GOLD RESOURCE CORP (Form: 10-Q, Received: 08/09/2012 17:22:06)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-34857

GOLD RESOURCE CORPORATION

(Exact Name of Registrant as Specified in its charter)

Colorado

84-1473173

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

2886 Carriage Manor Point, Colorado Springs, Colorado 80906

(Address of Principal Executive Offices) (Zip Code)

(303) 320-7708

(Registrant’s telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 52,828,776 shares of common stock outstanding as of August 8, 2012.

GOLD RESOURCE CORPORATION

FORM 10-Q

Index


		Page
Part I - FINANCIAL INFORMATION
Item 1	Financial Statements
	Consolidated Balance Sheets at June 30, 2012 (unaudited) and December 31, 2011		1
	Consolidated Statements of Operations for the three and six months ended June 30, 2012 and 2011, and for the period from Inception (August 24,1998) to June 30, 2012 (unaudited)		2
	Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011, and for the period from Inception (August 24, 1998) to June 30, 2012 (unaudited)		3
	Notes to Consolidated Financial Statements (unaudited)		4
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		10
Item 3	Quantitative and Qualitative Disclosures About Market Risk		19
Item 4	Controls and Procedures		20

Part II - OTHER INFORMATION
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		21
Item 6	Exhibits		21
SIGNATURES			22

References in this report to agreements to which Gold Resource Corporation is a party and the definition of certain terms from those agreements are not necessarily complete and are qualified by reference to the agreements. Readers should refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and the exhibits listed therein.

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

GOLD RESOURCE CORPORATION

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands, except shares)


	June 30, 2012			December 31, 2011
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	44,778		$	51,960
Gold and silver bullion		5,517			2,549
Accounts receivable		8,307			14,281
Inventories		5,287			4,243
Deferred tax assets		11,118			11,118
Prepaid expenses		869			957

Total current assets		75,876			85,108
Land and mineral rights		227			227
Property and equipment - net		12,751			10,318
Deferred tax assets		19,517			19,517

Total assets	$	108,371		$	115,170

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	586		$	1,691
Accrued expenses		4,212			4,879
IVA taxes payable		3,676			559
Income taxes payable		490			15,987
Dividends payable		3,175			2,645

Total current liabilities		12,139			25,761
Asset retirement obligation		2,405			2,281

Total liabilities		14,544			28,042
Shareholders’ equity:
Preferred stock - $0.001 par value, 5,000,000 shares authorized: no shares issued and outstanding		—			—
Common stock - $0.001 par value, 100,000,000 shares authorized: 53,015,767 and 52,998,303 shares issued and outstanding, respectively		53			53
Additional paid-in capital		119,729			132,529
(Deficit) accumulated during the exploration stage		(19,798	)		(39,522	)
Treasury stock at cost, 104,251 shares		(1,954	)		(1,954	)
Other comprehensive income - currency translation adjustment		(4,203	)		(3,978	)

Total shareholders’ equity		93,827			87,128

Total liabilities and shareholders’ equity	$	108,371		$	115,170

The accompanying notes are an integral part of these consolidated financial statements.

GOLD RESOURCE CORPORATION

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

for the three and six months ended June 30, 2012 and 2011

and for the period from Inception (August 24, 1998) to June 30, 2012

(U.S. dollars in thousands, except shares and per share amounts)

(Unaudited)


	Three months ended June 30,						Six months ended June 30,						Inception (August 24, 1998) to June 30,
	2012			2011			2012			2011			2012
Sales of metals concentrate, net	$	30,010		$	20,664		$	70,631		$	31,944		$	190,548

Mine cost of sales:
Production costs applicable to sales		12,603			5,200			19,697			9,277			50,160
Depreciation and amortization		152			79			384			143			1,023
Accretion		19			22			40			43			190

Total mine cost of sales		12,774			5,301			20,121			9,463			51,373

Mine gross profit		17,236			15,363			50,510			22,481			139,175
Costs and expenses:
General and administrative expenses		3,400			1,591			5,989			2,978			37,350
Exploration expenses		2,231			1,023			3,584			1,535			37,689
Construction and development		4,117			6,025			8,098			9,091			83,013
Production start up expense, net		—			—			—			—			209
Management contract expense		—			—			—			—			752

Total costs and expenses		9,748			8,639			17,671			13,604			159,013

Operating income (loss)		7,488			6,724			32,839			8,877			(19,838	)
Other income (expense)		692			(23	)		(1,297	)		(144	)		1,578

Income (loss) before income taxes		8,180			6,701			31,542			8,733			(18,260	)
Provision for income taxes		4,576			1,806			11,818			1,806			(218	)

Net income (loss) before extraordinary item		3,604			4,895			19,724			6,927			(18,042	)
Extraordinary items:
Flood loss, net of income tax benefit of $750		—			(1,756	)		—			(1,756	)		(1,756	)

Net income (loss)	$	3,604		$	3,139		$	19,724		$	5,171		$	(19,798	)

Other comprehensive (loss) income:
Currency translation gain (loss)		(1,689	)		(80	)		(225	)		384			(4,203	)

Net comprehensive income (loss)	$	1,915		$	3,059		$	19,499		$	5,555		$	(24,001	)

Net income per common share:
Basic:
Before extraordinary item	$	0.07		$	0.09		$	0.37		$	0.13
Extraordinary item		—		$	(0.03	)		—		$	(0.03	)

Net income	$	0.07		$	0.06		$	0.37		$	0.10

Diluted:
Before extraordinary item	$	0.06		$	0.09		$	0.35		$	0.12
Extraordinary item		—		$	(0.03	)		—		$	(0.03	)

Net income	$	0.06		$	0.06		$	0.35		$	0.09

Weighted average shares outstanding:
Basic		52,909,756			52,998,303			52,904,370			52,998,303

Diluted		56,443,419			56,545,865			56,400,692			56,530,421

The accompanying notes are an integral part of these consolidated financial statements.

GOLD RESOURCE CORPORATION

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

for the six months ended June 30, 2012 and 2011

and for the period from Inception (August 24, 1998) to June 30, 2012

(U.S. dollars in thousands)

(Unaudited)


	Six months ended June 30,						Inception (August 24, 1998) to June 30,
	2012			2011			2012
Cash flows from operating activities:
Net income (loss)	$	19,724		$	5,171		$	(19,798	)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		518			330			2,062
Accretion		40			43			190
Asset retirement obligation		—			—			2,307
Stock-based compensation		4,659			2,898			20,710
Management fee paid in stock		—			—			392
Related party payable paid in stock		—			—			320
Currency translation gain (loss)		(225	)		384			(4,203	)
Unrealized loss from gold and silver bullion held		329			—			758
Realized loss from gold and silver bullion converted		90			—			90
Deferred tax assets		—			—			(30,635	)
Other		—			—			29
Changes in operating assets and liabilities:
Accounts receivable		5,974			(1,411	)		(8,307	)
Inventories		(1,044	)		(2,511	)		(5,287	)
Prepaid expenses		88			(385	)		(871	)
Accounts payable		(1,105	)		1,201			586
Accrued expenses		(667	)		(521	)		4,212
IVA taxes payable		3,117			1,830			3,676
Income taxes payable		(15,497	)		1,056			490
Dividends payable		530			530			3,175

Total adjustments		(3,193	)		3,444			(10,306	)

Net cash provided by (used in) operating activities		16,531			8,615			(30,104	)

Cash flows from investing activities:
Capital expenditures		(2,951	)		(3,089	)		(15,275	)
Purchases of gold and silver bullion		(4,183	)		—			(7,160	)
Conversion of gold and silver bullion		796			—			796

Net cash used in investing activities		(6,338	)		(3,089	)		(21,639	)

Cash flows from financing activities:
Proceeds from sales of common stock		—			—			150,633
Proceeds from exercise of stock options		—			—			428
Proceeds from debentures - founders		—			—			50
Dividends paid		(17,459	)		(11,130	)		(53,273	)
Treasury stock purchases		—			—			(1,954	)
Proceeds from exploration funding agreement		—			—			500

Net cash provided by (used in) financing activities		(17,459	)		(11,130	)		96,384

Effect of exchange rates on cash and equivalents		84			120			137

Net increase (decrease) in cash and equivalents		(7,182)			(5,484	)		44,778
Cash and equivalents at beginning of period		51,960			47,582			—

Cash and equivalents at end of period		$44,778		$	42,098		$	44,778

Supplemental Cash Flow Information
Income taxes paid		$28,392		$	—		$	28,392

Non-cash investing and financing activities:
Conversion of funding into common stock	$	—		$	—		$	500

Conversion of founders debentures into common stock	$	—		$	—		$	50

The accompanying notes are an integral part of these consolidated financial statements.

GOLD RESOURCE CORPORATION

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2012

(Unaudited)

1.	Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Gold Resource Corporation (the “Company”) was organized under the laws of the State of Colorado on August 24, 1998. The Company is a producer of metal concentrates that contain gold, silver, copper, lead and zinc at its El Aquila Project in Southern Mexico. The Company is also performing exploration and evaluation work on its portfolio of base and precious metal exploration properties in Mexico and is evaluating other properties for possible acquisition worldwide.

Significant Accounting Policies

Exploration Stage Company : Despite the fact that the Company commenced production in 2010, it is still considered an exploration stage company under the criteria set forth by the Securities and Exchange Commission (“SEC”) since it has not yet demonstrated the existence of proven or probable reserves, as defined by the SEC in Industry Guide 7 , at its El Aguila Project in Oaxaca, Mexico or any of its other properties. As a result, and in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for exploration stage companies, all expenditures for exploration and evaluation of the Company’s properties are expensed as incurred until mineralized material is classified as proven or probable reserves. Accordingly, substantially all expenditures for mine development and mill construction have been expensed as incurred. Certain expenditures, such as for rolling stock or other general-purpose equipment, may be capitalized, subject to evaluation for possible impairment of the asset. As of June 30, 2012, none of the mineralized material at the Company’s El Aguila Project or any of its other properties met the SEC’s definition of proven or probable reserves. The Company expects to remain an exploration stage company for the foreseeable future, even though it has reached commercial production. The Company will not exit the exploration stage unless and until it demonstrates the existence of proven or probable reserves that meet SEC guidelines.

Basis of Presentation : The consolidated balance sheet as of December 31, 2011 was derived from audited financial statements at that date, but this report does not include all information and footnotes required by U.S. GAAP for complete audited financial statements. The interim consolidated financial statements included herein have been prepared by the Company, without audit, in accordance with the rules and regulations of the SEC pursuant to Item 210 of Regulation S-X promulgated by the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such SEC rules and regulations, although the Company believes that the disclosures included are adequate to make the information presented not misleading.

In management’s opinion, the unaudited consolidated financial statements contained herein reflect all adjustments, that are necessary for the fair presentation of the Company’s financial position, results of operations, and cash flows on a basis consistent with that of its prior audited consolidated financial statements. However, the results of operations for interim periods may not be indicative of results to be expected for the full fiscal year. Therefore, these consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, including the summary of significant accounting policies, included in the Company’s Form 10-K for the year ended December 31, 2011. Unless otherwise noted, there have been no material changes in the footnotes from those accompanying the audited consolidated financial statements contained in the Company’s Form 10-K.

Use of Estimates : The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management routinely makes judgments and estimates about the effects of matters that are inherently uncertain and bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.

Reclassifications : Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on the Company’s net earnings.

Concentration of Credit Risk: During the three and six months ended June 30, 2012, 100% of the Company’s revenues and accounts receivable resulted from sales to Consorcio Minero de Mexico Cormin Mex. S.A. de C.V. (“Consorcio”), a subsidiary of the Trafigura Group Company. For the three months ended June 30, 2011, 100% of the Company’s revenues and accounts receivables resulted from sales to Consorcio. For the six months ended June 30, 2011, 95.2% of the Company’s revenues and accounts receivables resulted from sales to Consorcio and the remaining 4.8% to Trafigura Beheer, B.V. (“Beheer”) of Lucerne Switzerland, also a subsidiary of the Trafigura Group Company.

Sales to Consorcio and Beheer are made under separate contracts with different contract terms. The Company has carefully considered and assessed the credit risk resulting from its concentrate sales arrangements with Consorcio and Beheer and believes it is not exposed to significant credit risk in relation to the counterparty meeting its contractual obligations as it pertains to its trade receivables during the ordinary course of business. In the event that the Company’s relationship with Consorcio or Beheer is interrupted for any reason, it believes that it would be able to locate another entity to purchase its metals concentrates. However, any interruption could temporarily disrupt the Company’s sale of its principal products and adversely affect operating results.

The Company’s El Aguila Project, which is located in the state of Oaxaca, Mexico, accounted for 100% of the Company’s total sales of metals concentrate for the six months ended June 30, 2012 and 2011.

Net Income (Loss) Per Share : Diluted income per share reflects the potential dilution that could occur if potentially dilutive securities, as determined using the treasury stock method, are converted into common stock. Potentially dilutive securities, such as stock options and warrants, are excluded from the calculation when their inclusion would be anti-dilutive, such as periods when a net loss is reported or when the exercise price of the instrument exceeds the fair market value. For the three and six month periods ended June 30, 2012 and 2011, potentially dilutive securities included 3.5 million shares for exercisable stock options during each respective period.

Fair Value of Financial Instruments : The Company’s financial instruments consist of cash and cash equivalents, investments in gold and silver bullion, accounts receivable and accounts payable as of June 30, 2012 and December 31, 2011. The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximated their fair values at June 30, 2012 and December 31, 2011 due to their short maturities. See also Note 2, “Gold and Silver Bullion.”

Recently Adopted Accounting Standards : The Company evaluates the pronouncements of various authoritative accounting organizations, primarily the Financial Accounting Standards Board (“FASB”), the SEC, and the Emerging Issues Task Force (“EITF”), to determine the impact of new pronouncements on U.S. GAAP on the Company. The following are recent accounting pronouncements adopted by the Company:

In May 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-04, “Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (“ASU 2011-04”). ASU 2011-04 changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements to ensure consistency between U.S. GAAP and IFRS. ASU 2011-04 also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This new guidance is to be applied prospectively. On January 1, 2012, the Company adopted ASU 2011-04 and does not anticipate that it will materially expand its consolidated financial statement footnote disclosures or have an impact on the Company’s consolidated financial position, results of operations or cash flows.

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (“ASC Topic 220”): Presentation of Comprehensive Income” (“ASU 2011-05”), which amends current comprehensive income guidance. This accounting update eliminates the option to present the components of other comprehensive income as part of the statement of shareholders’ equity. Instead, the Company must report comprehensive income in either a single continuous statement of comprehensive income which contains two sections, net income and other comprehensive income, or in two separate but consecutive statements. ASU 2011-05 will be effective for public companies during the interim and annual periods beginning after December 15, 2011, with early adoption permitted. On January 1, 2012, the Company adopted ASU 2011-05 and does not anticipate that it will have an impact on the Company’s consolidated financial position, results of operations or cash flows as it only requires a change in the format of the current presentation.

2.	Gold and Silver Bullion

The Company continues to invest a portion of its treasury in physical gold and silver bullion. The bullion was purchased to diversify the Company’s treasury and is being used in conjunction with a recently adopted program offering shareholders the ability to convert their cash dividend into gold and silver bullion. The table below shows the balance of the Company’s holdings as of June 30, 2012 and December 31, 2011:


	June 30, 2012				December 31, 2011
	Gold		Silver		Gold		Silver
	(in thousands, except ounces and per ounce)				(in thousands, except ounces and per ounce)

Ounces		1,808		96,685		868		41,728
Average cost per ounce	$	1,670.43	$	33.66	$	1,720.93	$	35.55
Fair value per ounce	$	1,600.78	$	27.12	$	1,574.50	$	28.32

Total cost	$	3,020	$	3,255	$	1,494	$	1,484

Total fair value	$	2,894	$	2,623	$	1,367	$	1,182

ASC 820: “Fair Value Measurement” (“ASC 820”) establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The fair value measurement of each class of assets and liabilities is dependent upon its categorization within the fair value hierarchy, based upon the lowest level of input that is significant to the fair value measurement of each class of asset and liability. Pursuant to the fair value hierarchy established in ASC 820, the fair value of the Company’s gold and silver bullion is established based on quoted prices in active markets for identical assets or liabilities (Level 1); specifically, the fair value is based on the daily London P.M. fix as of June 30, 2012. The unrealized losses of $0.5 million and $0.3 million were included in the Company’s other income (expense) for the three and six months ended June 30, 2012, respectively. There were no unrealized gains or losses recognized for the three and six months ended June 30, 2011 since the Company did not hold an investment in gold and silver bullion during that time. The Company incurred a realized loss of $0.1 million from the conversion of its gold and silver bullion for the three months ended June 30, 2012.

3.	Inventories

Inventories at June 30, 2012 and December 31, 2011 consisted of the following:


	June 30,		December 31,
	2012		2011
	(in thousands)
Ore stockpiles	$	2,239	$	1,629
Concentrates		497		663
Materials and supplies		2,551		1,951

Total inventories	$	5,287	$	4,243

4.	Other income (expense)

Other income (expense) for the three and six months ended June 30, 2012 and 2011 consisted of the following:


	Three Months ended June 30,						Six Months ended June 30,
	2012			2011			2012			2011
	(in thousands)						(in thousands)
Currency exchange gain (loss)	$	1,287		$	(32	)	$	(938	)	$	(184	)
Unrealized (loss) from gold and silver bullion held		(528	)		—			(329	)		—
Realized (loss) from gold and silver bullion converted		(90	)		—			(90	)		—
Interest income		(5	)		18			(2	)		44
Other income (expense)		28			(9	)		62			(4	)

Total other income (expense)	$	692		$	(23	)	$	(1,297	)	$	(144	)

5.	Property and Equipment

At June 30, 2012 and December 31, 2011, property and equipment consisted of the following:


	June 30,			December 31,
	2012			2011
	(in thousands)
Trucks and autos	$	1,337		$	1,095
Building		1,737			1,737
Office furniture and equipment		2,001			1,768
Machinery and equipment		9,721			7,245

Subtotal		14,796			11,845
Accumulated depreciation		(2,045	)		(1,527	)

Total property and equipment, net	$	12,751		$	10,318

Depreciation expense for the three months ended June 30, 2012 and 2011 was $0.2 million. Depreciation expense for the six months ended June 30, 2012 and 2011 was $0.5 million and $0.3 million, respectively.

6.	Income Taxes

The Company recorded an income tax expense of $7.2 million and $11.8 million, a 31.0% effective tax rate and a 37.5% effective tax rate, for the three and six months ending March 31 and June 30, 2012, respectively. The Company had no comparable income tax expense for the three and six months ending June 30, 2011. The income tax expense recognized for the three and six months ending June 30, 2012 was primarily the result of increased production of metal products resulting in income tax expense recognized in Mexico as well as a taxable dividend paid from the Mexican entity to the U.S. entity that resulted in taxable U.S. income.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carry forward periods), projected future taxable income and tax-planning strategies in making this assessment. As of June 30, 2012, the Company believes it has sufficient positive evidence to conclude that realization of its federal, state and the foreign deferred tax assets of Gold Resource Corporation and Golden Trump Resources, S.A. de C.V. are more likely than not to be realized.

During the second quarter ending June 30, 2012, the Company is estimating an annual taxable dividend of $17.5 million to be received from its Mexican operations. In prior years, there was an intercompany debt that allowed funds to be transferred from Mexico to the U.S. without triggering U.S. tax. The company has historically asserted permanent reinvestment of all Mexico earnings. During 2012, the Company plans to partially repatriate the current year Mexico earnings and the Company will now accrue US tax on the portion of the cash that is repatriated to the U.S. The impact of this change in repatriation is included in the Company’s annualized effective tax rate, resulting in an increased effective tax rate through the quarter of 55.9%.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of June 30, 2012, the Company made no provision for interest or penalties related to uncertain tax positions. The Company files income tax returns in U.S. and Mexico federal jurisdiction and various states. There are currently no Mexican or U.S. federal or state income tax examinations underway for these jurisdictions. Furthermore, the Company is no longer subject to U.S. federal income tax examinations by the Internal Revenue Service or by state and local tax authorities for tax years ended on or before December 31, 2009 or Mexican tax examinations for tax years ended on or before December 31, 2006. Although certain tax years are closed under the statute of limitations, tax authorities can still adjust tax losses being carried forward to open tax years.

7.	Asset Retirement Obligation

The Company’s asset retirement obligation (“ARO”) relates to the estimated reclamation, remediation, and closure costs for its El Aguila Project. Changes in the Company’s asset retirement obligation for the six months ended June 30, 2012 and year ended December 31, 2011 are as follows:


	Six months ended June 30,		Year ended December 31,
	2012		2011
	(in thousands)
Asset retirement obligation – opening balance	$	2,281	$	2,495
Foreign currency translation		84		(296	)
Accretion		40		82

Asset retirement obligation – ending balance	$	2,405	$	2,281

8.	Shareholders’ Equity

The Company declared dividends of $17.5 million and paid dividends of $16.9 million during the six months ended June 30, 2012. During the six months ended June 30, 2011, the Company declared dividends of $11.1 million and paid dividends of $10.6 million. The Board of Directors has authorized the Company’s dividends to be charged to paid-in capital until such time as the Company has retained earnings, at which time any subsequent dividends will be charged to retained earnings. Subsequent to June 30, 2012, the Company declared a regular monthly cash dividend of $0.06 per common share as described in Note 12.

On September 23, 2011, the Board of Directors approved a share repurchase program pursuant to which the Company may repurchase up to $20 million of its common stock from time to time in market transactions. There is no pre-determined end date associated with the share repurchase program. As of June 30, 2012, the Company had repurchased 104,251 shares of common stock for $2 million. Subsequent to June 30, 2012, the Company purchased an additional 82,740 shares of common stock for $1.5 million as described in Note 12.

9.	Concentrate Sales Settlements

The Company records adjustments to sales of metals concentrate that result from final settlement of provisional invoices in the period that the final invoice settlement occurs. These adjustments resulted in a decrease to sales revenue of $1.0 million and $0.0 million for the three and six months ended June 30, 2012, respectively, and a decrease to sales revenue of $0.1 million and $0.1 million for the three and six months ended June 30, 2011, respectively.

In addition to the final settlement adjustments on provisional invoices, the Company records a sales revenue adjustment to mark-to-market outstanding provisional invoices at the end of each reporting period. These adjustments resulted in an increase to sales revenue of $0.1 million and $0.7 million for the three and six months ended June 30, 2012, respectively, and an increase to sales revenue of $0.7 million and $0.7 million for the three and six months ended June 30, 2011, respectively.

Smelter refining fees, treatment charges and penalties are netted against sales of metals concentrates in the consolidated statement of operations. Total charges for these items totaled $3.8 million and $8.6 million for the three and six months ended June 30, 2012, respectively, and $2.4 million and $3.1 million for the three and six months ended June 30, 2011, respectively.

10.

Stock Options

The fair value of stock option grants is amortized over the respective vesting period. Total stock-based compensation expense related to stock options allocated among production costs and general and administrative expense for the three months ended June 30, 2012 and 2011 was $2.6 million and $1.5 million, respectively. Total stock-based compensation expense related to stock options allocated among production costs and general and administrative expense for the six months ended June 30, 2012 and 2011 was $4.7 million and $2.9 million, respectively. Below is a table of stock-based compensation expense allocated between production and general and administrative expense for the three and six months ended 2012 and 2011.


	Three Months ended June 30,				Six Months ended June 30,
	2012		2011		2012		2011
	(in thousands)				(in thousands)
Production costs applicable to sales		1,094		1,052		2,188		2,075
General and administrative expenses		1,509		469		2,471		823

Total stock-based compensation	$	2,603	$	1,521	$	4,659	$	2,898

The estimated unrecognized stock-based compensation expense from unvested options as of June 30, 2012 was approximately $18.3 million, which is expected to be recognized over the remaining vesting periods of up to 3.0 years.

11.

Extraordinary Item—Flood

On April 20, 2011, the El Aquila Project experienced a rain and hail storm that was unusual and infrequent to the area which flooded the La Arista underground mine, damaging roads, buildings and equipment. The Company experienced resultant property damage of approximately $2.5 million for which it recorded an extraordinary loss of $1.8 million, net of a $0.8 million income tax benefit, for the three and six months ended June 30, 2011. The Company has filed an insurance claim to recover property damages and losses resulting from business interruption. It is unknown how much, if anything, the Company will recover.

12.

Subsequent Events

On July 20, 2012 and July 24, 2012, the Company purchased 40,800 and 41,940 shares common stock for $0.8 million and $0.7 million, respectively, under its share repurchase program adopted and approved by the Board of Directors on September 23, 2011.

On July 24, 2012, the Company declared a regular monthly dividend of $0.06 per common share to shareholders of record on August 10, 2012, and payable on August 23, 2012.

ITEM 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion summarizes the results of operations of Gold Resource Corporation and its subsidiaries (“we”, “our”, or “us”) for the three and six months ended June 30, 2012 and compares those results to the three and six months ended June 30, 2011. It also analyzes our financial condition at June 30, 2012 and compares it to our financial condition at December 31, 2011. This discussion should be read in conjunction with the Management’s Discussion and Analysis and the audited financial statements for the years ended December 31, 2011 and 2010 and footnotes contained in our Form 10-K for the year ended December 31, 2011.

The discussion also presents certain Non-GAAP financial measures that are important to management in its evaluation of our operating results and which are used by management to compare our performance with what we perceive to be peer group mining companies and relied on as part of management’s decision-making process. Management believes these measures may also be important to investors in evaluating our performance. For a detailed description of each of the Non-GAAP financial measures, please see the discussion under “ Non-GAAP Measures ”.

Overview

Business

Gold Resource Corporation is a mining company that pursues gold and silver projects that are expected to have low operating costs and high returns on capital. We are presently focused on mineral production at the El Aguila Project, which includes both the La Arista underground mine and the El Aguila open pit mine, in Oaxaca, Mexico. We achieved commercial production in July 2010 at our El Aguila open pit mine with a metal concentrate containing our primary product of gold and a silver by-product. Operations at the El Aguila open pit mine ceased in February 2011 with the start-up of mine operations at the La Arista underground mine in March 2011. Our La Arista underground mine produces metal concentrates that contain our primary metal products of gold and silver, and by-products of copper, lead and zinc. For the three months ended June 30, 2012, the sale of our metal concentrates generated revenues of $30.0 million, mine gross profit of $17.2 million and net income of $3.6 million. For the six months ended June 30, 2012, we recorded revenues of $70.6 million, mine gross profit of $50.5 million, and net income of $19.7 million.

For the second quarter of 2012, we sold 17,211 gold equivalent ounces (AuEq) at a total cash cost (including royalties) of $509 per ounce. For the six months ended June 30, 2012, we sold 39,780 ounces AuEq at a total cash cost (including royalties) of $347 per ounce. AuEq is determined by taking the silver ounces sold and converting them to equivalent gold ounces by using the gold to silver average price ratio. The gold and silver average prices used in the calculation are the actual metal prices realized from the sales of our metals concentrate.

Our second quarter mineral production was lower than expected. Several factors contributed to the decrease including La Arista underground mine infrastructure needs coupled with mining of lower grade zones of the deposit. The necessity for expanded development included upgrading electric power throughout the mine, expanding ventilation requirements and the handling of increased ground water with depth. These development activities limited our preparation and mining of higher grade stopes. Decreases in long-hole stoping resulted in both processing more diluted development ore and required mining from areas of the deposit with lower metal grades. As a result of the lower second quarter production, we are revising our 2012 outlook to a targeted annual mill production range of 100,000 to 120,000 ounces AuEq at a gold-to-silver price ratio assumption of 53:1; however, there is no assurance that we will reach this target.

Exploration Stage Company

We are considered an exploration stage company under the SEC criteria since we have not demonstrated the existence of proven or probable reserves at our El Aguila Project or any of our other properties in Oaxaca, Mexico. Accordingly, as required by the SEC guidelines ( see Note 1 to the Unaudited Consolidated Financial Statements) and U.S. GAAP for companies in the exploratory stage, substantially all of our investment in mining properties to date, including construction of the mill and mines, have been expensed and therefore do not appear as assets on our consolidated balance sheet. We expect to expense additional construction and development expenditures in 2012 related to the La Arista underground mine. All expenditures for exploration and evaluation of our properties are expensed as incurred. Certain expenditures, such as expenses for rolling stock or other general purpose equipment may be capitalized, subject to our evaluation of the possible impairment of the asset.

Our characterization as an exploration stage company and the required classification of construction and development expenditures as operating expenses rather than as capital expenditures has caused us to report lower net income in 2012 and 2011 than if we had capitalized the expenditures. Additionally, we will not have a corresponding depreciation or amortization expense for these costs in the future since they are expensed as incurred rather than capitalized. Although the majority of the capital expenditures for the

El Aguila Project were completed between 2007 and 2010, we expect underground mine construction to continue in future years. In comparison to other mining companies that capitalize development expenditures because they have exited the exploration stage, we may report lesser profits as a result of this ongoing construction, which will be expensed instead of capitalized for financial reporting purposes.

