Exhibit 2.1 

EXECUTION COPY

GOLD RESOURCE CORPORATION

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GOLD RESOURCE ACQUISITION SUB, INC.

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AQUILA RESOURCES INC.

ARRANGEMENT AGREEMENT

October 5, 2021  

TABLE OF CONTENTS

ARRANGEMENT AGREEMENT

THIS ARRANGEMENT AGREEMENT is made as of October 5, 2021

AMONG

GOLD RESOURCE CORPORATION, a corporation incorporated under the laws of the State of Colorado (the “Parent”)

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GOLD RESOURCE ACQUISITION SUB, INC., a corporation incorporated under the laws of the State of Colorado (the “Purchaser”)

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AQUILA RESOURCES INC., a corporation incorporated under the laws of the Province of Ontario (the “Company”)

WHEREAS the Parent and the Company have entered into a binding letter agreement (the “Letter Agreement”) dated September 7, 2021 setting out certain key terms of a proposed acquisition by the Parent, directly or indirectly, of all the issued and outstanding common shares of the Company by way of a plan of arrangement under the OBCA;

AND WHEREAS pursuant to the Letter Agreement, the Company, the Parent and the Purchaser desire to enter into this Agreement;

AND WHEREAS the Purchaser is a wholly-owned indirect subsidiary of the Parent;

AND WHEREAS the Board of the Company, following the recommendation of the Special Committee, has determined that the Arrangement is fair to the Shareholders and that the Arrangement is in the best interests of the Company and has resolved, subject to the terms and conditions of this Agreement, to recommend that the Shareholders vote in favour of the Arrangement Resolution;

AND WHEREAS concurrently with the execution and delivery of this Agreement, as a condition and ‎inducement to the willingness of the Parent and the Purchaser to enter into this Agreement, each of the ‎Supporting Shareholders has entered into a Support ‎Agreement pursuant to which, among other things and subject to the terms and conditions thereof, such Supporting ‎Shareholder has agreed to vote its Common Shares in favour of the Arrangement Resolution‎;

NOW THEREFORE in consideration of the premises and the covenants and agreements herein contained, the Parties agree as follows:

Article 1
INTERPRETATION

Section 1.1               Definitions

In this Agreement, unless otherwise defined or expressly stated herein or something in the subject matter or the context is inconsistent therewith:

“Acceptable Confidentiality Agreement” means a confidentiality agreement between the Company and a third party other than the Parent and the Purchaser: (i) that is entered into in accordance with Article 5 hereof; (ii) that contains confidentiality restrictions that are no less favourable to the Company in the aggregate than those set out in the Confidentiality Agreement; and (iii) that contains customary standstill provisions, including a provision that only permits the third party, either alone or jointly with others, to make an Acquisition Proposal to the Board that is not publicly announced;

“Acquisition Proposal” means, other than the transactions contemplated by this Agreement, any offer, proposal or inquiry (written or oral) from any person or group of persons after the date of this Agreement relating to: (i) any direct or indirect acquisition, take-over bid, exchange offer, treasury issuance of securities, sale of securities or other transaction by any person or group of persons of voting, equity or other securities of the Company or any of its Subsidiaries (or securities convertible into or exchangeable or exercisable for voting, equity or other securities) that, if consummated, would result in such person or group of persons owning 20% or more of the voting, equity or other securities of the Company or any of its Subsidiaries (assuming, if applicable, the conversion, exchange or exercise of such securities convertible into or exchangeable or exercisable for voting, equity or other securities); (ii) any plan of arrangement, amalgamation, merger, share exchange, consolidation, reorganization, recapitalization, winding up, liquidation, dissolution or other business combination in respect of the Company or any of its Subsidiaries; (iii) any direct or indirect acquisition (or any lease, license, royalty, joint venture, long-term supply agreement or other arrangement having a similar economic effect), whether in a single transaction or a series of related transactions, by any person or group of persons of any assets of the Company or any of its Subsidiaries that individually or in the aggregate constitute 20% or more of the consolidated book value of the assets of the Company and its Subsidiaries or 20% or more of the consolidated revenue of the Company and its Subsidiaries, in each case based on the financial statements of the Company most recently filed prior to such time as part of the Company Disclosure Record; or (iv) any other transaction or series of transactions involving the Company or any of its Subsidiaries having substantially the same result as any of the foregoing;

“affiliate” and “associate” have the meanings respectively ascribed thereto under the Securities Act;

“Agreement” means this arrangement agreement (including the Schedules attached hereto) as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms hereof;

“Alternative Transaction” has the meaning ascribed thereto in Section 4.5(2);

“Arrangement” means an arrangement under the provisions of Section 182 of the OBCA, on the terms and conditions set forth in the Plan of Arrangement, subject to any amendments or variations to the Plan of Arrangement made in accordance with the terms of this Agreement or made at the direction of the Court in the Final Order with the prior written consent of the Company, the Parent and the Purchaser, each acting reasonably;

“Arrangement Resolution” means the special resolution approving the Plan of Arrangement to be considered at the Meeting substantially in the form set out in Schedule “B” hereto;

“Articles of Arrangement” has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

“Back Forty Project” means the Company’s 100%-owned development-stage open pit and underground mining project delineating a gold-rich volcanogenic massive sulfide deposit located along the Penokean Volcanic Belt in Menominee County, Michigan, consisting of mineral rights, surface rights and all related exploration, development, mining, processing, tailings management, administrative, infrastructure and related and ancillary assets, equipment, inventory, Permits and approvals;

“Board” means the board of directors of the Company;

“Board Recommendation” has the meaning ascribed thereto in Section 2.4(2);

“Budget” means the Company’s budget for the period ending March 31, 2022, a copy of which is annexed to the Company Disclosure Letter;

“Business Day” means a day other than a Saturday, a Sunday or any day on which major banks are closed for business in Toronto, Ontario and Denver, Colorado;

“Circular” means the notice of meeting and accompanying management information circular (including all schedules, appendices and exhibits thereto, and information incorporated by reference) to be sent to the Shareholders in connection with the Meeting, including any amendments or supplements thereto in accordance with the terms of this Agreement;

“Code” means the United States Internal Revenue Code of 1986, as amended;

“Common Shares” means the common shares in the capital of the Company;

“Company Annual Financial Statements” means the audited consolidated financial statements of the Company as at and for the years ended December 31, 2020 and December 31, 2019, including the notes thereto;

“Company Consultants” means the independent contractors, agents and consultants who provide services to the Company or any of its Subsidiaries, other than external legal counsel and auditors;

“Company Diligence Information” means the material contained in the virtual data room established by the Company or otherwise provided or made available to the Parent or Purchaser as of 5:00 p.m. on October 1, 2021;

“Company Disclosure Letter” means the confidential disclosure letter dated the date hereof regarding this Agreement that has been executed by the Company and delivered to the Parent and the Purchaser with this Agreement;

“Company Disclosure Record” means all documents filed by or on behalf of the Company on the System for Electronic Document Analysis Retrieval (SEDAR) maintained by the Canadian Securities Administrators since January 1, 2019 that are publicly available;

“Company Employees” means the officers and employees of the Company and its Subsidiaries;

“Company Financial Statements” means, collectively, the Company Annual Financial Statements and the Company Interim Financial Statements;

“Company Interim Financial Statements” means the unaudited condensed interim consolidated financial statements of the Company as at and for the three and six months ended June 30, 2021 and June 30, 2020, including the notes thereto;

“Company MD&A” means the management discussion and analysis filed in conjunction with the Company Financial Statements and included in the Company Disclosure Record;

“Company Senior Management” means Guy Le Bel, Barry Hildred, Stephanie Malec, David Carew and David Anderson;

“Competition Act” means the Competition Act (Canada) and the regulations promulgated thereunder;

“Confidentiality Agreement” means the confidentiality agreement dated as of July 6, 2021 between the Company and the Parent;

“Consideration” means the consideration to be received by the Shareholders pursuant to the Plan of Arrangement in respect of each Common Share that is issued and outstanding immediately prior to the Effective Time;

“Consideration Shares” means the Parent Shares to be issued in exchange for Common Shares pursuant to the Arrangement;

“Contract” means any contract, agreement, license, franchise, lease, arrangement, commitment, joint venture, partnership, note or instrument (whether written or oral) to which a Party or any of its Subsidiaries is a party or by which the Party or any of its Subsidiaries is bound or affected or to which any of their respective properties or assets is subject;

“Court” means the Ontario Superior Court of Justice (Commercial List);

“Covered Persons” has the meaning ascribed thereto in Section 8.9;

“Covid-19” means the novel coronavirus, which was declared a pandemic by the World Health Organization on March 12, 2020;

“D&O Indemnified Parties” has the meaning ascribed thereto in Section 4.9;

“Depositary” means TSX Trust Company, or any other depositary or trust company, bank or financial institution as the Parent and the Purchaser may appoint to act as depositary with the approval of the Company, acting reasonably;

