Act of 1933.
If
any of
the securities being registered on this form are to be offered on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act of 1933,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
Calculation
of Registration Fee
|
Title
of each class of securities to be registered
|
|
Proposed
maximum amount to be registered
|
|
Proposed
maximum offering price per unit (1)
|
|
Amount
of aggregate offering price
|
|
Total
registration fee
|
|
Common
Stock, $0.001 par value
|
|
6,000,000
|
|
$1.625
|
|
$9,750,000
|
|
$1043.25
|
_________________
(1) Calculated
in accordance with Rule 457(c) and (h) of the regulations promulgated under
the
Securities Act of 1933.
EXPLANATORY
NOTE
This
registration statement is being filed to register 6,000,000 shares of common
stock, $0.001 par value, of Gold Resource Corporation authorized under the
Gold
Resource Corporation Non-Qualified Stock Option and Stock Grant Plan (the
“Plan”) and includes a reoffer prospectus prepared in accordance with General
Instruction C to Form S-8 and Part I of Form S-3, which may be used for the
offer and sale of securities registered hereunder by certain officers and
directors of Gold Resource Corporation who may be deemed to be “affiliates” of
Gold Resource Corporation as that term is defined in Rule 405 under the
Securities Act of 1933. The reoffer prospectus also includes restricted
securities received prior to the filing of this registration statement under
the
Plan by a shareholder who is not an “affiliate.” The amount of shares to be
offered or resold by means of the reoffer prospectus contained herein by each
selling shareholder (and any other person with whom such selling shareholder
is
acting in concert for the purpose of selling such shares), may not exceed,
during any three-month period, the amount specified in Rule 144(e) of the
Securities Act.
PART
I
INFORMATION
REQUIRED IN THE SECTION 10(a) PROSPECTUS
The
documents containing the information specified in Part I, Items 1 and 2 of
Form
S-8, will be sent or given to any recipient of a stock option or stock award
in
accordance with Form S-8 and Rule 428(b)(1) of the Securities Act. Such
documents are not required to be and are not filed with the Securities and
Exchange Commission either as part of this Registration Statement or as
prospectuses or prospectus supplements pursuant to Rule 424. These documents
and
the documents incorporated by reference in this Registration Statement pursuant
to Item 3 of Part II of this Form S-8, taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Securities Act. The reoffer
prospectus follows this paragraph.
R
E O F F E R P R O S P E C T U
S
GOLD
RESOURCE CORPORATION
2,240,000
shares of Common Stock,
$0.001
par value
This
prospectus relates to 2,240,000 shares of common stock, $0.001 par value per
share, which may be offered from time to time by the selling shareholders
identified in this prospectus under the heading “SELLING
SHAREHOLDERS.”
Gold
Resource Corporation (hereinafter referred to as “Gold Resource,” “we,” “our” or
“us”) will not receive the proceeds from the sale of the shares. The shares may
be offered by the selling shareholders from time to time: (i) in transactions
in
the over the counter market, on an automated inter-dealer system or national
securities exchange on which shares of our common stock may be listed, in
negotiated transactions, or a combination of such methods; and (ii) at market
prices prevailing at the time of sale, or at prices related to such prevailing
market prices, or at negotiated prices. The selling shareholders may effect
these transactions by selling the shares to or through securities
broker-dealers. Such broker-dealers may receive compensation in the form of
discounts, concessions, or commissions from the selling shareholders and/or
the
purchasers of the shares for whom broker-dealers may act as agent or to whom
they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). See “SELLING
SHAREHOLDERS”
and
“PLAN
OF DISTRIBUTION”
in
this
prospectus. Selling shareholders may also sell such shares pursuant to Rule
144
under the Securities Act of 1933, as amended (“Securities Act”) if the
requirements for the availability of such rule have been satisfied.
Of
the
total shares included in this prospectus, 2,000,000 are defined as “control
securities” under the Securities Act. Of those 2,000,000 shares, 1,900,000
shares will be issued to the selling shareholders upon exercise of options
granted to them under our Non-Qualified Stock Option and Stock Grant Plan (the
“Plan”) and 100,000 shares were issued to a director as a stock grant award. The
remaining 240,000 shares included in this prospectus are “restricted securities”
as defined in the Securities Act and are held by a selling shareholder who
exercised options under the Plan prior to the filing of the registration
statement of which this prospectus forms a part. This prospectus has been
prepared for the purposes of registering the shares under the Securities Act
to
allow for future sales to the public by selling shareholders on a delayed or
continuous basis without restriction.
We
have
agreed to bear all expenses (other than underwriting discounts, selling
commissions, and underwriter expense allowance, and fees and expenses of counsel
and other advisers to the selling shareholders) in connection with the
registration and sale of the shares being offered by the selling shareholders.
Effective
September 14, 2006 our common stock began trading in the over the counter market
and quoted on the Bulletin Board maintained by the National Association of
Securities Dealers (the “OTCBB”) under the symbol “GORO.” On November
30,
2006,
the last reported sale price of our common stock was $1.62
per
share.
These
securities are speculative and involve a high degree of risk. See Risk Factors
beginning at page 7.
Since
we do not currently meet the registrant requirements for use of Form S-3, the
amount of common stock which may be resold by means of this prospectus by each
of the selling shareholders, and any other person with whom he or she is acting
in concert for the purpose of selling securities of our company must not exceed,
in any three-month period, the amount specified in Rule 144(e) promulgated
under
the Securities Act.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of the prospectus. Any representation to the contrary is a criminal
offense.
The
date
of this prospectus is December 1, 2006
The
registration statement (including any post-effective amendments) that contains
this prospectus, including the exhibits to the registration statement, contains
additional information about us and the securities the selling shareholders
may
offer under this prospectus.
The
public may read and copy any materials we file with the Securities and Exchange
Commission (the “SEC”) at the SEC’s Public Reference Room at 100 F Street, N.E,
Washington, DC 20549. The public may obtain more information on the operation
of
the Public Reference Room by calling 1-800-SEC-0330. The SEC maintains an
Internet site that contains reports, proxy and information statements, and
other
information regarding issuers that file electronically with the SEC at
http://www.sec.gov.