We expect to remain an exploration stage company for the foreseeable future, even though we have achieved commercial production. We will not exit the exploration stage until such time, if ever, that we demonstrate the existence of proven or probable reserves that meet SEC guidelines

Exploration Activities

We continue to drill and conduct additional exploration at the La Arista underground mine, located at the El Aguila Project, to further delineate the vein system. Other El Aguila exploration activities consist of drilling other areas of the property to test new targets. Our primary focus for 2012 is to expand the La Arista vein system. We are also performing exploration activities to test targets on our other properties.

Physical Dividend Program

The physical dividend program was officially launched in April 2012. We continue to purchase gold and silver bullion to diversify our treasury and for use in conjunction with our physical dividend program which allows our shareholders the option to convert their cash dividends into physical gold and silver bullion we purchased. For a shareholder to convert their cash dividend into physical gold and/or silver, the shareholder must opt-in to the physical dividend program and request the conversion of their cash dividend, or any portion thereof, into physical gold and/or silver. For those shareholders who elect to convert their cash dividend into gold and/or silver bullion, the gold and silver will be delivered in the form of gold/silver bullion. No action is required by any shareholder who elects not to participate in the physical metals program and convert any portion of their cash dividend into gold and/or silver bullion. For those shareholders who wish to convert any portion of their cash dividend into gold and/or silver bullion, the process is as follows:

•

Shareholders must register and hold their Gold Resource Corporation common shares in their name directly with our transfer agent, Computershare Investor Services, and not through a brokerage house or other intermediary. This is a requirement so that we can locate and validate the shareholder’s position in our common stock.

•

Shareholders must set up an individual account with Gold Bullion International (“GBI”), 225 Liberty Street New York, NY 10006. GBI facilitates the cash to gold and silver conversion.

•

Shareholders then direct their cash dividend check issued by Computershare to be electronically sent to that shareholder’s GBI account for the option to have it, or any portion thereof, converted into bullion. The election to convert all or any portion of the shareholder’s cash dividend into bullion is governed by an agreement between the shareholder and GBI.

•

Shareholders with accounts at GBI who wish to change their current gold, silver and/or cash allocations for their cash dividend must do so by midnight EDT on the date preceding the monthly dividend record date. (We issue a press release with details of each dividend declaration, and the dividend record and payment dates.)

•

On the dividend record date, the number of bullion ounces to be converted and distributed to the shareholder’s individual account on the dividend payment date is calculated as the dollar value of that portion of the cash dividend the shareholder elected to convert to bullion, divided by the London Bullion Market PM gold fix on the record date or the London Bullion Market silver fix on the record date.

•

Only whole ounces of gold and silver bullion are credited to a shareholder’s individual account on the dividend payment date. The cash value attributable to fractional ounces will remain in the shareholder’s individual account as cash until such time as future dividends provide the shareholder with sufficient cash to convert to whole ounces of gold or silver based on the London PM gold fix and silver fix on a future dividend record date, and based on the shareholder’s self-directed gold, silver and/or cash allocations in effect at that time. The shareholder may also choose to move their cash out of their GBI account. Shareholders cannot move cash into their GBI account for conversion into gold and silver. Only the shareholder’s cash dividend sent from Computershare is eligible for conversion.

During the three months ended June 30, 2012, we purchased approximately 558 ounces gold and 12,098 ounces silver at market prices for a total cost of $1.3 million. During the six months ended June 30, 2012, we purchased approximately 1,372 ounces gold and 58,011 ounces silver at market prices for a total cost of $4.2 million.

Results of Operations

The following table summarizes our results of operations for the three and six months ended June 30, 2012 compared to the three and six months ended June 30, 2011:


	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012			2011
	(in thousands)					(in thousands)
Sales of metals concentrate, net	$	30,010	$	20,664		$	70,631		$	31,944
Mine cost of sales		12,774		5,301			20,121			9,463

Mine gross profit		17,236		15,363			50,510			22,481

Costs and expenses:
General and administrative expenses		3,400		1,591			5,989			2,978
Exploration expenses		2,231		1,023			3,584			1,535
Construction and development		4,117		6,025			8,098			9,091

Total costs and expenses		9,748		8,639			17,671			13,604

Operating income		7,488		6,724			32,839			8,877
Other income (expense)		692		(23	)		(1,297	)		(144	)

Income before income taxes		8,180		6,701			31,542			8,733
Provision for income taxes		4,576		1,806			11,818			1,806

Net income before extraordinary item		3,604		4,895			19,724			6,927
Extraordinary items:
Flood loss, net of income tax benefit of $750		—		(1,756	)		—			(1,756	)

Net income	$	3,604	$	3,139		$	19,724		$	5,171

Sales of metals concentrate, net

During the three and six months ended June 30, 2012, we generated sales revenue of $30 million and $70.6 million respectively, net of treatment charges, compared to sales revenue of $20.7 million and $31.9 million, during the same periods in 2011, an increase of 45% and 121%, respectively.

The significant increase in sales revenue for the three and six months ended June 30, 2012, as compared to the three and six months ended June 30, 2011, reflects increased payable metals sold as a result of increased tonnes of higher grade ore milled and improved metal recoveries due to La Arista start-up of operations in 2011, in addition to an increase in the average metal prices realized. Revenue generated from sales of base metal concentrates (copper, lead and zinc) which are derived from the La Arista underground mine and are considered by-products of our gold and silver production. (S ee Production and Sales Statistics tables titled “ La Arista Underground Mine” and “ El Aguila Open Pit Mine” below for additional information regarding the three and six months ended June 30, 2012 and 2011).

Production

Our production for the three and six months ended June 30, 2012 consisted of ore from our La Arista underground mine. Our production for the six months ended June 30, 2011 consisted of ore from both the La Arista underground mine and the El Aguila open pit mine. Production for the three months ended June 30, 2011 did not included ore from the El Aguila open pit mine, which ceased operations in February 2011, but it did include ore from the La Arista underground mine, which began operations in March 2011. Our production rate at La Arista is directly a result of mine development and the establishment of sufficient stopes and working faces. We anticipate the number of stopes and working faces will increase over time and as we go deeper at the mine.

Our production for the three months ended June 30, 2012 was lower than expected. Several factors contributed to the decrease including La Arista underground mine infrastructure needs coupled with mining of lower grade zones of the deposit. The necessity for expanded development included upgrading electric power throughout the mine, expanding ventilation requirements and the handling of increased ground water with depth. These development activities limited our preparation and mining of higher grade stopes. Decreases in long-hole stoping resulted in both processing more diluted development ore and required mining from areas of the deposit with lower metal grades. In addition to addressing the infrastructure needs of the La Arista mine during the quarter, we also focused on preparing ore blocks from levels 7 through 10 in preparation for stoping higher grade ore.

Below are certain key production statistics for our La Arista underground mine during the three and six months ended June 30, 2012 and 2011 and the El Aguila open pit mine during the six months ended June 30, 2011.


Production and Sales Statistics
	La Arista Underground Mine				La Arista Underground Mine
	Three months ended June 30,		Three months ended June 30,		Six months ended June 30,		Six months ended June 30,
	2012		2011		2012		2011
Production Summary
Milled:
Tonnes Milled		59,928		40,194		135,006		55,217
Tonnes Milled per Day		659		442		742		453
Grade:
Average Gold Grade (g/t)		3.73		2.36		4.03		2.18
Average Silver Grade (g/t)		274		386		390		388
Average Copper Grade (%)		0.38		0.42		0.44		0.30
Average Lead Grade (%)		1.75		1.10		1.74		1.06
Average Zinc Grade (%)		4.01		2.39		3.78		2.26
Recoveries:
Average Gold Recovery (%)		88		89		89		90
Average Silver Recovery (%)		92		93		93		92
Average Copper Recovery (%)		70		63		74		63
Average Lead Recovery (%)		69		75		72		78
Average Zinc Recovery (%)		78		72		76		67
Mill production (before smelter payable metal deductions)
Gold (ozs.)		6,342		2,720		15,564		3,484
Silver (ozs.)		487,053		461,546		1,577,534		630,666
Copper (tonnes)		161		104		442		104
Lead (tonnes)		720		332		1,683		458
Zinc (tonnes)		1,876		688		3,862		836
Payable metal sold
Gold (ozs.)		7,119		2,384		13,613		7,614
Silver (ozs.)		603,426		460,479		1,428,799		576,489
Copper (tonnes)		186		81		393		81
Lead (tonnes)		651		340		1,365		391
Zinc (tonnes)		1,934		458		3,011		484
Average metal prices realized
Gold (oz.)	$	1,631	$	1,576	$	1,708	$	1,444
Silver (oz.)	$	27	$	37	$	31	$	36
Copper ( tonne)	$	7,850	$	8,947	$	8,319	$	8,947
Lead (tonne)	$	2,018	$	2,440	$	2,074	$	2,474
Zinc ( tonne)	$	1,958	$	2,183	$	2,027	$	2,191
Gold equivalent ounces produced (mill production)
Gold Ounces		6,342		2,720		15,564		3,484
Gold Equivalent Ounces from Silver		8,146		10,737		28,890		15,812

Total Gold Equivalent Ounces		14,488		13,457		44,454		19,296

Gold equivalent ounces sold
Gold Ounces		7,119		2,384		13,614		3,697
Gold Equivalent Ounces from Silver		10,092		10,713		26,166		14,454

Total Gold Equivalent Ounces		17,211		13,097		39,780		18,151

Total Cash Cost per Gold Equivalent Ounce ⁽¹⁾	$	509	$	303	$	347		—

(1)

A reconciliation of this non-GAAP measure to mine cost of sales, the most comparable GAAP measure, can be found below in Non-GAAP Measures . Total cash cost per gold equivalent ounce sold for the combined La Arista underground mine and the El Aguila open pit mine for the for the six months ended June 30, 2011, can be found in the Non-GAAP Measures .


Production and Sales Statistics
	El Aguila Open Pit Mine
	Six months ended June 30 ,
	2011 ⁽¹⁾
Production Summary ⁽¹⁾
Milled:
Tonnes Milled		46,409
Tonnes Milled per Day		829
Grade:
Average Gold Grade (g/t)		3.35
Average Silver Grade (g/t)		39
Recoveries:
Average Gold Recovery (%)		81
Average Silver Recovery (%)		75
Mill production (before payable metal deductions)
Gold (ozs.)		5,559
Silver (ozs.)		58,309
Payable metal sold
Gold (ozs.)		3,917
Silver (ozs.)		43,605
Average metal prices realized
Gold (oz.)	$	1,383
Silver (oz.)	$	34
Gold equivalent ounces produced (mill production)
Gold Ounces		5,559
Gold Equivalent Ounces from Silver ⁽²⁾		—

Total Gold Equivalent Ounces		5,559

Gold equivalent ounces sold
Gold Ounces		3,917
Gold Equivalent Ounces from Silver ⁽²⁾		—

Total Gold Equivalent Ounces		3,917

(1)	No activity for the three months ended June 30, 2011.

(2)	Silver ounces were considered a by-product in arriving at the total cash cost per ounce equivalent.

Mine gross profit . For the three months ended June 30, 2012, mine gross profit totaled $17.2 million compared to $15.4 million for the three months ended June 30, 2011. Gross profit percentages for the three months ended June 30, 2012 decreased to 57.4% from 74.4% for the three months ended June 30, 2011. We experienced lower production and higher operating costs at the La Arista underground mine during the three months ended June 30, 2012, principally due to required development work in the mine and mining of lower grade ore zones. For the six months ended June 30, 2012, mine gross profit totaled $50.5 million compared to $22.5 million for the six months ended June 30, 2011. Gross profit percentages for the six months ended June 30, 2012 increased to 71.5% from 70.4% for the six months ended June 30, 2011. The increase in mine gross profit from the prior period was primarily due to the increase in sales of metal concentrate in 2012 and higher metal prices realized in 2012.

Net income. For the three months ended June 30, 2012, net income was $3.6 million, or $0.07 per share, as compared to $3.1 million, or $0.06 per share, for the comparable period of 2011. For the six months ended June 30, 2012, net income was $19.7 million, or $0.37 per share, as compared to $5.2 million, or $0.10 per share, for the comparable period of 2011. Higher net income for the three and six months ended June 30, 2012 resulted from significantly higher revenue from the sale of precious metals and base metals in 2012.

Costs and expenses. Total costs and expenses during the three months ended June 30, 2012 were $9.7 million compared to $8.6 million during the comparable period of 2011, an increase of $1.1 million, or 12.8%. The increase in cost and expenses was the result of increases in general and administrative and exploration expenses, offset by a decrease of

construction and development expenses. Total costs and expenses during the six months ended June 30, 2012 were $17.7 million compared to $13.6 million during the comparable period of 2011, an increase of $4.1 million, or 29.9%. This increase in costs and expenses, which are discussed by category below, was primarily the result of increased exploration activities, increased salaries, professional consulting fees and stock-based compensation.

General and administrative expenses. General and administrative expenses for the three and six months ended June 30, 2012 was $3.4 million and $6 million, respectively, compared to $1.6 million and $3 million, respectively, for the same periods of 2011. General and administrative expenses include salaries and benefits, stock-based compensation expense, professional consulting fees, investor relations, and travel. The general and administrative expense for the three and six months ended June 30, 2012 increased by $1.8 million and $3 million, respectively, from the prior period, due to an increase in stock-based compensation expense, salaries and benefits and professional consulting fees.

Exploration expenses. Property exploration expenses totaled $2.2 million and $3.6 million for the three and six months ended June 30, 2012, respectively, compared to $1.0 million and $1.5 million, respectively, for the same periods of 2011. The increase resulted from additional drilling activity on our exploration projects.

Construction and development expenses. Construction and development expenses during the three months and six months ended June 30, 2012 was $4.1 million and $8.1 million, respectively, compared to $6.0 million and $9.1 million, respectively, during the comparable period in 2011. The decrease resulted from the completion of the tailings dam construction in 2011and a reduction in other mine construction activities in 2012. Our exploration program includes definition and delineation of the La Arista vein system. These costs are classified as construction and development costs in the unaudited consolidated statement of operations and therefore are not reflected as exploration expenses.

Other income (expense). For the three months ended June 30, 2012, we recorded other income of $0.7 million, compared to other expense of $23,000 during the same period of 2011. For the six months ended June 30, 2012, we recorded other expense of $1.3 million, compared to other expense of $0.1 million during the same period of 2011. The change in other income (expense) resulted primarily from recognizing currency exchange losses of $0.9 million during the six months ended June 30, 2012 compared to a currency exchange loss of $0.2 million, in the comparable period in 2011. The 2012 currency exchange loss principally resulted from translating U.S. dollar cash balances held by our Mexican subsidiaries into the Mexican peso functional currency during a period when the U.S. dollar was decreasing compared to the Mexican peso.

Provision for income taxes. During the three and six months ended June 30, 2012, the Company recorded a provision for income taxes of $4.6 million and $11.8 million, respectively. There was no corresponding provision for income tax during the 2011 period. See Note 6 to the unaudited consolidated financial statements for additional information.

Non-GAAP Measures

Throughout this report, we have provided information prepared or calculated according to U.S. GAAP, as well as provided some non-U.S. GAAP (“non-GAAP”) performance measures. Because the non-GAAP performance measures do not have any standardized meaning prescribed by U.S. GAAP, they may not be comparable to similar measures presented by other companies. Accordingly, these measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP.

Total Cash Cost per Gold Equivalent Ounce Sold

We use total cash cost per gold equivalent ounce sold (including royalties), calculated in accordance with the Gold Institute’s Standard, as one indicator for comparative monitoring of our mining operations from period to period and believe that investors also find this information helpful when evaluating our performance. In accordance with the Gold Institute Standard, total cash costs are arrived at by taking mine cost of sales, plus treatment and refining charges (which are netted against revenues), less by-product credits earned from sales of metals we consider to be by-products (copper, lead and zinc at the La Arista underground mine and silver at the El Aguila open pit mine) less any noncash items such as depreciation, amortization and stock-based compensation and reclamation costs. Total cash costs are divided by gold equivalent ounces sold (gold sold, plus gold equivalent ounces of silver sold converted to gold using our realized gold price to silver price ratio, at the La Arista underground mine; and gold sold at the El Aguila open pit mine) to arrive at total cash cost per gold equivalent ounce sold. There can be no assurance that our reporting of this Non-GAAP measure is similar to that reported by other mining companies.

In prior reporting periods, we reported cash operating cost per gold equivalent ounce produced (on-site mill production). The principal difference between cash operating costs and total cash costs is that cash operating costs exclude

royalty payments, whereas total cash costs include royalty payments. Our concentrates are subject to a 5% net smelter returns royalty. The principal difference between gold equivalent ounces produced at the mill and gold equivalent ounces sold, is that gold equivalent ounces produced at the mill do not reflect payable metal deductions levied by smelters, whereas gold equivalent ounces sold are after payable metal deductions levied by smelters. Total cash cost per ounce figures for all periods presented in this Management’s Discussion and Analysis are presented on an ounces sold basis, which in our opinion is the predominate method used by companies that apply the Gold Institute Standard.

We have reconciled total cash cost per gold equivalent ounce sold to reported U.S. GAAP measures in the table below. The most comparable financial measures to our total cash cost is mine cost of sales calculated in accordance with U.S. GAAP. Mine cost of sales is obtained from the unaudited consolidated statements of operations.


	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(In thousands, except total cash cost per gold equivalent ounce)
Gold equivalent ounces sold		17,211			13,097			39,780			22,068
Cost of sales - production costs	$	12,774		$	5,301		$	20,121		$	9,463
Treatment and refining charges		3,785			2,454			8,556			3,112
By-product credits		(6,447	)		(2,553	)		(12,080	)		(4,448	)
Depreciation and amortization		(152	)		(79	)		(384	)		(143	)
Accretion		(19	)		(22	)		(40	)		(43	)
Reclamation costs		(95	)		(81	)		(190	)		(162	)
Stock-based compensation		(1,094	)		(1,052	)		(2,188	)		(2,075	)

Total cash costs	$	8,752		$	3,968		$	13,795		$	5,704

Total cash cost per gold equivalent ounce sold (including royalties)	$	509		$	303		$	347		$	258

Cash Flow from Mine Site Operations

Cash flow from mine site operations is furnished to provide additional information and is not a U.S. GAAP measure. This measure should not be considered in isolation as a substitute for measures of performance prepared in accordance with U.S. GAAP. We believe that certain investors use this measure as a basis to assess mine performance and as a measure on which our planned distributions to shareholders are currently based. The following table provides a reconciliation of cash flow from mine site operations to mine gross profit as presented in the consolidated statements of operations.


	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(In thousands)
Mine gross profit	$	17,236	$	15,363	$	50,510	$	22,481
Stock-based compensation		1,094		1,052		2,188		2,075
Depreciation and amortization		152		79		384		143
Accretion		19		22		40		43


Cash flow from mine site operations	$	18,501	$	16,516	$	53,122	$	24,742

Liquidity and Capital Resources

As of June 30, 2012, we had working capital of $63.8 million, consisting of current assets of $75.9 million and current liabilities of $12.1 million. This represents an increase of $4.5 million from the working capital balance of $59.3 million as of December 31, 2011. Consistent with our plans, our working capital balance fluctuates as we use cash to fund our operations, including exploration, mine development and construction and dividends.

We target calendar year cash distributions to our shareholders totaling approximately one-third of cash flow from mine site operations (See Non-GAAP measures), subject to the laws of the State of Colorado that govern distributions to shareholders. Our target dividend payment of one-third of cash flow from mine operations may be increased, decreased, suspended or discontinued at any time at the sole discretion of the Board of Directors based on company development requirements and strategies, cash balances, spot gold and silver prices, taxation, general market conditions or any other reason. For the six months ended June 30, 2012, we declared dividends of $17.5 million, representing 32.9% of cash flow from mine site operations for the six months ended June 30, 2012. We believe that based on current metal prices and the expected operating performance of the La Arista mine, our cash flow from mine site operations will be sufficient to fund our expected disbursements for operating, capital, other expenses and our planned distributions to shareholders for at least the next twelve months. We do not anticipate that we will need to pursue any external sources of financing during the next twelve months.

The mineral concessions that comprise our La Arista underground mine are subject to a 4% net smelter returns royalty on sales of any gold and silver dore, and a 5% net smelter returns royalty on sales of any concentrate. We produce copper, lead and zinc concentrates, but no gold and silver dore, at our La Arista underground mine. We produced a gold concentrate at our El Aguila open pit mine. Royalties are considered mine operating costs and are funded from the sale of concentrates. Royalty expense is recorded based on provisional invoices and adjusted based on the final invoice. Royalties are paid when we receive full payment of our final invoices. We made royalty payments for the three and six months ended June 30, 2012 of $1.5 million and $3.3 million, respectively, and $1.2 million and $1.7 million for the three and six months ended June 30, 2011, respectively. We estimate that between $5 million and $7 million of royalty payments will be made in 2012, subject to market prices for the metals in our concentrates, mine production and timing of final invoice settlements.

Upon declaration of a dividend, each shareholder has the option to subsequently convert that cash dividend into gold and silver bullion. To the extent we do not hold sufficient gold and silver bullion by the distribution payment date we must purchase gold and/or silver bullion in the market. We intend to purchase gold and silver

bullion in the market at various times throughout the year, and intend to hold quantities of gold and/or silver bullion to enable us to meet, at a minimum, our forecasted physical delivery requirements in the current and following month.

We have spent $3.6 million to date of our $7.8 million budgeted for exploration in 2012 on drilling and other exploration related activities at our El Aguila project and other exploration properties. Our planned exploration expenditures are discretionary and could be significantly more or less depending on the ongoing results from the exploration programs.

Cash and cash equivalents as of June 30, 2012 decreased to $44.8 million from $52.0 million as of December 31, 2011, a net decrease in cash of $7.2 million. During this period, we purchased approximately $4.2 million of gold and silver bullion.

Net cash provided by operating activities for the six months ended June 30, 2012 was $16.5 million compared $8.6 million during the comparable period in 2011. Our operating cash increased significantly as a result of generating more revenue and higher net income during the 2012 period as compared to the first six months of 2011.

Net cash used in investing activities for the six months ended June 30, 2012 was $6.3 million compared to $3.1 million for the same period of 2011. Cash used in investing activities during the six months ended June 30, 2012 was the

result of equipment purchases for our exploration, construction and development activities and purchases of gold and silver bullion. Although most of our exploration stage expenditures are recorded as an expense rather than an asset, we capitalize the acquisition cost of land and mineral rights and certain equipment that has alternative future uses or significant salvage value, including rolling stock, furniture, and electronics. The cost of acquiring these capitalized assets is reflected in our investing activities.

Net cash used in financing activities for the six months ended June 30, 2012 was $17.5 million compared to $11.1 million during the same period in 2011, consisting of dividends paid in each respective period. In August 2011, we instituted a regular monthly dividend consisting of $0.05 per share. The Board of Directors increased the monthly dividend to $0.06 per share in April 2012. As a result of the increase and based on the number of shares of common stock outstanding as of the date of this report, we anticipate paying dividends aggregating approximately $9.5 million each quarter; however, the Board of Directors may re-evaluate its decision on the basis of changes in our operations. The estimated aggregate amount of dividends we intend to pay may also be reduced in the future if there are significant purchases of common stock under our share repurchase program as the outstanding shares of common stock would be reduced.

Critical Accounting Policies

There have been no material changes in our critical accounting policies since December 31, 2011.

Forward-Looking Statements

This report contains or incorporates by reference “forward-looking statements,” as that term is used in federal securities laws, about our financial condition, results of operations and business. These statements include, among others:

•

statements about our future drilling results and plans for development of our properties;

•

statements concerning the benefits that we expect will result from our business activities and certain transactions that we contemplate or have completed, such as receipt of proceeds, decreased expenses and avoided expenses and expenditures; and

•

statements of our expectations, beliefs, future plans and strategies, exploration activities, anticipated developments and other matters that are not historical facts.

These statements may be made expressly in this document or may be incorporated by reference to other documents that we will file with the SEC. You can find many of these statements by looking for words such as “believes,” “expects,” “anticipates,” “estimates,” or similar expressions used in this report or incorporated by reference in this report.

These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause our actual results to be materially different from any future results expressed or implied in those statements. Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied. We caution you not to put undue reliance on these statements, which speak only as of the date of this report. Further, the information contained in this document or incorporated herein by reference is a statement of our present intention and is based on present facts and assumptions, which may change at any time and without notice, based on changes in such facts or assumptions.

Risk Factors Impacting Forward-Looking Statements

The important factors that could prevent us from achieving our stated goals and objectives include, but are not limited to, those set forth in other reports we have filed with the SEC and the following:

•

decisions of foreign countries and banks within those countries;

•

violence and crime associated with drug cartel activity in Mexico;

•

natural disasters such as earthquakes or weather-related events;

•

unexpected changes in business and economic conditions, including the rate of inflation;

•

changes in interest rates and currency exchange rates;

•

timing and amount of production, if any;

•

technological changes in the mining industry;

•

our costs;

•

changes in exploration and overhead costs;

•

access and availability of materials, equipment, supplies, labor and supervision, power and water;

•

results of current and future feasibility studies;

•

the level of demand for our products;

•

changes in our business strategy, plans and goals;

•

interpretation of drill hole results and the geology, grade and continuity of mineralization;

•

the uncertainty of mineralized material estimates and timing of development expenditures;

•

lack of governmental and/or local support for mining operations;

•

commodity price fluctuations; and

•

ability and timing of sufficient mine development.

We undertake no responsibility or obligation to update publicly these forward-looking statements, but may do so in the future in written or oral statements. Investors should take note of any future statements made by or on our behalf.

ITEM 3:

Quantitative and Qualitative Disclosures about Market Risk

Our exposure to market risks includes, but is not limited to, the following risks: changes in commodity prices, foreign currency exchange rates, changes in interest rates and equity price risks. We do not use derivative financial instruments as part of an overall strategy to manage market risk; however, we may consider such arrangements in the future as we evaluate our business and financial strategy.

Commodity Price Risk

The results of our operations will depend in large part upon the market prices of gold and silver. Gold and silver prices fluctuate widely and are affected by numerous factors beyond our control. The level of interest rates, the rate of inflation, the world supply of gold and silver and the stability of exchange rates, among other factors, can all cause significant fluctuations in commodity prices. Such external economic factors are in turn influenced by changes in international investment patterns, monetary systems and political developments. The price of gold and silver has fluctuated widely in recent years, and future price declines could cause a mineral project to become uneconomic, thereby having a material adverse effect on our business and financial condition. We have not entered into derivative contracts to protect the selling price for gold or silver. We may in the future more actively manage our exposure through derivative contracts or other commodity price risk management programs, although we have no intention of doing so in the near-term.

Our provisional concentrate sales contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of the gold and silver concentrates at the prevailing indices’ prices at the time of sale. The embedded derivative, which does not qualify for hedge accounting, is marked-to-market through earnings each period prior to final settlement.

In addition to adversely affecting our mineralized material estimates and our financial condition, declining gold and silver prices could require a reassessment of the feasibility of a particular project. Even if a project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause delays in the implementation of a project. This risk is increased since we have not sought or obtained a formal feasibility study with regard to any of our projects.

Foreign Currency Risk

We transact a significant amount of our business in Mexican pesos. As a result, currency exchange fluctuations may impact our operating costs. The appreciation of non-U.S. dollar currencies such as the peso against the U.S. dollar increases expenses and the cost of purchasing capital assets in U.S. dollar terms in Mexico, which can adversely impact our operating results and cash flows. Conversely, a depreciation of non-U.S. dollar currencies usually decreases operating costs and capital asset purchases in U.S. dollar terms.

The value of cash and cash equivalents denominated in foreign currencies also fluctuates with changes in currency exchange rates. Appreciation of non-U.S. dollar currencies results in a foreign currency gain on such investments and a decrease in non-U.S. dollar currencies results in a loss. We have not utilized market-risk sensitive instruments to manage our exposure to foreign currency exchange rates but may in the future actively manage our exposure to foreign currency exchange rate risk.

Provisional Sales Contract Risk

We enter into concentrate sales contracts with third-party smelters. The contracts, in general, provide for a provisional payment based upon provisional assays and quoted metal prices. The provisionally priced sales contracts contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of concentrates at the forward price at the time of sale. The embedded derivative, which is the final settlement based on a future price, does not qualify for hedge accounting and is marked-to-market through earnings each period prior to final settlement.

At June 30, 2012, we had outstanding provisionally priced sales of $30.5 million consisting of 7,119 ounces of gold and 603,426 ounces of silver, 186 tons of copper, 651 tons of lead and 1,934 tons of zinc which had a fair value of approximately $30.8 million including the embedded derivative. If the price for each metal were to change by one percent, the change (plus or minus) in the total fair value of the concentrates sold would be approximately $332,928.

At December 31, 2011, we had outstanding provisionally priced sales of $34.2 million consisting of 6,264 ounces of gold and 716,438 ounces of silver, 197 tons of copper, 606 tons of lead and 1,497 tons of zinc which had a fair value of approximately $33.8 million including the embedded derivative. If the price for each metal were to change by one percent, the change (plus or minus) in the total fair value of the concentrates sold would be approximately $181,000.

Interest Rate Risk

We have no debt outstanding nor do we have any investment in debt instruments other than highly liquid short-term investments. Accordingly, we consider our interest rate risk exposure to be insignificant at this time.