“Director” means the director appointed under Section 278 of the OBCA;

“Dissent Rights” has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

“DSUs” means deferred share units of the Company issued pursuant to, or governed by, the Equity Incentive Plan;

“Effective Date” has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

“Effective Time” has the meaning ascribed thereto in Section 1.1 of the Plan of Arrangement;

“Employee Plans” means all benefit, bonus, incentive, profit sharing, termination, change of control, pension, retirement, savings, stock option, stock purchase, stock appreciation, phantom stock, health, welfare, medical, dental, disability, life insurance and similar plans, programmes, arrangements or practices relating to the current or former employees, officers or directors of the Company or any of its Subsidiaries, sponsored or funded by the Company or any of its Subsidiaries, under which the Company or any of its Subsidiaries has any liability, contingent or otherwise, other than benefit plans established pursuant to statute;

“Employment Agreements” means the employment agreements, consulting agreements and other agreements listed in the Company Disclosure Letter;

“Environment” means the natural environment (including soil, land surface or subsurface strata, surface water, wetlands, groundwater, sediment, ambient air (including all layers of the atmosphere), organic and inorganic matter and living organisms, including public health) and all sewer systems;

“Environmental Approvals” means all Permits, issued or required to be issued pursuant to any Environmental Law;

“Environmental Laws” means Laws aimed at or relating to reclamation or restoration of properties; abatement of pollution; protection of the Environment; protection of human health and safety; protection of wildlife, including endangered species; processing, distribution, use, handling, transport, management, treatment, storage, disposal or control of, or exposure to Hazardous Substances; Releases or threatened Releases of Hazardous Substances and all Environmental Approvals;

“Equity Incentive Plan” means the equity incentive plan of the Company effective May 23, 2017;

“Fairness Opinion” means the opinion of PI Financial Corp. that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by the Shareholders, under the Arrangement is fair, from a financial point of view, to the Shareholders;

“Final Order” means the final order of the Court approving the Arrangement under Section 182(5)(f) of the OBCA, in form and substance acceptable to the Company, the Parent and the Purchaser, each acting reasonably, after a hearing upon the procedural and substantive fairness of the terms and conditions of the Arrangement, as such order may be affirmed, amended, modified, supplemented or varied by the Court (with the consent of the Company, the Parent and the Purchaser, each acting reasonably) at any time prior to the Effective Date or, if appealed, as affirmed or amended (provided that any such amendment is acceptable to the Company, the Parent and the Purchaser, each acting reasonably) on appeal unless such appeal is withdrawn, abandoned or denied;

“Financial Advisors” means Scotia Capital Inc. and PI Financial Corp.;

“Governmental Authority” means any international, multinational, national, federal, provincial, territorial, state, regional, municipal, local or other government or governmental body and any division, agent, official, agency, commission, board or authority of any government, governmental body, quasi-governmental or private body (including the TSX, the NYSE American or any other stock exchange) exercising any statutory, regulatory, expropriation or taxing authority under the authority of any of the foregoing and any domestic, foreign or international judicial, quasi-judicial or administrative court, tribunal, commission, board, panel or arbitrator acting under the authority of any of the foregoing;

“Hazardous Substances” means any substance, material or waste that is regulated, prohibited, listed, defined, designated or classified as hazardous, dangerous, radioactive, corrosive, explosive, infectious, carcinogenic, or toxic or a pollutant or a contaminant under or pursuant to, or that could result in liability under, any applicable Environmental Laws;

“IFRS” means International Financial Reporting Standards as incorporated in the Handbook of the Canadian Institute of Chartered Accountants, at the relevant time applied on a consistent basis;

“Interim Order” means the interim order of the Court to be issued following the application therefor submitted to the Court as contemplated by Section 2.2, after being informed of the intention to rely upon the exemption from registration under Section 3(a)(10) of the U.S. Securities Act with respect to the Consideration Shares issued pursuant to the Arrangement, in form and substance acceptable to the Company, the Parent and the Purchaser, each acting reasonably, providing for, among other things, the calling and holding of the Meeting, as such order may be affirmed, amended, modified, supplemented or varied by the Court with the consent of the Company, the Parent and the Purchaser, each acting reasonably;

“Investment Canada Act” means the Investment Canada Act (Canada) and the regulations promulgated thereunder;

“Joint Venture” means a joint venture, partnership or other similar arrangement, whether in corporate, partnership, contractual or other legal form, in which a Party or any of its Subsidiaries directly or indirectly holds voting shares, equity interests or other rights of participation but which is not a subsidiary of such Party, and any subsidiary of any such entity;

“Key Third Party Consents” means the authorizations, consents, waivers, approvals, replacements, renewals, agreements and amendments or modifications to agreements to be obtained, and filings to be made, set out in Section 3.1(d) of the Company Disclosure Letter;

“Laws” means all laws, statutes, treaties, conventions, codes, ordinances (including zoning), decrees, rules, regulations, by-laws, notices, judicial, arbitral, administrative, ministerial, departmental or regulatory judgments, injunctions, orders, decisions, settlements, writs, assessments, arbitration awards, rulings, determinations or awards, decrees or policies, guidelines, protocols or other requirements of any Governmental Authority having the force of law and any legal requirements arising under the common law or principles of law or equity, and the term “applicable” with respect to such Laws and, in the context that refers to any person, means such Laws as are applicable at the relevant time or times to such person or its business, undertaking, property or securities and emanate from a Governmental Authority having jurisdiction over such person or its business, undertaking, property or securities;

“Letter Agreement” has the meaning ascribed thereto in the recitals;

“Liens” means any pledge, claim, lien, charge, option, encumbrance, easement, right of way, adverse interest, hypothec, action, mortgage, security interest, lease, sublease, right of first refusal, superficies, servitude, royalty, levy, payment out of production, streaming right, collateral securing the payment obligations of any person, voting trust or agreement, transfer restriction under any shareholder or similar agreement or consent right, in each case, whether contingent or absolute, direct or indirect, or any agreement, option, right or privilege (whether by Law, Contract or otherwise) capable of becoming any of the foregoing or with any similar effect whatsoever;

“Litigation” has the meaning ascribed thereto in Section 4.1(1)(n);

“Matching Period” has the meaning ascribed thereto in Section 5.4(1)(e);

“Material Adverse Effect” means any fact, state of facts, change, effect, event, circumstance, occurrence or development that individually or in the aggregate with other such facts, state of facts, changes, effects, events, circumstances, occurrences or developments is or would reasonably be expected to be material and adverse to the business, operations, results of operations, assets, properties, liabilities (including any contingent liabilities) or financial condition of the Company and its Subsidiaries, on a consolidated basis, except any such fact, state of facts, change, effect, event, circumstance, occurrence or development resulting from:

provided, however, that each of clauses (i) through (vii) above shall not apply to the extent that any of the changes, developments, conditions or occurrences referred to therein disproportionately adversely affect the Company and its Subsidiaries in comparison to other comparable persons who operate in the industry in which the Company and its Subsidiaries operate, and provided further that references in certain sections of this Agreement to dollar amounts are not intended to be, and shall not be deemed to be, illustrative or interpretive for purposes of determining whether a Material Adverse Effect has occurred;

“Material Contract” means any Contract of the Company or any of its Subsidiaries: (i) that if terminated or modified or if it ceased to be in effect, would reasonably be expected to have a Material Adverse Effect; (ii) relating directly or indirectly to the guarantee of any liabilities or obligations or to indebtedness for borrowed money; (iii) under which indebtedness of the Company or any of its Subsidiaries for borrowed money is outstanding or may be incurred or pursuant to which any property or asset of the Company or any of its Subsidiaries is mortgaged, pledged or otherwise subject to a Lien securing indebtedness; (iv) restricting the incurrence of indebtedness by the Company or any of its Subsidiaries (including by requiring the granting of an equal and rateable Lien) or the incurrence of any Liens on any properties or assets of the Company or any of its Subsidiaries, or restricting the payment of dividends by the Company or any of its Subsidiaries; (v) under which the Company or any of its Subsidiaries is obligated to make or expects to receive payments in excess of US$100,000 over the remaining term; (vi) providing for the establishment, investment in, organization or formation of any Joint Venture, strategic relationship, limited liability company or partnership; (vii) other than the Support Agreements, any shareholders or stockholders agreements, registration rights agreements, voting trusts, proxies or similar agreements, arrangements or commitments with respect to any shares or other equity interests of the Company or any of its Subsidiaries or any other Contract relating to disposition, voting or dividends with respect to any shares or other equity securities of the Company or any of its Subsidiaries; (viii) that creates an exclusive dealing arrangement or right of first offer or refusal or similar rights or terms to any person; (ix) with a Governmental Authority; (x) providing for employment, severance or change in control payments; (xi) providing for the purchase, sale or exchange of, or option to purchase, sell or exchange, any property or asset where the purchase or sale price or agreed value or fair market value of such property or asset exceeds US$100,000; (xii) that limits or restricts (A) the ability of the Company or any of its Subsidiaries to engage in any line of business or carry on business in any geographic area, or (B) the scope of persons to whom the Company or any of its Subsidiaries may sell or acquire assets, products or deliver or obtain services; (xiii) any Contract providing for a royalty, streaming or similar arrangement or economically equivalent arrangement in respect of any of the Material Property; (xiv) any standstill or similar Contract currently restricting the ability of the Company or any of its Subsidiaries to offer to purchase or purchase the assets or equity securities of another person; (xv) that provides for indemnification by the Company or any of its Subsidiaries or the assumption of any Tax, environmental, or other liability of any person; (xvi) that is made out of the ordinary course of business; (xvii) (A) which is a mining concession, lease or claim in respect of the Material Property, or an earn-in, back-in, right of first offer or refusal in respect of the Material Property or (B) that is material to the Company and related to the operation of, or the exploitation, extraction, development or production of gold or zinc from, the Material Property; or (xvii) that is otherwise material to the Company or any of its Subsidiaries; and, for greater certainty, includes the Material Contracts listed in the Company Disclosure Letter;