We
will
provide, without charge, to each person to whom a copy of this prospectus is
delivered, including any beneficial owner of securities, upon the written or
oral request of such person, a copy of any or all of the documents incorporated
by reference herein (other than exhibits to such documents, unless such exhibits
are specifically incorporated by reference into the information that the
prospectus incorporates). Requests should be directed to:
Gold
Resource Corporation
222
Milwaukee Street, Suite 301
Denver,
Colorado 80206
Telephone
number: (303) 320-7708
Attention:
William W. Reid, President
The following documents filed with the SEC (File Number 333-129321) are hereby
incorporated by reference into this prospectus:
1. Our
prospectus filed pursuant to Rule 424(b)(3) dated May 15, 2006;
2. Our
Quarterly Report on Form 10-QSB/A for the quarter ended March 31,
2006;
3. Our
Current Report on Form 8-K dated June 20, 2006;
4. Our
Quarterly Report on Form 10-QSB for the quarter ended June 30, 2006;
5. Our
Current Report on Form 8-K dated September 19, 2006; and
6. Our
Quarterly Report on Form 10-QSB for the quarter ended September 30,
2006.
All documents filed by us with the SEC pursuant to Sections 13(a), 13(c), 14,
or
15(d) of the Securities Exchange Act of 1934, as amended, subsequent to the
date
of this prospectus and prior to the termination of the offering registered
hereby shall be deemed to be incorporated by reference into this prospectus
and
to be a part hereof from the date of the filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
The
following information summarizes information found in this prospectus and the
documents incorporated by reference in this prospectus. It does not contain
all
of the information you should consider before investing in our common stock.
You
should read the entire prospectus carefully, including the sections entitled
“RISK
FACTORS”
and
“DOCUMENTS
INCORPORATED BY REFERENCE.”
About
the Company
We
are an
exploration stage company organized in Colorado on August 24, 1998 to search
for
gold and silver. We currently have an interest in two properties located in
Mexico, one known as the El
Aguila project
and one known as the El
Rey project.
In October 2002, we leased some mineral claims in the State of Oaxaca, Mexico,
designated the El
Aguila
project.
These claims cover approximately 1,896 hectares (4,685 acres) and are located
in
the historic San
Jose de Gracia
mining
district in the State of Oaxaca. The El
Aguila
project
is an exploration property in which we lease a 100% interest. Since acquiring
that interest, we have drilled approximately 6,700 meters (21,981 feet) of
test
holes in one section of the property and have encountered gold and silver
mineralized material. We are continuing our exploration efforts on this
property.
In
2005,
we obtained some additional mineral claims in the Mexican State of Oaxaca which
we call the El
Rey project.
The El
Rey
project
is an exploration stage property in which we acquired mineral claims by filing
mineral concessions with the Mexican government. We have conducted very limited
exploration of this property to date.
We
are an
exploration stage company, and there is no assurance that a commercially viable
mineral deposit exists on either of our properties. Additional exploration
will
be required before a final evaluation as to the economic and legal feasibility
is determined. There is no assurance that the proceeds of this offering will
be
successful to complete necessary exploration, evaluation and feasibility
studies.
In
August
2006, we completed our initial public offering. We sold 4,600,000 shares of
our
common stock for cash proceeds of $4,351,200 (net of finders’ fees of $248,800).
Effective September 14, 2006, our common stock began trading on the OTCBB under
the symbol “GORO.”
Our
operations in Mexico are conducted through our wholly-owned Mexican
subsidiaries, Don David Gold, S.A. de C.V. and Golden Trump S.A. de C.V. All
references to us or our company in this prospectus include our subsidiaries.
Our
principal executive offices are located at 222 Milwaukee Street, Suite 301,
Denver, Colorado 80206, and our telephone number is (303) 320-7708.
Summary
Financial Data
The
following table presents certain selected historical consolidated financial
data
about our company. Historical consolidated financial information as of and
for
the year ended December 31, 2005 and 2004 has been derived from our
consolidated financial statements, which have been audited by Stark Winter
Schenkein & Co., LLP, our independent registered public accounting
firm. Historical consolidated financial information as of and for the nine
months ended September 30, 2006 and 2005 have been derived from our
unaudited consolidated financial statements.
You
should read the data set forth below in conjunction with our financial
statements and related notes incorporated by reference in this
prospectus.
| |
|
Balance Sheet Data
|
|
| |
|
September
30,
|
|
December 31,
|
|
| |
|
2006
|
|
2005
|
|
| |
|
(unaudited)
|
|
|
|
|
Cash
and Cash Equivalents
|
|
$
|
3,298,609
|
|
$
|
176,182
|
|
|
Total
Assets
|
|
|
3,342,279
|
|
|
246,980
|
|
|
Current
Liabilities
|
|
|
290,519
|
|
|
33,607
|
|
|
Total
Liabilities
|
|
|
290,519
|
|
|
33,607
|
|
|
Shareholders’
Equity
|
|
|
3,051,760
|
|
|
213,373
|
|
| |
|
Operating Data
|
|
| |
|
Nine
months ended
September
30,
|
|
Year ended
December 31,
|
|
| |
|
2006
|
|
2005
|
|
2005
|
|
2004
|
|
| |
|
(unaudited)
|
|
|
|
|
|
|
Other
Revenue
|
|
$
|
7,954
|
|
$
|
3,311
|
|
$
|
6,174
|
|
$
|
113
|
|
|
General
and Administrative Expenses
|
|
|
781,090
|
|
|
103,142
|
|
|
286,219
|
|
|
27,732
|
|
|
Stock
Compensation
|
|
|
516,350
|
|
|
87,500
|
|
|
87,500
|
|
|
500,000
|
|
|
Property
Acquisition Related Costs
|
|
|
100,000
|
|
|
95,796
|
|
|
103,548
|
|
|
68,591
|
|
|
Exploration
Costs
|
|
|
361,735
|
|
|
393,783
|
|
|
739,570
|
|
|
257,383
|
|
|
Net
Comprehensive (Loss)
|
|
|
(1,764,163
|
)
|
|
(680,662
|
)
|
|
(1,217,711
|
)
|
|
(853,666
|
)
|
|
Net
(Loss) per Share
|
|
$
|
(0.09
|
)
|
$
|
(0.04
|
)
|
$
|
(0.08
|
)
|
$
|
(0.08
|
)
|
Investment
in our common stock involves a high degree of risk and could result in a loss
of
your entire investment. Prior to making an investment decision, you should
carefully consider all of the information in this prospectus and, in particular,
you should evaluate the risk factors set forth below. Additional risks and
uncertainties not currently known to us or that we currently deem to be
immaterial may also impair our business operations. If we are unable to prevent
events that have a negative effect from occurring, then our business may
suffer.
Risk
Relating to Our Company
Since
we are a new business with no operating history, investors have no basis to
evaluate our ability to operate profitably. We
were
organized in 1998 but have had no revenue from operations since our inception.
Our activities to date have been limited to organizational efforts, raising
financing, acquiring mining properties and conducting limited exploration.
We
face all of the risks commonly encountered by other new businesses, including
the lack of an established operating history, need for additional capital and
personnel, and intense competition. There is no assurance our business plan
will
be successful.