Equity Price Risk

We have, in the past, sought and may, in the future, seek to acquire additional funding by sale of common stock and other equity. The price of our common stock has been volatile in the past and may also be volatile in the future. As a result, there is a risk that we may not be able to sell our common stock at an acceptable price should the need for new equity funding arise.

ITEM 4:

Controls and Procedures

(a) During the fiscal period covered by this report, our management, with the participation of the Principal Executive Officer and Principal Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on such evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that, as of June 30, 2012, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the required time periods and are designed to ensure that information required to be disclosed in our reports is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) There was no change in our internal control over financial reporting that occurred during the quarter ended June 30, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 2:

Unregistered Sales of Equity Securities and Use of Proceeds

(c) Issuer Purchases of Equity Securities

In September 2011, our Board of Directors authorized a share repurchase of up to $20.0 million with no pre-established end date. During the six months ended June 30, 2012, none of our shares were repurchased.

ITEM 6:

Exhibits

The following exhibits are filed or furnished herewith:


Exhibit Number		Description

10.1		Purchase Contract 203-09CMX-25739-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective October 5, 2009

10.2		Purchase Contract 203-10-27070-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective December 3, 2010

10.3		Purchase Contract 103-11CMX-019-0-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective March 28, 2011

10.4		Purchase Contract 103-11CMX-019-1-P between Don David Gold Mexico, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective April 1, 2012

10.5		Purchase Contract 203-11CMX-020-0-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective date March 28, 2011

10.6		Purchase Contract 203-11CMX-008-1-P between Don David Gold Mexico, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective April 1, 2012

10.7		Purchase Contract 303-11CMX-028-0-P between Don David Gold Mexico, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective date May 27, 2012

10.8		Purchase Contract 303-11CMX-028-1-P between Don David Gold Mexico, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective April 1, 2012

10.9		Amendment to Purchase Contract 203-09CMX-25739-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective October 1, 2010

10.10		Amendment to Purchase Contract 103-11CMX-019-1-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective date July 1, 2011

10.11		Amendment to Purchase Contract Amendment 203-11CMX-020-0-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective July 1, 2011

10.12		Amendment to Purchase Contract Amendment 203-11CMX-020-1-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective July 1, 2011

10.13		Amendment to Purchase Contract Amendment 303-11CMX-028-1-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective July 1, 2011

10.14		Purchase Contract Assignment 203-09CMX-25739-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective November 10, 2010

10.15		Mining Exploration and Exploitation Agreement between Don David Gold, S.A. de C.V. and Jose Perez Reynoso effective November 21, 2002

10.16		Amendment to Mining Exploration and Exploitation Agreement between Don David Gold, S.A. de C.V. and Jose Perez Reynoso effective November 22, 2010

10.17		Amendment to Mining Exploration and Exploitation Agreement between Don David Gold Mexico, S.A. de C.V. and Jose Perez Reynoso effective August 3, 2012

31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for William W. Reid.*

31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Bradley J. Blacketor.*

32		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for William W. Reid and Bradley J. Blacketor.*

101		Financial statements from the Quarterly Report on Form 10-Q of Gold Resource Corporation for the six months ended June 30, 2012, formatted in XBRL: (i) the Unaudited Consolidated Balance Sheets, (ii) the Unaudited Consolidated Statements of Operations, (iii) the Unaudited Consolidated Statements of Cash Flows, and (iv) the Notes to the Unaudited Consolidated Financial Statements.*

*		This document is not being “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Registration Statements or other documents filed with the Securities and Exchange Commission shall not incorporate this exhibit by reference, except as otherwise expressly stated in such filing.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the Company has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

EXHIBIT INDEX


Exhibit Number		Description

10.1		Purchase Contract 203-09CMX-25739-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective October 5, 2009

10.2		Purchase Contract 203-10-27070-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective December 3, 2010

10.3		Purchase Contract 103-11CMX-019-0-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective March 28, 2011

10.4		Purchase Contract 103-11CMX-019-1-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective April 1, 2012

10.5		Purchase Contract 203-11CMX-020-0-P between Don David Gold Mexico, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective date March 28, 2011

10.6		Purchase Contract 203-11CMX-008-1-P between Don David Gold Mexico, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective April 1, 2012

10.7		Purchase Contract 303-11CMX-028-0-P between Don David Gold Mexico, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective date May 27, 2012

10.8		Purchase Contract 303-11CMX-028-1-P between Don David Gold Mexico, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective April 1, 2012

10.9		Amendment to Purchase Contract 203-09CMX-25739-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective October 1, 2010

10.10		Amendment to Purchase Contract 103-11CMX-019-1-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective date July 1, 2011

10.11		Amendment to Purchase Contract Amendment 203-11CMX-020-0-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective July 1, 2011

10.12		Amendment to Purchase Contract Amendment 203-11CMX-020-1-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective July 1, 2011

10.13		Amendment to Purchase Contract Amendment 303-11CMX-028-1-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective July 1, 2011

10.14		Purchase Contract Assignment 203-09CMX-25739-P between Don David Gold, S.A. de C.V. and Consorcio Minero de Mexico Cormin Mexico, S.A. de C.V. effective November 10, 2010

10.15		Mining Exploration and Exploitation Agreement between Don David Gold, S.A. de C.V. and Jose Perez Reynoso effective November 21, 2002

10.16		Amendment to Mining Exploration and Exploitation Agreement dated between Don David Gold, S.A. de C.V. and Jose Perez Reynoso effective November 22, 2010

10.17		Amendment to Mining Exploration and Exploitation Agreement between Don David Gold Mexico, S.A. de C.V. and Jose Perez Reynoso effective August 3, 2012

31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for William W. Reid.*

31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Bradley J. Blacketor.*

32		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for William W. Reid and Bradley J. Blacketor.*

101		Financial statements from the Quarterly Report on Form 10-Q of Gold Resource Corporation for the six months ended June 30, 2012, formatted in XBRL: (i) the Unaudited Consolidated Balance Sheets, (ii) the Unaudited Consolidated Statements of Operations, (iii) the Unaudited Consolidated Statements of Cash Flows, and (iv) the Notes to the Unaudited Consolidated Financial Statements.*

This document is not being “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Registration Statements or other documents filed with the Securities and Exchange Commission shall not incorporate this exhibit by reference, except as otherwise expressly stated in such filing.

Exhibit 10.1

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A DE C,V,

a Trafigura Group Company

DON DAVID GOLD, S.A. DE C.V.

Mexico City, October 5, 2009

PURCHASE CONTRACT

203-09-CMX-25739-P

This contract is concluded on the 5 ^th day of October 2009 (the “ Effective Date ”) between DON DAVID GOLD, S.A. DE C.V.., Macedonio Alcala No. 201-105, Col Centro, Oaxaca, Oaxaca, Mexico (the “ Seller ”) and CONSORCIO MINERO DE MEXICO CORMIN MEX, S.A. DE C.V., Avenida Reforma No 115 Despacho 2102, Col. Lomas de Chapultepec, C.P. 11000, Delegación Miguel Hidalgo, Distrito Federal, Mexico (the “ Buyer ”).

SCOPE OF THE CONTRACT

The Seller agrees to sell gold/silver concentrates and the Buyer agrees to buy gold/silver concentrates at the terms and conditions set out below:

DEFINITIONS


1 ton means:		1 metric ton of 1000 kilograms or 2204.62 lbs;

1 kilogram means		1000 grams;

1 unit means:		1% of the dry net weight;

1 ounce means:		1 troy ounce of 31.1035 grams;

1 pound means:		453.593 grams;

US$ and US cents means:		the lawful currency of the United States of America;

INCOTERMS 2000 means:		the 2000 edition of the standard trade definitions published by the International Chamber of Commerce;

LME means:		London Metal Exchange;

Banking Day and Business Day mean:		any day except a Saturday or Sunday on which banks in the city of New York, New York, USA, are generally open for the conduct of business;

Affiliates means:		in relation to any company or corporation, a Subsidiary or Holding Company of that company or corporation or any other Subsidiary of that company or corporation or of that Holding Company;

Subsidiary means:		in relation to any company or corporation, a company or corporation which is controlled, directly or indirectly, by the first mentioned company or corporation; more than half the issued share capital of which is beneficially owned, directly or indirectly by the first mentioned company or corporation; or which is a Subsidiary of another Subsidiary of the first mentioned company or corporation; and for this purpose, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body.

Holding Company means:		in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary;

Valid TML		Transportable Moisture Limit for the current shipment;

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A DE C,V,

a Trafigura Group Company


Valid FMP		Flow Moisture Point valid for the current shipment;

IMO/BC Code means:		the International Maritime Organisation Code of Safe Practice for Solid Bulk Cargoes in effect at the time of delivery.

QUANTITY

100% of the concentrate production, estimated to be approximately 600 to 900 wmt per month, to be delivered from October 2009 to September 2010.

QUALITY

“El Aguila” gold/silver concentrates, assaying as follows (the “Concentrate”):


Gold		200 - 400 g/dmt
Silver		3000 - 5000 g/dmt
Arsenic		1500 - 2000 g/dmt
Antimony		200 - 300 g/dmt
Bismuth		15 -30 g/dmt
Mercury		0.05 - 0.10 g/dmt
Tellurium		30 - 45 g/dmt

The Concentrate shall otherwise be free from deleterious impurities harmful to the smelting and / or refining processes. The Concentrate shall conform to all local regulations and the IMO / BC Code of Safe Practice for Solid Bulk Cargoes. Seller shall present valid TML, FMP and moisture certificates if so requested by Buyer. In the event of a significant deviation both parties shall agree to discuss a solution in good faith in line With the prevailing market.

DELIVERY

CIP Manzanillo or parity (Incoterms 2000).

All export charges and the costs of loading the Concentrate into the carrying vessel shall be for Buyer’s account. Seller shall have the right to collect the 15% VAT.

PRICE

Payables

Silver

Pay for 95% (ninety five percent) of the final silver content, subject to a minimum deduction of 50 (fifty) grams per dry metric ton of the Concentrate, shall be paid at the official LBMA spot quotation for silver, as published in the Metal Bulletin in US$ and averaged over the quotational period.

Gold

Pay for 95% (ninety five percent) of the final gold content of the Concentrate, subject to a minimum deduction of 1.5 (one point five) grams per dry metric ton of the Concentrate shall be paid at the London Final quotation as published in the Metal Bulletin in US$ and averaged over the quotational period.

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A DE C,V,

a Trafigura Group Company

Deductions

Treatment Charge

US$310.00 (US$ three hundred and teen) per dry metric ton of the Concentrate delivered basis CIP Manzanillo or parity.

Refining Charges

Silver

US$1.20 (US$ one point two zero) per payable ounce.

This refining charge is based on a silver price of US$15/TOz and shall be increased by US$0.05 for each US$1.0 dollar that the final silver price is over US$15/TOz.

Gold

US$8.00 (US$ eight) per payable ounce.

Arsenic + Antimony Penalty

US$3.00 (US$ three) per dry metric ton of the Concentrate for each 0.10% (zero point one percent) the final combined arsenic plus antimony content exceeds 0.4% (zero point four percent) up to 3% (three percent).

Bismuth Penalty

US$1.50 (US$ one point five) per dry metric ton of the Concentrate for each 0.010% (zero point zero one percent) the final bismuth content exceeds 0.1% (zero point one percent).

All fractions pro rata.

QUOTATIONAL PERIOD

The applicable quotational period for each payable metal and each monthly quota separately shall be:

•

The first month following the month of delivery at Buyer’s designated warehouse (M+I)

For the avoidance of doubt the month of delivery (“M”) shall be the month of the closing date of the lot delivered to the designated warehouse.

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A DE C,V,

a Trafigura Group Company

PAYMENT

The provisional payment shall be effected as follows:

First Provisional Payment

90% (ninety percent) of the provisional invoice value of the Concentrate, based on the final weights and provisional dry weights determined at the receiving warehouse, provisional assays, and the applicable metal quotations averaged over the 5 (five) LME pricing days prior to the invoicing date, shall be paid 10 days after lot completion at the warehouse against the following documents:

1.	Seller’s provisional invoice;

2.	Seller’s provisional weight and moisture certificate;

3.	Seller’s provisional assay certificate.

4.	Holding Certificate acceptable to Buyer and duly signed by an independent surveyor company.

Final Payment

Final payment shall be made by the party so owing within 3 (three) Banking Days of final weights, final assays and final prices being known against presentation of Seller’s final invoice.

TITLE AND RISK

Title to and risk in the Concentrate shall pass from Seller to Buyer when the Concentrate has been delivered to the Buyer’s nominated warehouse in Manzanillo, Mexico.

WEIGHING, SAMPLING AND MOISTURE DETERMINATION

The operations of weighing, sampling and moisture determination shall be carried out at the receiving warehouse nominated by Buyer. The weight determined at the warehouse less a weight franchise of 0.50 (zero point five percent) percent shall be final and binding for settlement purposes.

Seller and Buyer shall appoint an internationally recognised supervision company on a joint basis to represent them during these operations. The costs of these operations shall be shared equally between the parties.

The size of the lots for sampling purposes shall be approximately 30 wet metric tons. Sample portions shall be made from each such sample lot and distributed as follows:

-	2 sets of sealed samples for the Seller;

-	2 sets of sealed samples for the Buyer;

-	1 set of sealed samples to be retained by an internationally recognised supervision company for eventual umpire purposes.

The final contents for all elements shall be calculated on a lot-by-lot basis. The sum of the individual lot contents will constitute the total of the shipment.

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A DE C,V,

a Trafigura Group Company

ASSAYING

Assays shall be determined by an independent laboratory at loading port and shall be considered as finals for both parties.

Seller and buyer will determine by mutual agreement one of the following laboratories for assay determination, and will be chosen on a rotational basis:

-Alfred Knight Mexico

-ERSA

-SGS

Silver and Gold assays shall be determined unadjusted for cupel absorption and slag loss

FORCE MAJEURE

If either party is prevented, hindered or delayed from performing in whole or in part any obligation or condition of this contract by reason of force majeure (the “ Affected Party ”), the Affected Party shall give written notice to the other party promptly and in any event within 3 (three) Business Days after receiving notice of the occurrence of a force majeure event giving, to the extent reasonably practicable, the details and expected duration of the force majeure event and the quantity of Concentrate affected (the “ Force Majeure Notice ”).

Provided that a Force Majeure Notice has been given, for so long as the event of force majeure exists and to the extent that performance is prevented, hindered or delayed by the event of force majeure, neither party shall be liable to the other and the Affected Party may suspend performance of its obligations under this contract (a “Force Majeure Suspension”). During the period of a Force Majeure Suspension, the other party may suspend the performance of all or a part of its obligations to the extent that such suspension is commercially reasonable.

The Affected Party shall use commercially reasonable efforts to avoid or remove the event of force majeure and shall promptly notify the other party when the event of force majeure is terminated.

If a Force Majeure Suspension occurs, the time for performance of the affected obligations and, if applicable, the term of this contract shall be extended for a period equal to the period of suspension.

If the period of the Force Majeure Suspension is equal to or exceeds 3 months from the date of the Force Majeure Notice, and so long as the force majeure event is continuing, either party may, in its sole discretion and by written notice, terminate this contract or, in the case of multiple deliveries under this contract, terminate the affected deliveries. Upon termination in accordance with this clause, neither party shall have any further liability to the other in respect of this contract or, as the case may be, the terminated deliveries except for any rights and remedies previously accrued under the Contract, including any payment obligations.

“Force Majeure” means any cause or event reasonably beyond the control of a party, including, but not limited to fires, earthquakes, lightning, floods, explosions, storms, adverse weather, landslides and other acts of natural calamity or acts of god; navigational accidents or maritime peril; vessel damage or loss; strikes, grievances, actions by or among workers or lock-outs (whether or not such labour difficulty could be settled by acceding to any demands of any such labour group of individuals); accidents at, closing of, or restrictions upon the use of mooring facilities, docks, ports, harbours, railroads or other navigational or transportation mechanisms; disruption or breakdown of, storage plants, terminals, machinery or other facilities; acts of war, hostilities (whether declared or undeclared), civil commotion, embargoes, blockades, terrorism, sabotage or acts of the public enemy; any act or omission of any governmental authority; good faith compliance with any order, request or directive of any governmental authority; or any other cause reasonably beyond the control of a party, whether similar or dissimilar to those above and whether foreseeable or unforeseeable, which, by the exercise of due diligence, such party could not have been able to avoid or overcome. A party’s inability economically to perform its obligations under the Contract shall not constitute an event of force majeure.

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A DE C,V,

a Trafigura Group Company

This clause shall not apply to any Concentrate for which vessel, truck or rail wagon space has been booked, pricing has been established, the quotational period has commenced or payment has been made unless the Buyer has expressly consented in writing.

SUSPENSION OF QUOTATIONS

The metal prices and currency quotations specified under this contract are the quotations in general use for the pricing of the metal content of concentrate.

In the event that any of these price quotations cease to exist or cease to be published or should no longer be internationally recognised as the basis for the settlement of concentrate contracts, then upon the request of either party, Seller and Buyer will promptly consult together with a view to agree on a new pricing basis and on the date for bringing such basis into effect. The basic objective will be to secure the continuity of fair pricing.

DISPUTE RESOLUTION

Any dispute arising out of or in connection with this contract including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of the New York Court of International Arbitration, which Rules are deemed to be incorporated by reference into this clause. The tribunal shall consist of three arbitrators, one to be nominated by Buyer, one by Seller and the third by the President of the NYCIA. In case either party fails to nominate its arbitrator then he will be appointed by the President of the NYCIA. However, it is understood that both parties shall be entitled to take any reasonable measures for the protection of rights accrued to them by this contract without prejudice to the provisions of this clause. The arbitration shall be held in London, England. The Arbitration Tribunal shall state in its award in detail the facts of the case and reasons for its decision. The award shall be final and binding and not subject to appeal.

CHOICE OF LAW

This contract shall be governed by and construed in accordance with New York law.

The United Nations Convention on Contracts for the International Sale of Goods (1980) shall not apply to this contract.

TAXES AND TARIFFS

Any taxes, tariffs and duties whether existing or new on the Concentrate or contained metals or on commercial documents relating thereto or on the cargo itself, imposed in the country of origin shall be borne by the Seller.

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A DE C,V,

a Trafigura Group Company

LICENSES

Seller undertakes that all the necessary export licences and all other authorisations required for the Concentrate have been obtained (and/or will be obtained) for the entire quantity covered by this contract. Seller furthermore guarantees that such licences will remain in force for the full life of this contract.

ASSIGNMENT

THIRD PARTY RIGHTS

Any person who is not a party to this contract may not enforce any term of it. The parties agree that the Contracts (Rights of Third Parties) Act 1999 shall not apply to this contract or any other agreement entered pursuant to it.

LIMITATION OF LIABILITY

Neither the Seller nor the Buyer shall be liable, whether in contract or in tort or otherwise, for indirect, consequential or special damages or losses of whatsoever nature, however caused.

INCOTERMS

Insofar as not inconsistent herewith INCOTERMS 2000 (and any later amendments thereto) shall apply to this contract.

NOTICES

No notice or communication with respect to this contract shall be effective unless it is given in writing and delivered or sent by facsimile or electronic mail to the other party at the address set out herein, or to such other address as each party otherwise notifies the other party.

Notices given by first class mail shall be deemed to have been delivered when received. Notices sent by facsimile or electronic mail shall be deemed to have been received upon completion of successful transmission if sent during normal office hours at the place of receipt. Any facsimile or electronic mail transmitted outside of normal office hours at the place of receipt shall be deemed to have been received on the next Business Day.

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A DE C,V,

a Trafigura Group Company

All notices, requests and other communications hereunder shall be addressed:


If to Buyer:		CONSORCIO MINERO DE MÉXICO
		CORMIN MEX, S.A. DE C.V.
		Av. Reforma, No. 116, Despacho 2102
		Lomas de Chapultepec
		Delegatión Miguel Hidalgo
		México D.F. 11000, México
		Phone: +52 55 53 51 44 00

If to Seller:		DON DAVID GOLD S.A. DE C.V.
		Macedonio Alcalá No. 201-105,
		Col Centro, Oaxaca, Oaxaca,
		México
		Phone: +52 951 5216 82 58

WAIVERS

No waiver of any right, power or remedy or of any provision of this contract and no amendment of any provision of this contract shall be effective unless and to the extent that it is expressly made and reduced to writing.

SEVERABILITY

The invalidity, illegality or unenforceability of any one or more of the provisions of this contract shall in no way affect or impair the validity and enforceability of the other provisions of this contract.

CONFIDENTIALITY

The existence of and terms of this contract shall be held confidential by the parties save to the extent that such disclosure is made to a party’s banks, accountants, auditors, legal or other professional advisers, or as may be required by law, a competent court or a liquidator or administrator of a party, or the other party has consented in writing to such disclosure.

ENTIRE AGREEMENT

This contract constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous agreements between the parties relating to the subject matter. Each party acknowledges and represents that it has not relied on or been induced to enter into this contract by any representation, warranty or undertaking other than those expressly set out in this contract. A party is not liable to the other party for a representation, warranty or undertaking of whatsoever nature that is not expressly set out in this contract.

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A DE C,V,

a Trafigura Group Company

IN WITNESS WHEREOF the parties have executed this document as of the respective dates specified below with effect from the Effective Date specified on the first page of this document.

Accepted:



DON DAVID GOLD, S.A. DE C.V.				CONSORCIO MINERO DE MEXICO
(signed by fully authorised signatory)				CORMIN MEX S.A. DE C.V.
				(signed by fully authorised signatory)

Place and Date:				Place and Date:

Exhibit 10.2

LOGO

DON DAVID GOLD S.A. DE C.V.

Macedonio Alcala No. 201-105

Col Centro, Oaxaca, Oaxaca

Mexico

Lucerne, 3 December 2010 / ERF / ak

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This contract is concluded on the 27 ^th day of October 2010 (the “ Effective Date ”) between DON DAVID GOLD S.A. DE C.V., Macedonio Alcala No. 201-105, Col Centro, Oaxaca, Oaxaca, Mexico (the “ Seller ”) and TRAFIGURA BEHEER B.V., Amsterdam, Branch Office Lucerne, Zürichstrasse 31, 6002 Lucerne, Switzerland (the “ Buyer ”).

1.	SCOPE OF THE CONTRACT

The Seller agrees to sell silver/gold concentrate and the Buyer agrees to buy silver/gold concentrate at the terms and conditions set out below:

2.	DEFINITIONS


1 kilogram means:		1,000 grams;

1 ounce means:		1 troy ounce of 31.1035 grams;

1 pound means:		453.593 grams;

1 ton means:		1 metric ton of 1,000 kilograms or 2204.62 lbs;

1 unit means:		1% of the dry net weight;

Affiliates means:		in relation to any company or corporation, a Subsidiary or Holding Company of that company or corporation or any other Subsidiary of that company or corporation or of that Holding Company;

Banking Day and Business Day mean:		any day except a Saturday or Sunday on which banks in the city of New
		York, New York, USA, are generally open for the conduct of business;

Holding Company:		has the meaning given to it in the definition of Subsidiary;

IMO/BC Code means:		the International Maritime Organisation Code of Safe Practice for Solid Bulk Cargoes prevailing at the time of delivery;

INCOTERMS 2000 means:		the 2000 edition of the standard trade definitions published by the
		International Chamber of Commerce;

LBMA means:		London Bullion Market Association;

LME means:		London Metal Exchange;

Subsidiary means:		a company or corporation which, in relation to another company or corporation (a “Holding Company”): (a) is controlled, directly or indirectly, by the Holding Company; (b) more than half the issued share capital of which is beneficially owned, directly or indirectly by the Holding Company; or (c) which is a Subsidiary of another Subsidiary of

T RAFIGURA B EHEER B.V., A MSTERDAM , B RANCH O FFICE L UCERNE

R EGISTERED AND M AILING A DDRESS : Z ÜRICHSTRASSE 31, P OSTFACH 4268, 6002 L UCERNE , S WITZERLAND

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		the Holding Company; and for this purpose, a company or corporation shall be treated as being controlled by a Holding Company if the Holding Company is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;

US$ means:		the lawful currency of the United States of America;

Valid TML means:		Transportable Moisture Limit valid for the current shipment;

Valid FMP means:		Flow Moisture Point valid for the current shipment.

3.	QUANTITY

100% (one hundred percent) of the El Aguila production of silver/gold concentrate produced during November and December 2010, estimated to be approximately 300 (three hundred) wet metric tons per month (the “ Concentrate ”).

4.	QUALITY

El Aguila gold/silver concentrate, assaying as follows:


Gold		200-400 g/dmt
Silver		3,000-5,000 g/dmt
Arsenic		1,500-2,000 g/dmt
Antimony		200-300 g/dmt
Bismuth		15-30 g/dmt
Mercury		0.05-0.10 g/dmt
Tellurium		30-45 g/dmt

The Concentrate shall otherwise be free from deleterious impurities harmful to the smelting and / or refining processes and shall be able to withstand the voyage, upon all customary forms of transportation, to the destination intended by the Buyer. The Concentrate shall conform to all local regulations and the IMO / BC Code of Safe Practice for Solid Bulk Cargoes. Seller shall promptly present valid TML, FMP and moisture certificates if so requested by Buyer.

5.	SHIPMENT

Shipment is scheduled as follows:

•

Approximately 300 (three hundred) metric tons during November 2010; and

•

Approximately 300 (three hundred) metric tons during December 2010.

6.	DELIVERY

FOB (Incoterms 2000) one safe port and berth Manzanillo, Mexico or parity.

For the avoidance of doubt: a) all loading costs are for Seller’s account; and b) Seller shall be responsible for custom clearing the Concentrate for export from Mexico and all customs clearance and export charges shall be for Seller’s account.

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PRICE

The price per dry metric ton of the Concentrate shall be the sum of the payments less the deductions specified below:

Payments

Silver

Pay for 95% (ninety-five percent) of the final silver content, subject to a minimum deduction of 50 (fifty) grams per dry metric ton of the Concentrate at the official LBMA spot quotation for silver, as published in the Metal Bulletin in US$ and averaged over the quotational period.

Gold

Pay for 95% (ninety-five percent) of the final gold content, subject to a minimum deduction of 1.5 (one point five) grams per dry metric ton of the Concentrate and at the mean of the official LBMA PM quotation for gold, as published in the Metal Bulletin in US$ and averaged over the quotational period.

Deductions

Treatment Charge

US$ 300.00 (US$ three hundred) per dry metric ton of the Concentrate delivered FOB Manzanillo, Mexico or parity.

Refining Charges


Silver:		US$ 1.20 (US$ one point two zero) per payable ounce of silver.

This refining charge is based on a silver price of US$15/oz and shall be increased by US$0.05 for each US$1.0 dollar that the final silver prices is over US$15/oz.


Gold:		US$ 8.00 (US$ eight) per payable ounce of gold.

Impurities

Arsenic and Antimony

US$ 3.00 (US$ three) per dry metric ton of the Concentrate for each 0.10% (zero point one zero percent) by which the final arsenic and antimony content exceeds 0.4% (zero point four percent), fractions pro rata.

Bismuth

US$ 1.50 (US$ one point five zero) per dry metric ton of the Concentrate for each 0.01% (zero point zero one percent) by which the final bismuth content exceeds 0.1% (zero point one percent), fractions pro rata.

8.	QUOTATIONAL PERIOD

The quotational period for all payable metals shall be the average of the first month following the month of delivery at Buyer’s designated warehouse (M+l).

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For the avoidance of doubt, the month of delivery (M) shall be the month of the closing date of the lot delivered to the designated warehouse.

9.	PAYMENT

All payments shall be made in US$ by telegraphic transfer.

Provisional Payment

The provisional payment shall be effected as follows:

90% (ninety percent) of the provisional value of the Concentrate, based on the bill of lading wet weight, provisional moisture, provisional assays and the metal quotations applicable on the bill of lading date (or on the last LME market day prior to the bill of lading date if the bill of lading date does not fall on an LME market day), shall be paid against the presentation of the following documents:

1.	3/3 original ‘clean on board’ Charter Party bills of lading, made out to order, blank endorsed and marked freight payable as per Charter Party;

2.	Seller’s provisional invoice;

3.	Seller’s provisional weight and moisture certificate;

4.	Seller’s provisional assay certificate.

Final Payment

Final payment shall be made by the party so owing latest 3 (three) Banking Days after the date final assays, weights and prices are known against presentation of the final invoice.

10.

TITLE AND RISK

Title shall pass from the Seller to the Buyer upon Buyer’s provisional payment.

Risk shall pass from Seller to Buyer when the Concentrate passes the ship’s rail at the port of loading.

11.

INSURANCE

Insurance for the Concentrate shall be covered by Seller up to the passing of risk from Seller to Buyer.

12.

WEIGHING, SAMPLING AND MOISTURE DETERMINATION

The operations of weighing, sampling and moisture determination shall be carried out at the Buyer’s warehouse in the usual technical manner. The moisture and the weight thus determined less a weight franchise of 0.50% (zero point five zero percent) shall be final and binding for settlement purposes, save for fraud or manifest error.

Seller and Buyer shall appoint an internationally recognised supervision company on a joint basis to conduct these operations. The costs of these operations shall be shared equally between the parties.

