Form 8-K - Current report

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): July 9, 2024

 

GATOS SILVER, INC.

(Exact name of registrant as specified in its charter)

 

Delaware (State or other jurisdiction of incorporation)

001-39649 (Commission File Number)

27-2654848 (I.R.S. Employer Identification No.)

 

925 W Georgia Street, Suite 910 Vancouver, British Columbia, Canada (Address of principal executive offices)

V6C 3L2 (Zip Code)

 

Registrant’s telephone number, including area code: [phone]

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	GATO	New York Stock Exchange Toronto Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On July 9, 2024, Gatos Silver, Inc. issued a press release announcing production results at the Cerro Los Gatos Mine for the quarter and six months ended June 30, 2024 and providing certain other updates. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.

 

The full text of the press release is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference. The information included in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto are intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this report, regardless of any general incorporation language in the filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press Release, dated July 9, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	GATOS SILVER, INC.
Date: July 10, 2024	By:	/s/ Dale Andres
		Dale Andres
		Chief Executive Officer

 

 

 

Exhibit 99.1

 

 

	925 W Georgia St, Suite 910 Vancouver, British Columbia  V6C 3L2 [phone] www.gatossilver.com

 

GATOS SILVER REPORTS Q2 2024 PRODUCTION RESULTS WITH RECORD MILL THROUGHPUT AND ZINC PRODUCTION

 

Vancouver, British Columbia, July 9, 2024 — Gatos Silver, Inc. (NYSE/TSX: GATO) (“Gatos Silver” or the “Company”) today announced production results for the quarter and six months ended June 30, 2024 at its 70%-owned Cerro Los Gatos (“CLG”) mine in Mexico.

 

Dale Andres, CEO of Gatos Silver, commented: “In the second quarter of 2024 the CLG mine delivered strong operational results, with record zinc production and the sixth consecutive quarterly record for mill throughput. Silver equivalent production for the quarter was 3.88 million ounces, an increase of 18% from the second quarter of 2023, and we continue to track at the top end of 2024 guidance.”

 

“Our mine debottlenecking efforts delivered a mill throughput average of 3,240 tonnes per day, up 1% from the first quarter of 2024 and up 11% from the second quarter of 2023, as we advanced towards our medium-term target of sustained throughput rates of 3,500 tonnes per day. We expect to complete an updated life of mine plan in the third quarter of 2024 with a target to further extend the mine life. We also increased exploration drilling efforts during the second quarter on both near mine targets and at the San Luis prospect located five kilometers from the CLG mine.”

 

Production Results (100% basis)

 

CLG comparative production highlights are summarized below:

 

	Three Months Ended June 30,		Six Months Ended June 30,
CLG Production (100% Basis)	2024	2023	2024	2023
Tonnes milled (dmt)	294,869	265,342	586,983	525,770
Tonnes milled per day (dmt)	3,240	2,916	3,225	2,905
Feed Grades
Silver (g/t)	273	265	279	296
Zinc (%)	4.55	4.00	4.27	3.96
Lead (%)	2.06	1.85	1.92	1.86
Gold (g/t)	0.29	0.26	0.29	0.28
Contained Metal
Silver ounces (millions)	2.30	2.00	4.67	4.43
Zinc pounds - in zinc conc. (millions)	19.1	14.8	34.9	28.9
Lead pounds - in lead conc. (millions)	12.0	9.7	22.2	19.1
Gold ounces - in lead conc. (thousands)	1.36	1.20	2.75	2.58
Silver Equivalent ounces (millions)1	3.88	3.30	7.58	6.99
Recoveries
Silver - in both lead and zinc concentrates	88.9%	88.6%	88.9%	88.4%
Zinc - in zinc concentrate	64.6%	63.5%	63.1%	62.8%
Lead - in lead concentrate	89.5%	89.1%	89.4%	88.9%
Gold - in lead concentrate	48.8%	53.9%	50.4%	54.7%

 

Page 1 of 3

 

¹ For 2024, silver equivalent production is calculated using prices of $23/oz silver, $1.20/lb zinc, $0.90/lb lead and $1,800/oz gold to “convert” zinc, lead and gold production contained in concentrate to “equivalent” silver ounces (contained metal, multiplied by price, divided by silver price). For 2023, silver equivalent production was calculated using prices of $22/oz silver, $1.20/lb zinc, $0.90/lb lead and $1,700/oz gold. For comparative purposes, the calculated silver equivalent production for the three and six months ended June 30, 2023 would be 3.24 million ounces and 6.89 million ounces, respectively, using price assumptions for 2024.