The
report of our independent accountants on our financial statements for the year
ended December 31, 2005 includes a "going concern" qualification, meaning
that there is substantial doubt about our ability to continue in
operation.
The
report cited the following factors in support of our accountant's conclusion:
(i) the substantial losses we incurred for the years ended December 31, 2005
and
2004; (ii) our lack of operating revenue; and (iii) our dependence on sale
of equity securities and receipt of capital from outside sources to continue
in
operation. From inception to September 30, 2006, we have accumulated a loss
of
$5,673,478. If we are unable to obtain additional financing or eventually
produce revenue, we may be forced to sell our assets, curtail or cease
operations. In any event, investors in our common stock could lose all or part
of their investment.
The
probability of an individual prospect having reserves is extremely remote.
Therefore, in all likelihood, our properties do not contain any reserves, and
any funds spent by us on exploration will probably be
lost.
A
“reserve,” as defined by regulation of the SEC, is that part of a mineral
deposit which could be economically and legally extracted or produced at the
time of the reserve determination. Statistically, most mineral prospects do
not
contain reserves which can be economically extracted. For this reason, it is
unlikely that our properties contain any reserves. The funds we have spent
on
exploration, as well as funds which we might spend in the future, will probably
be lost.
We
are dependent upon receipt of additional working capital to fund our business
plan. We
may
require additional capital for exploration of one or both of our existing
properties, or acquisition of additional properties. If our exploration program
proves successful, we will require significant additional capital to fund
development of the El
Aguila
project
and to construct a mill in order to place it into production. In addition,
we
will require additional working capital to fund operations pending sale of
any
gold or other precious metals. While we completed our initial public offering
on
August 17, 2006 for net proceeds of $4,351,200, we have allocated approximately
$3 million for future exploration costs and anticipate we will need to obtain
additional financing from outside sources within the next 12 months in order
to
continue to fund our business needs.
We
have no proved or probable reserves, meaning there is no assurance that we
can
economically produce gold or other precious minerals from our properties.
In
order
to demonstrate the availability of proved or probable reserves, it will first
be
necessary for us to continue exploration to demonstrate the availability of
sufficient mineralized material. Exploration is inherently risky, with few
properties ultimately proving economically successful. If our exploration
efforts are successful, it will then be necessary for us to engage an outside
engineering firm to assess geological and other data and develop an economic
model demonstrating commercial feasibility of the property. This feasibility
study will require significant additional time and investment. There is no
assurance we can economically produce gold or other precious metals from our
properties.
At
the present time, we are totally dependent upon production of gold or other
precious metals from two properties, raising the risk if either or both of
those
properties should prove unproductive.
Since we
have never produced gold or other precious metals from either of our properties,
and since we have no proved or probable reserves, there is no assurance that
gold or other precious metals can be economically produced under existing and
future costs and expenses. If we are unable to economically produce gold from
either or both of these properties, we would be forced to identify and invest
substantial sums in one or more additional properties, and there is no assurance
that such properties would be available on terms favorable to us.
Our
properties are located in Mexico and are subject to changes in political
conditions and regulations in that country. Our
existing properties are located in Mexico. In the past, Mexico has been subject
to political instability, changes and uncertainties which may cause changes
to
existing government regulations affecting mineral exploration and mining
activities. Civil or political unrest could disrupt our operations at any time.
Our mineral exploration and mining activities in Mexico may be adversely
affected in varying degrees by changing governmental regulations relating to
the
mining industry or shifts in political conditions that increase the costs
related to our activities or maintaining our properties. Finally, Mexico's
status as a developing country may make it more difficult for us to obtain
required financing for our project.
Our
business operations may be adversely affected by social and political unrest
in
Oaxaca.
The
property which we are currently exploring for mineralization is located in
the
State of Oaxaca, Mexico. Oaxaca City, the capital of the State of Oaxaca,
is currently experiencing escalating social and political unrest. Certain
civilian groups seeking political reform have staged protests and
demonstrations around various locations in Oaxaca City, including schools,
government offices and major roadways and violence in the area is increasing.
Although our property is located roughly one and one half hour's drive from
Oaxaca City, these events may still negatively impact our business
operations. Our exploration program may be interrupted if we are unable to
hire qualified personnel or if we are denied access to the site where our
property is located. We may also be required to make additional expenditures
to
provide increased security in order to protect property or personnel located
at
our exploration site. Significant delays in exploration or increases in
expenditures will likely have a material adverse affect on our financial
condition and results of operations.
Our
ability to continue exploration and extract any minerals that we discover is
subject to payment of concession fees and royalties and if we fail to satisfy
these requirements, we may lose our interest in the
properties.
Mining
concessions in Mexico are subject to payment of concession fees to the federal
government or lease payments to the owner of the concessions. Additionally,
our
lease for the El
Aguila
project
is subject to a net smelter return royalty of 4%
where
production is sold in the form of gold/silver doré and
5% where
production is sold in concentrate form. Our failure or inability to pay the
concession fees to the government may cause us to lose our interest in one
or
both of our properties. The requirement to pay royalties to the owner of the
lease at our El
Aguila
property
will reduce our profitability if we commence commercial production of gold
or
other precious metals.
Our
ability to develop our property, even if warranted by exploration results,
is
subject to the rights of the Ejido (local inhabitants) to surface use for
agricultural purposes. If
we are
successful in discovering sufficient amounts of mineralized material to warrant
production, our ability to mine minerals is subject to making satisfactory
arrangements with the Ejido
for
access and surface disturbances. Ejidos
are
groups of local inhabitants who were granted rights to conduct agricultural
activities on the property. We must negotiate a satisfactory arrangement with
these inhabitants in order to disturb or discontinue their rights to farm.
Our
inability to successfully negotiate such agreements could impair or impede
our
ability to successfully mine the properties.
The
volatility of the price of gold could adversely affect our future operations
and, if warranted, our ability to develop our properties.
The
commercial feasibility of our properties and our ability to raise funding to
conduct continued exploration and development if warranted, is dependent on
the
price of gold and other precious metals. The price of gold may also have a
significant influence on the market price of our common stock and the value
of
our properties. Our decision to put a mine into production and to commit the
funds necessary for that purpose must be made long before the first revenue
from
production would be received. A decrease in the price of gold may prevent our
property from being economically mined or result in the writeoff of assets
whose
value is impaired as a result of lower gold prices. The price of gold is
affected by numerous factors beyond our control, including inflation,
fluctuation of the United States Dollar and foreign currencies, global and
regional demand, the sale of gold by central banks, and the political and
economic conditions of major gold producing countries throughout the world.