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The size of the lots for sampling purposes shall be approximately 30 (thirty) wet metric tons. Sample portions shall be made from each such sample lot and distributed as follows:

-	2 sets of sealed samples for the Seller:

-	1 set of sealed samples to be retained by an internationally recognised supervision company for use by the umpire in the event one is appointed.

The final contents for all elements shall be calculated on a lot-by-lot basis. The sum of the individual lot contents will constitute the total of the shipment.

13.

ASSAYING

Assays shall be determined one of the following mutually greed internationally recognized independent laboratories at the port of loading:

Alfred H. Knight de Mexico, S.A. de C.V.

Fdo. Montes de Oca No. 183

Col. Independencia, C/P. 03630

Mexico, D. F

Stewart Inspection and Analysis Limited

Caddick Road

Knowsley Business Park

Prescot

L34 9ER

England

SGS Nederland B.V.,

Mineral Services

Malledijk 18

3200 AE Spijkenisse

The Netherlands

The results so obtained shall be final and binding for settlement purposes, save for fraud or manifest error. The assays shall be unadjusted for cupel absorption and slag loss. The cost of these operations shall be shared equally between the parties.

14.

FORCE MAJEURE

The Affected Party shall use commercially reasonable efforts to avoid or remove the event of force majeure and shall promptly notify the other party when the event of force majeure is terminated.

If a Force Majeure Suspension occurs, the time for performance of the affected obligations and, if

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“Force Majeure” means any cause or event reasonably beyond the control of a party, including, but not limited to fires, earthquakes, lightning, floods, explosions, storms, adverse weather, landslides and other acts of natural calamity or acts of god; navigational accidents or maritime peril; vessel damage or loss; strikes, grievances, actions by or among workers or lock-outs (whether or not such labour difficulty could be settled by acceding to any demands of any such labour group of individuals); accidents at, closing of, or restrictions upon the use of mooring facilities, docks, ports, harbours, railroads or other navigational or transportation mechanisms; disruption or breakdown of, storage plants, terminals, machinery or other facilities; acts of war, hostilities (whether declared or undeclared), civil commotion, arrest and/or detention of the Concentrate and/or vessel, embargoes, blockades, terrorism, sabotage or acts of the public enemy; any act or omission of any governmental authority; good faith compliance with any order, request or directive of any governmental authority; or any other cause reasonably beyond the control of a party, whether similar or dissimilar to those above and whether foreseeable or unforeseeable, which, by the exercise of due diligence, such party could not have been able to avoid or overcome. A party’s inability economically to perform its obligations under the Contract shall not constitute an event of force majeure.

This clause shall not apply to any obligations to pay, indemnify or provide security or to any Concentrate for which vessel, truck or rail wagon space has been booked, pricing has been established, the quotational period has commenced or payment has been made unless the Buyer has expressly consented in writing.

15.

SUSPENSION OF QUOTATIONS

The metal prices and currency quotations specified under this contract are the quotations in general use for the pricing of the metal content of concentrate.

16.

DISPUTE RESOLUTION

Subject to the option set out in this clause below, all claims, disputes or differences whatsoever between the parties arising out of or in connection with this contract, including without limitation to any question regarding its existence, validity or termination, (a “ Dispute ”) shall be referred to arbitration in London, England, in accordance with the Arbitration Act 1996 (or any subsequent amendment or re-enactment thereof) (the “ Act ”).

The claiming party shall appoint one arbitrator and give written notice to the other party of the appointment (“ Arbitration Notice ”). The defending party shall appoint and give notice to the claiming party of the second arbitrator within 14 calendar days of the Arbitration Notice. The third arbitrator shall be appointed by the two arbitrators so appointed within 14 calendar days of the defending party’s notice. Failing appointment of an arbitrator by the defending party in accordance with this clause, the claiming party’s arbitrator may act as sole arbitrator, at the claiming party’s option. The arbitrator(s) shall have experience of commodities trading matters.

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Subject to any right of appeal under the Act, any arbitral award rendered by the tribunal shall be final and binding upon the parties and judgment may be entered thereon or any order of enforcement obtained in any courts having jurisdiction.

Notwithstanding the provisions of this clause, Buyer shall have the right to commence and pursue proceedings for interim or conservatory relief against the Seller in any court in any jurisdiction and the commencement and pursuit of such proceedings in any one court or jurisdiction shall not preclude Buyer commencing or pursuing proceedings in any other court or jurisdiction (whether concurrently or not) if and to the extent permitted by the applicable law.

Notwithstanding the foregoing arbitration provisions, Buyer shall have the option of referring any Dispute to the High Court of Justice in London, England, or any other court having jurisdiction over the Dispute (the “ Court ”). If Buyer is the defending party, such option must be declared within 14 calendar days of an Arbitration Notice and, upon such declaration, the parties shall procure that the arbitration be discontinued (without an award being given).

If Buyer exercises its option, the parties waive any objection now or later to any proceedings relating to the contract being brought in the Court and the parties hereby irrevocably submit to the exclusive jurisdiction of the Court.

Promptly upon Buyer exercising its option, Seller shall notify Buyer of an address for service of proceedings in the jurisdiction and the contact details of lawyers in the jurisdiction appointed to represent the other party.

A judgment relating to this contract which is given or would be enforced by a Court shall be conclusive and binding on the parties and may be enforced without review in any other jurisdiction.

17.

CHOICE OF LAW

The contract shall be governed by and construed in accordance with the laws of England, without regard to principles of choice of law.

The United Nations Convention on Contracts for the International Sale of Goods (1980) shall not apply to this contract.

18.

TAXES AND TARIFFS

19.

LICENCES

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20.

ASSIGNMENT

Without the prior written consent of the other party, which shall not be unreasonably withheld, neither party may assign or create a trust or otherwise transfer its rights or obligations under this contract in full or in part, except that the Buyer and its assigns may without such consent assign all or a portion of their rights to receive and obtain payment under this contract in connection with bank funding arrangements.

21.

THIRD PARTY RIGHTS

22.

DEFAULT

Strictly without prejudice to the rights and remedies of the parties in law, the parties shall have the following additional rights and remedies upon the occurrence of an event of default.

For the purposes of this clause, an event of default (“ Event of Default ”) shall mean any of the following:

(i)	The failure of the Seller to comply with any terms under this contract or any other contract with the Buyer or any of its Affiliates and such failure remains uncured for 3 (three) Business Days following written notice thereof;

(ii)	The inability or admitted inability or declared inability of a party to pay its debts as they fall due or declaration under any applicable law or if the value of a party’s assets is at any time less than the amount of its liabilities (taking into account contingent and prospective liabilities);

(iii)

The institution or commencement or the threat of commencement of any corporate action or legal proceedings in respect of a party in relation to the suspension of payments, any moratorium of any indebtedness, dissolution, administration, reorganization, composition, compromise, arrangement with creditors, winding up, liquidation, receivership, compulsory management or bankruptcy or any analogous procedure in any jurisdiction;

(iv)

The occurrence of a material adverse change in the financial standing or creditworthiness of the Seller, or of any party supporting or purporting to support, guarantee and/or fulfil any of the obligations of the Seller whether by means of a credit support instrument or otherwise (the “ Credit Support Provider ”) when compared to the Seller’s or a Credit Support Provider’s financial standing as at the date of this contract, which change, in the sole opinion of the Buyer, affects the Seller’s or the Credit Support Provider’s ability to perform its financial obligations in respect of this contract;

(v)	The failure by the Seller to provide a written assurance (to the satisfaction of the Buyer), within 3 (three) Business Days following a reasonable request by the Buyer, that it will comply with any or all of its obligations under this contract or any other contract.

For the purposes of this clause, the terms “Defaulting Party” and “Seller” shall include any of the Seller’s Affiliates.

Upon the occurrence of an Event of Default with respect to a party (the “ Defaulting Party ”) and irrespective of whether or not an Event of Default is continuing, the other party (the “ Non-Defaulting Party ”) may in its sole and absolute discretion and notwithstanding any implied terms arising by virtue of prior contrary course of dealing or rule of law or doctrine to the contrary.

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(i)

Notify the Defaulting Party of a delivery termination date (which shall be no earlier than the date of such Notice and no later than twenty (20) Days after the date of such Notice) on which the delivery in respect of which the Event of Default has occurred shall terminate (the “ Delivery Termination Date ”); and/or

(ii)

Notify the Defaulting Party of a contract termination date (which shall be no earlier than the date of such notice and no later than 20 days after the date of such notice) on which this contract and the transactions contemplated hereunder shall terminate (the “ Contract Termination Date ”); and/or

(iii)

Withhold any payments due to the Defaulting Party until such Event of Default is cured: and/or

(iv)	Suspend performance of its obligations under this contract until such Event of Default is cured.

If a notice of a Delivery Termination Date or a Contract Termination Date (a “ Termination Date ”) is given under this clause: (i) the Termination Date will occur on the designated date whether or not the relevant Event of Default is then continuing; and (ii) any accrued rights or obligations that have arisen prior to the Termination Date shall not be affected.

If an Event of Default occurs and/or a Termination Date is established, the Non-Defaulting Party may (in its absolute discretion) set off any or all amounts whether present or future, actual or contingent which the Defaulting Party owes to the Non-Defaulting Party (whether under this or any other contract and/or on any other account whatsoever) against any or all amounts which the Non-Defaulting Party owes to the Defaulting Party (whether under this or any other contract and/or on any other account whatsoever). Notwithstanding any rule or provision in this contract to the contrary, the Non-Defaulting Party shall not be required to pay to the Defaulting Party any net amount due to a delivery termination or a contract termination until the Non-Defaulting Party receives confirmation satisfactory to it in its reasonable discretion that (i) all amounts due and payable as of the Termination Date by the Defaulting Party under this contract and/or on any account whatsoever with the Non-Defaulting Party have been fully and finally paid, and (ii) all other obligations of any kind whatsoever of the Defaulting Party to make any payments (including but not limited to payments of damages) to the Non-Defaulting Party under this contract and/or on any account whatsoever which are due and payable as of or as a consequence of the Termination Date have been fully and finally performed.

23.

LIMITATION OF LIABILITY

Neither the Seller nor the Buyer shall be liable, whether in contract or in tort or otherwise, for indirect, consequential or special damages or losses of whatsoever nature, however caused.

Under no circumstances shall Buyer’s liability exceed the value of the Concentrate as at the date of shipment.

24.

INCOTERMS

Insofar as not inconsistent herewith INCOTERMS 2000 (and any later amendments thereto) shall apply to this contract.

25.

CHANGE OF CONTROL

In the event of any actual or prospective change in the organisation, control or management of the Buyer or the Seller, including without limitation, a change to the majority shareholding or privatisation or equivalent process, subject always to clause 23. DEFAULT, this contract will not be changed or in any way modified and shall continue in full force and effect.

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26.

NOTICES

All notices, requests and other communications hereunder shall be addressed:


If to Seller:		DON DAVID GOLD S.A. DE C.V. Macedonio Alcala No. 201-105 Col Centro, Oaxaca, Oaxaca Mexico Phone: +52 951 5216 82 58

If to Buyer:		TRAFIGURA BEHEER B.V., Amsterdam, Branch Office Lucerne Zürichstrasse 31, 6002 Lucerne, Switzerland Phone: +41 41 419 4343 Fax: +41 41 419 4344 Telex: 868001 TRAF CH

27.

WAIVERS

No amendment, modification or waiver of any provision of this contract or of any right, power or remedy shall be effective unless made expressly and in writing.

No waiver of any breach of any provision of this contract shall: (a) be considered to be a waiver of any subsequent or continuing breach of that provision; or (b) release, discharge or prejudice the right of the waiving party to require strict performance by the other party of any other provisions of this contract.

28.

SET OFF

Notwithstanding any other provision of this contract, if, at any time, Seller and/or any of its Affiliates fails to make any payment due to Buyer and/or any of its Affiliates, whether under this contract or any other contracts between the parties, Buyer shall be entitled to withhold, set off or deduct any sum either under this contract or any other contracts then in force; provided that such deduction shall not exceed the aggregate value of the goods and the sums due under the contracts. Such withholdings or deduction may be applied by Buyer automatically in diminution of its claims against Seller in respect of any such failure to pay or perform any part of a contract.

29.

SEVERABILITY

PURCHASE CONTRACT

203-10-27070-P

30.

CONFIDENTIALITY

31.

ENTIRE AGREEMENT

IN WITNESS WHEREOF the parties have executed this document as of the respective dates specified below with effect from the Effective Date specified on the first page of this document.


Accepted:				TOMAS FINSCHI AUTHORISED SIGNATURE
DON DAVID GOLD S.A. DE C.V. (signed by fully authorised signatory)				TRAFIGURA BEHEER B.V., Amsterdam, Branch Office Lucerne (signed by fully authorized signatory)

Place and Date: 21 Diciembre 2010				Place and Date: Lucerne, 3 December 2010

Exhibit 10.3

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company

DON DAVID GOLD S.A. DE C.V

Macedonio Alcala No. 201-105

Col. Centro, Oaxaca, Oaxaca

Lucerne, 28 March 2011

PURCHASE CONTRACT

103-11CMX-019-0-P

This contract is concluded on the 25 ^th day of March 2011 (the “ Effective Date ”) between DON DAVID GOLD S.A. DE C.V., Macedonio Alcala No. 201-105 Col. Centro, Oaxaca, Oaxaca, Mexico (the “ Seller ”) and CONSORCIO MINERO DE MEXICO CORMIN MEX, S.A. DE C.V., Reforma 115 piso 21, despacho 2102, Col. Lomas de Chapultepec, Mexico D.F., Mexico (the “ Buyer ”).

SCOPE OF THE CONTRACT

The Seller agrees to sell zinc concentrate and the Buyer agrees to buy zinc concentrate at the terms and conditions set out below:

DEFINITIONS


1 ounce means:		1 troy ounce of 31.1035 grams;

1 ton means:		1 metric ton of 1,000 Kilograms or 2204.62 lbs;

1 unit means:		1% of the dry net weight;

Affiliates means:		in relation to any company or corporation, a Subsidiary or Holding Company of that company or corporation or any other Subsidiary of that company or corporation or of that Holding Company;

Banking Day and Business Day mean:		any day except a Saturday or Sunday on which banks in the city of New York, New York, USA, are generally open for the conduct of business;

Holding Company means:		in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary;

IMO/BC Code means:		the International Maritime Organisation Code of Safe Practice for Solid Bulk Cargoes prevailing at the time of delivery;

INCOTERMS 2000 means:		the 2000 edition of the standard trade definitions published by the International Chamber of Commerce;

LBMA means:		London Bullion Market Association;

LME means:		London Metal Exchange;

Month of Scheduled Shipment (MOSS) means:		in respect of any shipment of the concentrate, the calendar month in which shipment has been scheduled as per the clause SHIPMENT or as otherwise agreed in writing between the parties;

Subsidiary means:		in relation to any company or corporation, a company or corporation which is controlled, directly or indirectly, by the first mentioned company or corporation; more than half the issued share capital of which is beneficially owned, directly or indirectly by the first mentioned company or corporation; or which is a Subsidiary of another Subsidiary of the first mentioned company or corporation; and for this purpose, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;

US$ means:		the lawful currency of the United States of America;

Valid TML means:		Transportable Moisture Limit valid for the current shipment;

Valid FMP means:		Flow Moisture Point valid for the current shipment.

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		103-11CMX-019-0-P

QUANTITY AND QUALITY

100% March to May 2011 production of Aguila zinc concentrate assaying as follows (the “ Concentrate ”):


Zn		60%
Ag		230 gr/dmt
Au		4 gr/dmt
Fe		> 6%
SiO2		> 3%
Cd		> 0.4%
As+Sb		> 0.5%

In the event the actual assays deviate from the contractual assays both parties agree to discuss in good faith to reach a solution in line with prevailing market terms.

DELIVERY

DAP (Delivery At Place) impala warehousing Manzanillo or Parity (Incoterms 2000)

DAP – Seller delivers the goods when they are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. Risks transfer at this point from seller to buyer.

All export charges and the cost of loading the concentrate into the carrying vessel shall be for Buyer’s account, Seller shall have the right to collect the 16% VAT.

PRICE

Payments

Zinc

Pay for 85% (eighty-five percent) of the final zinc content, subject to a minimum deduction of 8 (eight) units, at the official London Metal Exchange cash settlement quotation for Special High Grade Zinc, as published in the Metal Bulletin in US$ and averaged over the quotational period.

Silver

Deduct 3 (three) ounces per dry metric ton of the Concentrate and pay for 70% (seventy percent) of the balance of the final silver content at the LBMA spot quotation for silver, as published in the Metal Bulletin in US$ and averaged over the quotational period.

Gold

Deduct 2 (two) grams per dry metric ton of the Concentrate and pay for 70% (seventy percent) of the balance of the final Gold content at the LONDON FINAL quotation for gold, as published in the Metal Bulletin in US$ and averaged over the quotational period.

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		103-11CMX-019-0-P

Deduction

Treatment Charge

US$218 (US$ two hundred and eighteen) per dry metric ton of the Concentrate delivered basis DAP Manzanillo, Mexico or parity.

This treatment charge is based on an applicable zinc price of US$2,300 per dry metric ton and will be:

•

Increased US$0.12 for each US$1.00 (US$ one) the applicable zinc price exceeds US$2,300 per dry metric ton;

All fractions pro rata.

Penalties

None one, subject to maximum contents as follow:

Fe < 6%

SiO2 < 3%

Cd < 0.4%

As+Sb < 0.5%

QUOTATIONAL PERIOD

The quotational period for all payable metals shall be the month following the Month of arrival at the warehouse (M+I).

PAYMENT

All payments shall be made in US$ by telegraphic transfer.

Provisional Payment

90% (ninety percent) of the provisional invoice value of the Concentrate, based on the final wet weight, final moisture, provisional assays and the metal forward LME prices referred to the contractual QP at the date of invoice is issued, shall be paid 10 (ten) calendar days after the closing date of lot delivery to the Manzanillo warehouse against the presentation of the following documents:

1.	Holding certificate as per Appendix 1 hereto;

2.	Seller’s provisional invoice;

3.	Seller’s provisional weight and moisture certificate;

4.	Seller’s provisional assay certificate;

5.	Original Certificate of Origin issued and legalised by the local Chamber of Commerce of EUR. 1 certificate, if required.

Final Payment

Final payment shall be made by the party so owing latest 3 (three) Banking Days after the date final assays, weights and prices are known against presentation of the final invoice.

In case Seller is indebted to Buyer by reason of having received provisional payment in excess of the amount of the final invoice, this difference shall be re-paid by Seller to Buyer by telegraphic transfer within 3 (three) Banking Days of final weights, final assays and final prices being known.

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		103-11CMX-019-0-P

TITLE AND RISK

Title and Risk in the concentrate shall pass from seller to buyer when the concentrate has been delivered to the buyer’s nominated warehouse in Manzanillo, Mexico

WEIGHING, SAMPLING AND MOISTURE DETERMINATION

The operations of weighing, sampling and moisture determination shall be carried out at the Manzanillo warehouse in the usual technical manner. The moisture and the wet weight determined less a weight franchise of 0.5% (zero point five percent) shall be final and binding for settlement purposes.

Seller and Buyer shall appoint an internationally recognized supervision company on a joint basis to represent them during these operations. The costs of these operations shall be shared equally between the parties.

The size of the lots for sampling purposes shall be approximately 30 (thirty hundred) wet metric tons. Sample portions shall be made from each such sample lot and distributed as follows:

2 sets of sealed samples for the Seller;

2 sets of sealed samples for the Buyer;

1 set of sealed samples to be reserved by an internationally recognised supervision company for eventual umpire purposes.

The final contents for all elements shall be calculated on a lot-by-lot basis. The sum of the individual lot contents will constitute the total of the shipment.

ASSAYING

Assays shall be determined by an independent laboratory at loading port and shall be considered as finals for both parties

Seller and buyer will determine by mutual agreement one of the following laboratories for assays determination, and will be chosen on a rotational basisi

Laboratory Services International B.V.

Geijssendorfferweg 54

3088 GK Rotterdam

SGS Laboratory Services

Malledijk 18

3200 AE Spijkenisse

The Netherlands

Alfred H. Knight International Ltd.

Eccleston Grange

Prescot Road

St. Helens

Merseyside WA10 3BQ

England

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		103-11CMX-019-0-P

Silver and gold assays shall be determined unadjusted for cupel absorption and slag loss

FORCE MAJEURE

If either party is prevented, hindered or delayed from performing in whole or in part any obligation or condition of this contract by reason of force majeure (the “ Affected Party ”), the Affected Party shall give written notice to the other party promptly and in any event within 3 (three) Business Days after receiving notice of the occurrence of a force majeure event giving, to the extent reasonably practicable, the details and expectable duration of the force majeure event and the quantity of Concentrate affected (the “ Force Majeure Notice ”).

The Affected Party shall be use commercially reasonable efforts to avoid or remove the event of force majeure and shall promptly notify the other party when the event of force majeure is terminated.

“Force Majeure” means any cause or event reasonably beyond the control of a party, including, but not limited to fires, earthquakes, lightning, floods, explosions, storms, adverse weather, landslides and other acts of natural calamity or acts of god; navigational accidents or maritime peril; vessel damager or loss; strikes, grievances, actions by or among workers or lock-outs (whether or not such labour difficulty could be settled by acceding to any demands of any such labour group of individuals); accidents at, closing of, or restrictions upon the use of mooring facilities, docks, ports, harbours, railroads, or other navigational or transportation mechanisms; disruption or breakdown of, storage plants, terminals, machinery or other facilities; acts of war, hostilities (whether declared or undeclared), civil commotion, embargoes, blockades, terrorism, sabotage or acts of the public enemy; any act or omission of any governmental authority; good faith compliance with any order, request or directive of any governmental authority; or any other cause reasonably beyond the control of a party, whether similar or dissimilar to those above and whether foreseeable or unforeseeable, which, by the exercise of due diligence, such party could not have been able to avoid or overcome. A party’s inability economically to perform its obligations under the Contract shall not constitute an event of fore majeure.

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		103-11CMX-019-0-P

SUSPENSION OF QUOTATIONS

The metal prices and currency quotations specified under this contract are the quotations in general use for the pricing of the metal content of concentrate.

DISPUTE RESOLUTION

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of the New York Court of International Arbitration (“NYCIA”), which Rules are deemed to be incorporated by reference into this clause. The tribunal shall consist of three arbitrators, all of whom shall have experience in shipping and trading matters. One arbitrator shall be appointed by Buyer, one by Seller and a third by the President of the NYCIA. The third arbitrator shall always be a particing barrister or solicitor. In case either party fails to nominate its arbitrator then he will be appointed by the President of the LCIA. However, it is understood that both parties shall be entitled to take any reasonable measures for the protection of rights accrued to them by this contract without prejudice to the provisions of this clause. The arbitration shall be held in New York, US. The tribunal shall state in its award in detail the facts of the case and reasons for its decision. The award shall be final and binding and not subject to appeal.

CHOICE OF LAW

This contract shall be governed by and constructed in accordance with New York law.

The United Nations Convention on Contracts for the International Sale of Goods (1980) shall not apply to this contract.

TAXES AND TARIFFS

LICENSES

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		103-11CMX-019-0-P

ASSIGNMENT

THIRD PARTY RIGHTS

LIMITATION OF LIABILITY

Neither the Seller nor the Buyer shall be liable, whether in contract or in tort or otherwise, for indirect, consequential or special damages or losses of whatsoever nature, however caused.

Under no circumstances shall Buyer’s liability exceed the value of the Concentrate as at the date of shipment.

INCOTERMS

Insofar as not inconsistent herewith INCOTERMS 2000 (and any later amendments thereto) shall apply to this contract.

CHANGE OF CONTROL

In the event of any actual or prospective change in the organisation, control or management of a party, including without limitation, a change to the majority shareholding or privatisation or equivalent process, subject always to DEFAULT, this contract will not be changed or in any way modified and shall continue in full force and affect.

NOTICES

No notice or communication with respect to this contract shall be effective unless it is given in writing and delivered or sent by facsimile or electronic mail to the other party at the address set our herein, or to such other address as each party otherwise notifies the other party.

All notices, requests and other communications hereunder shall be addressed:


If to Seller:		DON DAVID GOLD S.A. DE C.V.
		Macedonio Alcala No. 201-105
		Col. Centro, Oaxaca, Oaxaca
		Mexico
		Phone: +52 951 5216 82 58

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		103-11CMX-019-0-P


If to Buyer:		CONSORCIO MINERO DE MEXICO, CORMIN MEX, S.A. DE C.V.
		Reforma 115 piso 21, despacho 2012
		Col. Lomas de Chapultepec, del. Miguel Hidalgo
		Mexico D.F., Mexico
		Phone: +52 55 4021 69

WAIVERS

No waiver by Buyer of any right, power or remedy or of any provision of this contract and no amendment of any provision of this contract shall be effective unless and to the extent that it is expressly made and reduced to writing.

SEVERABILITY

CONFIDENTIALITY

ENTIRE AGREEMENT

FUTURE PRODUCTION

Both parties agree to discuss in good faith a commercial take off agreement for the delivery of polymetallic concentrates (Cu/Au, Pb/Ag and Zn) to begin to be shipped in June 2011, once the production is stabilized and the seller declared the commercial production for each concentrate, copper, zinc and lead. The discussion should be done during june 2011 by both parties in order to establish a mutual agreement in good faith for the terms and conditions for the next period.

International Market Terms from the main mining and smelter companies in the world will be taken into consideration to determine the terms and conditions of the take off agreement. The previous one will be subject to a satisfactory agreement to both parties.

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		103-11CMX-019-0-P

IN WITNESS WHEREOF the parties have executed this document as of the respective dates specified below with effect from the Effective Date specified on the first page of this document.


Accepted:

DON DAVID GOLD. S.A. DE C.V.				CONSORCIO MINERO DE MEXICO
(signed by fully authorised signatory)				CORMIN MEX S.A. DE C.V.
				(signed by fully authorised signatory)

Place and Date: USA				Place and Date: Mexico

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

Exhibit 10.4

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company

DON DAVID GOLD MEXICO, SA. DE C.V.

Calle Las Rosas No. 339

Colonia Reforma, C.P. 68050

Oaxaca de Juárez, Oaxaca.

México

Mexico City, April 1st, 2012

AMENDMENT TO PURCHASE CONTRACT 103-11CMX-019-1-P

With respect to contract 103-11CMX-019-1-P (the “ Contract ”) between CONSORCIO MINERO DE MEXICO CORMIN MEX, S.A. DE C.V., Av. Reforma No. 115, Despacho 2102, Lomas de Chapultepec, Delegaciòn Miguel Hidalgo, Mexico D.F. 11000, Mexico (the “Buyer”) and DON DAVID GOLD, SA. DE C.V., Macedonio Alcalá No. 201-105, colonia centro, Oaxaca de Juárez, Oaxaca (the “Seller”), Buyer and Seller agree to amend the Contract as follows:

The Effective Date of this Amendment shall be the 01 ^st day of February 2012.

A GREED TERMS

As from the Effective Date:

I. - General Provisions

The rights and obligations of the Seller under the Contract dated July 1, 2011 are assigned and transferred to the company DON DAVID GOLD MEXICO, S.A. DE C.V., and this company accept all this rights and obligations;

Nothing in this Agreement shall affect or prejudice any claim or demand whatsoever which Cormin Mex may have against the Seller, relating to matters arising prior to the Effective Date.

DON DAVID GOLD MEXICO, S.A DE C.V., guarantees the performance of all of its obligations under the Contract mentioned above and indemnifies the Buyer in respect of any losses, liabilities, costs and expenses incurred or suffered as a result of any failure to perform any obligation under the Contract.

II. - A SSAYING

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company

later than 60 (sixty) calendar days after the date on which the assay samples are sealed and sent to the respective parties. In the event one party fails to present its assay certificate to the other party by the 60th (sixtieth) calendar day following the date on which the assay samples were sealed and sent to the respective parties, the assay results of the party which was ready to exchange its assay results shall be final and binding, save for fraud or manifest error.

Should the difference between the results of both parties be not more than:


Silver	30 gr	(thirty grams per dry metric ton)
Gold	0.5grms	(zero point five grams per dry metric ton)
Zinc	0.50 %	(zero point five percent)

Then the exact mean of the two results shall be taken as the agreed assay for the purpose of final accounting.

In the event that the difference between Seller’s and Buyer’s assay results exceeds the limits set out above then an umpire assay shall be made by an umpire laboratory to be agreed upon between Buyer and Seller, which shall be one of the following, acting in rotation:

Stewart Inspection and Analysis Limited

Caddick Road

Knowsley Business Park

Prescot

L34 9ER

England

Laboratory Services International B.V.

Pittsburghstraat 9

3047 BL Rotterdam

The Netherlands

Alfred H. Knight International Ltd.

Eccleston Grange

Prescot Road

St. Helens

Merseyside WA10 3BQ

England

SGS Nederland B.V.,

Mineral Services

Malledijk 18

3200 AE Spijkenisse

The Netherlands

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company

Should the umpire assay fall between the results of the two parties, the arithmetical mean of the umpire assay and the assay of the party whose results are nearer to the umpire’s shall be taken as the agreed assay. Should the umpire assay fall outside the exchanged results, the middle of the 3 (three) results shall be final. If the umpire results coincides with the result of either of the two parties or is the exact mean of the exchanged result, the umpire assay shall be final.