“material fact” has the meaning attributed to such term under the Securities Act;

“Material Property” means, collectively, the real property interests, mineral rights and surface rights comprising the Back Forty Project which are held by the Company and its Subsidiaries, including Back Forty Joint Venture LLC;

“Meeting” means the special meeting of the Shareholders, including any adjournment or postponement thereof in accordance with the terms of this Agreement, to be called and held in accordance with the Interim Order for the purpose of considering and, if thought advisable, approving the Arrangement Resolution;

“MI 61-101” means Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions of the Securities Authorities in the Provinces of Ontario and Quebec;

“Mining Leases” has the meaning ascribed thereto in Section 3.1(t)(i);

“Misrepresentation” has the meaning attributed to such term under the Securities Act;

“Money Laundering Laws” has the meaning ascribed thereto in Section 3.1(n)(iii);

“NI 43-101” means National Instrument 43-101 - Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators;

“NYSE American” means the NYSE American stock exchange;

“OBCA” means the Business Corporations Act (Ontario);

“OHSL” shall have the meaning ascribed thereto in Section 3.1(z);

“Optionholder” means a holder of Options;

“Options” means the outstanding options to purchase Common Shares issued pursuant to the Stock Option Plan and/or the Equity Incentive Plan, as listed in the Company Disclosure Letter;

“ordinary course of business” or any similar reference, means, with respect to an action taken or to be taken by any person, that such action is consistent with the past practices of such person and is taken in the ordinary course of the normal day-to-day business and operations of such person;

“Outside Date” means January 14, 2022 or such later date as may be agreed to in writing by the Parties;

“Parent Annual Financial Statements” means the audited consolidated financial statements of the Parent as at and for the years ended December 31, 2020 and December 31, 2019, including the notes thereto;

“Parent Disclosure Record” means all documents filed by or on behalf of the Parent on the Electronic Data Gathering, Analysis, and Retrieval system (EDGAR) maintained by the SEC since January 1, 2019 that are publicly available;

“Parent Financial Statements” means, collectively, the Parent Annual Financial Statements and the Parent Interim Financial Statements;

“Parent Interim Financial Statements” means the unaudited condensed consolidated interim financial statements of the Parent as at and for the three and six months ended June 30, 2021 and June 30, 2021, including the notes thereto;

“Parent Material Adverse Effect” means any fact, state of facts, change, effect, event, circumstance, occurrence or development that individually or in the aggregate with other such facts, state of facts, changes, effects, events, circumstances, occurrences or developments is or would reasonably be expected to be material and adverse to the business, operations, results of operations, assets, properties, liabilities (including any contingent liabilities), or financial condition of the Parent and its Subsidiaries, on a consolidated basis, except any such fact, state of facts, change, effect, event, circumstance, occurrence or development resulting from:

provided, however, that each of clauses (i) through (vii) above shall not apply to the extent that any of the changes, developments, conditions or occurrences referred to therein disproportionately adversely affect the Parent and its Subsidiaries in comparison to other comparable persons who operate in the industry in which the Parent and its Subsidiaries operate, and provided further that references in certain sections of this Agreement to dollar amounts are not intended to be, and shall not be deemed to be, illustrative or interpretive for purposes of determining whether a Parent Material Adverse Effect has occurred;

“Parent Shares” means the shares of common stock in the capital of the Parent;

“Parties” means the parties to this Agreement and “Party” means any one of them;

“Permit” means any lease, license, permit, certificate, consent, decree, order, direction, grant, approval, classification, registration, agreement or other authorization of or from any Governmental Authority;

“Permitted Liens” means:

“person” includes an individual, sole proprietorship, corporation, body corporate, incorporated or unincorporated association, syndicate or organization, partnership, limited partnership, limited liability company, unlimited liability company, joint venture, joint stock company, trust, natural person in his or her capacity as trustee, executor, administrator or other legal representative, a government or Governmental Authority or other entity, whether or not having legal status;

“Plan of Arrangement” means the plan of arrangement substantially in the form and content set out in Schedule “A” hereto, as amended, modified or supplemented from time to time in accordance with Article 6 of the Plan of Arrangement or at the direction of the Court in the Final Order, with the consent of the Company, the Parent and the Purchaser, each acting reasonably;

“Pre-Acquisition Reorganization” has the meaning ascribed thereto in Section 4.4;

“Proceedings” has the meaning ascribed thereto in Section 3.1(p);

“Release” means any sudden, intermittent or gradual release, spill, leak, pumping, addition, pouring, emission, emptying, discharge, injection, escape, leaching, disposal, dumping, deposit, spraying, burial, abandonment, incineration, seepage, placement or introduction of a Hazardous Substance, whether accidental or intentional, into the Environment;

“Remedial Action” shall mean any investigation, feasibility study, impact study, risk analysis, monitoring, testing, sampling, removal (including removal of underground storage tanks), restoration, clean-up, remediation, closure, site restoration, remedial response, compensation measure or remedial work, in each case in connection with Environmental Approvals, Environmental Laws, or otherwise relating to the Environment;

“Representatives” means, in respect of a Party, any officer, director, employee, consultant, representative (including financial, legal or other advisor) or agent of the Party or any of its Subsidiaries;

“Returns” means all returns, reports, declarations, elections, notices, filings, forms, statements and other documents (whether in tangible, electronic or other form) and including any amendments, schedules, attachments, supplements, appendices and exhibits thereto, made, prepared, filed or required to be made, prepared or filed by Law in respect of Taxes;

“RSUs” means restricted share units of the Company issued pursuant to, or governed by, the Equity Incentive Plan;

“SEC” means the U.S. Securities and Exchange Commission;

“Securities Act” means the Securities Act (Ontario) and the rules, regulations and published policies made thereunder;

“Securities Authority” means any applicable securities regulatory authority, including the applicable securities commissions or securities regulatory authorities in each of the provinces and territories of Canada and the SEC;

“Securities Laws” means the Securities Act, the U.S. Exchange Act, the U.S. Securities Act and all other applicable securities Laws and applicable stock exchange rules and listing standards of the TSX, the NYSE American and any other relevant stock exchange;

“Securityholder” means, collectively, the Shareholders, the Optionholders, the holders of DSUs and the holders of RSUs;

“Shareholder” means a holder of Common Shares;

“Shareholder Approval” has the meaning ascribed thereto in Section 2.2(b);

“Special Committee” means the special committee of directors established by the Board in connection with the transactions contemplated by this Agreement;

“Stock Option Plan” means the stock option plan of the Company, as approved by Shareholders on May 28, 2006 and most recently re-approved and ratified by Shareholders on June 25, 2013;

“Subsidiary” means, with respect to a specified entity, any:

“Superior Proposal” means any unsolicited bona fide written Acquisition Proposal from a person who is an arm’s length third party of the Company (other than the Parent and the Purchaser), made after the date of this Agreement, to acquire 100% of the outstanding Common Shares or all or substantially all of the assets of the Company on a consolidated basis that:

“Superior Proposal Notice” has the meaning ascribed thereto in Section 5.4(1)(c);

“Support Agreements” means the agreements to vote in favour of the Arrangement from certain Shareholders, including each of the Company’s directors and officers;

“Supporting Shareholders” means the persons who are party to the Support Agreements, other than the Parent and the Purchaser;