During the last five years, the average annual market price of gold has
fluctuated between $271 per ounce and $445 per ounce, as shown in the table
below. Although it is possible for us to protect some price fluctuations by
hedging in certain circumstances, the volatility of mineral prices represents
a
substantial risk, which no amount of planning or technical expertise can
eliminate.
|
2001
|
2002
|
2003
|
2004
|
2005
|
|
$271
|
$310
|
$364
|
$406
|
$445
|
Competition
in the mining industry is intense, and we have limited financial and personnel
resources with which to compete.
Competition in the mining industry for desirable properties, investment capital
and personnel is intense. Numerous companies headquartered in the United States,
Canada and elsewhere throughout the world compete for properties on a global
basis. We are an insignificant participant in the gold mining industry due
to
our limited financial and personnel resources. We may be unable to attract
the
necessary investment capital to fully explore and if warranted, develop our
properties and unable to acquire other desirable properties.
An
adequate supply of water may not be available to complete desired development
of
our property.
If we
make a discovery sufficient enough to warrant putting our property into
production, we will require additional amounts of water for our operations.
We
would be required to pump water from the Totolapam River to any facility we
may
construct on our property. Water rights are owned by the Mexican nation and
administered by the Comision
Nacional de Agua (“CNA”),
an agency of the Mexican government. The CNA has granted water concessions
to
private parties throughout the area defined as the Oaxaca Hydrologic Basin,
however, there is no assurance that we will be granted such concessions.
Accordingly, we may not have access to the amount of water needed to operate
a
mine at the property.
Since
most of our expenses are paid in Mexican pesos, and we anticipate selling any
production from our properties in United States dollars, we are subject to
adverse changes in currency values that will be difficult to prevent.
Our
operations in the future could be affected by changes in the value of the
Mexican peso against the United States dollar. At the present time, since we
have no production, we have no plans or policies to utilize forward sales
contracts or currency options to minimize this exposure. If and when these
measures are implemented, there is no assurance they will be cost effective
or
be able to fully offset the effect of any currency fluctuations.
Our
activities in Mexico are subject to significant environmental regulations,
which
could raise the cost of doing business.
Mining
operations are subject to environmental regulation by SEMARNAT, the
environmental protection agency of Mexico. Regulations require that an
environmental impact statement, known in Mexico as a Manifiestacion
de Impacto Ambiental,
be
prepared by a third party contractor for submission to SEMARNAT. Studies
required to support this impact statement include a detailed analysis of many
subject areas, including soil, water, vegetation, wildlife, cultural resources
and socio-economic impacts. We may also be required to submit proof of local
community support for a project to obtain final approval. Significant
environmental legislation exists in Mexico, including fines and penalties for
spills, release of emissions into the air, seepage and other environmental
damage.
The
nature of mineral exploration and production activities involves a high degree
of risk and the possibility of uninsured losses. Exploration
for minerals is highly speculative and involves greater risk than many other
businesses. Our operations are subject to all of the operating hazards and
risks
normally incident to exploring for mineral properties, such as, but not limited
to:
|
|
•
|
|
encountering
unusual or unexpected formations;
|
|
|
•
|
|
environmental
pollution;
|
|
|
•
|
|
personal
injury, flooding and landslides;
|
| |
•
|
|
variations
in grades of ore;
|
| |
•
|
|
labor
disputes; and
|
|
|
•
|
|
decrease
in value of reserves due to a lower gold
price.
|
We
currently have no insurance to guard against any of these risks. If we determine
that capitalized costs associated with any of our mineral interests are not
likely to be recovered, we would incur a writedown on our investment in such
property interest. All of these factors may result in losses in relation to
amounts spent which are not recoverable.
If
we
lose any of our existing employees or consultants, there is no assurance that
we
would find a suitable replacement on acceptable terms. If either
of our current employees or our principal consultant in Mexico were to die,
become disabled or leave the company, we would be forced to identify and retain
individuals to replace them. Messrs. William and David Reid are our only
employees at this time. Jose Perez Reynoso is our consultant in Mexico who
oversees our properties and operations. There is no assurance that we can find
suitable individuals to replace them or to add to our employee base if that
becomes necessary. We are entirely dependent on these individuals as our only
personnel at this time. We have no life insurance on any individual at this
time, and we may be unable to hire a suitable replacement for them on favorable
terms, should that become necessary.
In
the event of a dispute regarding title to our property or any facet of our
operations, it will likely be necessary for us to resolve the dispute in Mexico,
where we would be faced with unfamiliar laws and procedures.
The
resolution of disputes in foreign countries can be costly and time consuming,
similar to the situation in the United States. However, in a foreign country,
we
face the additional burden of understanding unfamiliar laws and procedures.
We
may not be entitled to a jury trial, as we might be in the United States.
Further, to litigate in any foreign country, we would be faced with the
necessity of hiring lawyers and other professionals who are familiar with the
foreign laws. For these reasons, we may incur unforeseen losses if we are forced
to resolve a dispute in Mexico or any other foreign country.
While
we believe we have adequate internal controls over financial reporting, we
will
be required to evaluate our internal controls under Section 404 of the
Sarbanes-Oxley Act of 2002 and any adverse results from such evaluation could
result in a loss of investor confidence in our financial reports and have a
material adverse effect on the price of our common stock.
Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002, we expect that we will be
required to furnish a report by our management on internal controls for the
fiscal year ending December 2007. Such a report must contain, among other
matters, an assessment of the effectiveness of our internal controls over
financial reporting, including a statement as to whether or not our internal
controls are effective. This assessment must include disclosure of any material
weaknesses in our internal controls over financial reporting identified by
our
management. Such a report must also contain a statement that our auditors have
issued an attestation report on our management’s assessment of such internal
controls. While we believe our internal controls over financial reporting are
effective, we are still constructing the system, processing documentation and
performing the evaluations needed to comply with Section 404, which is both
costly and challenging. We may not be able to complete our evaluation, testing
and any required remediation in a timely fashion. If we are unable to assert
that our internal controls over financial reporting are effective, or if we
disclose significant deficiencies or material weaknesses in our internal
controls, investors could lose confidence in the accuracy and completeness
of
our financial reports, which would have a material adverse effect on our stock
price.
The
laws of the State of Colorado and our Articles of Incorporation may protect
our
directors from certain types of lawsuits. The
laws
of the State of Colorado provide that our directors will not be liable to us
or
our shareholders for monetary damages for all but certain types of conduct
as
directors of the company. Our Articles of Incorporation permit us to indemnify
our directors and officers against all damages incurred in connection with
our
business to the fullest extent provided or allowed by law. The exculpation
provisions may have the effect of preventing shareholders from recovering
damages against our directors caused by their negligence, poor judgment or
other
circumstances. The indemnification provisions may require us to use our limited
assets to defend our directors and officers against claims, including claims
arising out of their negligence, poor judgment, or other
circumstances.