The cost of the umpire assay shall be borne by the party whose result is farthest from the umpire result. The cost of the umpire assay shall be borne equally by both parties when the umpire assay is the exact mean of the exchanged results.

III. – Jurisdiction

This Agreement shall be governed by and construed in accordance with the laws of Mexico. Any dispute arising out of or in connection with this Agreement (including any question regarding its existence, validity or termination) shall be referred to and finally resolved by Mexico’s trials.

IN WITNESS WHEREOF the Parties have executed this Agreement as of the respective dates set out below with effect from the Effective Date.


Accepted:


CONSORCIO MINERO DE MEXICO CORMIN MEX, S.A. DE C.V. (signed by fully authorised signatory)		DON DAVID GOLD, S.A. DE C.V., (Signed by fully authorised signatory)

Place and Date:		Place and Date: Colorado Springs, CO USA April 25, 2012 Name: William W. Reid



DON DAVID GOLD MEXICO, S.A. DE C.V., (Signed by fully authorised signatory)

Place and Date: Colo Springs, CO USA April 25, 2012

Name: William W. Reid

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

Exhibit 10.5

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company

DON DAVID GOLD S.A. DE C.V.

Macedonio Alcala No. 201-105

Col. Centro, Oaxaca, Oaxaca

Lucerne, 28 March 2011

PURCHASE CONTRACT

203-11CMX-020-0-P

SCOPE OF THE CONTRACT

The Seller agrees to sell lead concentrate and the Buyer agrees to buy lead concentrate at the terms and conditions set out below:

DEFINITIONS


1 ounce means:		1 troy ounce of 31.1035 grams;

1 ton means:		1 metric ton of 1,000 kilograms or 2204.62 lbs;

1 unit means:		1% of the dry net weight;

Affiliates means:		in relation to any company or corporation, a Subsidiary or Holding Company of that company or corporation or any other Subsidiary of that company or corporation or of that Holding Company;

Banking Day and Business Day mean:		any day except a Saturday or Sunday on which banks in the city of New York, New York, USA, are generally open for the conduct of business;

Holding Company means:		in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary;

IMO/BC Code means:		the International Maritime Organisation Code of Safe Practice for Solid Bulk Cargoes prevailing at the time of delivery;

INCOTERMS 2000 means:		the 2000 edition of the standard trade definitions published by the International Chamber of Commerce;

LBMA means:		London Bullion Market Association;

LME means:		London Metal Exchange;

Month of Scheduled Shipment (MOSS) means:		in respect of any shipment of the concentrate, the calendar month in which shipment has been scheduled as per the clause SHIPMENT or as otherwise agreed in writing between the parties;

Subsidiary means:		in relation to any company or corporation, a company or corporation which is controlled, directly or indirectly, by the first mentioned company or corporation; more than half the issued share capital of which is beneficially owned, directly or indirectly by the first mentioned company or corporation; or which is a Subsidiary of another Subsidiary of the first mentioned company or corporation; and for this purpose, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;

US$ means:		the lawful currency of the United States of America;

Valid TML means:		Transportable Moisture Limit valid for the current shipment;

Valid FMP means:		Flow Moisture Point valid for the current shipment.

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		203-11CMX-020-0-P

QUANTITY AND QUALITY

100% March to May 2011 production of Aguila lead concentrate assaying as follows (the “ Concentrate ”):


Pb		24%
Ag		10,000 gr/dmt
Au		45 gr/dmt
Se		> 400 ppm
Bi		> 0.1%
As + Sb		> 0.5%

In the event the actual assays deviate from the contractual assays both parties agree to discuss in good faith to reach a solution in line with prevailing market terms.

The Concentrate shall otherwise be free from deleterious impurities harmful to the smelting and/or refining processes and shall be able to withstand the voyage, upon all customary forms of transportation, to the destination intended by the Buyer. The Concentrate shall conform to all local regulations and the IMO / BC Code of Safe Practice for Solid Bulk Cargoes. Seller shall promptly present valid TML, FMP moisture certificates if so requested by Buyer.

DELIVERY

DAP (Delivery At Place) impala warehousing Manzanillo or Parity (Incoterms 2000)

All export charges and the cost of loading the concentrate into the carrying vessel shall be for Buyer’s account, Seller shall have the right to collect the 16% VAT.

PRICE

Payments

Lead

Pay for 95% (ninety-five percent) of the final lead content, subject to a minimum deduction of 3 (three) units, at the official London Metal Exchange cash settlement quotation for Lead, as published in the Metal Bulletin in US$ and averaged over the quotational period.

Silver

Pay for 95% (ninety-five percent), subject to a minimum deduction of 50 (fifty) grams balance of the final silver content at the LBMA spot quotation for silver, as published in the Metal Bulletin in US$ and averaged over the quotational period.

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		203-11CMX-020-0-P

Gold

Pay for 95% (ninety-five percent), subject to a minimum deduction of 1.5 (one point five) grams balance of the final balance of the final Gold content at the LONDON FINAL Quotation for gold, as published in the Metal Bulletin in US$ and averaged over the quotational period.

Deduction

Treatment Charge

US$ 375 (US$ three hundred and seventy five) per dry metric ton of the Concentrate delivered basis DAP Manzanillo, Mexico or parity.

This treatment charge is based on an applicable lead price of US$ 2,300 per dry metric ton and will be:

•

Increased by US$ 0.10 for each US$ 1.00 (US$ one) the applicable lead price exceeds US$ 2,300 per dry metric ton;

All fractions pro rata.

Refining Charges


Silver:		US$ 2 (US$ two) per payable troy ounce of silver.
		Basis in a price of US$ 20 per ounce, and increase US$ 0,085 per each US 1.00/MT the final Ag price is above US$ 20 (Twenty) per ounce


Cold:		US$ 10.00 (US$ ten) per payable troy ounce of gold.

Penalties

None one, subject to maximum contents as follow


Sc		< 400 ppm
Bi		< 0.1%
As+Sb		< 0.5%

QUOTATIONAL PERIOD

The quotational period for all payable metals shall be the month following the Month of arrival at the warehouse (M+I).

PAYMENT

All payments shall be made in US$ by telegraphic transfer.

Provisional Payment

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		203-11CMX-020-0-P

1.	Holding certificate as per Appendix 1 hereto;

2.	Seller’s provisional invoice;

3.	Seller’s provisional weight and moisture certificate;

4.	Seller’s provisional assay certificate;

5.	Original Certificate of Origin issued and legalised by the local Chamber of Commerce or EUR.1 certificate, if required.

Final Payment

Final payment shall be made by the party so owing latest 3 (three) Banking Days after the date final assays, weights and prices are known against presentation of the final invoice.

TITLE AND RISK

Title and Risk in the concentrate shall pass from seller to buyer when the concentrate has been delivered to the buyer’s nominated warehouse in Manzanillo, Mexico

WEIGHING, SAMPLING AND MOISTURE DETERMINATION

The size of the lots for sampling purposes shall be approximately 30 (thirty hundred) wet metric tons. Sample portions shall be made from each such sample lot and distributed as follows:

-	2 sets of sealed samples for the Seller;

-	2 sets of sealed samples for the Buyer;

-	1 set of sealed samples to be reserved by an internationally recognised supervision company for eventual umpire purposes.

The final contents for all elements shall be calculated on a lot-by-lot basis. The sum of the individual lot contents will constitute the total of the shipment.

ASSAYING

Assays shall be determined by an independent laboratory at loading port and shall be considered as finals for both parties

Seller and buyer will determine by mutual agreement one of the following laboratories for assays determination, and will be chosen on a rotational basis

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		203-11CMX-020-0-P

Laboratory Services International B.V.

Geijssendorfferweg 54

3088 GK Rotterdam

SGS Laboratory Services

Malledijk 18

3200 AE Spijkenisse

The Netherlands

Alfred H. Knight International Ltd.

Eccleston Grange

Prescot Road

St. Helens

Merseyside WA10 3BQ

England

Silver and gold assays shall be determined unadjusted for cupel absorption and slag loss

FORCE MAJEURE

The Affected Party shall use commercially reasonable efforts to avoid or remove the event of force majeure and shall promptly notify the other party when the event of force majeure is terminated.

lf a Force Majeure Suspension occurs, the time for performance of the affected obligations and, if applicable, the term of this contract shall be extended for a period equal to the period of suspension.

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		203-11CMX-020-0-P

SUSPENSION OF QUOTATIONS

The metal prices and currency quotations specified under this contract are the quotations in general use for the pricing of the metal content of concentrate.

DISPUTE RESOLUTION

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of the New York Court of International Arbitration (“NYCIA”), which Rules are deemed to be incorporated by reference into this clause. The tribunal shall consist of three arbitrators, all of whom shall have experience in shipping and trading matters. One arbitrator shall be appointed by Buyer, one by Seller and a third by the President of the NYCIA. The third arbitrator shall always be a practicing barrister or solicitor. In case either party fails to nominate its arbitrator then he will be appointed by the President of the LCIA. However, it is understood that both parties shall be entitled to take any reasonable measures for the protection of rights accrued to them by this contract without prejudice to the provisions of this clause. The arbitration shall be held in New York, US. The tribunal shall state in its award in detail the facts of the case and reasons for its decision. The award shall be final and binding and not subject to appeal.

CHOICE OF LAW

This contract shall be governed by and construed in accordance with New York law.

The United Nations Convention on Contracts for the International Sale of Goods (1980) shall not apply to this contract.

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		203-11CMX-020-0-P

TAXES AND TARIFFS

LICENSES

ASSIGNMENT

THIRD PARTY RIGHTS

LIMITATION OF LIABILITY

Neither the Seller nor the Buyer shall be liable, whether in contract or in tort or otherwise, for indirect, consequential or special damages or losses of whatsoever nature, however caused.

Under no circumstances shall Buyer’s liability exceed the value of the Concentrate as at the date of shipment.

INCOTERMS

Insofar as not inconsistent herewith INCOTERMS 2000 (and any later amendments thereto) shall apply to this contract.

CHANGE OF CONTROL

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		203-11CMX-020-0-P

NOTICES

All notices, requests and other communications hereunder shall be addressed:


If to Seller:		DON DAVID GOLD S.A. DE C.V. Macedonio Alcala No. 201-105 Col. Centro, Oaxaca, Oaxaca Mexico Phone: + 52 951 5216 82 58

If to Buyer:		CONSORCIO MINERO DE MEXICO, CORMIN MEX, S.A. DE C.V. Reforma 115 piso 21, despacho 2102 Col. Lomas de Chapultepec, del. Miguel Hidalgo Mexico D.F., Mexico Phone: +52 55 4021 69

WAIVERS

SEVERABILITY

CONFIDENTIALITY

ENTIRE AGREEMENT

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		203-11CMX-020-0-P

FUTURE PRODUCTION

Both parties agree to discuss in good faith a commercial take off agreement for the delivery of polymetallic concentrates (Cu/Au, Pb/Ag and Zn) to begin to be shipped in June 2011, once the production is stabilized and the seller declared the commercial production for each concentrate, copper, zinc and lead, The discussion should be done during June 2011 by both parties in order to establish a mutual agreement in good faith for the terms and conditions for the next period.

IN WITNESS WHEREOF the parties have executed this document as of the respective dates specified below with effect from the Effective Date specified on the first page of this document.


Accepted:

DON DAVID GOLD. S.A. DE C.V.. (signed by fully authorised signatory)				CONSORCIO MINERO DE MEXICO CORMIN MEX S.A. DE C.V. (signed by fully authorised signatory)

Place and Date: USA				Place and Date: Mexico,

Exhibit 10.6

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company

DON DAVID GOLD MEXICO, SA. DE C.V.

Calle Las Rosas No. 339

Colonia Reforma, C.P. 68050

Oaxaca de Juárez, Oaxaca.

México

Mexico City, April 1st, 2012

AMENDMENT TO PURCHASE CONTRACT 203-11CMX-020-1-P

With respect to contract 203-11CMX-020-1-P (the “ Contract ”) between CONSORCIO MINERO DE MEXICO CORMIN MEX, S.A. DE C.V., Av. Reforma No. 115, Despacho 2102, Lomas de Chapultepec, Delegaciòn Miguel Hidalgo, Mexico D.F. 11000, Mexico (the “Buyer”) and DON DAVID GOLD, SA. DE C.V., Macedonio Alcalá No. 201-105, colonia centro, Oaxaca de Juárez, Oaxaca (the “Seller”), Buyer and Seller agree to amend the Contract as follows:

The Effective Date of this Amendment shall be the 01 ^st day of February 2012.

A GREED TERMS

As from the Effective Date:

I. - General Provisions

Nothing in this Agreement shall affect or prejudice any claim or demand whatsoever which Cormin Mex may have against the Seller, relating to matters arising prior to the Effective Date.

II. - A SSAYING

Assays shall be made independently by each party and the results of such assays shall be exchanged on a lot-by-lot basis for payable elements and on a composite basis for penalty

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec Mexico, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company

elements by registered airmail or special courier on a mutually agreed date, but in any event not later than 60 (sixty) calendar days after the date on which the assay samples are sealed and sent to the respective parties. In the event one party fails to present its assay certificate to the other party by the 60th (sixtieth) calendar day following the date on which the assay samples were sealed and sent to the respective parties, the assay results of the party which was ready to exchange its assay results shall be final and binding, save for fraud or manifest error.

Should the difference between the results of both parties be not more than:


Lead	0.5%	(zero point five percent)
Silver	50 gr	(fifty grams per dry metric ton)
Gold	1.00grms	(one gram per dry metric ton)
Arsenic	0.10%	(zero point one percent)
Antimony	0.10%	(zero point one percent)

Then the exact mean of the two results shall be taken as the agreed assay for the purpose of final accounting.

Stewart Inspection and Analysis Limited

Caddick Road

Knowsley Business Park

Prescot

L34 9ER

England

Laboratory Services International B.V.

Pittsburghstraat 9

3047 BL Rotterdam

The Netherlands

Alfred H. Knight International Ltd.

Eccleston Grange

Prescot Road

St. Helens

Merseyside WA10 3BQ

England

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company

III. - Jurisdiction

IN WITNESS WHEREOF the Parties have executed this Agreement as of the respective dates set out below with effect from the Effective Date.

Accepted:



CONSORCIO MINERO DE MEXICO				DON DAVID GOLD, S.A. DE C.V. ,
CORMIN MEX, S.A. DE C.V.				(Signed by fully authorised signatory)
(signed by fully authorised signatory)

Place and Date:				Place and Date: Colorado Springs, CO USA, April 25, 2012
				Name: William W. Reid
DON DAVID GOLD MEXICO, S.A. DE C.V. ,
(Signed by fully authorised signatory)
Place and Date: Colo Springs, CO USA April 25, 2012 Name: William W. Reid

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

Exhibit 10.7

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company

DON DAVID GOLD S.A. DE C.V.

Macedonio Alcala No. 201-105

Col. Centro, Oaxaca, Oaxaca

Lucerne, 26 May 2011

PURCHASE CONTRACT

303-11CMX-028-0-P

This contract is concluded on the 27 ^th day of May 2011 (the “ Effective Date ”) between DON DAVID GOLD S.A. DE C.V., Macedonio Alcala No. 201-105 Col. Centro, Oaxaca, Oaxaca, Mexico (the “ Seller ”) and CONSORCIO MINERO DE MEXICO CORMIN MEX, S.A. DE C.V., Reforma 115 piso 21, despacho 2102, Col. Lomas de Chapultepec, Mexico D.F., Mexico (the “ Buyer ”).

SCOPE OF THE CONTRACT

The Seller agrees to sell copper concentrate and the Buyer agrees to buy copper concentrate at the terms and conditions set out below:

DEFINITIONS

1 ounce means:

1 troy ounce of 31.1035 grams;

1 ton means:

1 metric ton of 1,000 kilograms or 2204.62 lbs;

1 unit means:

1% of the dry net weight;

Affiliates means:

in relation to any company or corporation, a Subsidiary or Holding Company of that company or corporation or any other Subsidiary of that company or corporation or of that Holding Company;

Banking Day and Business

Day mean:

any day except a Saturday or Sunday on which banks in the city of New York, New York, USA, are generally open for the conduct of business;

Holding Company means:

in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary;

IMO/BC Code means:

the International Maritime Organisation Code of Safe Practice for Solid Bulk Cargoes prevailing at the time of delivery;

INCOTERMS 2000 means:

the 2000 edition of the standard trade definitions published by the International Chamber of Commerce;

LBMA means:

London Bullion Market Association;

LME means:

London Metal Exchange;

Month of Scheduled

Shipment (MOSS) means:

in respect of any shipment of the concentrate, the calendar month in which shipment has been scheduled as per the clause SHIPMENT or as otherwise agreed in writing between the parties;

Subsidiary means:

in relation to any company or corporation, a company or corporation which is controlled, directly or indirectly, by the first mentioned company or corporation; more than half the issued share capital of which is beneficially owned, directly or indirectly by the first mentioned company or corporation; or which is a Subsidiary of another Subsidiary of the first mentioned company or corporation; and for this purpose, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;

US$ means:

the lawful currency of the United States of America;

Valid TML means:

Transportable Moisture Limit valid for the current shipment;

Valid FMP means:

Flow Moisture Point valid for the current shipment.

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec Mexico, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		303-11CMX-028-0-P

QUANTITY AND QUALITY

100% May and June 2011 delivery of Aguila copper concentrate assaying as follows (the “ Concentrate ”):

Cu 27%

Ag 17 kg

Au 70 grm

Pb 12%

Zn 3%

Se > 400 ppm

Bi > 0.05%

As + Sb > 0.3 %

In the event the actual assays deviate from the contractual assays both parties agree to discuss in good faith to reach a solution in line with prevailing market terms.

DELIVERY

DAP (Delivery At Place) impala warehousing Manzanillo or Parity (Incoterms 2000)

Seller shall have the right to collect the 16% VAT.

PRICE

Payments

Copper

Pay for 100% (one hundred percent) of the final copper content, after deduction of 2 (two) units, at the official London Metal Exchange cash settlement quotation for Copper, as published in the Metal Bulletin in US$ and averaged over the quotational period.

Silver

Pay for 95% (ninety-five percent), balance of the final silver content at the LBMA spot quotation for silver, as published in the Metal Bulletin in US$ and averaged over the quotational period.

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		303-11CMX-028-0-P

Gold

Deduction

Treatment Charge

US$ 375 (US$ three hundred and seventy five) per dry metric ton of the Concentrate delivered basis DAP Manzanillo, Mexico or parity.

Refining Charges


Copper:		US$ 37.5 Cents (US$ thirty seven point five) per payable pound of copper.

Silver:		US$ 2 (US$ two) per payable troy ounce of silver.
Basis in a price of US $ 20 per ounce, and increase US$0.085 per each US 1.00/MT the final Ag price is above US $20 (Twenty) per ounce

Gold:		US$ 10.00 (US$ ten) per payable troy ounce of gold.

Penalties

Lead + Zinc

US$ 2.00 (US$ two) per dry metric ton of the Concentrate for each 0.10 % (zero point one percent) the final combined lead plus zinc content exceeds 4 % (four percent).

Arsenic + Antimony

US$ 3.00 (US$ three) per dry metric ton of the Concentrate for each 0.10 % (zero point one percent) the final combined arsenic plus antimony content exceeds 0.7 % (zero point seven percent).

All fractions pro rata.

None one, subject to maximum contents as follow

Bi < 0.05%

Se > 400 ppm

F > 500 ppm

QUOTATIONAL PERIOD

The quotational period for all payable metals shall be the month following the Month of arrival at the warehouse (M+1).

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		303-11CMX-028-0-P

PAYMENT

All payments shall be made in US$ by telegraphic transfer.

Provisional Payment

90% (ninety percent) of the provisional invoice value of the Concentrate, based on the final wet weight, final moisture, provisional assays and the metal forward LME prices referred to the contractual QP at the date of invoice is issued, shall be paid 10 (ten) calendar days after the truck delivery to the Manzanillo warehouse against the presentation of the following documents:

1.	Holding certificate as per Appendix 1 hereto;

2.	Seller’s provisional invoice;

3.	Seller’s provisional weight and moisture certificate;

4.	Seller’s provisional assay certificate;

Final Payment

Final payment shall be made by the party so owing latest 3 (three) Banking Days after the date final assays, weights and prices are known against presentation of the final invoice.

TITLE AND RISK

Title and Risk in the concentrate shall pass from seller to buyer when the concentrate has been delivered to the buyer’s nominated warehouse in Manzanillo, Mexico

WEIGHING, SAMPLING AND MOISTURE DETERMINATION

The size of the lots for sampling purposes shall be approximately 30 (thirty hundred) wet metric tons. Sample portions shall be made from each such sample lot and distributed as follows:

-	2 sets of sealed samples for the Seller;

-	2 sets of sealed samples for the Buyer;

-	1 set of sealed samples to be reserved by an internationally recognised supervision company for eventual umpire purposes.

The final contents for all elements shall be calculated on a lot-by-lot basis. The sum of the individual lot contents will constitute the total of the shipment.

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		303-11CMX-028-0-P

ASSAYING

Assays shall be determined by an independent laboratory at loading port and shall be considered as finals for both parties

Seller and buyer will determine by mutual agreement one of the following laboratories for assays determination, and will be chosen on a rotational basis

Laboratory Services International B.V.

Geijssendorfferweg 54

3088 GK Rotterdam

SGS Laboratory Services

Malledijk 18

3200 AE Spijkenisse

The Netherlands

Alfred H. Knight International Ltd.

Eccleston Grange

Prescot Road

St. Helens

Merseyside WA10 3BQ

England

Silver and gold assays shall be determined unadjusted for cupel absorption and slag loss

FORCE MAJEURE

The Affected Party shall use commercially reasonable efforts to avoid or remove the event of force majeure and shall promptly notify the other party when the event of force majeure is terminated.

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		303-11CMX-028-0-P

contract, terminate the affected deliveries. Upon termination in accordance with this clause, neither party shall have any further liability to the other in respect of this contract or, as the case may be, the terminated deliveries except for any rights and remedies previously accrued under the Contract, including any payment obligations.

SUSPENSION OF QUOTATIONS

The metal prices and currency quotations specified under this contract are the quotations in general use for the pricing of the metal content of concentrate.

DISPUTE RESOLUTION

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of the New York Court of International Arbitration (“NYCIA”), which Rules are deemed to be incorporated by reference into this clause. The tribunal shall consist of three arbitrators, all of whom shall have experience in shipping and trading matters. One arbitrator shall be appointed by Buyer, one by Seller and a third by the President of the NYCIA. The third arbitrator shall always be a practicing barrister or solicitor. In case either party fails to nominate its arbitrator then he will be appointed by the President of the LCIA. However, it is understood that both parties shall be entitled to take any reasonable measures for the protection of rights accrued to them by this contract without prejudice to the provisions of this clause. The arbitration shall be held in New York, US. The tribunal shall state in its award in detail the facts of the case and reasons for its decision. The award shall be final and binding and not subject to appeal.

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		303-11CMX-028-0-P

CHOICE OF LAW

This contract shall be governed by and construed in accordance with New York law.

The United Nations Convention on Contracts for the International Sale of Goods (1980) shall not apply to this contract.

TAXES AND TARIFFS

LICENSES

ASSIGNMENT

THIRD PARTY RIGHTS

LIMITATION OF LIABILITY

Neither the Seller nor the Buyer shall be liable, whether in contract or in tort or otherwise, for indirect, consequential or special damages or losses of whatsoever nature, however caused.

Under no circumstances shall Buyer’s liability exceed the value of the Concentrate as at the date of shipment.

INCOTERMS

Insofar as not inconsistent herewith INCOTERMS 2000 (and any later amendments thereto) shall apply to this contract.

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		303-11CMX-028-0-P

CHANGE OF CONTROL

NOTICES

All notices, requests and other communications hereunder shall be addressed:


If to Seller:		DON DAVID GOLD S.A. DE C.V.
		Macedonio Alcala No. 201-105
		Col. Centro, Oaxaca, Oaxaca Mexico
		Phone: +52 951 5216 82 58

If to Buyer:		CONSORCIO MINERO DE MEXICO, CORMIN MEX, S.A. DE C.V.
		Reforma 115 piso 21, despacho 2102
		Col. Lomas de Chapultepec, del. Miguel Hidalgo
		Mexico D.F., Mexico
		Phone: +52 55 402169

WAIVERS

SEVERABILITY

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company


PURCHASE CONTRACT		303-11CMX-028-0-P

CONFIDENTIALITY

ENTIRE AGREEMENT

FUTURE PRODUCTION

IN WITNESS WHEREOF the parties have executed this document as of the respective dates specified below with effect from the Effective Date specified on the first page of this document.

Accepted:



DON DAVID GOLD, S.A. DE C.V.				CONSORCIO MINERO DE MEXICO
(signed by fully authorised signatory)				CORMIN MEX S.A. DE C.V.
				(signed by fully authorised signatory)

Place and Date: Denver, CO, USA				Place and Date: Mexico,

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

Exhibit 10.8

LOGO

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company

DON DAVID GOLD MEXICO, SA. DE C.V.

Calle Las Rosas No. 339

Colonia Reforma, C.P. 68050

Oaxaca de Juárez, Oaxaca.

México

Mexico City, April 1st, 2012

AMENDMENT TO PURCHASE CONTRACT 303-11CMX-028-1-P

With respect to contract 303-11CMX-028-1-P (the “ Contract ”) between CONSORCIO MINERO DE MEXICO CORMIN MEX, S.A. DE C.V., Av. Reforma No. 115, Despacho 2102, Lomas de Chapultepec, Delegaciòn Miguel Hidalgo, Mexico D.F. 11000, Mexico (the “Buyer”) and DON DAVID GOLD, SA. DE C.V., Macedonio Alcalá No. 201-105, colonia centro, Oaxaca de Juárez, Oaxaca (the “Seller”), Buyer and Seller agree to amend the Contract as follows:

The Effective Date of this Amendment shall be the 01 ^st day of February 2012.

A GREED TERMS

As from the Effective Date:

I. - General Provisions

Nothing in this Agreement shall affect or prejudice any claim or demand whatsoever which Cormin Mex may have against the Seller, relating to matters arising prior to the Effective Date.

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

LOGO

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company

II. - A SSAYING

Assays shall be made independently by each party and the results of such assays shall be exchanged on a lot-by-lot basis for payable elements and on a composite basis for penalty elements by registered airmail or special courier on a mutually agreed date, but in any event not later than 60 (sixty) calendar days after the date on which the assay samples are sealed and sent to the respective parties. In the event one party fails to present its assay certificate to the other party by the 60th (sixtieth) calendar day following the date on which the assay samples were sealed and sent to the respective parties, the assay results of the party which was ready to exchange its assay results shall be final and binding, save for fraud or manifest error.

Should the difference between the results of both parties be not more than:


Silver	200 gr		(two hundred grams per dry metric ton)
Gold	2.00grms		(two grams per dry metric ton)
Copper	0.50	%	(zero point five percent)
Arsenic	0.10	%	(zero point one percent)
Antimony	0.20	%	(zero point two percent)
Lead	0.30	%	(zero point three percent)
Zinc	0.30	%	(zero point three percent)

Then the exact mean of the two results shall be taken as the agreed assay for the purpose of final accounting.

Stewart Inspection and Analysis Limited

Caddick Road

Knowsley Business Park

Prescot

L34 9ER

England

Laboratory Services International B.V.

Pittsburghstraat 9

3047 BL Rotterdam

The Netherlands

Alfred H. Knight International Ltd.

Eccleston Grange

Prescot Road

St. Helens

Merseyside WA10 3BQ

England

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

LOGO

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. DE C.V.

a Trafigura Group Company

SGS Nederland B.V.,

Mineral Services

Malledijk 18

3200 AE Spijkenisse

The Netherlands

III. - Jurisdiction

IN WITNESS WHEREOF the Parties have executed this Agreement as of the respective dates set out below with effect from the Effective Date.


Accepted:


CONSORCIO MINERO DE MEXICO CORMIN MEX, S.A. DE C.V. (signed by fully authorised signatory)		DON DAVID GOLD, S.A. DE C.V., (Signed by fully authorised signatory)

Place and Date:		Place and Date:	Colo Springs, CO USA April 25, 2012
		Name: William W. Reid


DON DAVID GOLD MEXICO, S.A. DE C.V.,
(Signed by fully authorised signatory)
Place and Date:	Colo Springs, CO USA April 25, 2012
Name: William W. Reid

Av. Paseo de la Reforma No. 115, Piso 21 Oficina 2102 Col. Lomas de Chapultepec México, D.F. C.P. 11000 Tel.: 5540 2169 Fax: 5540 2203

Exhibit 10.9

LOGO

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. de C.V.

A TRAFIGURA GROUP COMPANY

DON DAVID GOLD, S.A. DE C.V.

Mexico City, 1 October 2010 / ERF

Amendment 1 to Purchase Contract

203-09-CMX-25739-P

With respect to contract 203-09-CMX-25739-P dated concluded on the 5 ^th day of October 2009 (the “ Effective Date ”) between DON DAVID GOLD, S.A. DE C.V., Macedonio Alcala No. 201-105, Col Centro, Oaxaca, Oaxaca, Mexico, (the “ Seller ”) and CONSORCIO MINERO DE MÉXICO CORMIN S.A. DE C.V., Av. Reforma, No. 115, Despacho 2102, Lomas de Chapultepec, Delegación Miguel Hidalgo, México D.F. 11000, México (the “ Buyer ”), the parties hereby agree to amend the Contract to include the following:

The Effective Date of this Amendment shall be the 1 ^st of October 2010.