“Tax” or “Taxes” means (a) any and all taxes, dues, duties, rates, imposts, fees, levies, other assessments, tariffs, charges or obligations of the same or similar nature, however denominated, imposed, assessed or collected by any Governmental Authority, including all income taxes, including any tax on or based on net income, gross income, income as specifically defined, earnings, gross receipts, capital gains, profits, business royalty or selected items of income, earnings or profits, and specifically including any federal, provincial, state, territorial, county, municipal, local or foreign taxes, state profit share taxes, windfall or excess profit taxes, capital taxes, royalty taxes, production taxes, payroll taxes, health taxes, employment taxes, withholding taxes, sales taxes, use taxes, goods and services taxes, custom duties, value added taxes, ad valorem taxes, excise taxes, alternative or add-on minimum taxes, franchise taxes, gross receipts taxes, licence taxes, occupation taxes, real and personal property taxes, stamp taxes, anti-dumping taxes, countervailing taxes, occupation taxes, environment taxes, transfer taxes, and employment or unemployment insurance premiums, social insurance premiums and worker’s compensation premiums and governmental pension plan (including Canada Pension Plan) contributions, and other taxes, fees, imposts, assessments or charges of any kind whatsoever imposed by any Governmental Authority; (b) any interest, penalties, additional taxes, fines and other charges and additions imposed by any Governmental Authority on or in respect of amounts of the type described in clause (a) above or this clause (b); (c) any liability for the payment of any amounts of the type described in clauses (a) or (b) as a result of being a member of an affiliated, consolidated, combined or unitary group for any period; and (d) any liability for the payment of any amounts of the type described in clauses (a) or (b) as a result of any express or implied obligation to indemnify any other person or as a result of being a transferee or successor in interest to any party;

“Tax Act” means the Income Tax Act (Canada) and the regulations promulgated thereunder, as amended;

“Termination Fee” has the meaning ascribed thereto in Section 5.6(2);

“Termination Fee Event” has the meaning ascribed thereto in Section 5.6(2);

“Treasury Regulations” means the regulations promulgated by the United States Department of the Treasury under the Code;

“TSX” means the Toronto Stock Exchange;

“U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;

“U.S. GAAP” means United States generally accepted accounting principles;

“U.S. Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder; and

“wilful breach” by a Party means that, as applicable, a senior officer of the applicable Party (a) as to a representation or warranty herein, had actual knowledge that such representation or warranty made by the Party of which he or she served as a senior officer was materially false when made or (b) as to a covenant herein, directed or allowed the Party to take an action, fail to take an action or permit an action to be taken or occur that he or she knew at such time constituted a material breach of such covenant herein by such Party.

Except where otherwise specified, all references to currency herein are to lawful money of Canada. References to “C$” are to Canadian dollars, and references to “US$” are to United States dollars.

The division of this Agreement into Articles and Sections and the insertion of a table of contents and headings are for convenience of reference only and do not affect the construction or interpretation of this Agreement. The terms “this Agreement”, “hereof”, “herein”, “hereunder” and similar expressions refer to this Agreement, including the Schedules hereto, and not to any particular Article, Section or other portion hereof. Unless something in the subject matter or context is inconsistent therewith, references herein to an Article, Section or Schedule by number or letter or both are to that Article, Section or Schedule in or to this Agreement.

Any reference in this Agreement to the “knowledge” of the Company, means to the knowledge and information of the Company Senior Management after making due and diligent inquiry regarding the relevant matter. Any reference in this Agreement to the “knowledge” of the Parent or the Purchaser, means to the knowledge and information of Allen Palmiere, Kimberly Perry and Alberto Reyes after making due and diligent inquiry regarding the relevant matter.

Unless the context otherwise requires, words importing the singular number only include the plural and vice versa; words importing any gender include all genders. The terms “including” or “includes” and similar terms of inclusion, unless expressly modified by the words “only” or “solely”, mean “including without limiting the generality of the foregoing” and “includes without limiting the generality of the foregoing”. Any Contract, instrument or Law defined or referred to herein means such Contract, instrument or Law as from time to time amended, modified, supplemented or consolidated, including, in the case of Contracts or instruments, by waiver or consent and, in the case of Laws, by succession of comparable successor Laws, and all attachments thereto and instruments incorporated therein and, in the case of statutory Laws, all rules and regulations made thereunder.

In the event that any date on which any action is required to be taken hereunder by any of the Parties is not a Business Day, such action will be required to be taken on the next succeeding day which is a Business Day.

The following are the Schedules to this Agreement:

Schedule “A” - Form of Plan of Arrangement; and

Schedule “B” - Arrangement Resolution.

Article 2 

THE ARRANGEMENT

The Company, the Parent and the Purchaser agree that the Arrangement will be implemented in accordance with and subject to the terms and conditions of this Agreement and the Plan of Arrangement.

As soon as reasonably practicable after the date of this Agreement, but in any event on or before October 29, 2021, the Company shall apply in a manner reasonably acceptable to the Parent and the Purchaser pursuant to Section 182 of the OBCA and, in cooperation with the Parent and the Purchaser, prepare, file and diligently pursue an application for the Interim Order, which must provide, among other things:

For greater certainty, in seeking the Interim Order, the Company shall advise the Court that it is the intention ‎of the Parties to rely upon the exemption from registration provided by Section 3(a)(10) ‎of the U.S. Securities Act with respect to the issuance of all Consideration Shares to be issued pursuant to the Arrangement based upon and conditioned on the Court’s ‎approval of the Arrangement and its determination that the Arrangement is fair and ‎reasonable to holders of Common Shares to whom such securities will be issued by the Parent pursuant to the Arrangement, following a hearing and after consideration of the substantive and ‎procedural terms and conditions thereof.

If the Interim Order is obtained and the Arrangement Resolution is passed at the Meeting as provided for in the Interim Order, the Company shall take all steps necessary or desirable to submit the Arrangement to the Court and diligently pursue an application for the Final Order pursuant to Section 182 of the OBCA, as soon as reasonably practicable, but in any event not later than three (3) Business Days after the Arrangement Resolution is passed at the Meeting.

Subject to the terms of this Agreement, the Parent and the Purchaser shall cooperate with, assist and consent to the Company seeking the Interim Order and the Final Order, including by providing the Company on a timely basis any information reasonably required to be supplied by the Parent and the Purchaser in connection therewith. In connection with all Court proceedings relating to obtaining the Interim Order and the Final Order, the Company shall:

Following receipt by the Company of the Final Order and in any event not later than the Effective Date, the Purchaser shall: (i) deliver or arrange to be delivered into escrow with the Depositary sufficient Parent Shares to satisfy the aggregate Consideration payable by the Purchaser pursuant to the Plan of Arrangement (other than payments to Shareholders validly exercising Dissent Rights who have not withdrawn their notice of objection); and (ii) deposit or arrange to be deposited into escrow with the Depositary a sufficient cash amount to satisfy the aggregate consideration payable by the Company to the holders of RSUs and DSUs in accordance with the terms of the Plan of Arrangement.

The Parties agree that the Arrangement will be carried out with the intention that all Consideration Shares to be issued pursuant to the Arrangement will be issued by the Parent in reliance on the exemption from the registration requirements of the U.S. Securities Act provided by Section 3(a)(10) thereunder. In order to ensure the availability of the exemption under Section 3(a)(10) of the U.S. Securities Act, the Parties agree that the Arrangement will be carried out on the following basis:

“This Order will serve as a basis of a claim to an exemption, pursuant to section 3(a)(10) of the United States Securities Act of 1933, as amended, from the registration requirements otherwise imposed by that Act, regarding the distribution of securities of the Parent, pursuant to the Plan of Arrangement.”

The Company, the Purchaser, the Parent and the Depositary shall be entitled to deduct or withhold, or direct any other Person to deduct or withhold, from any consideration or amount otherwise payable or deliverable to any Shareholder, any holder of DSUs or RSUs, or any other Person under the Plan of Arrangement or this Agreement, such amounts as the Company, the Purchaser, the Parent or the Depositary, as the case may be, may reasonably determine is required to be deducted and withheld with respect to such payment under any provision of Laws in respect of Taxes. To the extent that amounts are so deducted or withheld, such deducted or withheld amounts shall be treated for all purposes hereof as having been paid to the Shareholder, the holder of DSUs or the holder of RSUs, or such other Person, as applicable, in respect of which such deduction or withholding was made, provided that such deducted or withheld amounts are actually remitted to the appropriate Governmental Authority. To the extent that any amount is so required to be deducted or withheld from any payment to a Shareholder, the Purchaser, the Parent and the Depositary are hereby authorized to sell or otherwise dispose of such portion of the Parent Shares issuable to the holder as is necessary to provide sufficient funds to the Company, the Purchaser, the Parent or the Depositary, as the case may be, to enable it to comply with such deduction or withholding requirement, and the Company or the Depositary shall notify the holder thereof and remit the applicable portion of the net proceeds of such sale (after deduction of all reasonable fees, commissions or costs in respect of such sale) to the appropriate Governmental Authority and shall remit to such holder any unapplied balance of the net proceeds of such sale. Any such sale will be made at prevailing market prices and none of the Company, the Purchaser, the Parent or the Depositary shall be under any obligation to obtain or indemnify any Shareholder in respect of a particular price for the Parent Shares so sold. Notwithstanding the foregoing, in lieu of having the Parent Shares sold or otherwise disposed of, a Shareholder may provide cash to the Company, the Purchaser, the Parent or the Depository to fund any required withholding taxes, provided the cash delivered is sufficient to satisfy any remittance in full and is received at least five (5) Business Days before the remittance by the Company, the Purchaser, the Parent or the Depository, as applicable, of any withholding is due.