Risks
Relating to Our Common Stock
The
sale of a substantial number of shares of our common stock may cause the price
of our common stock to decline.
In
addition to the 2,240,000 shares of common stock that may be offered by the
selling shareholders from time to time under this prospectus, we filed a
registration statement with the SEC that was declared effective on May 15,
2006
to qualify the resale of approximately 8.9 million shares of common stock from
time to time. Additionally, a large number of shares of our common stock will
become eligible for sale in the future under Rule 144. Under Rule 144, and
under
certain circumstances, an owner is permitted to sell every three months the
greater of: (i) 1% of the amount of our outstanding common stock, or (ii) the
average weekly trading volume of our common stock for the four weeks preceding
the sale. It is likely that market sales of large amounts of common stock (or
the potential for those sales even if they do not actually occur) may cause
the
market price of our common stock to decline, which may make it difficult to
sell
our common stock in the future at a time and price which we deem reasonable
or
appropriate and may also cause you to lose all or a part of your
investment.
The
sale of our common stock by the selling shareholders may depress the price
of
our common stock due to the limited trading market which
exists.
Due to a
number of factors, including the lack of listing of our common stock on a
national securities exchange, the trading volume in our common stock is limited.
Since we were approved for trading on the OTCBB on September 14, 2006, our
trading volume has averaged approximately 60,000
shares
per day. As a result, the sale of a significant amount of common stock by the
selling shareholders may depress the price of our common stock. As a result,
you
may lose all or a portion of your investment.
A
small number of existing shareholders own a significant amount of our common
stock, which could limit your ability to influence the outcome of any
shareholder vote. Our
executive officers and directors, beneficially own approximately
40%
of our
common stock as of the date of this prospectus.
Under
our Articles of Incorporation and Colorado law, the vote of a majority of the
shares outstanding is generally required to approve most shareholder action.
As
a result, these individuals will be able to influence the outcome of
shareholder votes for the foreseeable future, including votes concerning the
election of directors, amendments to our Articles of Incorporation or proposed
mergers or other significant corporate transactions. We have no existing
agreements or plans for mergers or other corporate transactions that would
require a shareholder vote at this time. However, shareholders should be aware
that they may have limited ability to influence the outcome of any vote in
the
future.
Since
our common stock is not presently quoted on Nasdaq or listed on a stock
exchange, trading in our shares will likely be subject to rules governing "penny
stocks," which will impair trading activity in our shares.
Our
common stock may be subject to rules adopted by the SEC regulating broker-dealer
practices in connection with transactions in penny stocks. Those disclosure
rules applicable to penny stocks require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized
disclosure document required by the SEC. These rules also require a cooling
off
period before the transaction can be finalized. These requirements may have
the
effect of reducing the level of trading activity in any secondary market for
our
common stock. Many brokers may be unwilling to engage in transactions in our
common stock because of the added disclosure requirements, thereby making it
more difficult for stockholders to dispose of their shares.
A
contract right allowing one of our largest shareholders the first opportunity
to
purchase any common stock offered by us in the future may result in a change
in
control.
Under
the terms of an agreement entered into with one of our largest shareholders,
we
are obligated to offer this entity the first right to purchase our common stock
in any future offering until August 2008. The holder of this right is Heemskirk
Consolidated Limited ("Heemskirk"). If Heemskirk exercises this right in
connection with any future offering of our common stock, the percentage interest
in our company owned by it could increase. This may result in a change in
control and could allow Heemskirk the ability to influence the management or
policies of our company. For example, if Heemskirk acquires enough stock to
become the holder of a majority of our outstanding voting stock, it could elect
the entire Board of Directors. Even if it does not acquire an absolute majority
of our stock but increases its voting interest in the company, it could wage
a
proxy battle and influence who our Board of Directors nominates as directors
in
the future. These and other events could have the effect of changing the way
that our company is operated.
Our stock price may be volatile and as a result you could lose all or part
of
your investment.
In
addition to volatility associated with over the counter securities in
general, the value of your investment could decline due to the impact of any
of
the following factors upon the market price of our common stock:
· Changes
in the worldwide price for gold;
· Disappointing
results from our exploration efforts;
· Failure
to meet our revenue or profit goals or operating budget;
· Decline
in demand for our common stock;
· Downward
revisions in securities analysts' estimates or changes in general market
conditions;
· Technological
innovations by competitors or in competing technologies;
· Investor
perception of our industry or our prospects; and
· General
economic trends
In
addition, stock markets have experienced extreme price and volume fluctuations
and the market prices of securities have been highly volatile. These
fluctuations are often unrelated to operating performance and may adversely
affect the market price of our common stock. As a result, investors may be
unable to resell their shares at a fair price.
Issuances
of our stock in the future could dilute existing shareholders and adversely
affect the market price of our common stock, if a public trading market
develops.
We have
the authority to issue up to 60,000,000 shares of common stock, 5,000,000 shares
of preferred stock, and to issue options and warrants to purchase shares of
our
common stock without stockholder approval. Because our common stock is not
currently quoted in Nasdaq or listed on an exchange, we are not required to
solicit shareholder approval prior to issuing large blocks of our stock. These
future issuances could be at values substantially below the price paid for
our
common stock by our current shareholders. In addition, we could issue large
blocks of our common stock to fend off unwanted tender offers or hostile
takeovers without further stockholder approval. Because trading in our common
stock is limited, the issuance of our stock may have a disproportionately large
impact on its price compared to larger companies.
We
have never paid dividends on our common stock and we do not anticipate paying
any in the foreseeable future.
We have
not paid dividends on our common stock to date, and we may not be in a position
to pay dividends for the foreseeable future. Our ability to pay dividends will
depend on our ability to successfully develop one or more properties and
generate revenue from operations. Further, our initial earnings, if any, will
likely be retained to finance our operations. Any future dividends will depend
upon our earnings, our then-existing financial requirements and other factors,
and will be at the discretion of our Board of Directors.
This
prospectus contains or incorporates by reference forward-looking statements
within the meaning of the United States Private Securities Litigation Reform
Act
of 1995 concerning our future business plans and strategies, the proposed
exploration and development of our property, the receipt of working capital,
future revenues and other statements that are not historical in nature. In
this
prospectus, forward-looking statements are often identified by the words
“anticipate,” “plan,” “believe,” “expect,” “estimate,” and the like. These
forward-looking statements reflect our current beliefs, expectations and
opinions with respect to future events, and involve future risks and
uncertainties which could cause actual results to differ materially from those
expressed or implied.