QUANTITY

100% of the concentrate production estimated to be approximately +/- 300 wmt per month, to be delivered from October 2010 to April 1 ^st , 2011, both months included.

FUTURE PRODUCTION

Both parties agree to discuss in good faith a possible commercial take off agreement for the delivery of polymetallic concentrates (Cu/Au, Pb/Ag and Zn) to begin to be shipped in May 2011. The discussion should be done in the last quarter of 2010 by both parties in order to establish a mutual agreement in good faith for the terms and conditions for the next period.

GENERAL PROVISIONS

This contract amendment may be executed in one or more counterparts and may be delivered by facsimile or other electronic means.

Reforma 115, Oficina 2102, Col. Lomas de Chapultepec, C.P. 11000, México,D.F.

Tel.: 5540-2169 Fax: 5540-2203.


AMENDMENT 1 TO PURCHASE CONTRACT		203-09-CMX-25739-P

All terms and conditions of the Contract shall remain in full force and effect, save as expressly varied herein.

This Amendment shall be governed by the New York Law.

IN WITNESS WHEREOF the parties have executed this Amendment as of the respective dates set out below with effect from the Effective Date specified on the first page of this Amendment.


Accepted:


DON DAVID GOLD, S.A. DE C.V. (signed by fully authorised signatory)						CONSORCIO MINERO DE MÉXICO CORMIN MEX S.A. DE C.V. (signed by fully authorised signatory)

Place and Date:						Place and Date:

Exhibit 10.10

DON DAVID GOLD S.A. DE C.V.

Macedonio Alcala No. 201-105

Col. Centro, Oaxaca, Oaxaca

México, 1 july 2011


AMENDMENT to PURCHASE CONTRACT		103-11CMX-019-1-P

This contract is concluded on the 1 ^st day of July 2011 (the “ Effective Date ”) between DON DAVID GOLD S.A. DE C.V., Macedonio Alcala No. 201-105 Col. Centro, Oaxaca, Oaxaca, Mexico (the “ Seller ”) and CONSORCIO MINERO DE MEXICO CORMIN MEX, S.A. DE C.V., Reforma 115 piso 21, despacho 2102, Col. Lomas de Chapultepec, Mexico D.F., Mexico (the “ Buyer ”).

The Effective Date of this Amendment shall be the 1 ^st day of July 2011

SCOPE OF THE CONTRACT

The Seller agrees to sell zinc concentrate and the Buyer agrees to buy zinc concentrate at the terms and conditions set out below:


DEFINITIONS

1 ounce means:		1 troy ounce of 31.1035 grams;
1 ton means:		1 metric ton of 1,000 kilograms or 2204.62 lbs;
1 unit means:		1% of the dry net weight;
Affiliates means:		in relation to any company or corporation, a Subsidiary or Holding Company of that company or corporation or any other Subsidiary of that company or corporation or of that Holding Company;
Banking Day and Business Day mean:		any day except a Saturday or Sunday on which banks in the city of New York, New York, USA, are generally open for the conduct of business;
Holding Company means:		in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary;
IMO/BC Code means:		the International Maritime Organisation Code of Safe Practice for Solid Bulk Cargoes prevailing at the time of delivery;
INCOTERMS 2000 means:		the 2000 edition of the standard trade definitions published by the International Chamber of Commerce;
LBMA means:		London Bullion Market Association;
LME means:		London Metal Exchange;
Month of Scheduled Shipment (MOSS) means:		in respect of any shipment of the concentrate, the calendar month in which shipment has been scheduled as per the clause SHIPMENT or as otherwise agreed in writing between the parties;
Subsidiary means:		in relation to any company or corporation, a company or corporation which is controlled, directly or indirectly, by the first mentioned company or corporation; more than half the issued share capital of which is beneficially owned, directly or indirectly by the first mentioned company or corporation; or which is a Subsidiary of another Subsidiary of the first mentioned company or corporation; and for this purpose, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;
US$ means:		the lawful currency of the United States of America;
Valid TML means:		Transportable Moisture Limit valid for the current shipment;
Valid FMP means:		Flow Moisture Point valid for the current shipment.


PURCHASE CONTRACT		103-11CMX-019-0-P

QUANTITY AND QUALITY

100% of El Aguila zinc concentrates production estimated between 500 and 800 wmt per month, between July 2011 to December 2012

Zn 50-55 %

Ag 350-500 gms

Au 4-8 gms

Pb l – 2%

Sb 0.07%

Cd 0.41%

Bi 0.004%

As 0.1-0.2%

S 30%

Fe 3-5%

F 170-200 ppm

SiO2 3-4%

Hg 8-20 ppm

Ni 20-30 ppm

Se 130-150 ppm

Te 20-30 ppm

Co 15-25 ppm

In the event the actual assays deviate from the contractual assays both parties agree to discuss in good faith to reach a solution in line with prevailing market terms.

DELIVERY

DAP (Delivery At Place) impala warehousing Manzanillo or Parity (Incoterms 2000)

All export charges and the cost of loading the concentrate into the carrying vessel shall be for Buyer’s account, Seller shall have the right to collect the 16% VAT.

PRICE

Payments

Zinc

Silver


PURCHASE CONTRACT		103-11CMX-019-0-P

Gold

Deduction

Treatment Charge

US$ 212 (US$ two hundred and twelve) per dry metric ton of the Concentrate delivered basis DAP Manzanillo, Mexico or parity.

This treatment charge is based on an applicable zinc price of US$ 2,300 per dry metric ton and will be:

•

Increased by US$ 0.12 for each US$ 1.00 (US$ one) the applicable zinc price exceeds US$ 2,300 per dry metric ton;

All fractions pro rata.

Penalties

None one, subject to maximum contents as follow:


Fe		< 6%
SiO2		< 3%
Cd		< 0.4%
As+Sb		<0.5%

QUOTATIONAL PERIOD

The quotational period for all payable metals shall be the month following the Month of arrival at the warehouse (M+1).

PAYMENT

All payments shall be made in US$ by telegraphic transfer.

Provisional Payment

90% (ninety percent) of the provisional invoice value of the Concentrate, based on the final wet weight, final moisture, provisional assays and the metal forward LME prices referred to the contractual QP at the date of invoice is issued, shall be paid 10 (ten) calendar days after the truck to delivery to the Manzanillo warehouse against the presentation of the following documents:

1.	Holding certificate as per Appendix 1 hereto;

2.	Seller’s provisional invoice;

3.	Seller’s provisional weight and moisture certificate;

4.	Seller’s provisional assay certificate;

5.	Original Certificate of Origin issued and legalised by the local Chamber of Commerce or EUR.1 certificate, if required.


PURCHASE CONTRACT		103-11CMX-019-0-P

Final Payment

Final payment shall be made by the party so owing latest 3 (three) Banking Days after the date final assays, weights and prices are known against presentation of the final invoice.

TITLE AND RISK

Title and Risk in the concentrate shall pass from seller to buyer when the concentrate has been delivered to the buyer’s nominated warehouse in Manzanillo, Mexico

WEIGHING, SAMPLING AND MOISTURE DETERMINATION

The size of the lots for sampling purposes shall be approximately 30 (thirty hundred) wet metric tons. Sample portions shall be made from each such sample lot and distributed as follows:

•

2 sets of sealed samples for the Seller;

•

2 sets of sealed samples for the Buyer;

•

1 set of sealed samples to be reserved by an internationally recognised supervision company for eventual umpire purposes.

The final contents for all elements shall be calculated on a lot-by-lot basis. The sum of the individual lot contents will constitute the total of the shipment.

ASSAYING

Assays shall be determined by an independent laboratory at loading port and shall be considered as finals for both parties

Seller and buyer will determine by mutual agreement one of the following laboratories for assays determination, and will be chosen on a rotational basisi

Laboratory Services International B.V.

Geijssendorfferweg 54

3088 GK Rotterdam

SGS Laboratory Services

Malledijk 18

3200 AE Spijkenisse

The Netherlands


PURCHASE CONTRACT		103-11CMX-019-0-P

Alfred H. Knight International Ltd.

Eccleston Grange

Prescot Road

St. Helens

Merseyside WA10 3BQ

England

Silver and gold assays shall be determined unadjusted for cupel absorption and slag loss

FORCE MAJEURE

The Affected Party shall use commercially reasonable efforts to avoid or remove the event of force majeure and shall promptly notify the other party when the event of force majeure is terminated.


PURCHASE CONTRACT		103-11CMX-019-0-P

SUSPENSION OF QUOTATIONS

The metal prices and currency quotations specified under this contract are the quotations in general use for the pricing of the metal content of concentrate.

DISPUTE RESOLUTION

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of the New York Court of International Arbitration (“NYCIA”), which Rules are deemed to be incorporated by reference into this clause. The tribunal shall consist of three arbitrators, all of whom shall have experience in shipping and trading matters. One arbitrator shall be appointed by Buyer, one by Seller and a third by the President of the NYCIA. The third arbitrator shall always be a practicing barrister or solicitor. In case either party fails to nominate its arbitrator then he will be appointed by the President of the LCIA. However, it is understood that both parties shall be entitled to take any reasonable measures for the protection of rights accrued to them by this contract without prejudice to the provisions of this clause. The arbitration shall be held in New York, US. The tribunal shall state in its award in detail the facts of the case and reasons for its decision. The award shall be final and binding and not subject to appeal.

CHOICE OF LAW

This contract shall be governed by and construed in accordance with New York law.

The United Nations Convention on Contracts for the International Sale of Goods (1980) shall not apply to this contract.

TAXES AND TARIFFS


PURCHASE CONTRACT		103-11CMX-019-0-P

LICENSES

ASSIGNMENT

THIRD PARTY RIGHTS

LIMITATION OF LIABILITY

Neither the Seller nor the Buyer shall be liable, whether in contract or in tort or otherwise, for indirect, consequential or special damages or losses of whatsoever nature, however caused.

Under no circumstances shall Buyer’s liability exceed the value of the Concentrate as at the date of shipment.

INCOTERMS

Insofar as not inconsistent herewith INCOTERMS 2000 (and any later amendments thereto) shall apply to this contract.

CHANGE OF CONTROL

NOTICES

All notices, requests and other communications hereunder shall be addressed:

If to Seller:

DON DAVID GOLD S.A. DE C.V.

Macedonio Alcala No. 201-105

Col. Centro, Oaxaca, Oaxaca

Mexico

Phone: +52 951 5216 82 58


PURCHASE CONTRACT		103-11CMX-019-0-P

If to Buyer:

CONSORCIO MINERO DE MEXICO, CORMIN MEX, S.A. DE C.V.

Reforma 115 piso 21, despacho 2102

Col. Lomas de Chapultepec, del. Miguel Hidalgo

Mexico D.F., Mexico

Phone: +52 55 4021 69

WAIVERS

SEVERABILITY

CONFIDENTIALITY

ENTIRE AGREEMENT

FUTURE PRODUCTION


PURCHASE CONTRACT		103-11CMX-019-0-P

IN WITNESS WHEREOF the parties have executed this document as of the respective dates specified below with effect from the Effective Date specified on the first page of this document.


Accepted:


DON DAVID GOLD. S.A. DE C.V..						CONSORCIO MINERO DE MEXICO
(signed by fully authorised signatory)						CORMIN MEX S.A. DE C.V.
						(signed by fully authorised signatory)

Place and Date: Denver, 7/20/11						Place and Date: Mexico,

Exhibit 10.11

DON DAVID GOLD S.A. DE C.V.

Macedonio Alcala No. 201-105

Col. Centro, Oaxaca, Oaxaca

Mexico, 1 july 2011

AMENDMENT 2 to PURCHASE CONTRACT

203-11CMX-020-1-P

This contract is concluded on the 1 ^st day of July 2011 (the “ Effective Date ”) between DON DAVID GOLD S.A. DE C.V. , Macedonio Alcala No. 201-105 Col. Centro, Oaxaca, Oaxaca, Mexico (the “ Seller ”) and CONSORCIO MINERO DE MEXICO CORMIN MEX, S.A. DE C.V. , Reforma 115 piso 21, despacho 2102, Col. Lomas de Chapultepec, Mexico D.F., Mexico (the “ Buyer ”).

The Effective Date of this Amendment shall be the 1 ^st day of July 2011

SCOPE OF THE CONTRACT

The Seller agrees to sell lead concentrate and the Buyer agrees to buy lead concentrate at the terms and conditions set out below:

DEFINITIONS


1 ounce means:		1 troy ounce of 31.1035 grams;
1 ton means:		1 metric ton of 1,000 kilograms or 2204.62 lbs;
1 unit means:		1% of the dry net weight;
Affiliates means:		in relation to any company or corporation, a Subsidiary or Holding Company of that company or corporation or any other Subsidiary of that company or corporation or of that Holding Company;
Banking Day and Business Day mean:		any day except a Saturday or Sunday on which banks in the city of New York, New York, USA, are generally open for the conduct of business;
Holding Company means:		in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary;
IMO/BC Code means:		the International Maritime Organisation Code of Safe Practice for Solid Bulk Cargoes prevailing at the time of delivery;
INCOTERMS 2000 means:		the 2000 edition of the standard trade definitions published by the International Chamber of Commerce;
LBMA means:		London Bullion Market Association;
LME means:		London Metal Exchange;
Month of Scheduled Shipment (MOSS) means:		in respect of any shipment of the concentrate, the calendar month in which shipment has been scheduled as per the clause SHIPMENT or as otherwise agreed in writing between the parties;
Subsidiary means:		in relation to any company or corporation, a company or corporation which is controlled, directly or indirectly, by the first mentioned company or corporation; more than half the issued share capital of which is beneficially owned, directly or indirectly by the first mentioned company or corporation; or which is a Subsidiary of another Subsidiary of the first mentioned company or corporation; and for this purpose, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;
US$ means:		the lawful currency of the United States of America;
Valid TML means:		Transportable Moisture Limit valid for the current shipment;
Valid FMP means:		Flow Moisture Point valid for the current shipment.


PURCHASE CONTRACT		203-11CMX-020-1-P

QUANTITY AND QUALITY

100% of El Aguila lead concentrates production estimated between 150 and 200 wmt per month, between July 2011 to December 2012

Pb 30-40%

Ag 6,000-7,000 gms

Au 25-40 gms

Zn 8-10%

Sb 0.78%

Cd.0.09%

Bi 0.01%

As 0.2-03%

S 30%

Fe 10-15%

F 170-200 ppm

SiO2 4-5%

Hg 15-20 ppm

Ni 40-50 ppm

Te 20-30 ppm

Co 60-70 ppm

In the event the actual assays deviate from the contractual assays both parties agree to discuss in good faith to reach a solution in line with prevailing market terms.

DELIVERY

DAP (Delivery At Place) impala warehousing Manzanillo or Parity (Incoterms 2000)

All export charges and the cost of loading the concentrate into the carrying vessel shall be for Buyer’s account, Seller shall have the right to collect the 16% VAT.

PRICE

Payment

Lead


PURCHASE CONTRACT		203-11CMX-020-1-P

Silver

Gold

Deduction

Treatment Charge

US$ 369 (US$ three hundred and sixty nine) per dry metric ton of the Concentrate delivered basis DAP Manzanillo, Mexico or parity.

This treatment charge is based on an applicable lead price of US$ 2,300 per dry metric ton and will be:

•

Increased by US$ 0.10 for each US$ 1.00 (US$ one) the applicable lead price exceeds US$ 2,300 per dry metric ton;

All fractions pro rata.

Refining Charges


Silver:		US$ 2.6 (US$ two point six) per payable troy ounce of silver.

		Basis in a price of US $ 20 per ounce, and increase US$0,085 per each US 1.00/MT the final Ag price is above US $20 (Twenty) per ounce

Gold:		US$ 15.00 (US$ fifteen) per payable troy ounce of gold.

Penalties

Arsenic + Antimony

US$ 3.00 (US$ three) per dry metric ton of the Concentrate for each 0.10 % (zero point one percent) the final combined arsenic plus antimony content exceeds 0.7 % (zero point seven percent)

All fractions pro rata.

QUOTATIONAL PERIOD

The quotational period for all payable metals shall be the month following the Month of arrival at the warehouse (M+1).

PAYMENT

All payments shall be made in US$ by telegraphic transfer.


PURCHASE CONTRACT		203-11CMX-020-1-P

Provisional Payment

90% (ninety percent) of the provisional invoice value of the Concentrate, based on the final wet weight, final moisture, provisional assays and the metal forward LME prices referred to the contractual QP at the date of invoice is issued, shall be paid 10 (ten) calendar days after the truck to delivery to the Manzanillo warehouse against the presentation of the following documents:

1.	Holding certificate as per Appendix 1 hereto;

2.	Seller’s provisional invoice;

3.	Seller’s provisional weight and moisture certificate;

4.	Seller’s provisional assay certificate;

5.	Original Certificate of Origin issued and legalised by the local Chamber of Commerce or EUR.1 certificate, if required.

Final Payment

Final payment shall be made by the party so owing latest 3 (three) Banking Days after the date final assays, weights and prices are known against presentation of the final invoice.

TITLE AND RISK

Title and Risk in the concentrate shall pass from seller to buyer when the concentrate has been delivered to the buyer’s nominated warehouse in Manzanillo, Mexico

WEIGHING, SAMPLING AND MOISTURE DETERMINATION

The size of the lots for sampling purposes shall be approximately 30 (thirty hundred) wet metric tons. Sample portions shall be made from each such sample lot and distributed as follows:

•

2 sets of sealed samples for the Seller;

•

2 sets of sealed samples for the Buyer;

•

1 set of sealed samples to be reserved by an internationally recognised supervision company for eventual umpire purposes.

The final contents for all elements shall be calculated on a lot-by-lot basis. The sum of the individual lot contents will constitute the total of the shipment.


PURCHASE CONTRACT		203-11CMX-020-1-P

ASSAYING

Assays shall be determined by an independent laboratory at loading port and shall be considered as finals for both parties

Seller and buyer will determine by mutual agreement one of the following laboratories for assays determination, and will be chosen on a rotational basisi

Laboratory Services International B.V.

Geijssendorfferweg 54

3088 GK Rotterdam

SGS Laboratory Services

Malledijk 18

3200 AE Spijkenisse

The Netherlands

Alfred H. Knight International Ltd.

Eccleston Grange

Prescot Road

St, Helens

Merseyside WA10 3BQ

England

Silver and gold assays shall be determined unadjusted for cupel absorption and slag loss

FORCE MAJEURE

The Affected Party shall use commercially reasonable efforts to avoid or remove the event of force majeure and shall promptly notify the other party when the event of force majeure is terminated.

If the period of the Force Majeure Suspension is equal to or exceeds 3 months from the date of the Force Majeure Notice, and so long as the force majeure event is continuing, either party may, in its sole discretion and by written notice, terminate this contract or, in the case of multiple deliveries under this contract, terminate the affected deliveries. Upon termination in accordance with this clause, neither party shall have any further liability to the other in respect of this contractor, as the case may be, the terminated deliveries except for any rights and remedies previously accrued under the Contract, including any payment obligations.


PURCHASE CONTRACT		203-11CMX-020-1-P

“Force Majeure” means any cause or event reasonably beyond the control of a party, including, but not limited to fires, earthquakes, lightning, floods, explosions, storms, adverse weather, landslides and other acts of natural calamity or acts of god; navigational accidents or maritime peril; vessel damage or loss; strikes, grievances, actions by or among workers or lock-outs (whether or not such labour difficulty could be settled, by acceding to any demands of any such labour group of individuals); accidents at, closing of, or restrictions upon the use of mooring facilities, docks, ports, harbours, railroads or other navigational or transportation mechanisms; disruption or breakdown of, storage plants, terminals, machinery or other facilities; acts of war, hostilities (whether declared or undeclared), civil commotion, embargoes, blockades, terrorism, sabotage or acts of the public enemy; any act or omission of any governmental authority; good faith compliance with any order, request or directive of any governmental authority; or any other cause reasonably beyond the control of a party, whether similar or dissimilar to those above and whether foreseeable or unforeseeable, which, by the exercise of due diligence, such party could not have been able to avoid or overcome. A party’s inability economically to perform its obligations under the Contract shall not constitute an event of force majeure.

SUSPENSION OF QUOTATIONS

The metal prices and currency quotations specified under this contract are the quotations in general use for the pricing of the metal content of concentrate.

DISPUTE RESOLUTION

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of the New York Court of International Arbitration (“NYCIA”), which Rules are deemed to be incorporated by reference into this clause. The tribunal shall consist of three arbitrators, all of whom shall have experience in shipping and trading matters. One arbitrator shall be appointed by Buyer, one by Seller and a third by the President of the NYCIA. The third arbitrator shall always be a practicing barrister or solicitor. In case either party fails to nominate its arbitrator then he will be appointed by the President of the LCIA. However, it is understood that both parties shall be entitled to take any reasonable measures for the protection of rights accrued to them by this contract without prejudice to the provisions of this clause. The arbitration shall be held in New York, US. The tribunal shall state in its award in detail the facts of the case and reasons for its decision. The award shall be final and binding and not subject to appeal.

CHOICE OF LAW

This contract shall be governed by and construed in accordance with New York law.

The United Nations Convention on Contracts for the International Sale of Goods (1980) shall not apply to this contract.


PURCHASE CONTRACT		203-11CMX-020-1-P

TAXES AND TARIFFS

LICENSES

ASSIGNMENT

THIRD PARTY RIGHTS

LIMITATION OF LIABILITY

Neither the Seller nor the Buyer shall be liable, whether in contract or in tort or otherwise, for indirect, consequential or special damages or losses of whatsoever nature, however caused.

Under no circumstances shall Buyer’s liability exceed the value of the Concentrate as at the date of shipment.

INCOTERMS

Insofar as not inconsistent herewith INCOTERMS 2000 (and any later amendments thereto) shall apply to this contract.

CHANGE OF CONTROL


PURCHASE CONTRACT		203-11CMX-020-1-P

NOTICES

All notices, requests and other communications hereunder shall be addressed:


If to Seller:		DON DAVID GOLD S.A. DE C.V. Macedonio Alcala No. 201-105 Col. Centro, Oaxaca, Oaxaca Mexico Phone: +52 951 5216 82 58

If to Buyer:		CONSORCIO MINERO DE MEXICO, CORMIN MEX, S.A. DE C.V. Reforma 115 piso 21, despacho 2102 Col. Lomas de Chapultepec, del, Miguel Hidalgo Mexico D.F., Mexico Phone: +5255 4021 69

WAIVERS

SEVERABILITY

CONFIDENTIALITY

ENTIRE AGREEMENT

This contract constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes any previous agreements between the parties relating to the subject matter. Each party acknowledges and represents that it has not relied on or been induced to enter into this contract by any representation, warranty or undertaking other than those expressly set out in this contract A party is not liable to the other party for a representation, warranty or undertaking of whatsoever nature that is not expressly set out in this contract.


PURCHASE CONTRACT		203-11CMX-020-1-P

FUTURE PRODUCTION

IN WITNESS WHEREOF the parties have executed this document as of the respective dates specified below with effect from the Effective Date specified on the first page of this document.


Accepted:


DON DAVID GOLD. S.A. DE C.V..				CONSORCIO MINERO DE MEXICO
(signed by fully authorised signatory)				CORMIN MEX S.A. DE C.V. (signed by fully authorised signatory)

Place and Date: Denver, 7/20/11				Place and Date: Mexico,

Exhibit 10.12

DON DAVID GOLD S.A. DE C.V.

Macedonio Alcala No. 201-105

Col. Centro, Oaxaca, Oaxaca

México, 1 july 2011

AMENDMENT 2 to PURCHASE CONTRACT

203-11CMX-020-1-P

The Effective Date of this Amendment shall be the 1 ^st day of July 2011

SCOPE OF THE CONTRACT

The Seller agrees to sell lead concentrate and the Buyer agrees to buy lead concentrate at the terms and conditions set out below:


DEFINITIONS

1 ounce means:		1 troy ounce of 31.1035 grams;
1 ton means:		1 metric ton of 1,000 kilograms or 2204.62 lbs;
1 unit means:		1% of the dry net weight;
Affiliates means:		in relation to any company or corporation, a Subsidiary or Holding Company of that company or corporation or any other Subsidiary of that company or corporation or of that Holding Company;
Banking Day and Business Day mean:		any day except a Saturday or Sunday on which banks in the city of New York, New York, USA, are generally open for the conduct of business;
Holding Company means:		in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary;
IMO/BC Code means:		the International Maritime Organisation Code of Safe Practice for Solid Bulk Cargoes prevailing at the time of delivery;
INCOTERMS 2000 means:		the 2000 edition of the standard trade definitions published by the International Chamber of Commerce;
LBMA means:		London Bullion Market Association;
LME means:		London Metal Exchange;
Month of Scheduled Shipment (MOSS) means:		in respect of any shipment of the concentrate, the calendar month in which shipment has been scheduled as per the clause SHIPMENT or as otherwise agreed in writing between the parties;
Subsidiary means:		in relation to any company or corporation, a company or corporation
		which is controlled, directly or indirectly, by the first mentioned company or corporation; more than half the issued share capital of which is beneficially owned, directly or indirectly by the first mentioned company or corporation; or which is a Subsidiary of another Subsidiary of the first mentioned company or corporation; and for this purpose, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;
US$ means:		the lawful currency of the United States of America;
Valid TML means:		Transportable Moisture Limit valid for the current shipment;
Valid FMP means:		Flow Moisture Point valid for the current shipment.


PURCHASE CONTRACT		203-11CMX-020-1-P

QUANTITY AND QUALITY

100% of El Aguila lead concentrates production estimated between 150 and 200 wmt per month, between July 2011 to December 2012

Pb 30-40%

Ag 6,000 – 7,000 gms

Au 25-40 gms

Zn 8-10 %

Sb 0.78%

Cd 0.09%

Bi 0.01%

As 0.2-0.3%

S 30%

Fe 10-15%

F 170-200 ppm

SiO2 4-5%

Hg 15-20 ppm

Ni 40-50 ppm

Te 20-30 ppm

Co 60-70 ppm

In the event the actual assays deviate from the contractual assays both parties agree to discuss in good faith to reach a solution in line with prevailing market terms.

DELIVERY

DAP (Delivery At Place) impala warehousing Manzanillo or Parity (Incoterms 2000)

All export charges and the cost of loading the concentrate into the carrying vessel shall be for Buyer’s account, Seller shall have the right to collect the 16% VAT.

PRICE

Payments

Lead


PURCHASE CONTRACT		203-11CMX-020-1-P

Silver

Gold

Deduction

Treatment Charge

US$ 369 (US$ three hundred and sixty nine) per dry metric ton of the Concentrate delivered basis DAP Manzanillo, Mexico or parity.

This treatment charge is based on an applicable lead price of US$ 2,300 per dry metric ton and will be:

•

Increased by US$ 0.10 for each US$ 1.00 (US$ one) the applicable lead price exceeds US$ 2,300 per dry metric ton;

All fractions pro rata.

Refining Charges

Silver: US$ 2.6 (US$ two point six) per payable troy ounce of silver.

Basis in a price of US $ 20 per ounce, and increase US$0.085 per each US 1.00/MT the final Ag price is above US $20 (Twenty) per ounce

Gold: US$ 15.00 (US$ fifteen) per payable troy ounce of gold.

Penalties

Arsenic + Antimony

US$ 3.00 (US$ three) per dry metric ton of the Concentrate for each 0.10 % (zero point one percent) the final combined arsenic plus antimony content exceeds 0.7 % (zero point seven percent).

All fractions pro rata.

QUOTATIONAL PERIOD

The quotational period for all payable metals shall be the month following the Month of arrival at the warehouse (M+1).

PAYMENT

All payments shall be made in US$ by telegraphic transfer.


PURCHASE CONTRACT		203-11CMX-020-1-P

Provisional Payment

90% (ninety percent) of the provisional invoice value of the Concentrate, based on the final wet weight, final moisture, provisional assays and the metal forward LME prices referred to the contractual QP at the date of invoice is issued, shall be paid 10 (ten) calendar days after the truck to delivery to the Manzanillo warehouse against the presentation of the following documents:

1.	Holding certificate as per Appendix 1 hereto;

2.	Seller’s provisional invoice;

3.	Seller’s provisional weight and moisture certificate;

4.	Seller’s provisional assay certificate;

5.	Original Certificate of Origin issued and legalised by the local Chamber of Commerce or EUR.1 certificate, if required.

Final Payment

Final payment shall be made by the party so owing latest 3 (three) Banking Days after the date final assays, weights and prices are known against presentation of the final invoice.

TITLE AND RISK

Title and Risk in the concentrate shall pass from seller to buyer when the concentrate has been delivered to the buyer’s nominated warehouse in Manzanillo, Mexico

WEIGHING, SAMPLING AND MOISTURE DETERMINATION

The size of the lots for sampling purposes shall be approximately 30 (thirty hundred) wet metric tons. Sample portions shall be made from each such sample lot and distributed as follows:

•

2 sets of sealed samples for the Seller;

•

2 sets of sealed samples for the Buyer;

•

1 set of sealed samples to be reserved by an internationally recognised supervision company for eventual umpire purposes.