The Parent hereby unconditionally and irrevocably guarantees in favour of the Company, as principal and not as surety, the due and punctual performance (and, where applicable, payment) by the Purchaser (and its successors and permitted assigns) of each of its obligations and liabilities under this Agreement and the Plan of Arrangement, as the same may be amended, changed, replaced, settled, compromised or otherwise modified from time to time, and irrespective of any bankruptcy, insolvency, dissolution, winding-up, termination of the existence of or other matter whatsoever respecting the Purchaser or any successor or permitted assignee, including providing the Depositary with sufficient funds and Consideration Shares under Section 2.8 to pay the aggregate Consideration to Shareholders and the holders of RSUs and holders of DSUs pursuant to the Arrangement and all related or other fees and expenses for which the Purchaser is responsible under the terms of this Agreement (all in accordance with the terms hereof). The Parent hereby agrees that the Company shall not have to proceed first against the Purchaser in respect of any such matter before exercising its rights under this guarantee against the Parent and agrees to be liable for all guaranteed obligations as if it were the principal obligor of such obligations.

Subject to the terms and conditions of this Agreement and pursuant to the Plan of Arrangement, all outstanding RSUs and DSUs, whether vested or unvested, will be cancelled in exchange for a cash payment by the Company to each holder of an RSU or DSU, in respect of each RSU or DSU held by such holder, as applicable, of an amount equal in cash equal to the 5-day volume weighted average price of the Company Shares on the TSX as of the close of trading on the second (2^nd) trading day preceding the Effective Date less any applicable Taxes, and the Parent, the Purchaser and the Company shall take all such actions as may be necessary or desirable to give effect to the foregoing. All Options that are outstanding shall be cancelled on the Effective Date with no payment of consideration in respect thereof.

Article 3
REPRESENTATIONS AND WARRANTIES

Except as specifically disclosed in (i) the Company Disclosure Letter (which shall make reference to the applicable section in respect of which such qualification is being made) the Company represents and warrants to and in favour of the Purchaser and the Parent as follows and acknowledges that the Purchaser and the Parent are relying upon such representations and warranties in entering into this Agreement:

No material authorization, licence, permit, certificate, registration, consent or approval of, or filing with, or notification to, any Governmental Authority is required to be obtained or made by or with respect to the Company or any of its Subsidiaries for the Parent and its Subsidiaries (including the Company and its Subsidiaries) to conduct operations at the Material Property following the Effective Time.

True, complete and correct copies of the agreements, arrangements and understandings referred to in paragraph (i) of this Section 3.1(x), are included in the Company Diligence Information.

Each of the Parent and the Purchaser represents and warrants to and in favour of the Company as follows and acknowledges that the Company is relying upon such representations and warranties in entering into this Agreement:

No investigation by or on behalf of any Party prior to the execution of this Agreement will mitigate, diminish or affect the representations and warranties made by the other Parties. The representations and warranties of the Parties contained in this Agreement will not survive the completion of the Arrangement and will expire and be terminated on the earlier of the Effective Time and the date on which this Agreement is terminated in accordance with its terms. This Section 3.3 will not limit any covenant or agreement of any of the Parties, which. by its terms, contemplates performance after the Effective Time or the date on which this Agreement is terminated, as the case may be.

Article 4
COVENANTS

Subject to compliance with applicable Laws and the terms of any existing Contracts, the Company will afford to the Parent and the Purchaser and their respective Representatives until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, continuing access to the Company Diligence Information and reasonable access during normal business hours and upon giving reasonable notice to the Company, to the Company’s and its Subsidiaries’ businesses, properties, books and records and such other data and information as the Parent or the Purchaser may reasonably request, as well as to its management personnel, subject however to such access not interfering with the ordinary conduct of the business of the Company or any of its Subsidiaries. Subject to compliance with applicable Laws and such requests not materially interfering with the ordinary conduct of the business of the Company, the Company and its Subsidiaries will also make available to the Parent and the Purchaser and their respective Representatives information reasonably requested by the Parent or the Purchaser for the purposes of preparing, considering and implementing integration and strategic plans for the combined businesses of the Company, the Parent and the Purchaser and their affiliates following completion of the Arrangement. Without limiting the generality of the provisions of the Confidentiality Agreement, the Parent acknowledges that all information provided to it under this Section 4.2, or otherwise pursuant to this Agreement or in connection with the transactions contemplated hereby, is subject to the Confidentiality Agreement, which will remain in full force and effect in accordance with its terms notwithstanding any other provision of this Agreement.

Subject to the terms and conditions of this Agreement, the Parent and the Purchaser will perform all obligations required to be performed by it under this Agreement, cooperate with the Company in connection therewith, and use commercially reasonable efforts to do such other acts and things as may be necessary or desirable in order to complete the Arrangement and other transactions contemplated hereby, including:

Section 4.7               Mutual Covenants

Each of the Parties covenants and agrees that, subject to the terms and conditions of this Agreement, until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms:

The Company shall assist in effecting the resignations and mutual releases of each director and officer of the Company and each of its Subsidiaries to the extent requested by the Parent or the Purchaser and as at the Effective Time and causing any such persons to be replaced by persons identified by the Parent or the Purchaser as of the Effective Time.

The Parties shall cooperate in the preparation of presentations, if any, to the Shareholders and, if desired by the Parent, to the Parent’s shareholders regarding the Arrangement. A Party must not issue any press release or make any other public statement or disclosure with respect to this Agreement or the Arrangement without the consent of the other Parties (which consent shall not be unreasonably withheld, conditioned or delayed), and the Company must not make any filing with any Governmental Authority (subject in each case to the Company’s overriding obligations to make any disclosure or filing required by Laws) with respect to this Agreement or the Arrangement without the consent of the Parent and the Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed); provided that any Party that, based on the written opinion of its outside legal counsel, is required to make disclosure by Law shall use its best efforts to give the other Parties prior oral or written notice and a reasonable opportunity to review or comment on the disclosure or filing (other than with respect to confidential information contained in such disclosure or filing). The Party making such disclosure shall give reasonable consideration to any comments made by the other Parties and their counsel, and if such prior notice is not possible, shall give such notice immediately following the making of such disclosure or filing. For greater certainty, the foregoing shall not prevent any of the Parties from making internal announcements to employees and having discussions with Shareholders and financial analysts and other stakeholders so long as such statements and announcements are consistent with the most recent press releases, public disclosures or public statements made by the Parties.

Article 5
ADDITIONAL AGREEMENTS

Section 5.1               Non-Solicitation

If the Company or any of its Subsidiaries or any of its or their respective Representatives, receives or otherwise becomes aware of any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to an Acquisition Proposal, or any request for copies of, access to, or disclosure of, confidential information relating to the Company or any of its Subsidiaries in connection with an Acquisition Proposal, including but not limited to information, access, or disclosure relating to the properties, facilities, books or records of the Company or any of its Subsidiaries, the Company shall promptly notify the Parent and the Purchaser, at first orally, and then as soon as practicable and in any event within twenty-four (24) hours in writing, of such Acquisition Proposal, inquiry, proposal, offer or request, including a description of its material terms and conditions, the identity of all persons making the Acquisition Proposal, inquiry, proposal, offer or request, and shall provide the Parent and the Purchaser with copies of all material documents, material or correspondence or other material received in respect of, from or on behalf of any such persons and such other details of such Acquisition Proposal, inquiry, proposal, offer or request as the Parent or the Purchaser may reasonably request. The Company shall keep the Parent and the Purchaser fully informed on a current basis of the status of developments and, to the extent permitted by Section 5.3, discussions and negotiations with respect to such Acquisition Proposal, inquiry, proposal, offer or request, including any changes, modifications or other amendments to any such Acquisition Proposal, inquiry, proposal, offer or request and shall provide to the Parent and the Purchaser copies of all material or correspondence if in writing or electronic form, and if not in writing or electronic form, a description of the terms of such correspondence communicated to the Company by or on behalf of any person making any such Acquisition Proposal, inquiry, proposal, offer or request.

Section 5.3               Responding to an Acquisition Proposal

Section 5.4               Right to Match

Section 5.5               Breach by Subsidiaries and Representatives

Without limiting the generality of the foregoing, the Company shall advise its Subsidiaries and its and their respective Representatives of the prohibitions set out in this Article 5, and any violation of the restrictions set forth in this Article 5 by the Company, its Subsidiaries or its or their respective Representatives shall be deemed to be a breach of this Article 5 by the Company.