In
addition to the specific factors identified under “RISK
FACTORS”
above,
other uncertainties that could affect the accuracy of forward-looking statements
include:
• decisions
of foreign countries and banks within those countries;
• technological
changes in the mining industry;
• our
costs;
• the
level
of demand for our products;
• changes
in our business strategy;
• interpretation
of drill hole results and the geology, grade and continuity of
mineralization;
• the
uncertainty of reserve estimates and timing of development expenditures;
and
• commodity
price fluctuations.
This
list, together with the factors identified under “RISK
FACTORS,”
is
not
exhaustive of the factors that may affect any of our forward-looking statements.
You should read this prospectus completely and with the understanding that
our
actual future results may be materially different from what we expect. These
forward-looking statements represent our beliefs, expectations and opinions
only
as of the date of this prospectus. We do not intend to update these forward
looking statements except as required by law. We qualify all of our
forward-looking statements by these cautionary statements.
Prospective
investors are urged not to put undue reliance on forward-looking
statements.
We
will
not receive any proceeds from the sale by the selling shareholders of shares
of
common stock pursuant to this prospectus. Of the total amount of shares which
may be offered pursuant to this prospectus, 1,900,000 shares underlie stock
options granted under our Plan. We will receive proceeds from the exercise
of
these outstanding stock options upon their exercise based on the exercise price
of the options, of which 1,400,000 options may be exercised for $0.25 per share
and 500,000 options may be exercised for $1.00 per share. If all stock options
were exercised, we would receive aggregate proceeds of $850,000. All proceeds,
if any, from the exercise of these options will be added to our working capital.
The
selling shareholders named in this prospectus are offering all of the 2,240,000
shares offered through this prospectus. The shares offered by the selling
shareholders consist of 1,900,000 shares which may be issued upon exercise
of
outstanding stock options and 340,000 shares of common stock that are currently
outstanding and that may be sold from time to time.
The
following table provides, as of November 30, 2006, information regarding the
beneficial ownership of our common stock held by each of the selling
shareholders, including:
1.
the
number of shares owned by each selling shareholder prior to this
offering;
2.
the
total number of shares that are to be offered by each selling shareholder;
3.
the
total number of shares that will be owned by each selling shareholder upon
completion of the offering; and
4.
the
percentage of shares owned by each selling shareholder upon completion of the
offering.
Information
with respect to beneficial ownership is based upon information obtained from
the
selling shareholders. Information with respect to “Number of Shares Beneficially
Owned Prior to the Offering” includes the shares issuable upon exercise of the
stock options held by the selling shareholders that are exercisable within
60
days of the date of this prospectus. The “Number of Shares that may be Offered”
includes the shares that may be acquired by the selling shareholders pursuant
to
the exercise of stock options granted to the selling shareholders pursuant
to
our Plan. Information with respect to “Common Stock Beneficially Owned After the
Offering” assumes the sale of all of the shares offered by this prospectus and
no other purchases or sales of our common stock by the selling shareholders.
The
percentage of common stock to be owned upon completion of the offering is based
on 23,504,852 shares
of
common stock outstanding as of November 30, 2006.
Except as described below and to our knowledge, such selling shareholder
beneficially owns and has sole voting and investment power over all
shares.
Because
the selling shareholders may offer all, some or none of the shares pursuant
to
the offering contemplated by this prospectus, and because this offering is
not
being underwritten on a firm commitment basis, no estimate can be given as
to
the amount of common stock that will be held upon termination of this offering.
The
following table contains information for the selling shareholders offering
2,240,000 shares pursuant to the Plan:
|
Name
of Selling Shareholder(1)
|
|
Number
of Shares Beneficially
Owned
Prior to the Offering
|
|
Number
of Shares that may be Offered
|
|
Common
Stock Beneficially Owned After the Offering
|
|
| |
|
|
|
|
|
Number
|
|
Percent
(%)
|
|
|
William
W. Reid(2)
|
|
|
5,219,606(5)(6
|
)
|
|
800,000(5
|
)
|
|
4,419,606(6
|
)
|
|
18.2
|
|
|
David
C. Reid(2)
|
|
|
4,311,539(7
|
)
|
|
600,000(7
|
)
|
|
3,711,539
|
|
|
15.4
|
|
|
Bill
M. Conrad(3)
|
|
|
600,000(8
|
)
|
|
600,000(8
|
)
|
|
0
|
|
|
0
|
|
|
William
F. Pass(4)
|
|
|
1,561,207
|
|
|
240,000
|
|
|
1,321,027
|
|
|
5.6
|
|
___________________________
(1)
Except as otherwise indicated, the address of each beneficial owner is c/o
Gold
Resource Corporation, 222 Milwaukee Street, Suite 301, Denver, Colorado 80206.
(2)
Officer and director.
(3)
Director.
(4)
Former consultant whose address is 2201 Kipling Street, Suite 100, Lakewood,
Colorado 80215.
(5)
Includes 800,000 shares underlying options which are exercisable as of the
date
of this prospectus.
(6)
Includes 2,200,000 shares owned by the reporting person’s spouse, of which he
disclaims beneficial ownership.
(7)
Includes 600,000 shares underlying options, which are exercisable as of the
date
of this prospectus.
(8)
Includes 500,000 shares underlying options, which are exercisable as of the
date
of this prospectus.
Each
selling shareholder has purchased or will acquire our common stock for
investment and with no present intention of distributing or reselling such
shares unless registered for resale. However, in recognition of the fact that
holders of restricted securities may wish to be legally permitted to sell their
shares when they deem appropriate, we have filed a Form S-8 registration
statement with the SEC of which this prospectus forms a part with respect to
the
resale of the shares from time to time in the over the counter market or in
privately negotiated transactions. We have agreed to prepare and file such
amendments and supplements to the registration statement and to keep the
registration statement effective until all the shares offered hereby have been
sold pursuant thereto, until such shares are no longer, by reason of Rule 144
under the Securities Act or any other rule of similar effect, required to be
registered for the sale thereof by the selling shareholders. Sales of shares
under this prospectus by the selling shareholders, and any other person with
whom he or she is acting in concert for the purpose of selling our common stock,
must not exceed, in any three-month period, the amount specified in Rule 144(e)
promulgated under the Securities Act.
Certain
of the selling shareholders, their associates and affiliates may from time
to
time perform services for our company or its subsidiaries in the ordinary course
of business.
