Benzinga | Oct 5, 2020 07:46AM EDT

Gold Resource Corporation Announces Intent To Create Two Independent, Strategically-Focused Companies With Nevada Mining Unit Spin-Off To Shareholders

COLORADO SPRINGS, CO, Oct. 05, 2020 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Gold Resource Corporation (NYSE:GORO), a gold and silver producer, developer, and explorer with operations in Oaxaca, Mexico and Nevada, USA, today announced its intent to spin-off its Nevada Mining Unit to shareholders as a separate, publicly-traded company ("Spinco").

The transaction is expected to be structured as a pro-rata distribution of 100% of the Spinco shares to Gold Resource shareholders. Approximately 20 million shares of Spinco are expected to be distributed to the Company's shareholders. Shareholder approval is not required for the spin-off, which is expected to be tax-free to Gold Resource shareholders for U.S. tax purposes.

The Spinco transaction is subject to certain customary conditions, including the approval of a Spinco registration statement to be filed with the Securities and Exchange Commission and final approval by the Company's Board of Directors. The transaction is targeted to be completed by year-end 2020 or the first quarter of 2021.

Expected Benefits of the Transaction

* Permit each company to focus on its own unique strategic business plan

* Allow each company flexibility to allocate resources and deploy capital in a manner consistent with its own business strategy

* Unlock a value premium for the Nevada Mining Unit due to its location in one of the world's premier mining jurisdictions

* Allow each company to focus on streamlining each distinct operation -- underground, hard rock operations in Mexico, and open-pit heap leach operations in Nevada, USA

* Two separate companies have the potential to provide investors with greater value than a single combined company