GOLD RESOURCE CORP Income Taxes Disclosure

7. Income Taxes

The Company accounts for income taxes in accordance with the provisions of ASC 740, “Income Taxes” (“ASC 740”) on a tax jurisdictional basis. The Company and its U.S. subsidiaries file U.S. tax returns and the Company’s foreign subsidiaries file tax returns in Mexico and Canada.

For financial reporting purposes, total loss before income taxes includes the following components.

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The Company’s total income tax provision (benefit) consists of the following:

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The provision (benefit) for income taxes for the years ended December 31, 2024 and 2023 differs from the amount of income tax determined by applying the applicable United States statutory federal income tax rate to pre-tax income from operations as a result of the following differences:

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In 2024, the Company recorded a valuation allowance on the Mexico Income Tax net deferred tax assets for $18.9 million. In the fourth quarter of 2023, the Company completed a study of the Internal Revenue Code section 382 (“382”) net operating loss limitations related to ownership changes in connection with the Back Forty Project acquisition. The study found that approximately $45.1 million of federal net operating losses and $12.3 million of Michigan net operating losses would be subject to potential limitation under 382. The study also concluded that $30.8 million of federal losses and $33.7 million of Michigan losses would be unable to offset future taxable income by the Company due to loss limitations under 382 and loss carryforward expirations. The annual limitation for the Company under 382 is $1.3 million.

The following table sets forth deferred tax assets and liabilities:

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In accordance with ASC 740, the Company presents deferred tax assets net of its deferred tax liabilities on its Consolidated Balance Sheets on a jurisdictional basis. The net deferred tax liability of $14.0 million as of December 31, 2024 shown in the table above is comprised of a $13.5 million deferred tax liability related to the U.S. entities and a $0.5 million deferred tax liability related to Don David Gold Mine S.A. de C.V. (“DDGM”) in Mexico. No net deferred tax balances exist in Canada due to the existence of a full valuation allowance.

The Company evaluates the evidence available to determine whether a valuation allowance is required on deferred tax assets. As of December 31, 2024, the Company determined that a valuation allowance of $56.5 million was necessary due to the uncertain utilization of specific deferred tax assets, primarily net operating loss carryforwards, with $20.2 million in U.S., $18.9 million in Mexico and $17.4 million in Canada; $28.0 million of the total valuation allowance of the $56.5 million is related to Aquila in the U.S. and Canada. As of December 31, 2023, the Company determined that a valuation allowance of $32.8 million was necessary due to the uncertain utilization of specific deferred tax assets, primarily net operating loss carryforwards, with $19.0 million in U.S. and $13.8 million in Canada; $24.0 million of the valuation allowance is related to Aquila. The net change in the Company’s valuation allowance was an increase of $23.7 million for the year ended December 31, 2024. The increase in valuation allowance is primarily explained by recognition of a valuation allowance in Mexico for Mexico income tax purposes during the year and also due to continuing losses subject to a valuation allowance in the U.S. and Canada.

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At December 31, 2024, the Company has available U.S. federal loss carryforwards of $81.6 million, of which $61.0 million have no expiration date, and $20.6 million that expire at various dates between 2027 and 2037; U.S. Foreign Tax Credits of $2.0 million that expire at various dates between 2025 and 2026; state of Colorado tax loss carryforwards of $55.9 million, of which $29.5 million expire at various dates between 2025 and 2037 and $26.4 million that have no expiration; available state of Michigan tax loss carryforwards of $18.8 million expiring at various dates between 2025 and

2034; Wisconsin tax loss carryforwards of $4.0 million expiring in 2042; and Canadian tax loss carryforwards of $22.9 million that expire between 2026 and 2044.

Mexico Valuation Allowance

The Company recorded a valuation allowance on the Mexico Income Tax net deferred tax assets in 2024 for $18.9 million. In accordance with applicable accounting rules, a valuation allowance is recorded when it is more likely than not that some portion of the deferred tax assets will not be realized, after considering all available evidence, both positive and negative. The Company determined a valuation allowance on Mexico income tax deferred tax assets was necessary due primarily to the recent losses at the Mexico mine.

Mexico Mining Taxation

Mining entities in Mexico are subject to two mining duties, in addition to the 30% Mexico corporate income tax: (i) a “special” mining duty of 7.5% of taxable income as defined under Mexican tax law (also referred to as “mining royalty tax”) on extraction activities performed by concession holders, and (ii) the “extraordinary” mining duty of 0.5% on gross revenue from the sale of gold, silver, and platinum. The mining royalty tax is generally applicable to earnings before income tax, depreciation, depletion, amortization, and interest. In calculating the mining royalty tax, there are no deductions related to depreciable costs from operational fixed assets, but prospecting and exploration expenses are amortized at 10% rate in a straight line. Both duties are tax deductible for income tax purposes. As a result, the effective tax rate applicable to the Company’s Mexican operations is substantially higher than Mexico’s statutory rate.

On November 15, 2024, the Mexican government signed into law a rate increase of the “special” mining duty from 7.5% to 8.5% of the applicable taxable income, and for the “extraordinary” mining duty an increase from 0.5% to 1% on applicable gross revenue. The new tax rates became effective January 1, 2025. Going forward, the Company adjusted its deferred tax liabilities to reflect the new 8.5% rate for the “special” mining duty.

The Company periodically transfers funds from its Mexican wholly owned subsidiary to the U.S. in the form of dividends. Mexico requires a 10% withholding tax on dividends on all post-2013 earnings. The Company began distributing post-2013 earnings from Mexico in 2018. According to the existing U.S. – Mexico tax treaty, the dividend withholding tax between these countries is reduced to 5% if certain requirements are met. The Company determined that it had met such requirements and paid a 5% withholding tax on dividends received from Mexico, and as a result, paid $0.1 million and $0.1 million for years ending December 31, 2024 and 2023, respectively. At the end of 2024, the Company reviewed the tax treaty and believes that it qualifies for a 0% tax withholding. Going forward, the Company will apply this rate on any intercompany dividend payment from Mexico.

Other Tax Disclosures

The Company files U.S. and various state income tax returns, as well as foreign income tax returns in Canada and Mexico, with varying statutes of limitations. In general, the statute of limitations is three years in the United States and in Canada. However, the Company has net operating loss and tax credit carryforward balances beginning in the tax year ended December 31, 2007 for the United States and in the tax year ended December 31, 2006 for Canada. As a result, all tax years since 2007 remain open to examination in the United States and all tax years since 2006 remain open to examination in Canada. In Mexico, the statute of limitations is generally five years, which currently is 2018 and forward. The Company is under audit for the tax year ended December 31, 2015. All other years are closed to inspection outside of the standard statute of limitations window in Mexico.

In October 2023, the Company received a notification from the Mexican Tax Administration Services (“SAT”) with a sanction of 331 million pesos (approximately $16.1 million as of December 31, 2024) as the result of a 2015 tax audit that began in 2021. The 2015 tax audit performed by SAT encompassed various tax aspects, including but not limited to intercompany transactions, mining royalty tax, and extraordinary mining tax. Management is in process of disputing this tax notification and sent a letter of protest to the tax authorities along with providing all requested documentation. If necessary, management intends to pursue legal avenues of protest, including filing a lawsuit with the Mexico court system,

if necessary, to ensure that these adjustments are removed. Management believes the position taken on the 2015 income tax return meets the more likely than not threshold and that as of December 31, 2024 and December 31, 2023, the Company has no liability for uncertain tax positions. If the Company were to determine there was an unrecognized tax benefit, the Company would recognize the liability and related interest and penalties within income tax (benefit) provision.