The
shares offered hereby may be sold from time to time to purchasers directly
by
the selling shareholders. Alternatively, the selling shareholders may from
time
to time offer the shares to or through underwriters, broker-dealers or agents,
who may receive compensation in the form of underwriting discounts, concessions
or commissions from the selling shareholders or the purchasers of shares for
whom they may act as agents. The selling shareholders and any underwriters,
broker-dealers or agents that participate in the distribution of shares may
be
deemed to be "underwriters" within the meaning of the Securities Act and any
profit on the sale of the shares by them deemed to be underwriting discounts
and
commissions under the Securities Act. The selling shareholders may agree to
indemnify any broker or dealer or agent against certain liabilities related
to
the selling of the shares, including liabilities arising under the Securities
Act.
The
shares offered in this prospectus may be sold from time to time in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. The
sale of the shares may be effected in transactions (which may involve crosses
or
block transactions) (i) on any national or international securities exchange
or
quotation service on which the shares may be listed or quoted at the time of
sale; (ii) in the over the counter market; (iii) in transactions otherwise
than
on such exchanges or in the over the counter market; or (iv) through the writing
of options. At the time a particular offering of the shares is made, a
prospectus supplement, if required, will be distributed which will set forth
the
aggregate amount and type of shares being offered and the terms of the offering,
including the name or names of any underwriters, broker-dealers or agents,
any
discounts, commissions and other terms constituting compensation from the
selling shareholders and any discounts, commissions or concessions allowed
or
reallowed or paid to broker-dealers.
In
addition to selling their shares under this prospectus, the selling shareholders
may transfer their shares in other ways not involving market makers or
established trading markets, including directly by gift, distribution, or other
transfer, or sell their shares under Rule 144 of the Securities Act rather
than
under this prospectus, if the transaction meets the requirements of Rule 144.
Any selling shareholder who uses this prospectus to sell his shares will be
subject to the prospectus delivery requirements of the Securities
Act.
Regulation
M under the Securities Exchange Act of 1934 provides that during the period
that
any person is engaged in the distribution of our shares of common stock, as
defined in Regulation M, such person generally may not purchase our common
stock. The selling shareholders are subject to these restrictions, which may
limit the timing of purchases and sales of our common stock by the selling
shareholders. This may affect the marketability of our common stock.
All
expenses of the registration of the shares will be paid by us, including,
without limitation, SEC filing fees and expenses and compliance with state
securities or "blue sky" laws; provided, however, that the selling shareholders
will pay all underwriting discounts and selling commissions, if any.
Our
authorized capital consists of 60,000,000 shares of common stock, $0.001 par
value per share, and 5,000,000 shares of preferred stock, $0.001 per share.
As
of November 30, 2006, we had 23,504,852 shares of common stock issued and
outstanding, and no shares of preferred stock outstanding.
The
following discussion summarizes the rights and privileges of our capital stock.
This summary is not complete, and you should refer to our Articles of
Incorporation, as amended, a copy of which is filed with the SEC as an exhibit
to our registration statement dated October 28, 2005.
Common
Stock
The
holders of our common stock are entitled to one vote for each share held of
record on all matters submitted to stockholders, including the election of
directors. Cumulative voting for directors is not permitted. Except as provided
by special agreement, the holders of common stock are not entitled to any
preemptive rights and the shares are not redeemable or convertible. All
outstanding common stock is, and all common stock offered hereby will be, when
issued and paid for, fully paid and nonassessable. The number of authorized
shares of common stock may be increased or decreased (but not below the number
of shares then outstanding or otherwise reserved under obligations for issuance
by us) by the affirmative vote of a majority of shares cast at a meeting of
our
shareholders at which a quorum is present.
Our
Articles of Incorporation and Bylaws do not include any provision that would
delay, defer or prevent a change in control of our company. However, as a matter
of Colorado law, certain significant transactions would require the affirmative
vote of a majority of the shares eligible to vote at a meeting of shareholders
which requirement could result in delays to or greater cost associated with
a
change in control of the company.
The
holders of our common stock are entitled to dividends if, as and when declared
by our Board of Directors from legally available funds, subject to the
preferential rights of the holders of any outstanding preferred stock. Upon
any
voluntary or involuntary liquidation, dissolution or winding up of our affairs,
the holders of our common stock are entitled to share, on a pro rata basis,
all
assets remaining after payment to creditors and prior to distribution rights,
if
any, of any series of outstanding preferred stock.
Preferred
Stock
Our
Articles of Incorporation vest our Board of Directors with authority to divide
the preferred stock into series and to fix and determine the relative rights
and
preferences of the shares of any such series so established to the full extent
permitted by the laws of the State of Colorado and our Articles of Incorporation
in respect to, among other things, (i) the number of shares to constitute such
series and the distinctive designations thereof; (ii) the rate and preference
of
dividends, if any, the time of payment of dividends, whether dividends are
cumulative and the date from which any dividend shall accrue; (iii) whether
preferred stock may be redeemed and, if so, the redemption price and the terms
and conditions of redemption; (iv) the liquidation preferences payable on
preferred stock in the event of involuntary or voluntary liquidation; (v)
sinking fund or other provisions, if any, for redemption or purchase of
preferred stock; (vi) the terms and conditions by which preferred stock may
be
converted, if the preferred stock of any series are issued with the privilege
of
conversion; and (vii) voting rights, if any. As of the date of this prospectus,
we have not designated or authorized any preferred stock for issuance.
Restrictions
on Future Sales of Our Common Stock
Under
the
terms of an agreement entered into with one holder of our common stock, we
are
obligated to offer Heemskirk Consolidated Limited the first right to purchase
our common stock in any future offering until August 2008. We do not believe
the
terms of this arrangement will affect the market for our common stock or
our future operations. However, it provides the holder the ability to preserve
or increase its percentage interest in our company.
Transfer
Agent
We
have
appointed Corporate Stock Transfer, Inc. ("CST") in Denver as transfer agent
for
our common stock. CST is located at 3200 Cherry Creek Drive South, Suite 430,
Denver, Colorado 80209 and its telephone number is (303) 282-4800.
The
validity of the shares of common stock offered hereby by will be passed upon
for
us by Dufford & Brown, P.C., Denver, Colorado.
Our
financial statements as of December 31, 2005 and for the two years then ended
have been incorporated in this prospectus in reliance on the report of Stark
Winter Schenkein & Co., LLP, our independent registered public accounting
firm. These financial statements have been incorporated herein on the authority
of this firm as an expert in auditing and accounting.
