COLORADO SPRINGS, Colo.,
Sept. 16, 2011 /PRNewswire/ -- In
response to multiple negative pieces published by a website known
as thestreetsweeper.org, the management of Gold Resource
Corporation (NYSE Amex: GORO) believes the Company is being
targeted by individuals or groups holding short positions in its
securities in an effort to manipulate the Company's stock
price.
The Company's management is advising its shareholders and
potential investors to consider the source of these articles.
Thestreetsweeper.org website is run by an individual named
Hunter Adams, a felon previously
convicted of conspiracy to commit securities fraud, money
laundering and racketeering stemming from his participation in
"pump-and-dump" stock schemes and his ties to the Gambino organized
crime family. While the site purports to be a financial
investigatory website, it appears its operations are financed by
profits generated from taking short positions in the stock of
companies it profiles. As a result, the profiles it generates
are neither balanced nor unbiased. The website disclosed it
has held various short positions in the Company's stock since it
first published a piece on the Company last month. Its most recent
short position disclosure reveals it is currently short 40,506
shares. Any investor or potential investor interested in
learning more about the website, its personnel and its questionable
journalistic ethics can do so by reading an article published by
the American Journalism Review at
http://www.ajr.org/article.asp?id=4911.
With respect to the thestreetsweeper.org's piece published on
September 15, 2011, the Company
reiterates that it has publicly disclosed compensation information
for its executive officers in accordance with the rules and
regulations of the Securities and Exchange Commission (SEC) since
becoming a public company in 2006. The Company's named
executive officers received salary increases approved by the Board
of Director's compensation committee in 2010 on the basis of
achieving the goal of getting its flagship mineral project into
commercial production and this fact is discussed in the Company's
proxy statement filed with the SEC in April
2011. At the Company's most recent annual meeting held
on June 21, 2011, shareholders
approved the say-on-pay proposal concerning the Company's
compensation policies and practices casting 99% of the votes in
favor of the proposal.
As is typical during the start-up phase of operations, key
personnel received grants of stock and non-qualified stock options
as part of their compensation package in order to preserve working
capital and align management's incentives with that of its
shareholders. One key fact that the article fails to mention
during its sensationalistic discussion of Jason Reid's and Bill
Conrad's option exercises and subsequent stock sales is that
the options granted in 2006 expired in 2009, which forced these
individuals to exercise the options or lose them. The article
also fails to take into account the potential individual income tax
burden that typically results with the exercise of in-the-money,
non-qualified stock options which may have factored into the
subsequent share sales.
Furthermore, the Company was not subject to the insider
reporting requirements mandated by Section 16 of the Securities and
Exchange Act of 1934 (Exchange Act) until it registered under the
Exchange Act with the SEC in August
2010. Once a company is subject to Section 16 of the
Exchange Act, insiders are required to report transactions in the
company's stock to the SEC within two days of the transaction.
The lack of insider stock sale reports filed with the SEC on
Forms 3, 4 or 5 prior to August 2010
is not a regulatory deficiency or an attempt to mislead the public
regarding insider share sales. Information regarding insider
holdings have been available to the public in the Company's annual
reports on Form 10-K and various registration statements filed with
the SEC each year since going public in 2006. The continuous
attempt to paint these circumstances as something unforthcoming or
sinister is disingenuous. Since becoming subject to the
Exchange Act rules in August 2010,
the Company's insiders have diligently complied with Section 16 and
timely filed their reports with the SEC—a fact that is also
discussed in the Company's proxy statement.
The Board of Directors of the Company continues to fully support
Jason Reid and Bill Conrad as part of the Gold Resource team
and StarkSchenkein, LLP as its independent registered public
accounting firm. Since joining the Company, Mr. Reid has
worked his way up to executive management and was recently
re-elected as a director of the Company by shareholders voting 94%
in favor. Mr. Conrad is an independent, long-standing member
of the Board of Directors who spent significant time and effort
developing corporate governance and overseeing management since
joining the board, and was also recently re-elected to the board by
94% of the votes cast. As a non-management member of the
board, Mr. Conrad is free to pursue outside business interests
unrelated to the Company. The Company's financial statements
audited by StarkSchenkein have been filed with and reviewed by the
SEC and have not been restated. In a consistent application
of its unbalanced view of the facts, the article is quick to point
out the deficiency comments StarkSchenkein received during its
regular PCAOB review, yet fails to mention that nearly all public
accounting firms, including the Big Four firms for which the
Company is criticized for not engaging, received similar comments
from the PCAOB.
Finally, in response to the assertion that the Company failed to
answer questions or refused to allow StarkSchenkein to answer
questions, the record should reflect that the Company and its
auditors were provided less than 24 hours from the time of first
contact until the piece was published. Regardless, the
Company's management will not participate in an interview with
anyone associated with this website, or any similar website, that
negatively profiles companies while the site's backers take a short
position in the stock of those companies.
The Company will continue to let its performance speak for
itself going forward, with record quarterly production and profits,
an instituted monthly dividend of $0.05 per share ($0.60 annually) and an aggressive growth
trajectory. Gold Resource Corporation and its management team
will continue to stay focused on executing its business plan on
behalf of its shareholders.
About GRC:
Gold Resource Corporation is a mining company focused on
production and pursuing development of gold and silver projects
that feature low operating costs and produce high returns on
capital. The Company has 100% interest in six potential
high-grade gold and silver properties in Mexico's southern state of Oaxaca. The Company has 52,998,303
shares outstanding, no warrants and no debt and has returned over
$24.6 million to shareholders in
monthly dividends since declaring commercial production
July 2010. For more
information, please visit GRC's website, located at
www.Goldresourcecorp.com and read the Company's 10-K for an
understanding of the risk factors involved.
This press release contains forward-looking statements that
involve risks and uncertainties. The statements contained in this
press release that are not purely historical are forward-looking
statements within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act. When used in this press
release, the words "plan", "target", "anticipate," "believe,"
"estimate," "intend" and "expect" and similar expressions are
intended to identify such forward-looking statements. Such
forward-looking statements include, without limitation, the
statements regarding Gold Resource Corporation's strategy, future
plans for production, future expenses and costs, future liquidity
and capital resources, and estimates of mineralized material. All
forward-looking statements in this press release are based upon
information available to Gold Resource Corporation on the date of
this press release, and the company assumes no obligation to update
any such forward-looking statements. Forward looking statements
involve a number of risks and uncertainties, and there can be no
assurance that such statements will prove to be accurate. The
Company's actual results could differ materially from those
discussed in this press release. In particular, there can be no
assurance that production will continue at any specific rate.
Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in the company's
10-K filed with the Securities and Exchange Commission
Contact: Greg Patterson –
Corporate Development 303-320-7708
SOURCE Gold Resource Corporation