Section 5.6               Termination Fees

and, in the case of either (A) or (B),

For purposes of the foregoing, the term “Acquisition Proposal” shall have the meaning assigned to such term in Section 1.1, except that references to “20% or more” shall be deemed to be references to “50% or more”.

Section 5.7               Expenses

Article 6
TERM AND TERMINATION

Section 6.1               Term

This Agreement shall be effective from the date hereof until the termination of this Agreement in accordance with its terms.

Section 6.2               Termination

Section 6.3               Effect of Termination and Survival

If this Agreement is terminated by any Party pursuant to Section 6.2, this Agreement shall become void and of no further force or effect without liability of any Party (or any shareholder, director, officer, employee, agent, consultant or representative of such Party) to any other Party to this Agreement, except that:

Section 6.4               Notice and Cure Provisions

If any Party determines at any time prior to the Effective Time that it intends to refuse to complete the transactions contemplated hereby because of any unfilled or unperformed condition contained in this Agreement, such Party will so notify the other Party forthwith upon making such determination in order that the other Party will have the right and opportunity to take such steps, at its own expense, as may be necessary for the purpose of fulfilling or performing such condition within a reasonable period of time, but in no event later than the Outside Date. No Party may elect not to complete the transactions contemplated hereby pursuant to the conditions precedent contained in Article 7 hereof or exercise any termination right arising therefrom, and no payments will be payable as a result of such election pursuant to Article 7, unless forthwith and in any event prior to the Outside Date the Party intending to rely thereon has given a written notice to the other Party specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Party giving such notice is asserting as the basis for the non-fulfillment of the applicable condition precedent or the exercise of the termination right, as the case may be. If any such notice is given, provided that the other Party is proceeding diligently to cure such matter, if such matter is susceptible to being cured, the Party giving such notice may not terminate this Agreement as a result thereof until the earlier of the Outside Date and the expiration of a period of fifteen (15) Business Days from such notice. If such notice has been given prior to the date of the Meeting, such meeting, unless the Parties otherwise agree, will be postponed or adjourned until the expiry of such period (without causing any breach of any other provision contained herein).

Section 6.5               Notice of Breach

Each Party will give prompt notice to the other of the occurrence or failure to occur (in either case, actual, anticipated, contemplated or, to the knowledge of such Party, threatened), at any time from the date hereof until the Effective Date, of any event or state of facts which occurrence or failure would, or would reasonably be likely to (a) cause any of the representations or warranties of either Party contained herein to be untrue, misleading or inaccurate in any material respect on the date hereof or at the Effective Date; or (b) result in the failure to satisfy any conditions precedent set out Section 7.1, Section 7.2 and Section 7.3.

Article 7
CONDITIONS PRECEDENT

Section 7.1               Mutual Conditions Precedent

The respective obligations of the Parties to complete the Arrangement are subject to the satisfaction, or mutual waiver by the Parties, on or before the Effective Date, of each of the following conditions, each of which are for the mutual benefit of the Parties and which may be waived, in whole or in part, by the Purchaser, the Parent or the Company at any time:

Section 7.2               Additional Conditions Precedent to the Obligations of the Company

The obligation of the Company to complete the Arrangement will be subject to the satisfaction, or waiver by the Company, on or before the Effective Date, of each of the following conditions, each of which is for the exclusive benefit of the Company and which may be waived by the Company at any time, in whole or in part, in its sole discretion and without prejudice to any other rights that the Company may have:

Section 7.3               Additional Conditions Precedent to the Obligations of the Parent and the Purchaser

The obligation of the Purchaser to complete the Arrangement will be subject to the satisfaction, or waiver by the Parent and the Purchaser, on or before the Effective Date, of each of the following conditions, each of which is for the exclusive benefit of the Parent and the Purchaser and which may be waived by the Parent and the Purchaser at any time, in whole or in part, in their sole discretion and without prejudice to any other rights that the Parent or the Purchaser may have:

Section 7.4               Satisfaction of Conditions

The conditions precedent set out in Section 7.1, Section 7.2 and Section 7.3 shall be conclusively deemed to have been satisfied, waived or released at the Effective Time.

Article 8
GENERAL

Section 8.1               Notices

Any demand, notice or other communication to be given in connection with this Agreement must be given in writing and will be given by mail or electronic mail addressed to the recipient as follows:

Gold Resource Corporation
2000 South Colorado Blvd.
Tower 1, Suite 10200
Denver, Colorado, USA 80222

Attention:        Allen Palmiere, CEO, President and Director
E-mail:             [***]

with a copy (which will not constitute notice) to:

Fasken Martineau DuMoulin LLP
333 Bay Street, Suite 2400,
Toronto, Ontario
M5H 2T6

Attention:         Brian Graves
Email:               bgraves@fasken.com

Aquila Resources Inc.
141 Adelaide Street West, Suite 520
Toronto, Ontario
M5H 3L5

Attention:        Guy Le Bel, President & CEO, Director
E-mail:             [***]

with a copy (which will not constitute notice) to:

Goodmans LLP
Bay Adelaide Centre
333 Bay Street, Suite 3400
Toronto, ON M5H 2S7

Attention:         Michael Partridge
Email:               mpartridge@goodmans.ca

or to such other street address, individual or electronic communication number or address as may be designated by notice given by either Party to the other. Any demand, notice or other communication given by electronic mail will be conclusively deemed to have been given on the day of transmittal thereof if given during the normal business hours of the recipient and on the Business Day during which such normal business hours next occur if not given during such hours on any day.

Section 8.2               Assignment

Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any Party without the prior written consent of the other Parties, provided that the Parent or Purchaser may assign all or part of its rights under this Agreement to, and their obligations under this Agreement may be assumed by, any of its affiliates, provided that if such assignment and/ or assumption takes place, the Parent and the Purchaser shall continue to be liable joint and severally with such affiliates, as the case may be, for all of its obligations hereunder.

Section 8.3               Benefit of Agreement

This Agreement will enure to the benefit of and be binding upon the respective successors (including any successor by reason of amalgamation or statutory arrangement) and permitted assigns of the Parties.

Section 8.4               Time of Essence

Time is of the essence of this Agreement.

Section 8.5               Governing Law; Attornment; Service of Process

This Agreement shall be governed, including as to validity, interpretation and effect, by the laws of the Province of Ontario and the laws of Canada applicable therein. Each of the Parties hereby irrevocably attorns to the non-exclusive jurisdiction of the courts of the Province of Ontario in respect of all matters arising under and in relation to this Agreement or the Arrangement and waives, to the fullest extent possible, the defence of an inconvenient forum or any similar defence to the maintenance of proceedings in such courts.

Section 8.6               Entire Agreement

This Agreement, together with the Confidentiality Agreement, constitutes the entire agreement among the Parties with respect to the subject matter thereof. There are no representations, warranties, terms, conditions, undertakings or collateral agreements, express, implied or statutory, among the Parties with respect thereto except as expressly set forth in this Agreement and the Confidentiality Agreement. The Parties also agree that the term of the Confidentiality Agreement will remain in full force and effect.

Section 8.7               Amendment

provided, however, that no such amendment may (i) reduce or materially affect the Consideration to be received by the Shareholders under the Arrangement without their approval at the Meeting or, following the Meeting, without their approval given in the same manner as required by applicable Laws for the approval of the Arrangement as may be required by the Court.

Section 8.8               Waiver and Modifications

Any Party may (a) waive, in whole or in part, any inaccuracy of, or consent to the modification of, any representation or warranty made to it hereunder or in any document to be delivered pursuant hereto, (b) extend the time for the performance of any of the obligations or acts of the other Parties (c) waive or consent to the modification of any of the covenants herein contained for its benefit or waive or consent to the modification of any of the obligations of the other Parties hereto or (d) waive the fulfillment of any condition to its own obligations contained herein. No waiver or consent to the modifications of any of the provisions of this Agreement will be effective or binding unless made in writing and signed by the Party or Parties purporting to give the same and, unless otherwise provided, will be limited to the specific breach or condition waived. The rights and remedies of the Parties hereunder are cumulative and are in addition to, and not in substitution for, any other rights and remedies available at law or in equity or otherwise. No single or partial exercise by a Party of any right or remedy precludes or otherwise affects any further exercise of such right or remedy or the exercise of any other right or remedy to which that Party may be entitled. No waiver or partial waiver of any nature, in any one or more instances, will be deemed or construed a continued waiver of any condition or breach of any other term, representation or warranty in this Agreement.

Section 8.9               Third Party Beneficiaries

Section 8.10           Severability

If any provision of this Agreement is determined by any court of competent jurisdiction to be illegal or unenforceable, that provision will be severed from this Agreement and the remaining provisions will continue in full force and effect so long as the economic or legal substance of the transactions contemplated herein is not affected in any material manner or would prevent or significantly impede or materially delay the completion of the Arrangement.