 

 

Silver equivalent¹ production for the second quarter of 2024 was 3.88 million ounces, 18% higher than the second quarter of 2023. Silver production was 2.30 million ounces, 15% higher than the comparable quarter of 2023. Zinc production increased by 29% compared with the second quarter of 2023 as a result of higher throughput, higher grades and higher recovery resulting in a record quarterly production of 19.1 million pounds. Lead production and gold production increased by 24% and 14%, respectively, compared with the second quarter of 2023 due to higher throughput and grades. We continue to expect both silver equivalent and silver production to be in the top half of our previously announced guidance ranges of 13.5 to 15.0 million ounces and 8.4 to 9.2 million ounces respectively for the full year in 2024.

 

The processing plant is reliably performing above 3,500 tonnes per operating day with no reduction in metallurgical recoveries. The CLG team is focused on first consistently maintaining and then gradually increasing daily mine production rates by implementing various optimization and improvement projects across the maintenance and mine operation functions over the next 6 to 12 months. The rebuild program for the underground mobile equipment fleet is progressing well and is expected to help further debottlenecking efforts in the mine during the second half of 2024.

 

As of June 30, 2024, the Company and the Los Gatos Joint Venture (“LGJV”) reported cash and cash equivalents of $82.5 million and $45.5 million, respectively.

 

About Gatos Silver

Gatos Silver is a silver dominant exploration, development and production company that discovered a new silver and zinc-rich mineral district in southern Chihuahua State, Mexico. As a 70% owner of the LGJV, the Company is primarily focused on operating the Cerro Los Gatos mine and on growth and development of the Los Gatos district. The LGJV includes approximately 103,000 hectares of mineral rights, representing a highly prospective and under-explored district with numerous silver-zinc-lead epithermal mineralized zones identified as priority targets.

 

Qualified Person

 

Scientific and technical disclosure in this press release was approved by Anthony (Tony) Scott, P.Geo., Senior Vice President of Corporate Development and Technical Services of Gatos Silver who is a “Qualified Person” as defined in S-K 1300 and NI 43-101.

 

Forward-Looking Statements

 

This press release contains statements that constitute “forward looking information” and “forward-looking statements” within the meaning of U.S. and Canadian securities laws. All statements other than statements of historical facts contained in this press release, including statements regarding production guidance for 2024, target throughput rate and timing to achieve such target, timing of an updated life of mine plan, life extension opportunities, mine debottlenecking, processing rates, and productivity improvements, are forward-looking statements. Forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements, and such other risks and uncertainties described in our filings with the U.S. Securities and Exchange Commission and Canadian securities commissions. Gatos Silver expressly disclaims any obligation or undertaking to update the forward-looking statements contained in this press release to reflect any change in its expectations or any change in events, conditions, or circumstances on which such statements are based unless required to do so by applicable law. No assurance can be given that such future results will be achieved. Forward-looking statements speak only as of the date of this press release.

 

Page 2 of 3

 

Investors and Media Contact

 

André van Niekerk
Chief Financial Officer

[e-mail]
[phone]

Page 3 of 3

Cover	Jul. 09, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 09, 2024
Entity File Number	001-39649
Entity Registrant Name	GATOS SILVER, INC.
Entity Central Index Key	0001517006
Entity Tax Identification Number	27-2654848
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	925 W Georgia Street
Entity Address, Address Line Two	Suite 910
Entity Address, City or Town	Vancouver
Entity Address, State or Province	BC
Entity Address, Country	CA
Entity Address, Postal Zip Code	V6C 3L2
City Area Code	604
Local Phone Number	424-0984
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	GATO
Security Exchange Name	NYSE
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	true

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