NO
DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING HEREIN CONTAINED AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN
AUTHORIZED BY THE COMPANY OR THE SELLING SHAREHOLDERS. THIS PROSPECTUS DOES
NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT ANY INFORMATION CONTAINED HEREIN IS CORRECT AS TO ANY
OF
THE TIME SUBSEQUENT TO ITS DATE. HOWEVER, THE COMPANY HAS UNDERTAKEN TO AMEND
THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART TO REFLECT ANY
FACTS OR EVENTS ARISING AFTER THE EFFECTIVE DATE THEREOF WHICH INDIVIDUALLY
OR
IN THE AGGREGATE REPRESENT A FUNDAMENTAL CHANGE IN THE INFORMATION SET FORTH
IN
THE REGISTRATION STATEMENT. IT IS ANTICIPATED, HOWEVER, THAT MOST UPDATED
INFORMATION WILL BE INCORPORATED HEREIN BY REFERENCE TO THE COMPANY'S REPORTS
FILED UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE "DOCUMENTS INCORPORATED
BY
REFERENCE."
ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
|
You
should rely only on the information contained in this document
or that we
have referred you to. We have not authorized anyone to provide
you with
information that is different. This prospectus is not an offer
to sell
common stock and is not soliciting an offer to buy common stock
in any
state where the offer or sale is not permitted.
|
|
2,240,000
Shares
GOLD
RESOURCE CORPORATION
Common
Stock
|
|
TABLE OF CONTENTS
|
|
|
| |
|
|
|
Caption
|
|
____________
PROSPECTUS
____________
|
|
|
|
|
| |
|
|
| |
|
|
| |
|
December
1, 2006
|
| |
|
|
PART
II
INFORMATION
REQUIRED IN THE REGISTRATION STATEMENT
ITEM
3. Incorporation of Documents by Reference.
Included
in prospectus.
ITEM
4. Description of Securities.
Included
in prospectus.
ITEM
5. Interests of Named Experts and Counsel.
Not
applicable.
ITEM
6. Indemnification of Directors and Officers
Our
Articles of Incorporation and Bylaws provide that we must indemnify, to the
fullest extent permitted by Colorado law, any of our directors, officers,
employees or agents made or threatened to be made a party to a proceeding,
by
reason of the person serving or having served in a capacity as such, against
judgments, penalties, fines, settlements and reasonable expenses incurred by
the
person in connection with the proceeding if certain standards are met. At
present, there is no pending litigation or proceeding involving any of our
directors, officers, employees or agents where indemnification will be required
or permitted. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to our directors, officers and
controlling persons pursuant to the foregoing provisions, or otherwise, we
have
been advised that in the opinion of the SEC, such indemnification is against
public policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable.
The
Colorado Business Corporation Act (the "Act") allows indemnification of
directors, officers, employees and agents of a company against liabilities
incurred in any proceeding in which an individual is made a party because he
was
a director, officer, employee or agent of the company if such person conducted
himself in good faith and reasonable believed his actions were in, or not
opposed to, the best interests of the company, and with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. A person must be found to be entitled to indemnification under this
statutory standard by procedures designed to assure that disinterested members
of the board of directors have approved indemnification or that, absent the
ability to obtain sufficient numbers of disinterested directors, independent
counsel or shareholders have approved the indemnification based on a finding
that the person has met the standard. Indemnification is limited to reasonable
expenses.
Our
Articles of Incorporation limit the liability of our directors to the fullest
extent permitted by the Act. Specifically, our directors will not be personally
liable for monetary damages for breach of fiduciary duty as directors, except
for:
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any
breach of the duty of loyalty to us or our
stockholders,
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acts
or omissions not in good faith or that involved intentional misconduct
or
a knowing violation of law,
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dividends
or other distributions of corporate assets that are in contravention
of
certain statutory or contractual
restrictions,
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violations
of certain laws, or
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any
transaction from which the director derives an improper personal
benefit.
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Liability
under federal securities law is not limited by the Articles.
ITEM
7. Exemption from Registration Claimed.
Not
applicable.
ITEM
8. Exhibits.
The
following exhibits are filed with this registration statement:
Number
Description
of Exhibits
5 Opinion
of Dufford & Brown, P.C.
23.1
Consent
of Stark Winter Schenkein & Co., LLP.
23.2
Consent
of Dufford & Brown, P.C. (included in Exhibit 5).
ITEM
9. Undertakings.
The
undersigned registrant hereby undertakes, except as otherwise specifically
provided in the rules of the Securities and Exchange Commission promulgated
under the Securities Act of 1933:
(1) To
file,
during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding
the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the maximum aggregate offering
price set forth in the "Calculations of Registration Fee" table in the effective
registration statement;
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement; Provided, however,
that:
A.
Paragraphs
(a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form
S-8, and the information required to be included in a post-effective amendment
by those paragraphs is contained in reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement; and
B.
Paragraphs
(a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the
registration statement is on Form S-3 or Form F-3 and the information required
to be included in a post-effective amendment by those paragraphs is contained
in
reports filed with or furnished to the Commission by the registrant pursuant
to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement, or is contained in
a
form of prospectus filed pursuant to Rule 424(b) that is part of the
registration statement.
(2) That,
for
the purpose of determining any liability under the Securities Act of 1933,
each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To
remove
from registration by means of a post-effective amendment any of the securities
being registered that remain unsold at the termination of the offering.
The
undersigned registrant hereby undertakes that, for purposes of determining
any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act
of
1934) that is incorporated by reference in the registration statement shall
be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be
the initial bona fide offering thereof.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933, as amended, and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the Registrant certifies
that
it has reasonable grounds to believe that it meets all of the requirements
for
filing on Form S-8 and has caused this Registration Statement to be signed
on
its behalf by the undersigned, thereunto duly authorized, in the City of Denver,
and State of Colorado, on the 30th day of November, 2006.
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GOLD
RESOURCE CORPORATION
(Registrant)
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By: |
/s/ William
W. Reid |
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William W. Reid
President and Chief Executive Officer
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Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacity and on the dates
stated.
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| /s/ William
W. Reid |
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Date:
November 30, 2006
William
W. Reid
Title:
President, Chief Executive Officer and
Chairman
of the Board of Directors
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| /s/ David
C. Reid |
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Date:
November 30, 2006
David
C. Reid
Title:
Vice President and Member of the Board of Directors
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| /s/ Frank
L. Jennings |
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Date:
November 30, 2006
Frank
L. Jennings
Title:
Principal Financial Officer
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| /s/ Bill
M. Conrad |
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Date:
November 30, 2006
Bill
M. Conrad
Title:
Member of the Board of Directors
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EXHIBIT
INDEX
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Item
Number
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Description of Exhibits
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5.
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Opinion
of Dufford & Brown, P.C.
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23.1
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Consent
of Stark Winter Schenkein & Co., LLP.
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23.2
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Consent
of Dufford & Brown, P.C. (included in Exhibit
5).
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