Section 8.11           Mutual Interest

Notwithstanding the fact that any part of this Agreement has been drafted or prepared by or on behalf of one of the Parties, all Parties confirm that they and their respective counsel have reviewed and negotiated this Agreement and that the Parties have adopted this Agreement as the joint agreement and understanding of the Parties, and the language used in this Agreement will be deemed to be the language chosen by the Parties to express their mutual intent, and the Parties waive the application of any Laws or rule or construction providing that ambiguities in any agreement or other document will be construed against the Party drafting such agreement or other document and agree that no rule of construction providing that a provision is to be interpreted in favour of the person who contracted the obligation and against the person who stipulated it will be applied against any Party.

Section 8.12           Further Assurances

Subject to the provisions of this Agreement, the Parties will, from time to time, do all acts and things and execute and deliver all such further documents and instruments, as the other Parties may, either before or after the Effective Date, reasonably require to effectively carry out or better evidence or perfect the full intent and meaning of this Agreement and, in the event the Arrangement becomes effective, to document or evidence any of the transactions or events set out in the Plan of Arrangement.

Section 8.13           Injunctive Relief

The Parties agree that irreparable harm would occur for which money damages would not be an adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to injunctive and other equitable relief to prevent breaches or threatened breaches of this Agreement, and to enforce compliance with the terms of this Agreement without any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief, this, subject to Section 5.6(4), being in addition to any other remedy to which the Parties may be entitled at law or in equity.

Section 8.14           No Personal Liability

Section 8.15           Counterparts

This Agreement may be executed and delivered in any number of counterparts (including by facsimile or electronic transmission), each of which will be deemed to be an original and all of which taken together will be deemed to constitute one and the same instrument.

[Remainder of page left intentionally blank]

IN WITNESS WHEREOF the Parties have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

[Signature Page to Arrangement Agreement]

Schedule “A”

Form of Plan of Arrangement

PLAN OF ARRANGEMENT
UNDER SECTION 182 of THE BUSINESS CORPORATIONS ACT (ONTARIO)

Article 1
INTERPRETATION

In this Plan of Arrangement, unless there is something in the subject matter or context inconsistent therewith, the following terms shall have the respective meanings set out below and grammatical variations of those terms shall have corresponding meanings:

“Arrangement” means an arrangement under the provisions of section 182 of the OBCA, on the terms and conditions set forth in this Plan of Arrangement, subject to any amendments or variations hereto made in accordance with Section 8.7 of the Arrangement Agreement or Article 6 of this Plan of Arrangement or made at the direction of the Court in the Final Order with the prior written consent of the Company, the Parent and the Purchaser, each acting reasonably;

“Arrangement Agreement” means the arrangement agreement made as of October 5, 2021 between the Company, the Parent and the Purchaser, including the schedules thereto, as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with its terms;

“Arrangement Resolution” means the special resolution approving this Plan of Arrangement to be considered at the Meeting;

“Articles of Arrangement” means the articles of arrangement of the Company in respect of the Arrangement, required by the OBCA to be filed with the Director after the Final Order is made, which shall include this Plan of Arrangement and otherwise be in a form and content satisfactory to the Company, the Parent and the Purchaser, each acting reasonably;

“Business Day” means a day other than a Saturday, a Sunday or any other day on which major banks are closed for business in Toronto, Ontario and Denver, Colorado;

“Certificate of Arrangement” means the certificate of arrangement issued by the Director pursuant to subsection 183(2) of the OBCA in respect of the Articles of Arrangement;

“Common Shares” means the common shares in the capital of the Company;

“Company” means Aquila Resources Inc., a corporation incorporated under the laws of the Province of Ontario;

“Consideration” means the consideration to be received by the Shareholders pursuant to the Plan of Arrangement in respect of each Common Share that is issued and outstanding immediately prior to the Effective Time, being 0.0399 of a Parent Share for each Common Share;

“Contract” means any contract, agreement, license, franchise, lease, arrangement, commitment, understanding, joint venture, partnership, note, instrument or other right or obligation (whether written or oral) to which a Party or any of its Subsidiaries is a party or by which the Party or any of its Subsidiaries is bound or affected or to which any of their respective properties or assets is subject;

“Court” means the Ontario Superior Court of Justice (Commercial List);

“Depositary” means TSX Trust Company, or any other depositary or trust company, bank or financial institution as the Parent and Purchaser may appoint to act as depositary with the approval of the Company, acting reasonably;

“Director” means the Director appointed pursuant to section 278 of the OBCA;

“Dissent Rights” has the meaning ascribed thereto in Section 4.1;

“Dissenting Shares” means the Common Shares held by Dissenting Shareholders in respect of which such Dissenting Shareholders have given Notice of Dissent;

“Dissenting Shareholder” means a registered Shareholder who has duly and validly exercised the Dissent Rights in respect of the Arrangement Resolution in strict compliance with the Dissent Rights and who has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights, but only in respect of the Common Shares in respect of which Dissent Rights are validly exercised by such registered Shareholder;

“DSUs” means deferred share units of the Company issued pursuant to, or governed by, the Equity Incentive Plan;

“Effective Date” means the date upon which the Arrangement becomes effective as established by the date of issue shown on the Certificate of Arrangement;

“Effective Time” means 12:01 a.m. (Toronto time) on the Effective Date or such other time as the Company, the Parent and the Purchaser may agree upon in writing;

“Equity Incentive Plan” means the equity incentive plan of the Company effective May 23, 2017;

“Final Order” means the final order of the Court approving the Arrangement under subsection 182(5)(f) of the OBCA, in form and substance acceptable to the Company, the Parent and the Purchaser, each acting reasonably, after a hearing upon the procedural and substantive fairness of the terms and conditions of the Arrangement, as such order may be affirmed, amended, modified, supplemented or varied by the Court (with the consent of the Company, the Parent and the Purchaser, each acting reasonably) at any time prior to the Effective Date or, if appealed, as affirmed or amended (provided that any such amendment is acceptable to the Company, the Parent and the Purchaser, each acting reasonably) on appeal unless such appeal is withdrawn, abandoned or denied;

“Former Shareholders” means the holders of Common Shares immediately prior to the time at which the steps set out at Section 3.1 occur;

“Governmental Authority” means any international, multinational, national, federal, provincial, territorial, state, regional, municipal, local or other government or governmental body and any division, agent, official, agency, commission, board or authority of any government, governmental body, quasi-governmental or private body (including the TSX, the NYSE American or any other stock exchange) exercising any statutory, regulatory, expropriation or taxing authority under the authority of any of the foregoing and any domestic, foreign or international judicial, quasi-judicial or administrative court, tribunal, commission, board, panel or arbitrator acting under the authority of any of the foregoing;

“holder”, when used with reference to any securities of the Company, means the holder of such securities shown from time to time in the central securities register maintained by or on behalf of the Company in respect of such securities;

“Interim Order” means the interim order of the Court to be issued following the application therefor submitted to the Court as contemplated by Section 2.2 of the Arrangement Agreement, after being informed of the intention to rely upon the exemption from registration under Section 3(a)(10) of the U.S. Securities Act with respect to the Parent Shares issued pursuant to the Arrangement, in form and substance acceptable to the Company, the Parent and the Purchaser, each acting reasonably, providing for, among other things, the calling and holding of the Meeting, as such order may be affirmed, amended, modified, supplemented or varied by the Court with the consent of the Company, the Parent and the Purchaser, each acting reasonably;

“Letter of Transmittal” means the letter of transmittal to be sent to registered Shareholders for use in connection with the Arrangement;

“Liens” means any pledge, claim, lien, charge, option, encumbrance, hypothec, action, mortgage, security interest, lease, sublease, right of first refusal, superficies, servitude, royalty, levy, collateral securing the payment obligations of any Person, voting trust or agreement, transfer restriction under any shareholder or similar agreement or consent right, in each case, whether contingent or absolute, direct or indirect, or any agreement, option, right or privilege (whether by Law, Contract or otherwise) capable of becoming any of the foregoing or with any similar effect whatsoever;

“Meeting” means the special meeting of the Shareholders, including any adjournment or postponement thereof in accordance with the terms of the Arrangement Agreement, to be called and held in accordance with the Interim Order for the purpose of considering and, if thought advisable, approving the Arrangement Resolution;

“Notice of Dissent” means a notice of dissent duly and validly given by a registered Shareholder exercising Dissent Rights as contemplated in the Interim Order and as described in Article 4;

“NYSE American” means the NYSE American stock exchange;

“OBCA” means the Business Corporations Act (Ontario);

“Optionholder” means a holder of Options;

“Options” means the outstanding options to purchase Common Shares issued pursuant to the Stock Option Plan and/or the Equity Incentive Plan;

“Parent” means Gold Resource Corporation, a corporation incorporated under the laws of the State of Colorado;

“Parent Shares” means the shares of common stock in the capital of the Parent;

“Parties” means the Company, the Parent and the Purchaser, and “Party” means any one of them;

“Plan of Arrangement” means this plan of arrangement as amended, modified or supplemented from time to time in accordance with Article 6 or at the direction of the Court in the Final Order, with the consent of the Company, the Parent and the Purchaser, each acting reasonably;

“Purchaser” means Gold Resource Acquisition Sub, Inc., a corporation incorporated under the laws of the State of Colorado;

“RSUs” means restricted share units of the Company issued pursuant to, or governed by, the Equity Incentive Plan;

“Shareholder” means a holder of Common Shares;

“Stock Option Plan” means the stock option plan of the Company, as approved by Shareholders on May 28, 2006 and most recently re-approved and ratified by Shareholders on June 25, 2013;

“Subsidiary” means, with respect to a specified entity, any:

“TSX” means the Toronto Stock Exchange; and

“U.S. Securities Act” means the United States Securities Act of 1933, as amended and the rules and regulations promulgated thereunder.

