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Message: Barrow's article GORO....fraud....no way says Doody

Special Alert - July 4, 2011
GOLD STOCK ANALYST
http://www.GoldStockAnalyst.com


Gold Resources (GORO) is the target of a "hatchet job" in July 2, 2011 issue of Barron's.
A link to the article is found here: http://online.barrons.com/home-page/ You'll have to join
for the full report, or buy at your newsstand. A link to GORO's reply is posted here:
http://www.goldresourcecorp.com/


From the Barron's lead-in, GORO's reply, and the response below, you can probably save
yourself the money, although you might like the cover article predicting $150/bbl oil in the
summer of 2012... higher oil is always good for Gold.


I am traveling now and without all my information in the office. But, as I am cited by name
in the article, I feel compelled to give my objections. GSA has always said the Reids are
"odd ducks" in the way they've financed and built the mine, but doing things differently is
not a reason to think there's fraud being committed, as the article implies.


In my phone conversation with the author, Michael Santoli, I made a number of points.


1) He cites no mining industry sources suggesting something might be amiss. In fact, he
cites no information sources beyond InsiderScore.com's tally of $13.7 mil in management
share sales over the past year. This is a trivial 6% of their now $229 mil holdings at the
recent $24 close and they still hold ~18% of the 53 mil shares issued. Source #2 is the Amex short interest report showing 3.4 mil shrs (14% of the public float) have been borrowed and sold (shorted) in hopes of buying back at a lower price. Who the shorters are, and what is their relation to Santoli, we are left to guess.


2) On GORO's side, but apparently not of equal or greater weight to Santoli are:


A) Hochschild Mining, a Peruvian miner, invested $65 mil in GORO (now holds ~28%) to
build the mill and start mining on the strength of 240,000' of drill results. This eliminated
the need to follow the traditional path of taking 2 years for a feasibility study to get the mine
financed. Moreover, Santoli neglected to mention that at the same approximate time
Hochschild bought into GORO, it made another major investment in Canadian miner,
Lakeshore Gold. Several years later, in 2010, needing several hundred million dollars itself
to build a new mine, Hochschild chose to sell all its Lakeshore and keep GORO. "Pretty
strong vote of confidence for GORO" said your Editor to Santoli.


B) Tocqueville Gold Fund (~9% of GORO shrs) was an early investor based on their inhouse
geologist's site visit and has continued to buy in every financing since to maintain its
position. Over the years Tocqueville has consistently been a top performing gold fund, the
best sign of a knowledgeable fund manager.


C) Analyst Mike Dudas is a long time industry veteran and had no reason to stake his own
reputation on a potential fraud when he assisted in Jefferies' $56 mil equity sale in Sept
2010.


D) I reminded Santoli that I was quoted in Barron's after Gold Stock Analyst declared to its
subscribers that Bre-X was a fraud in early 1997. Fortunately the Company collapsed before
the threatened $1 billion lawsuit was filed. But, my point to Santoli was that I have a track
record when it comes to revealing frauds, and if I thought something was amiss in GORO's
case, I'd have no hesitation to say so.


The article's opening point will be my last. GORO spent $1.7 mil on a Colorado Springs
townhouse in a residential development across from a golf course to be their new
headquarters. So what? I live on the beach in Ft Lauderdale and bought another unit in the
same building to be GSA's office when the time came. Where is it written that any
Company's management has to work in disgusting digs?


So what next? Despite the article, I don't think GORO will plummet when trading opens
Tuesday, July 5th. Most investors, certainly all those who came because of its GSA Top 10
status, already know the "odd duck" story. But in case I'm wrong, I've got several limit
orders placed at below market prices. I don't think they will get filled, but if they do, I'll be
glad own more GORO shares due other holders' stupid selling. And I'm telling my
brokerage "No" to lending my shares. Thanks for that idea, Santoli!


John Doody

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