The final contents for all elements shall be calculated on a lot-by-lot basis. The sum of the individual lot contents will constitute the total of the shipment


PURCHASE CONTRACT		203-11CMX-020-1-P

ASSAYING

Assays shall be determined by an independent laboratory at loading port and shall be considered as finals for both parties

Seller and buyer will determine by mutual agreement one of the following laboratories for assays determination, and will be chosen on a rotational basisi

Laboratory Services International B.V.

Geijssendorfferweg 54

3088 GK. Rotterdam

SGS Laboratory Services

Malledijk 18

3200 AE Spijkenisse

The Netherlands

Alfred H. Knight International Ltd.

Eccleston Grange

Prescot Road

St. Helens

Merseyside WA10 3BQ

England

Silver and gold assays shall be determined unadjusted for cupel absorption and slag loss

FORCE MAJEURE

The Affected Party shall use commercially reasonable efforts to avoid or remove the event of force majeure and shall promptly notify the other party when the event of force majeure is terminated.


PURCHASE CONTRACT		203-11CMX-020-1-P

SUSPENSION OF QUOTATIONS

The metal prices and currency quotations specified under this contract are the quotations in general use for the pricing of the metal content of concentrate.

DISPUTE RESOLUTION

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of the New York Court of International Arbitration (“NYCIA”), which Rules are deemed to be incorporated by reference into this clause. The tribunal shall consist of three arbitrators, all of whom shall have experience in shipping and trading matters. One arbitrator shall be appointed by Buyer, one by Seller and a third by the President of the NYCIA. The third arbitrator shall always be a practicing barrister or solicitor. In case either party fails to nominate its arbitrator then he will be appointed by the President of the LCIA. However, it is understood that both parties shall be entitled to take any reasonable measures for the protection of rights accrued to them by this contract without prejudice to the provisions of this clause. The arbitration shall be held in New York, US. The tribunal shall state in its award in detail the facts of the case and reasons for its decision. The award shall be final and binding and not subject to appeal.

CHOICE OF LAW

This contract shall be governed by and construed in accordance with New York law.

The United Nations Convention on Contracts for the International Sale of Goods (1980) shall not apply to this contract.


PURCHASE CONTRACT		203-11CMX-020-1-P

TAXES AND TARIFFS

LICENSES

ASSIGNMENT

THIRD PARTY RIGHTS

LIMITATION OF LIABILITY

Neither the Seller nor the Buyer shall be liable, whether in contract or in tort or otherwise, for indirect, consequential or special damages or losses of whatsoever nature, however caused.

Under no circumstances shall Buyer’s liability exceed the value of the Concentrate as at the date of shipment.

INCOTERMS

Insofar as not inconsistent herewith INCOTERMS 2000 (and any later amendments thereto) shall apply to this contract.

CHANGE OF CONTROL


PURCHASE CONTRACT		203-11CMX-020-1-P

NOTICES

All notices, requests and other communications hereunder shall be addressed:


If to Seller:		DON DAVID GOLD S.A. DE C.V. Macedonio Alcala No. 201-105 Col. Centro, Oaxaca, Oaxaca Mexico Phone: + 52 951 5216 82 58

If to Buyer:		CONSORCIO MINERO DE MEXICO, CORMIN MEX, S.A. DE C.V. Reforma 115 piso 21, despacho 2102 Col. Lomas de Chapultepec, del. Miguel Hidalgo Mexico D.F., Mexico Phone: +52 55 4021 69

WAIVERS

SEVERABILITY

CONFIDENTIALITY

ENTIRE AGREEMENT


PURCHASE CONTRACT		203-11CMX-020-1-P

FUTURE PRODUCTION

IN WITNESS WHEREOF the parties have executed this document as of the respective dates specified below with effect from the Effective Date specified on the first page of this document.


Accepted:


DON DAVID GOLD. S.A. DE C.V..				CONSORCIO MINERO DE MEXICO
(signed by fully authorised signatory)				CORMIN MEX S.A. DE C.V.
				(signed by fully authorised signatory)

Place and Date: Denver, 7/20/11				Place and Date: Mexico,

Exhibit 10.13

DON DAVID GOLD S.A. DE C.V.

Macedonio Alcala No. 201-105

Col. Centro, Oaxaca, Oaxaca

Mexico, 1 july 2011


AMENDMENT to PURCHASE CONTRACT		303-11CMX-028-1-P

This contract is concluded on the 1 ^st day of July 2011 (the “ Effective Date ”) between DON DAVID GOLD S.A. DE C.V. , Macedonio Alcala No. 201-105 Col. Centro, Oaxaca, Oaxaca, Mexico (the “ Seller ”) and CONSORCIO MINERO DE MEXICO CORMIN MEX, S.A. DE C.V. , Reforma 115 piso 21, despacho 2102, Col. Lomas de Chapultepec, Mexico D.F., Mexico (the “ Buyer ”).

The Effective Date of this Amendment shall be the 1 ^st day of july 2011

SCOPE OF THE CONTRACT

The Seller agrees to sell copper concentrate and the Buyer agrees to buy copper concentrate at the terms and conditions set out below:

DEFINITIONS


1 ounce means:		1 troy ounce of 31.1035 grams;
1 ton means:		1 metric ton of 1,000 kilograms or 2204.62 lbs;
1 unit means:		1% of the dry net weight;
Affiliates means:		in relation to any company or corporation, a Subsidiary or Holding
		Company of that company or corporation or any other Subsidiary of that company or corporation or of that Holding Company;
Banking Day and Business Day mean:		any day except a Saturday or Sunday on which banks in the city of New York, New York, USA, are generally open for the conduct of business;
Holding Company means:		in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary;
IMO/BC Code means:		the International Maritime Organisation Code of Safe Practice for Solid Bulk Cargoes prevailing at the time of delivery;
INCOTERMS 2000 means:		the 2000 edition of the standard trade definitions published by the International Chamber of Commerce;
LBMA means:		London Bullion Market Association;
LME means:		London Metal Exchange;
Month of Scheduled Shipment (MOSS) means*:		in respect of any shipment of the concentrate, the calendar month in which shipment has been scheduled as per the clause SHIPMENT or as otherwise agreed in writing between the parties;
Subsidiary means:		in relation to any company or corporation, a company or corporation which is controlled, directly or indirectly, by the first mentioned company or corporation; more than half the issued share capital of which is beneficially owned, directly or indirectly by the first mentioned company or corporation; or which is a Subsidiary of another Subsidiary of the first mentioned company or corporation; and for this purpose, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;
US$ means:		the lawful currency of the United States of America;
Valid TML means:		Transportable Moisture Limit valid for the current shipment;
Valid FMP means:		Flow Moisture Point valid for the current shipment


PURCHASE CONTRACT		303-11CMX-028-1-P

QUANTITY AND QUALITY

100% of El Aguila copper concentrates production estimated between 150 and 200 wmt per month, between July 2011 to December 2012

Cu 24-26%

Ag 8,000 - 10,0000 gms

Au 25-40 grm

Zn 1.5 - 2%

Pb 11-13%

Sb 1.5%

Cd 200-300 PPM

Bi 0.1%

As 0.4-0.5%

S 28-30%

Fe 28-30%

F110-120 PPM

Hg 15-20 PPM

In the event the actual assays deviate from the contractual assays both parties agree to discuss in good faith to reach a solution in line with prevailing market terms.

DELIVERY

DAP (Delivery At Place) impala warehousing Manzanillo or Parity (Incoterms 2000)

Seller shall have the right to collect the 16% VAT.

PRICE

Payments

Copper

Silver

Pay for 95% (ninety-five percent), balance of the final silver content at the LBMA spot quotation for silver, as published in the Metal Bulletin in US$ and averaged over the quotational period.


PURCHASE CONTRACT		303-11CMX-028-1-P

Gold

Deduction

Treatment Charge

US$ 355 (US$ three hundred and fifty five) per dry metric ton of the Concentrate delivered basis DAP Manzanillo, Mexico or parity.

Refining Charges


Copper:		US$ 35.5 Cents (US$ thirty five point five) per payable pound of copper.
		Basis in a price of US $ 4.50 (four point five) per payable pound of copper, and increase 10% (ten percent) per each US 1.00/MT the final Cu price is above US $4.50 (four point five) per pound

Silver:		US$ 2 (US$ two) per payable troy ounce of silver.
		Basis in a price of US $ 20 per ounce, and increase US $0.085 per each US 1.00/MT the final Ag price is above US $20 (Twenty) per ounce

Gold:		US$ 15.00 (US$ fifteen) per payable troy ounce of gold.

Penalties

Lead + Zinc

US$ 2.00 (US$ two) per dry metric ton of the Concentrate for each 0.10 % (zero point one percent) the final combined lead plus zinc content exceeds 4 % (four percent).

Arsenic + Antimony

US$ 3.00 (US$ three) per dry metric ton of the Concentrate for each 0.10 % (zero point one percent) the final combined arsenic plus antimony content exceeds 0.7 % (zero point seven percent).

All fractions pro rata.

None one, subject to maximum contents as follow

Bi < 0.05%

Se > 400 ppm

F > 500 ppm

QUOTATIONAL PERIOD

The quotational period for all payable metals shall be the month following the Month of arrival at the warehouse (M+l).


PURCHASE CONTRACT		303-11CMX-028-1-P

PAYMENT

All payments shall be made in US$ by telegraphic transfer.

Provisional Payment

90% (ninety percent) of the provisional invoice value of the Concentrate, based on the final wet weight, final moisture, provisional assays and the metal forward LME prices referred to the contractual QP at the date of invoice is issued, shall be paid 10 (ten) calendar days after the truck delivery to the Manzanillo warehouse against the presentation of the following documents:

1.	Holding certificate as per Appendix 1 hereto;

2.	Seller’s provisional invoice;

3.	Seller’s provisional weight and moisture certificate;

4.	Seller’s provisional assay certificate;

Final Payment

Final payment shall be made by the party so owing latest 3 (three) Banking Days after the date final assays, weights and prices are known against presentation of the final invoice.

TITLE AND RISK

Title and Risk in the concentrate shall pass from seller to buyer when the concentrate has been delivered to the buyer’s nominated warehouse in Manzanillo, Mexico

WEIGHING, SAMPLING AND MOISTURE DETERMINATION

The size of the lots for sampling purposes shall be approximately 30 (thirty) wet metric tons. Sample portions shall be made from each such sample lot and distributed as follows:

•

2 sets of sealed samples for the Seller;

•

2 sets of sealed samples for the Buyer;

•

1 set of sealed samples to be reserved by an internationally recognised supervision company for eventual umpire purposes.

The final contents for all elements shall be calculated on a lot-by-lot basis. The sum of the individual lot contents will constitute the total of the shipment.


PURCHASE CONTRACT		303-11CMX-028-1-P

ASSAYING

Assays shall be determined by an independent laboratory at loading port and shall be considered as finals for both parties

Seller and buyer will determine by mutual agreement one of the following laboratories for assays determination, and will be chosen on a rotational basisi

Laboratory Services International B.V.

Geijssendorfferweg 54

3088 GK Rotterdam

SGS Laboratory Services

Malledijk 18

3200 AE Spijkenisse

The Netherlands

Alfred H. Knight International Ltd.

Eccleston Grange

Prescot Road

St Helens

Merseyside WA10 3BQ

England

Silver and gold assays shall be determined unadjusted for cupel absorption and slag loss

FORCE MAJEURE

The Affected Party shall use commercially reasonable efforts to avoid or remove the event of force majeure and shall promptly notify the other party when the event of force majeure is terminated.


PURCHASE CONTRACT		303-11CMX-028-1-P

SUSPENSION OF QUOTATIONS

The metal prices and currency quotations specified under this contract are the quotations in general use for the pricing of the metal content of concentrate.

DISPUTE RESOLUTION

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of the New York Court of International Arbitration (“NYCIA”), which Rules are deemed to be incorporated by reference into this clause. The tribunal shall consist of three arbitrators, all of whom shall have experience in shipping and trading matters. One arbitrator shall be appointed by Buyer, one by Seller and a third by the President of the NYCIA. The third arbitrator shall always be a practicing barrister or solicitor. In case either party fails to nominate its arbitrator then he will be appointed by the President of the LCIA. However, it is understood that both parties shall be entitled to take any reasonable measures for the protection of rights accrued to them by this contract without prejudice to the provisions of this clause. The arbitration shall be held in New York, US. The tribunal shall state in its award in detail the facts of the case and reasons for its decision. The award shall be final and binding and not subject to appeal.


PURCHASE CONTRACT		303-11CMX-028-1-P

CHOICE OF LAW

This contract shall be governed by and construed in accordance with New York law.

The United Nations Convention on Contracts for the International Sale of Goods (1980) shall not apply to this contract.

TAXES AND TARIFFS

LICENSES

ASSIGNMENT

THIRD PARTY RIGHTS

LIMITATION OF LIABILITY

Neither the Seller nor the Buyer shall be liable, whether in contract or in tort or otherwise, for indirect, consequential or special damages or losses of whatsoever nature, however caused.

Under no circumstances shall Buyer’s liability exceed the value of the Concentrate as at the date of shipment.


PURCHASE CONTRACT		303-11CMX-028-1-P

INCOTERMS

Insofar as not inconsistent herewith INCOTERMS 2000 (and any later amendments thereto) shall apply to this contract.

CHANGE OF CONTROL

NOTICES

All notices, requests and other communications hereunder shall be addressed:


If to Seller:		DON DAVID GOLD S.A. DE C.V. Macedonio Alcala No. 201-105 Col. Centro, Oaxaca, Oaxaca Mexico Phone: + 52 951 5216 82 58

If to Buyer:		CONSORCIO MINERO DE MEXICO, CORMIN MEX, S.A. DE C.V. Reforma 115 piso 21, despacho 2102 Col. Lomas de Chapultepec, del. Miguel Hidalgo Mexico D.F., Mexico Phone: + 52 55 4021 69

WAIVERS

SEVERABILITY


PURCHASE CONTRACT		303-11CMX-028-1-P

CONFIDENTIALITY

ENTIRE AGREEMENT

FUTURE PRODUCTION

IN WITNESS WHEREOF the parties have executed this document as of the respective dates specified below with effect from the Effective Date specified on the first page of this document.


Accepted:

DON DAVID GOLD. S.A. DE C.V..				CONSORCIO MINERO DE MEXICO
(signed by fully authorised signatory)				CORMIN MEX S.A. DE C.V.
				(signed by fully authorised signatory)

Place and Date: Denver 7/20/11				Place and Date: Mexico,

Exhibit 10.14

LOGO

CONSORCIO MINERO DE MÉXICO CORMIN MEX, S.A. de C.V.

A TRAFIGURA GROUP COMPANY

10 November 2010

With respect to 203-09-CMX-25739-P (the “Contract”) concluded on the 5 ^th day of October 2009, as amended, between:

DON DAVID GOLD, S.A. DE C.V. . Macedonio Alcala No. 201-105, Col. Centro Oaxaca, Oaxaca, Mexico, hereinafter called Seller ;

and

CONSORCIO MINERO DE MEXICO CORMIN MEX, S.A. DE C.V. Avenida Reforma No. 115 Despacho 2102, Col. Lomas de Chapultepec, C.P. 11000, Delegacion Miguel Hidalgo, Distrito Federal, Mexico, called Buyer or Assignor ;

Buyer and Seller agree as follows:

ASSIGMENT

Whereas at October 26 ^th , 2010 (the “ Effective Date ”) Assignor wishes to assign all rights and obligations pertaining to the November 2010 and December 2010 quotas (the “ November and December 2010 Quotas ”) as follows:

•

The production estimated to be +/- 300 WMT during Nov 2010;

•

The production estimated to be +/- 300 WMT during Dec 2010.

The November and December 2010 Quotas will be assigned to:

TRAFIGURA BEHEER, B.V. Amsterdam. Branch Office Lucerne, Zürichstrasse 31,

Postfach 4268, 6002 Lucerne, Switzerland.

The parties agree as follows:

1.	The Seller agrees to release and discharge the Assignor upon the terms of the Assignee’s undertaking to perform the Contract and be bound by its terms and conditions in place of the Assignor in respect of the November and December 2010 Quotas.

2.	As from the Effective Date, the Assignee undertakes to perform the Contract in respect of the November and December 2010 Quotas and be bound by all of its terms and conditions in every way as if it had been a party to the Contract in place of the Assignor;

3.	The Seller and the Assignor hereby mutually release each other from their respective obligations with respect to the November and December 2010 Quotas as from the Effective Date.

4.	The Seller releases and discharges the Assignor from all future claims and demands whatsoever in respect of the November and December 2010 Quotas and accepts the liability of the Assignee under the Contract from the Effective Date.

Reforma 115, Oficina 2102, Col. Lomas de Chapultepec, C.P. 11000, México,D.F.

Tel.: 5540-2169 Fax: 5540-2203.


ASSIGNMENT AGREEMENT		203-09-CMX-25739-P				2

5.	Nothing in this Amendment Agreement shall affect or prejudice any claim or demand whatsoever which the Seller and the Assignor may have against each other relating to matters arising prior to the Effective Date.

GENERAL PROVISONS

This Assignment Agreement shall be governed by and construed in accordance with the laws of the state of New York. Any dispute arising out of or in connection with this Assignment Agreement (including any question regarding its existence, validity or termination) shall be referred to and finally resolved in accordance with the Dispute Resolution clause in the Contract.

COUNTERPARTS

This Assignment Agreement may be executed in one or more counterparts but shall not be effective until each party has executed at least one counterpart. This Assignment Agreement may be delivered by facsimile or other electronic means. Each counterpart shall constitute an original of this contract, but all the counterparts shall together constitute but one and the same instrument.

Accepted by:



Don David Gold, S.A. DE C.V.,
(signed by fully authorized signature)

		Trafigura Beheer B.V. Amsterdam, Branch Office Lucerne
Trafigura Beheer B.V., Amsterdam, Branch Office Lucerne
(signed by fully authorized signature)


Consorcio Minero de Mexico Cormin Mex S.A. de C.V. (signed by fully authorized signature)

Exhibit 10.15

MINING EXPLORATION AND EXPLOITATION AGREEMENT ENTERED INTO BY AND BETWEEN, AS FIRST PARTY MR. JOSE PEREZ REYNOSO, (HEREINAFTER “THE TITLEHOLDER”), AND AS THE SECOND PARTY, THE COMPANY DON DAVID GOLD S.A. DE C.V. (HEREINAFTER IDENTIFIED AS “THE COMPANY”), HEREBY REPRESENTED BY MR. VICTOR GARCIA JIMENEZ, IN ACCORDANCE WITH THE FOLLOWING REPRESENTATIONS AND CLAUSES.

R E P R E S E N T A T I O N S

I.	THE TITLEHOLDER represents:

(a)

To be a Mexican citizen of legal age, single, and legally authorized to hold mining concessions and to enter into this Agreement;

(b)

That he is the titleholder, of the rights derived from the mining concessions that cover the following mining lots (“THE LOTS”):


NAME OF LOT	TITLE NUMBER	HECTARES	TYPE OF CONCESSION

LA TEHUANA	210029	925.0000	Exploration

EL AGUILA	206772	899.6000	Exploration

EL AIRE	158272	72.0000	Exploitation

THE LOTS are located in the Municipality of Totolapam, State of Oaxaca, within the circumscription of the Mining Agency of Oaxaca, State of Oaxaca.

(c)

That, as titleholder of the rights covering the existing exploration mining concessions over THE LOTS, to this date, the TITLEHOLDER declares to have the concessions in good standing in relation with all the obligations required by the Mining Law and its Regulations, as well as all other applicable legal provisions, including the filing of proof of works reports and payment of rights over mining concessions;

(d)

That the rights covering the mining concessions covering THE LOTS are free and clear of all lien, encumbrance or limitation of domain; and

(e)

That its his wish to enter into this agreement to grant THE COMPANY the right to explore and exploit THE LOTS, according to the terms and conditions set forth herein.

II.

THE COMPANY represents:

(a)

That it is a Mexican mining company incorporated in accordance with the laws of the Mexican United States, with legal capacity to enter into this agreement and to become the titleholder of mining concessions.

(b)

That its legal representative, Mr. Victor Garcia Jimenez is duly authorized to represent it and enter into this agreement; and

(c)

That it wishes to acquire the right to explore and in its case, exploit THE LOTS, according to the terms and conditions herein set forth.

Given the foregoing representations, the parties agree to the following:

C L A U S E S

FIRST.- Right to explore and in its case exploit THE LOTS. THE TITLEHOLDER hereby grants THE COMPANY the exclusive right to explore and in its case, exploit THE LOTS, during the period in which the mining concessions exist over THE LOTS, during which THE COMPANY will be allowed to carry out all the exploration and exploitation works it considers convenient and which are allowed under the mining concession titles in force.

THE COMPANY will be allowed to assign or subcontract its rights granted under this Agreement, or enter into joint operation agreements with any other person or entity without prior consent from THE TITLEHOLDER, providing that such assignment, subcontract or joint operation agreement stipulates that all parties will be subject to the terms and conditions set forth in this Agreement.

SECOND.- Right to an early termination. The term of this agreement will be mandatory for THE TITLEHOLDER and without obligation for THE COMPANY, who in turn, can terminate it at any given moment through written notice delivered to THE TITLEHOLDER, informing of the date of termination.

Notwithstanding the abovementioned, THE TITLEHOLDER will also have the right to terminate this agreement at any given moment, according to what has been established in Clauses Nine and Ten hereinafter, in case that THE COMPANY does not comply with the obligations set forth herein.

In case of termination by THE COMPANY, also any payment obligation of the Minimum Royalty Retainer and Production Royalty not due will be cancelled.

THIRD.- Payment of Minimum Advance Royalty. As consideration for the execution of this Exploration and Exploitation Agreement, and in its case, as minimum royalty advance payments (“Minimum Royalty Advance Payment”) on the dates herein established, during the term of this Agreement, and while there is no production or it is not enough to cover the royalties, THE COMPANY will pay THE TITLEHOLDER the following amounts in US Dollars or its equivalent in Mexican Pesos, plus 15% of Value Added Tax.


a) When the TITLEHOLDER executes this Agreement	$	5,000 USD
b) Three months after the execution of the agreement	$	5,000 USD
c) Twelve months after the execution of the agreement	$	25,000 USD
d) Twenty-four months after the execution of the agreement	$	50,000 USD
e) Thirty-six months after the execution of the agreement	$	75,000 USD
f) Forty-eight months after the execution of the agreement	$	100,000 USD

Total	$	260,000 USD

Once the abovementioned amounts have been paid, THE COMPANY’S obligation to pay the Minimum Royalty Advance Payments will be over. All Minimum Royalty Advance Payments will be considered as an advance payment for the Production Royalty that will be paid according to

Clause Four below and as from that date and the Production Date, THE COMPANY will recover all the amounts paid as Minimum Royalty Advance Payments to THE TITLEHOLDER, which were paid on account of and will be deducted from the accrued Production Royalty payable in the future, until such deductions have totaled the amount previously paid as Minimum Royalty Advance Payments by THE COMPANY. If within the period of forty-eight months set forth in this Clause, the production begins, and it is not enough to pay the “Production Royalty”, THE COMPANY must pay THE TITLEHOLDER the Minimum Royalty Advance Payments described herein.

FOURTH.- Royalties . THE COMPANY hereby agrees to pay to THE TITLEHOLDER a royalty on smelting net settlements (hereinafter “Production Royalty”) over the smelting net settlements or first hand mineral purchase-sale invoices paid to THE COMPANY for minerals, crude ore, or other valuable products obtained and sold from THE LOTS. The Production Royalty will be calculated as follows:

En case that THE COMPANY procures smelting services: a Production Royalty of five percent (5%) on the smelting net settlements of all substances obtained and sold from THE LOTS.

In case of dore metal, bullion or other substances obtained and sold from THE LOTS by THE COMPANY: a Production Royalty of four percent (4%) of the real selling price of all minerals, crude ore or valuable products as described in the purchase-sale invoices, after deducting all treatment, penalties, and any other expenses and deductions from the product’s selling net price which are described in the smelting settlements or any other acceptable document issued for each separate sale and after deducting the real cost of freight of such substances to the smelting plant or any other acceptable document issued for each separate sale of the mentioned substances.

The Production Royalty paid to THE TITLEHOLDER according to that set forth herein, will be paid after all the Minimum Royalty Advance Payments described in the aforementioned Clause have been completely deducted and written off.

THE COMPANY must make the payment of the Production Royalty to THE TITLEHOLDER through wire transfer to an account, after receiving the corresponding invoice or invoices (including VAT) on a monthly basis within thirty (30) days after the last day of the month in which THE COMPANY receives final payments on the mineral, crude ore and other valuable products sales.

FIFTH.- Mineral Mixture. THE COMPANY can transport and mix minerals, crude ores or other valuable products from THE LOTS with other minerals, concentrates and other products from other properties, providing that before mixing them, THE COMPANY implements reasonable practices and proceeds to weight, determine its humidity, sample and assay the respective mineral, as well as apply reasonably exact recovery factors to determine the amount of byproducts or products associated with the mineral, crude ore or other valuable products obtained from THE LOTS. THE COMPANY must keep accounting and records of the results of such sampling and assay of the mined mineral, concentrate or other products obtained from THE LOTS and must notify THE TITLEHOLDER when such mixing takes place, supplying when required by him, complete copies of all the records according to what has been mentioned herein, and the accounting of the results obtained.

SIXTH.- Fees, rights, taxes and expenses. All the fees, rights, taxes and expenses caused as a consequence of the granting and execution of this agreement will be paid by THE COMPANY, with the exception of the income tax for the earnings received by THE TITLEHOLDER, which will be paid by him. THE TITLEHOLDER will issue invoices to THE COMPANY with the respective VAT.

SEVENTH.- Labor liability. Given that there will be no labor relationship between the workers and contractors of each one of the parties and the other, each party expressly agrees that in relation to their workers and contractors, it and its contractors, in relation to its workers, they will undertake full labor liability and therefore each party agrees to maintain the other party free and clear from any claim, lawsuit, charge or complaint presented against it by the workers or employees of any party, or by its contractors, labor or administrative authorities.

EIGHTH.- Additional obligations of THE TITLEHOLDER. In addition to the obligations acquired in accordance with the abovementioned clauses, THE TITLEHOLDER, during the term of this Agreement will:

(a)

Keep the rights that cover the mining concession of THE LOTS in good standing and also, keep them free and clear of any lien, encumbrance or limitation of domain;

(b)

Do not transfer the rights covering the mining concession of THE LOTS without previous consent from THE COMPANY, and in case he wishes to assign them, he shall give THE COMPANY the right of pre-emption to acquire them in the same terms and conditions offered to a third party;

(c)

Keep THE COMPANY free and clear from any claim and responsibility from any acts that are directly attributable to THE TITLEHOLDER and which are his own responsibility. Being compelled to indemnify THE COMPANY and repay the damages and losses that could be caused should it be deprived from the right to explore and exploit THE LOTS according to this Agreement;

(d)

In case this agreement is terminated, allow THE COMPANY a period of ninety (90) days to remove all its equipment and machinery from THE LOTS.

NINTH.- Additional obligations of THE COMPANY, In addition to the obligations acquired in accordance with the abovementioned clauses, THE COMPANY, during the term of this Agreement will:

(a)

Carry out the exploration and in its case, the exploitation of THE LOTS, as a good miner, according to appropriate and rational mining practices and in accordance with all legal provisions, carrying out enough work to comply with what has been set forth in the Mining Law and its Regulations, and to avoid interrupting the exploration and exploitation works without any justified cause;

(b)

Assume responsibility and comply when required, with the obligation of preparing and presenting exploration regular works’ assessments as the case may be and pay all the rights on the mining concessions;

(c)

Allow THE TITLEHOLDER or his representatives to inspect the works that are being carried out in THE LOTS, on the dates and times mutually convened in order to avoid obstruction of the activities being performed and for security reasons. Also, will allow

THE TITLEHOLDER or his representatives, access to all information related to the works, in particular, when they exist, the balance sheets on the metallurgical production obtained in THE LOTS;

(d)

Comply with the Safety and Police requirements on the works carried out in the mines and environmental pollution control; and

(e)

Keep THE LOTS in good conservation, exploration and exploitation conditions;

If at any given moment, during the term of this agreement, THE COMPANY should fail to comply with the obligations acquired herein, and especially the ones mentioned in this Clause, THE TITLEHOLDER will have the right to terminate this agreement in terms of what has been established in the following Clause Ten, apart from its right to request the payment of damages and prejudicial consequences.

TENTH.- Breach of Contract. The breach by any of the parties in relation to any of the obligations hereby acquired, will give the other party the right to request the immediate observation of the non-complied obligations, in such case, the affected party can request through written notice to the non-compliant party to fulfill its obligations, and if after a period of ninety days after the notice was delivered, the breach continues and no reasonable action has been made to correct such breach, then the affected party will have the right, at its own discretion, to legally request the other party compliance of its obligations or else, the termination of this agreement, and in addition the right to request payment for damages and prejudicial consequences.

ELEVENTH.- Force Majeure. It will not be considered a breach of contract if any of the parties has not complied with its obligations acquired herein due to force majeure causes.

All occurrences mentioned as follows in an illustrative, non-limitative way, will be considered force majeure: earthquakes, fire, floods, storms, epidemic, civil disturbances, labor disturbances, strikes, wars, invasions, revolution, acts of authority, opposition or disturbances, and in general, any other event or action which is completely out of control of any of the parties and which impedes the party to totally or partially comply with its obligations.

When any of the parties is affected by any event of force majeure that impedes it to comply with its obligations, it must notify the other party of such event, and must include information on the estimated time the event will last.

The other party will have the right to terminate this agreement, if after a twelve-month period from the date in which the event of force majeure started, this has not been solved, even though reasonable efforts to solve it have been made, within the party’s possibilities.

TWELFTH.- Agreement between the parties. This agreement reflects the total agreement between the parties in relation to its objective, therefore the same cancels and leaves without effect any other agreement, covenant or letter of intent which was previously executed in relation to the same objective.

This agreement is enforceable in all its terms and conditions to all heirs, assignees and successors of the parties.

Both parties agree upon the ratification of this document before a Notary Public and to register it in the Mining Public Registry according to the Mining Law and its Regulations.

THIRTEENTH.- Communications. All communications to be made among the parties pursuant to this Agreement shall be oral or in writing, on the understanding that if any of the parties wish to give an irrefutable notice, this must be done before a Notary Public.

For the purposes of this agreement, the parties designate the following domiciles:


THE TITLEHOLDER:		THE COMPANY:

Mr. Jose Perez Reynoso Cerro del Chiquihuite #22 Col. Campestre Churubusco México D.F. C.P. 04200 Phone: (55) 55496390		DON DAVID GOLD, S.A. DE C.V. San Francisco #656 - 601 Col. Del Valle, C.P, 03100 México D.F. Phone/Fax: (55) 55362028 Atn Mr. Victor Garcia Jimenez

FOURTEENTH.- Applicable Laws and Jurisdiction. For all that has not been expressly stated in this Agreement, the parties subject themselves to the applicable legal provisions of Mexico City, Federal District, specially to the Mining Law and its Regulations, the Federal Rights Law, the Commerce Code and the Civil Code for the Federal District, agreeing to submit their disputes before the competent courts of Mexico City, Federal District, waiving their right to the jurisdiction of any other court, judicature or court of justice to which they may have a right by virtue of their present or future domiciles.

This agreement is signed by quadruplicate on November 21, 2002


THE TITLEHOLDER				THE COMPANY
				DON DAVID GOLD, S.A. DE C.V.

/s/ Jose Perez Reynoso				/s/ Victor Garcia Jimenez
Mr. Jose Perez Reynoso				Mr. Victor Garcia Jimenez

Exhibit 10.16

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Exhibit 10.17

b) En caso de venta de doré, bullion u otras substancias obtenidas y vendidas de LOS LOTES por LA COMPAŃÍA: una regalía de producción del cuatro por ciento (4%) del precio real de venta de todos los minerales, mineral en bruto o productos de valor que aparezcan en las facturas de compraventa, después de deducir todos los cargos de tratamiento, castigos y cualquier otros gastos y deducciones del precio neto de venta del producto que aparezcan en las liquidaciones de fundición o cualquier otro documento aceptable por cada venta por separado y después de deducir también el costo real de los fletes de dichas substancias a la fundición o cualquier otro documento aceptable por cada venta por separado de las substancias mencionadas. La regalía de producción pagadera al CONCESIONARIO conforme a lo aqui establecido, será pagadera después de deducir y amortizar todos los pagos de Anticipo Minimo de Regalias establecidos en la Cláusula Tercera Anterior. LA COMPAŃIA deberá efectuar el pago de Regalías de Producción al CONCESIONARIO MEDIANTE transferencia por giro a una cuenta y contra el recibo de la factura o facturas correspondientes (con el IVA agregado y desglosado), mensualmente dentro de los treinta (30) días siguientes a la fecha de terminación de cada mes en el que LA COMPAÑÍA reciba pagos finales por venta de minerales, mineral en bruto u otros productos de valor. Con base en los antecedentes mencionados, las partes:

b) In case of gold/silver bearing material, ingots or any other substances obtained and sold from THE LOTS by THE COMPANY: a production royalty of four percent (4%) on the real sale price of all the minerals, crude metals or valuable products included in the buying and selling invoices, after deducting all the processing charges, punishments or any other expenses and deductions on the net sale price of the products included in the smelting accounts or any other acceptable document for each separate sale and also after deducting the real freight cost of sending such substances to the smelting company or any other acceptable document for each separate sale of the aforementioned substances.

The production royalty payable to the CONCESSIONAIRE according to what has been established herein, will be payable after deducting and repaying the Royalty Minimum Advance payment mentioned in the previous Third Clause. THE COMPANY must pay the CONCESSIONAIRE his production royalty through bank transfers to an account upon receiving the respective invoice or invoices (including VAT), every month within 30 days following the end of each month in which THE COMPANY receives final payments for the sale of minerals, raw minerals or other valuable products. Given the foregoing, the parties:

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DECLARAN

1. Que los representantes de cada una de las partes que intervienen en éste convenio cuentan con las facultades requeridas para celebrarlo y que las mismas no les han sido revocadas o limitadas en forma tal que les impidiera la celebración de este convenio.

2. Que es su voluntad realizar la modificación del CONTRATO, a fin de que: especificamente de los concentrados que se produzcan y vendan de la Mina a Cielo Abierta denominada EL Aguila y exclusivamente de esta mina, se realicen pagos anticipados del tres por ciento (3%) al CONCESIONARIO al recibir LA COMPAÑÍA el anticipo de los lotes o embarques a fundición.

En virtud de los antecedentes y declaraciones anteriores, las partes convienen en las siguientes:

CLAUSULAS

PRIMERA. Las partes convienen en agregar a la Cláusula CUARTA, lo siguiente a fin de que ésta quede como sigue:

LA COMPAÑÍA pagará al CONCESIONARIO una regalia sobre liquidaciones netas de fundición (en adelante “Regalias de producción) sobre las liquidaciones netas de fundición o facturas de compraventa de primera mano de mineral pagadas a LA COMPAÑÍA por minerals, mineral en bruto u otros productos de valor obtenidos y vendidos de LOS LOTES. La regalia de producción será calculada como sigue:

(a) En caso de que LA COMPAÑÍA utilice

DECLARE

2. That it is their wish to modify the AGREEMENT, for the specific circumstance where concentrates are produced and sold from the EI Aguila Open Pit mine, and for only this mine, so that: a three percent (3%) advance payment can be paid to the CONCESSIONAIRE, when THE COMPANY receives the advance payment of the LOTS or shipments to the smelting facility.

In view of the aforementioned facts and representations, the parties agree to the following:

CLAUSES

First.- The parties agree to include into Clause FOURTH the following; in order for same to remain as follows:

THE COMPANY will pay the CONCESSIONAIRE a royalty on net smelting proceeds (hereinafter “Production Royalties) based on net smelting proceeds or first hand mineral buying and selling invoices paid to THE COMPANY for minerals, raw minerals or any other valuable product obtained or sold from THE LOTS. The production royalty will be assessed as follows:

a) In case THE COMPANY uses

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servicios de fundicion. Una regalia de produccion del cinco por ciento (5%) de las liquidaciones netas de fundicion de todas las sustancias obtenidas y vendidas de LOS LOTES.

b) En caso de venta de dore, bullion u otras substancias obtenidas y vendidas de LOS LOTES por LA COMPANIA; una regalia de produccion del cuatro por ciento (4%) del precio real de venta de todos los minerales, mineral en bruto o productos de valor que aparezcan en las facturas de compraventa, después de deducir todos los cargos de tratamiento castigos y cualquier otros gastos y deducciones del precio neto de venta del producto que aparezcan en las liquidaciones de fundicion o cualquier otro documento aceptable por cada venta por separado de las substancias mencionadas.

La regalia de produccion pagadera al CONCESIONARIO conforme a lo aqui establecido, será pagadera después de deducir y amortizar todos los pagos de Anticipo Minimo de Regalias establecidos en la Clausula Tercera Anterior.

LA COMPANIA deberá efectuar el pago de Regalias de Produccion al CONCESIONARIO MEDIANTE transferencia por giro a una cuenta y contra el recibo de la factura o facturas correspondientes ( con el IVA agregado y desglosado ). mensualmente dentro de los treinta (30) dias siguientes a la fecha de terminacion de cada mes en el que LA COMPANIA reciba pagos finales por venta de smelting services. A production royalty of five percent (5%) over smelting net proceeds for all the substances obtained and sold from THE LOTS.

THE COMPANY must pay the CONCESSIONAIRE his production royalty through bank transfers to an account upon receiving the respective invoice or invoices (including VAT), every month within 30 days following the end of each month in which THE COMPANY receives final payments for the sale of minerals, crude metals or

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servicios de fundición. Una regalia de producción del cinco por ciento (5%) de las liquidaciones netas de fundición de todas las sustancias obtenidas y vendidas de LOS LOTES. b) En caso de venta de doré, bullion u otras substancias obtenidas y vendidas de LOS LOTES por LA COMPAÑIA: una regalia de producción del cuatro por ciento (4%) del preci real de venta de todos los minerales, mineral en bruto o productos de valor que aparezcan en las facturas de compraventa, después de deducir todos los cargos de tratamiento, castigos y cualquier otros gastos y deducciones del precio neto de venta del producto que aparezcan en las liquidaciones de fundición o cualquier otro documento aceptable por cada venta por separado y después de deducir también el costo real de los fletes de dichas substancias a Ia fundición o cualquier otro documento aceptable por cada venta por separado de las substancias mencionadas. La regalia de producción pagadera al CONCESIONARIO conforme a lo aqui establecido, será pagadera después de deducir y amortizar todos los pagos de Anticipo Minimo de Regalias establecidos en Ia Cláusula Tercera Anterior.

smelting services. A production royalty of five percent (5%) over smelting net proceeds for all the substances obtained and sold from THE LOTS.

LA COMPAÑIA deberá efectuar el pago de THE COMPANY must pay the Regalias de Producción al CONCESIONARIO CONCESSIONAIRE his production MEDIANTE transferencia por giro a una cuenta royalty through bank transfers to an y contra el recibo de la factura o facturas account upon receiving the respective correspondientes ( con el IVA agregado y invoice or invoices (including VAT), desglosado ), mensualmente dentro de los every month within 30 days following treinta (30) dias siguientes a la fecha de the end of each month in which THE terminación de cada mes en el que LA COMPANY receives final payments for COMPAÑIA reciba pagos finales por venta de the sale of minerals, crude metals or

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minerales, mineral en bruto u otros productos de valor.

Adendum. Para la exclusiva circunstancia respecto de concentrados producidos y vendidos de la Mina a Cielo Abierto denominada El Aguila (únicamente de esta mina), LA COMPAÑÍA pagará al CONCESIONARIO a cuenta del pago total de las regalias de los lotes o embarques enviados a fundición el tres por ciento (3%) de los anticipos pagados por la fundición a LA COMPAÑÍA en un término no mayor a diez (10) dias, contados a partir de dicho pago o pagos, cantidad que será desconetada una vez liquidado el lote o embarque correspondientes, efectuándose los ajustes y descuento pactados. Este pago por anticipado será únicamente un anticipo y el acuerdo final sobre los lotes subsistirá. En caso de que al final del acuerdo, LA COMPAÑÍA adeude al CONCESIONARIO pagos adicionales, entonces dichos pagos adicionales se harán de acuerdo a lo estipulado en el CONTRATO. En caso de que el acuerdo final muestre que el pago por anticipado excedió la cantidad debidamente adeudada al CONCESIONARIO y por tanto el CONCESIONARIO deba a LA COMPAÑÍA el sobrepago, LA COMPAÑÍA podrá deducir la cantidad correspondiente de futuros pagos anticipados por concepto de regallas.

SEGUNDA. Salvo las modificaiones contenidas en éste convenio, todas las demás cláusulas del CONTRATO y los terminos establecidos en las mismas, mantendran pleno vigor y fuerza entre las partes.

Addendum For the specific circumstance where concentrates are produced and sold from the El Aguila Open Pit Mine only, THE COMPANY will pay the CONCESSIONAIRE three percent (3%) as advance payment on the total royalties of the advance payments received by THE COMPANY from the lots or shipments sent to the smelting company. This payment must be made within ten (10) days after such payment or payments have been received, amount that must be deducted once the lot or shipment has been paid in full, applying any adjustments or discounts previously agreed upon. This advance payment is only an advance and the final settlement on the lots shall prevail. If upon final settlement THE COMPANY owes the CONCESSIONAIRE additional payments then those additional payments shall be made according to the AGREEMENT. If the final settlement shows the advance payment exceeded the correct amount owed the CONCESSIONAIRE and therefore the CONCESSIONAIRE owes THE COMPANY the overpayment, THE COMPANY may take that amount against any future advance payments. SECOND.- With the exception of the modifications included herein all the other clauses of the AGREEMENT and terms established therein, will continue in force among the parties.

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Habiendo leldo este convenio y enteradas de Both parties, agreeing with the judicial sus efectos legales, las partes lo ratifican y consequences of this agreement, firman en Mexico, D.F., el 22 execute and enter into the same in de Nov. de 2010. , on 22 Nov, 2010 DON DAVID GOLD, S.A. DE C.V. Ing. José Pérez Reynoso William W. Reid

Exhibit 10.17

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Exhibit 10.18

CONVENIO QUE CELEBRAN, POR UNA PRIMERA PARTE, DON DAVID GOLD, SA. DE CV., (EN LO SUCESIVO IDENTIFICADA COMO “LA COMPAŃÍA”), REPRESENTADA EN ESTE ACTO POR EL SR. WILLIAM W. REID; Y POR UNA SEGUNDA PARTE, ING. JOSE PEREZ REYNOSO, (EN LO SUCESIVO IDENTIFICADO COMO EL “CONCESIONARIO”), CONJUNTAMENTE REFERIDOS COMO LAS “PARTES”, POR SU PROPIO DERECHO, CONFORME A LOS SIGUIENTES ANTECEDENTES, DECLARACIONESY CLAUSULAS: ANTECEDENTES 1. Con fecha 21 de noviembre de 2002, celebraron un Contrato de Exploración y Explotación, (en lo sucesivo el “CONTRATO”), relativo a las concesiones mineras “La Tehuana”, titulo 210029, “El Aguila”, título 206772 y “El Áire”, titulo 158272, a las que en lo sucesivo se les denominará como los “LOS LOTES” el cual se encuentra inscrito bajo acta 217 a fojas 132 del volumen 14 del Libro de Actas, Contratos y Convenios Mineros, del Registro Público de Minería. 2. En La cláusula CUARTA del CONTRATO se establece que: La COMPAŃÍA pagará al CONCESIONARIO una regalía sobre liquidaciones netas de fundición (en adelante “Regalías de Producción”) sobre las liquidaciones netas dó fundición o facturas de compraventa de primera mano de mineral pagadas a LA COMPAŃÍA por minerales, mineral en bruto u otros productos de valor obtenidos y vendidos de LOS LOTES. La regalíá de producción será calculada como sigue: a) En caso de que LA COMPAŃÍA utilice servicios de fundición. Una regalía de producción del cinco por ciento (5 %) de las liquidaciones netas do fundición de

AGREEMENT ENTERED INTO BY AND BETWEEN AS THE FIRST PARTY, DON DAVID GOLD, S.A. DE CV. (HEREINAFTER “THE COMPANY”), REPRESENTED HEREIN BY MR. WILLIAM W. REID; AND AS THE SECOND PARTY, MR. JOSE PEREZ REYNOSO, (HEREINAFTER THE “CONCESSIONAIRE”), JOINTLY REFERRED HEREINAFTER AS TO THE “PARTIES” ON HIS OWN BEHALF, IN ACCORDANCE WITH THE FOLLOWING PRECEDENTS, REPRESENTATIONS AND CLAUSES: PRECEDENTS 1. An Exploration and Exploitation agreement was entered on November 21, 2002 (hereinafter the “AGREEMENT”) related to the mining concessions “La Tehuana2, title number 210029, “El Águila”, title number 206772 and “El Áire”, title number 158272, hereinafter referred as to the “THE LOTS” which has been registered under document 217 page 132, volume 14 in the Mining Acts, Contracts and Agreements Book, of the Public Mining Registry. 2. In clause FOUR of the AGREEMENT it has been established that: THE COMPANY will pay the CONCESSIONAIRE a royalty on net smelting proceeds (hereinafter “Production Royalties”) based on net smelting proceeds or first hand mineral buying and selling invoices paid to THE COMPANY for minerals, raw minerals or any other valuable products obtained or sold from THE LOTS. The Production Royalty will be assessed as follows: a) In case THE COMPANY uses smelting services. A production royalty of five percent (5%) over smelting net proceeds for all the substances

todas las substancias obtenidas

y obtained and sold from THE LOTS.

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vendidas de LOS LOTES.

b) En caso de venta de doré, bullion u otras substancias obtenidas y vendidas de LOS LOTES por LA COMPAÑÍA; una regalía de producción del cuatro por ciento (4%) del precio real de venta de todos los minerales, mineral en bruto o productos de valor que aparezcan en las facturas de compraventa, después de deducir todos los cargos de tratamiento, castigos y cualquier otros gastos y deducciones del precio neto de venta del producto que aparezcan en las liquidaciones de fundición o cualquier otro documento aceptable por cada por cada venta por separado y después de deducir también el costo real de los fletes de dichas substancias a la fundición o cualquier otro documento aceptable por cada venta por separado de las substancias mencionadas. La regalía de producción pagadera al CONCESIONARIO conforme a lo aquíestablecido, será pagadera después de deducir y amortizar todos los pagos de Anticipo Mínimo de Regalías establecidos en la Cláusula Tercera Anterior. La COMPAÑÍA deberá efectuar el pago de Regalías de Producción al CONCESIONARIO mediante transferencia por giro a una cuenta y contra el recibo de la factura o facturas correspondientes (con el IVA agregado y desglosado), mensualmente dentro de los treinta (30) días siguientes a la fecha de terminación de cada mes en el que LA COMPAŃÍA reciba pagos finales por venta de minerales, mineral en bruto u otros productos de valor. Con base en los antecedentes mencionados, las partes:

b) In case of gold/silver bearing material, ingots or any other substances obtained and sold from THE LOTS by THE COMPANY; a production royalty of four percent (4%) on the real sale price of all the minerals, crude metals or valuable products included in the buying and selling invoices, after deducting all the processing charges, punishments or any other expenses and deductions on the net sale price of the products included in the smelting accounts or any other acceptable document for each separate sale and also after deducting the real freight cost of sending such substances to the smelting company or any other acceptable document for each separate sale of the aforementioned substances. The production royalty payable to the CONCESSIONAIRE according to what has been established herein, will be payable after deducting and repaying the Royalty Minimum Advance payment mentioned in the previous Third Clause. THE COMPANY must pay the CONCESSIONAIRE his production royalty through bank transfers to an account upon receiving the respective invoice or invoices (including VAT), every month within 30 days following the end of each month in which THE COMPANY receives final payments for the sale of minerals, raw minerals or other valuable products.

THE COMPANY CONCESSIONAIRE

must pay the his production royalty

Given the foregoing, the parties:

DECLARAN

DECLARE

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1. Que los representantes de cada una de las partes que intervienen en este convenio, cuentan con las facultades requeridas para celebrarlo y que las mismas no les han sido revocadas o limitadas en forma tal que les impidiera la celebración de este convenio. 2. Que es su voluntad realizar la modificación del CONTRATO, a fin de que: específicamente de los pagos anticipados, que reciba LA COMPAÑÍA de los embarques de fundición de los concentrados de la Mina o Minas subterráneas que se produzcan Y vendan de LOS LOTES, se realicen pagos anticipados al CONCESIONARIO equivalentes al cincuenta por ciento (50%) de la Regalía de Producción que le corresponda del cálculo estimado del pago final que reciba LA COMPAÑÍA de dichas liquidaciones netas de fundición o facturas de compraventa de primera mano de mineral. En virtud de los antecedentes y declaraciones anteriores, las partes convienen en las siguientes: CLAUSULAS PRIMERA. Las partes convienen en agregar a la Cláusula CUARTA, lo siguiente a fin de que ésta quede como sigue: La COMPAÑÍA pagará al CONCESIONARIO una Regalía sobre liquidaciones netas de fundición (en adelante “Regalías de Producción”) sobre las liquidaciones netas de fundición o facturas de compraventa de primera mano de mineral pagadas a LA COMPAÑÍA por minerales, mineral en bruto u otros productos de valor obtenidos y vendidos de LOS LOTES. La regalía de producción será calculada como sigue: a) En caso de que LA COMPAÑÍA utilice servicios de fundición: Una regalía de producción del cinco por ciento (5%) de las

1. That the parties’ representatives entering into this agreement have enough authority to execute it, same authority that has not been revoked or limited whatsoever which would impede them from entering into this agreement. 2. That it is their wish to modify the AGREEMENT, for the specific circumstance that from the advanced payments THE COMPANY receives from the concentrates smelting shipments of the underground Mine or Mines produced and sold from THE LOTS it pays advance payment equivalent to a fifty percent (50%) of the Production Royalty to the estimated final payment that THE COMPANY may receive of said smelting net proceeds or buying and selling invoices. In view of the aforementioned facts and representations, the parties agree to the following:

CLAUSES

FIRST. The parties agree to include into Clause FOURTH the following; in order for same to remain as follows:

THE COMPANY will pay the CONCESSIONAIRE a Royalty on net smelting proceeds (hereinafter “Production Royalties”) based on net smelting proceeds or first hand mineral buying and selling invoices paid to THE COMPANY for minerals, raw minerals or any other valuable product obtained or sold form THE LOTS, the Production Royalty will be assessed as follows: a) In case THE COMPANY uses smelting services. A production royalty of five percent (5%) over smelting net proceeds

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Liquidaciones netas de fundición de todas las substancias obtenidas y vendidas de LOS LOTES.

b) En caso de venta de doré, bullion u otras substancias obtenidas y vendidas de LOS LOTES por LA COMPAÑÍA: una Regalía de producción del cuatro por ciento (4%) del precio real de venta de todos los minerals, mineral en bruto o productos de valor que aparezcan en las facturas de compraventa, después de deducir todos los cargos de tratamiento, castigos y cualquier otros gastos y deducciones del precio neto de venta del producto que aparezcan en las liquidaciones de fundición o cualquier otro documento aceptable por cada venta por separado y después de deducir también el costo real de los fletes de dichas substancias a la fundición o cualquier otro documento aceptable por cada venta por separado de las substancias mencionadas.

La regalía de producción pagadera al concesionario conforme a lo aquíestablecido, será pagada después de deducir y amortizar todos los pagos de Anticipo Mínimo de Regalías establecidos en la cláusula Tercera Anterior.

La COMPAÑÍA, deberá efectuar el pago de Regalías de producción as CONCESIONARIO mediante transferencia pro giro a una cuento y contra el recibo de la factura o facturas correspondientes (con el IVA agregado y desglosado), mensualmente dentro de los terinta (30) dias siguientes a la fecha de terminación de cada mes en el que LA COMPAÑÍA reciba pagos finales por venta de minerals, mineral en bruto u otros productos de valor.

Adendum

Con el objeto de agilizar los pagos de los concentrados producidos y vendidos de la Mina for all the substances obtained and sold from THE LOTS.

b) In case of gold/silver bearing material, ingots or any other substaces obtained and sold from THE LOTS by THE COMPANY; a production royalty of four percent (4%) on the real sale price of all the minerals, crude metals or valuable products included in the buying and selling invoices, after deducting all the processing charges, punishments or any other expenses and deductions on the net sale price of the products included in the smelting accounts or any other acceptable document for each separate sale and also after deducting the real freight cost of sending such substances to the smelting company or any other acceptable document for each separate sale of the aforementioned substances.

The production royalty payable to the CONCESSIONAIRE according to what has been established herein will be paid after deducting and repaying the Royalty Minimum Advance payment mentioned in the previous Third Clause.

THE COMPANY must pay the CONCESSIONAIRE his production royalty through bank transfer to an account upon receiving the respective invoice or invoices (including VAT), every month within 30 days following the end of each month in which THE COMPANY receives final payments for the sale of minerals, crude metals or other valuable products

Addendum

In order to expedite payments for the concentrates produced and sold in the

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o Minas subterránean, LA COMPAÑÍA pagará al CONCESSIONAIRE a cuenta del pago total de Regalías de los lotes o embarques enviados a fundición (los “Embarques”), de la siguiente forma:

1.- LA COMPAÑÍA calculará al final de cada mes, el valor provisional (“Valor Provisional”) de los Embarques enviados a findición para ese mes.

2. En base a Valor Provisional mensual LA COMPAÑÍA, realizará una estimación de la Regaliá de Producción debida del CONCESSIONAIRO.

3.Dentor de los 10 días siguientes al término de cada mes, se pagará un adelanto provisional at CONCESSIONAIRO correspondiente al 50% del calculo del Valor Provisional de la Regalía de Producción.

4. La liquidación del 50% restante será pagada de acuerdo a los térmios del CONTRATO.

5. Cualquier diferencia a fovor o en contra de los pagos provionales de la Regaliá de Producción serán ajustdos en el pago final de la Regalía de Producción relative a los Embarques mensuales correspondientes. En el caso de que el anticipo sea mayor al pago final, la diferencia se podrá deducir enpagos futuros.

6. Posteríor a la firma de este convenio modificatorio, las Partes calcularán los pagos provisionales de Regalías de Produccion de los meses pendients de pago por causes no atribuibles a LA COMPAÑÍA, a la fecha de celebración del presente convenio y seran pagados de acuredo con la presente modificacíón, en su totalidad en tres partes iguales pagaderas dentro de los tres meses siguientes a la firma de este convenio modificatorio. Los pagos de las Regalías de Producción respecto a los pagos finales por venta de minerals, mineral en bruto u otros productos de valor que ya se hubieren liquidado ensu totalidad a LA COMPAÑÍA a la fecha de celebración del presento convenio, se pagarán por LA COMPAÑÍA al CONCESSIONAIRO, en términus CONTRATO.

Underground Mine or Mines, THE COMPANY shall pay the CONCESSIONAIRE to account of the total payment of royalties for the lots or shipments (the “Shipments”) sent to smelting, as follows:

1.The COMPANY will calculate, at the end of each month, the provisional value (“provisional value”) of the Shipments sent to smelting for that month.

2. Based on this monthly Provisional Value THE COMPANY will figure an estimate of the Production Royalty payable to the Concessionaire.

3. Within 10 days of the end of each month, it will be paid a Provisional Advance to the CONCESSIONAIRE equal to 50% of the calculated Provisional value of the production Royalty due.

4. the final payment of the remaining 50% will be paid according to the AGREEMENT’s terms.

5. Any over payment or underpayment of the Provisional Advance relative to the actual Production Royalty due will be adjusted in the final production Royalty payment due with respect to the corresponding monthly Shipments. If the overpayment is greatee than what is due. Adjusted against next future payment.

6. upon signing this amendment agreement, the Parties will also calculate the provisional production Royalty amount payable for any back months for outstanding royalties due for causes not attributable to THE COMPANY upon the execution of this amendment agreement and pay according to this modification thereto in its totality in three equal parts within the three months following to the execution of this amendment agreement. Payments of the production Royalties with respect to final payments of the minerals, crude metals or valuable products that had been paid in its totality to THE COMPANY at the execution of this amendment agreement shall be paid by THE

LOGO

SEGUNDA. Salvo las modificaciones contenidas en este convenio, todas las demás cláusulas del CONTRATO y los términos establecidos en las mismas, mantendrán pleno vigor y fuerza entre las partes. Habiendo leído este convenio y enteradas de sus efectos legales, las partes lo ratifican y firman en el 3 de Agusto de 2012

COMPANY to the CONCESSIONAIRE in terms of the AGREEMENT. SECOND. With the exception of the modifications included herein, all the other clauses of the AGREEMENT and terms established therein, will continue in force among the parties. Both parties, agreeing with the judicial consequences of this agreement, execute and enter into the same in on August 3, 2012.

DON DAVID GOLD, S.A.DE C.V.

William W. Reid

Ing. José Pérez Reynoso

Exhibit 31.1

CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, William W. Reid, certify that:

1. I have reviewed this Form 10-Q of Gold Resource Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2012

/s/ William W. Reid

William W. Reid

Chief Executive Officer

Exhibit 31.2

CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bradley J. Blacketor, certify that:

1. I have reviewed this Form 10-Q of Gold Resource Corporation;

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2012

/s/ Bradley J. Blacketor

Bradley J. Blacketor

Chief Financial Officer

Exhibit 32

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, William W. Reid, Chief Executive Officer, and I, Brad J. Blacketor, Chief Financial Officer of Gold Resource Corporation (the “Company”) certify that:

1. I have reviewed the quarterly report on Form 10-Q of the Company;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the period presented in this quarterly report.

Date: August 9, 2012

/s/ William W. Reid

William W. Reid

Chief Executive Officer

Date: August 9, 2012

/s/ Bradley J. Blacketor

Bradley J. Blacketor

Chief Financial Officer

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