Any capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Arrangement Agreement. In addition, words and phrases used herein and defined in the OBCA and not otherwise defined herein or in the Arrangement Agreement shall have the same meaning herein as in the OBCA unless the context otherwise requires.

The division of this Plan of Arrangement into Articles, Sections, paragraphs and other portions and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation hereof. Unless otherwise indicated, all references to an “Article”, “Section” or “paragraph” followed by a number and/or a letter refer to the specified Article, Section or paragraph of this Plan of Arrangement. The words “including”, “includes” and “include” mean “including (or includes or include) without limitation” and the words “the aggregate of”, “the total of”, “the sum of”, or a phrase of similar meaning means “the aggregate (or total or sum), without duplication, of”.

In this Plan of Arrangement, unless the context otherwise requires, words used herein importing the singular include the plural and vice versa.

In the event that any date on which any action is required to be taken hereunder by any of the Parties is not a Business Day, such action shall be required to be taken on the next succeeding day which is a Business Day.

Time shall be of the essence in every matter or action contemplated hereunder. All times expressed herein or in any letter of transmittal contemplated herein are local time (Toronto, Ontario) unless otherwise stipulated herein or therein.

Unless otherwise stated, all references in this Plan of Arrangement to sums of money are expressed in lawful money of Canada.

Any reference to a statute refers to such statute and all rules, resolutions and regulations made under it, as it or they may have been or may from time to time be amended or re-enacted, unless stated otherwise.

Article 2
EFFECT OF THE ARRANGEMENT

This Plan of Arrangement is made pursuant to, is subject to the provisions of, and forms a part of the Arrangement Agreement, except in respect of the sequence of the steps comprising the Arrangement, which shall occur in the order set forth herein.

This Plan of Arrangement and the Arrangement, upon the filing of the Articles of Arrangement and the issuance of the Certificate of Arrangement, shall become effective and be binding upon the Parent, the Purchaser, the Company, all registered holders and beneficial holders of Common Shares (including Dissenting Shares), Options, RSUs, and DSUs, the registrar and transfer agent of the Company, the Depositary and all other Persons, at and after the Effective Time without any further act or formality required on the part of any Person.

Article 3

ARRANGEMENT

Commencing at the Effective Time, each of the events set out below shall occur and be deemed to occur in the following sequence, in each case, unless stated otherwise, effective as at five minute intervals starting at the Effective Time, without any further authorization, act or formality of or by the Company, the Parent, the Purchaser or any other Person:

In no event shall any holder of Common Shares be entitled to a fractional Parent Share. Where the aggregate number of Parent Shares to be issued to a Person as consideration under or as a result of this Arrangement would result in a fraction of a Parent Share being issuable, the number of Parent Shares to be received by such securityholder shall be rounded down to the nearest whole Parent Share and no Person will be entitled to any compensation in respect of a fractional Parent Share.

Notwithstanding any provision herein to the contrary, the Parent, the Purchaser and the Company agree that this Plan of Arrangement will be carried out with the intention that all Parent Shares issued to Former Shareholders on completion of this Plan of Arrangement will be issued by the Parent in reliance on the exemption from the registration requirements of the U.S. Securities Act as provided by Section 3(a)(10) thereof.

Article 4
DISSENT RIGHTS

Registered Shareholders may exercise dissent rights with respect to the Common Shares held by such holders (“Dissent Rights”) in connection with the Arrangement pursuant to and in the manner set forth in section 185 of the OBCA, as modified by the Interim Order and this Section 4.1, provided that, notwithstanding subsection 185(6) of the OBCA, the written objection to the Arrangement Resolution contemplated by subsection 185(6) of the OBCA must be sent to and received by the Company no later than 5:00 p.m. (Toronto time) at least two (2) Business Days before the Meeting (as it may be adjourned or postponed from time to time). Dissenting Shareholders who duly exercise their Dissent Rights shall be deemed to have transferred the Common Shares held by them and in respect of which Dissent Rights have been validly exercised to the Purchaser free and clear of all Liens, as provided in Section 3.1(e) and if they:

Article 5
CERTIFICATES AND PAYMENTS

In the event any certificate which immediately prior to the Effective Time represented one or more outstanding Common Shares which were exchanged or transferred in accordance with Section 3.1 has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the former holder of such Common Shares, the Depositary will deliver to such Person in exchange for such lost, stolen or destroyed certificate, the Parent Shares which the former holder of such Common Shares is entitled to receive pursuant to Section 3.1 in accordance with such holder’s Letter of Transmittal. When authorizing such payment in relation to any lost, stolen or destroyed certificate, the former holder of such Common Shares will, as a condition precedent to the delivery of such Consideration, give a bond satisfactory to the Parent, the Purchaser and the Depositary (each acting reasonably) in such sum as the Parent, the Purchaser and the Depositary may direct, or otherwise indemnify the Company, the Parent, the Purchaser and the Depositary in a manner satisfactory to the Parent, the Purchaser and the Depositary (each acting reasonably) against any claim that may be made against the Company, the Parent, the Purchaser or the Depositary with respect to the certificate alleged to have been lost, stolen or destroyed.

The Company, the Parent, the Purchaser and the Depositary shall be entitled to deduct or withhold from any consideration or amount otherwise payable or deliverable to any Shareholder, any holder of RSUs or any holder of DSUs under this Plan of Arrangement (including, without limitation, any amounts payable pursuant to Article 4), such amounts as the Company, the Parent, the Purchaser or the Depositary, as the case may be, may reasonably determine is required to be deducted and withheld with respect to such payment under any provision of Laws in respect of Taxes. To the extent that amounts are so deducted or withheld, such deducted or withheld amounts shall be treated for all purposes hereof as having been paid to the Shareholder, holder of RSUs, or holder of DSUs, as applicable, in respect of which such deduction or withholding was made, provided that such deducted or withheld amounts are actually remitted to the appropriate Governmental Authority. Each of the Company, the Parent, the Purchaser and the Depositary is hereby authorized to sell or otherwise dispose of such portion of Parent Shares payable as Consideration as is necessary to provide sufficient funds to the Company, the Parent, the Purchaser or the Depositary, as applicable, to enable it to implement such deduction or withholding, and the Company, the Parent, the Purchaser or the Depositary will notify the holder thereof and remit to the holder any unapplied balance of the net proceeds of such sale. Any sale will be made at prevailing market prices and none of the Company, the Parent, the Purchaser or the Depositary shall be under any obligation to obtain or indemnify any Shareholder in respect of a particular price for the Parent Shares so sold.

Any exchange or transfer of securities pursuant to this Plan of Arrangement shall be free and clear of any Liens or other claims of third parties of any kind.

From and after the Effective Time: (a) this Plan of Arrangement shall take precedence and priority over any and all Common Shares, RSUs, DSUs and Options issued or outstanding prior to the Effective Time, (b) the rights and obligations of the holders of Common Shares (including Dissenting Shares), RSUs, DSUs and Options and the Company, the Parent, the Purchaser, the Depositary and any transfer agent or other depositary therefor in relation thereto shall be solely as provided for in this Plan of Arrangement, and (c) all actions, causes of action, claims or proceedings (actual or contingent and whether or not previously asserted) based on or in any way relating to any Common Shares, RSUs, DSUs and Options shall be deemed to have been settled, compromised, released and determined without liability except as set forth in this Plan of Arrangement.

Article 6
AMENDMENTS

Article 7
FURTHER ASSURANCES

Notwithstanding that the transactions and events set out herein will occur and be deemed to occur in the order set out in this Plan of Arrangement without any further act or formality, each of the Company, the Parent and the Purchaser will make, do and execute, or cause to be made, done and executed, any such further acts, deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required by any of them in order to further document or evidence any of the transactions or events set out herein.

Schedule “B”

Arrangement Resolution

RESOLUTION OF THE SHAREHOLDERS
OF AQUILA RESOURCES INC.
(the “Company”)

BE IT RESOLVED THAT: