VANCOUVER, British Columbia, May 06, 2024 (GLOBE NEWSWIRE) — Gatos Silver, Inc. (NYSE/TSX: GATO) (“Gatos Silver” or the “Company”) today announced its first quarter 2024 financial and operating results. The Company will host an investor and analyst call on May 7, 2024, details of which are provided below.
The Company has a 70% interest in the Los Gatos Joint Venture (“LGJV”), which in turn owns the Cerro Los Gatos (“CLG”) mine in Mexico. Production for the first quarter of 2024 was previously disclosed on April 9, 2024. The Company’s reporting currency is US dollars.
Dale Andres, CEO said: “During the first quarter we continued to add cash to the balance sheet mainly because of the previously disclosed strong operational performance at the LGJV. All-in sustaining cost (“AISC”) per silver ounce was at the lower end of 2024 guidance thanks to improved operating efficiencies, which helped to offset inflationary cost pressures and the impact of the stronger Mexican peso.”
“We now expect full year 2024 silver and silver equivalent production to be in the top half and AISC to be in the lower half of our previously announced guidance ranges. We also continue to advance our growth initiatives. Conversion drilling of the South-East Deeps inferred resource to extend mine life progressed well during the quarter and the LGJV has started ramping-up exploration efforts on near-mine and other targets in the highly prospective Los Gatos district.”
Summary
LGJV Q1 2024 results compared to Q1 2023 (100% basis):
- Revenue of $72.2 million, up 3% from $69.9 million
- Cost of sales $30.8 million, up 18% from $26.0 million
- Net income $10.2 million, down 20% from $12.7 million
- EBITDA $35.1 million1, down 11% from $39.6 million
- Cash flow from operations of $37.3 million, down 7% from $40.0 million
- Sustaining capital $8.9 million1, up 17% from $7.6 million
- Free cash flow $25.5 million1, down 11% from $28.7 million
- Silver equivalent production of 3.70 million ounces2, consistent with 3.69 million ounces in Q1 2023
- Co-product AISC of $14.361 per ounce of payable silver, up 12% from $12.79
- By-product AISC of $10.081 per ounce of payable silver, up 65% from $6.11
Gatos Silver Q1 2024 results compared to Q1 2023:
- Net income of $2.5 million, up 203% from $0.8 million
- Basic and diluted earnings per share of $0.04, up from $0.01
- EBITDA of $1.8 million1, up 107% from $0.9 million
- Cash flow provided by operating activities of $15.1 million, compared to cash flow used by operating activities of $4.1 million
- Free cash flow of $15.1 million1, up from negative $4.1 million
_________________________________
1 See “Non-GAAP Financial Measures” below
2 See definition of silver equivalent production below
At the LGJV, higher sales volumes compared to Q1 2023 helped to drive higher revenue, partially offset by lower realized metal prices due to final settlement adjustments on sales. There was also a significant provisional revenue adjustment in the comparable quarter in 2023.
For Gatos Silver, higher net income, earnings per share and EBITDA1 for Q1 2024 were primarily attributable to the higher equity income from the LGJV, partially offset by an increase in general and administrative expenses including higher legal expenses which are not expected to be recurring beyond 2024. Other G&A expenses were also higher due to non-cash items, including stock-based compensation of $1.7 million. The change in operating cash flow and increase in free cash flow1 was primarily a result of the capital distribution received in Q1 2024. Capital distributions are now shown on the cash flow statement as cash flow received from operating activities, consistent with how cash dividends from the LGJV were treated in 2022.
As of March 31, 2024, the Company had a cash balance of $70.6 million, up 27% from $55.5 million at the end of 2023. The increase in cash during the quarter was due to receipt of a $21.0 million capital distribution.
Subsequent to quarter end, the LGJV made a capital distribution on April 22, 2024, to its partners of $25.0 million of which the Company received $17.5 million. Also, during March and April the full amount of funding to settle the class action lawsuits in both the US and Canada was placed into escrow accounts, of which the Company’s share was $4.0 million, with the remainder, $20.0 million, funded by our insurers.
As of April 30, 2024, the Company had a cash balance of $85.4 million and the LGJV had a cash balance of $20.0 million. The Company continues to be debt free with $50.0 million available under the revolving credit facility.
Financial and Operating Results
Below is select operational and financial information for the three months ended March 31, 2024 and 2023. For a detailed discussion of financial and operating results refer to the Form 10-Q for the three months ended March 31, 2024, filed on May 6, 2024, on both the EDGAR and SEDAR+ systems and posted on the Company’s website at https://gatossilver.com.
Los Gatos Joint Venture
| LGJV 100% Basis Selected Financial Information (Unaudited) |
Three Months Ended March 31, |
|||||
| (in millions, except where otherwise stated) | 2024 | 2023 | ||||
| Revenue | $ | 72.2 | $ | 69.9 | ||
| Cost of sales | 30.8 | 26.0 | ||||
| Royalties | 0.3 | 0.4 | ||||
| Exploration | 1.4 | 0.5 | ||||
| General and administrative | 4.3 | 3.9 | ||||
| Depreciation, depletion and amortization | 20.3 | 20.8 | ||||
| Other expense (income) | 0.3 | (0.4 | ) | |||
| Income tax expense | 4.8 | 6.0 | ||||
| Net income and comprehensive income2 | $ | 10.2 | $ | 12.7 | ||
| Sustaining capital1 | $ | 8.9 | $ | 7.6 | ||
| Resource development drilling expenditures | $ | 3.2 | $ | 3.0 | ||
| EBITDA1 | $ | 35.1 | $ | 39.6 | ||
| Cash provided by operating activities | $ | 37.3 | $ | 40.0 | ||
| Free cash flow1 | $ | 25.5 | $ | 28.7 | ||
| Operating Results (CLG 100% Basis) | ||||||
| Tonnes milled (dmt) | 292,114 | 260,428 | ||||
| Tonnes milled per day (dmt) | 3,210 | 2,894 | ||||
| Average Grades | ||||||
| Silver grade (g/t) | 284 | 329 | ||||
| Zinc grade (%) | 3.99 | 3.93 | ||||
| Lead grade (%) | 1.77 | 1.86 | ||||
| Gold grade (g/t) | 0.28 | 0.30 | ||||
| Production – Contained Metal | ||||||
| Silver ounces (millions) | 2.37 | 2.43 | ||||
| Zinc pounds – in zinc conc. (millions) | 15.8 | 14.0 | ||||
| Lead pounds – in lead conc. (millions) | 10.1 | 9.5 | ||||
| Gold ounces – in lead conc. (thousands) | 1.39 | 1.38 | ||||
| Silver equivalent ounces (millions)3 | 3.70 | 3.69 | ||||
| Co-product cash cost per ounce of payable silver equivalent1 | $ | 11.70 | $ | 10.47 | ||
| By-product cash cost per ounce of payable silver1 | $ | 6.09 | $ | 2.66 | ||
| Co-product AISC per ounce of payable silver equivalent1 | $ | 14.36 | $ | 12.79 | ||
| By-product AISC per ounce of payable silver1 | $ | 10.08 | $ | 6.11 | ||
| Sales volume by payable metal | ||||||
| Silver ounces (millions) | 2.24 | 2.22 | ||||
| Zinc pounds – in zinc conc. (millions) | 13.7 | 12.0 | ||||
| Lead pounds – in lead conc. (millions) | 10.0 | 8.9 | ||||
| Gold ounces – in lead conc. (thousands) | 1.18 | 1.12 | ||||
| Copper pounds – in lead conc. (millions) | 0.07 | — | ||||
| Average realized price by payable metal | ||||||
| Average realized price per silver ounce4 | $ | 22.91 | $ | 26.61 | ||
| Average realized price per zinc pound4 | $ | 1.07 | $ | 1.43 | ||
| Average realized price per lead pound4 | $ | 0.85 | $ | 1.05 | ||
| Average realized price per gold ounce4 | $ | 1,939 | $ | 1,787 | ||
| Average realized price per copper pound4 | $ | 3.87 | $ | — | ||
_________________________________
1 See Non-GAAP Financial Measures below
2 Totals may not add up due to rounding
3 Silver equivalent production for 2024 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 months ended March 31, 2023 would be 3.64 million ounces using price assumptions for 2024.
4 Realized prices include the impact of final settlement adjustments from sales
Gatos Silver, Inc.
| Selected Financial Information (Unaudited) | Three Months Ended March 31, | |||||||
| (in $ millions, except where otherwise stated) | 2024 | 2023 | ||||||
| General and Administrative | 7.0 | 5.5 | ||||||
| Total expenses | 7.0 | 5.6 | ||||||
| Equity income in affiliates | 7.3 | 5.0 | ||||||
| Other income, net | 2.3 | 1.4 | ||||||
| Total net other income | 9.6 | 6.4 | ||||||
| Net income and comprehensive income2 | $ | 2.5 | $ | 0.8 | ||||
| Net income per share basic and diluted | $ | 0.04 | $ | 0.01 | ||||
| EBITDA1 | $ | 1.8 | $ | 0.9 | ||||
| Cash provided (used) by operating activities | $ | 15.1 | $ | (4.1 | ) | |||
| Free cash flow1 | $ | 15.1 | $ | (4.1 | ) | |||
_________________________________
1 See Non-GAAP Financial Measures below
2 Totals may not add up due to rounding
2024 Guidance Update (CLG 100% basis)
Gatos Silver expects plant throughput in 2024 to average in the top half of our previously announced guidance range of 3,000 and 3,300 tonnes processed per day. This compares to 2,935 tonnes per day in 2023. The LGJV continues to strive to achieve sustainably higher plant throughput rates as mine debottlenecking efforts continue with a medium-term target to sustain 3,500 tonnes per day beyond 2024, or 40% above original design capacity.
As a result of strong plant throughput performance anticipated in 2024, both silver and silver equivalent production is now expected to be in the top half of our previously announced guidance ranges of 8.4 to 9.2 million ounces and 13.5 to 15.0 million ounces respectively.
The Company expects full year co-product and by-product AISCs to remain in the lower half of our original guidance ranges of $14.00 to $16.00 per ounce of payable silver equivalent and $9.50 to $11.50 per ounce of payable silver.
The Company continues to expect sustaining capital expenditures at CLG (100% basis) to be approximately $45 million in 2024, the majority of which is for underground development primarily to access the lower levels of the NW and Central zones and to further develop access to the SE zone. The expected expenditures also include projects to help improve operating efficiencies and to support debottlenecking efforts in the mine.
There is no change to anticipated exploration and definition drilling expenditures of $18 million in 2024, of which $9 million is expected to be capitalized and incurred on resource development drilling primarily in the SE Deeps zone and $9 million expensed and incurred on greenfields exploration. The focus in the first quarter was primarily on continuing to infill the SE Deeps zone to approximately 50 metre spacing for the 2024 mineral resource and mineral reserve update anticipated to be announced in the third quarter of 2024. The focus for the surface drilling rigs is now shifting to other district targets. Drill testing of near mine targets at Portigueño is already underway and drilling at the NW Deeps target is expected to commence this month. San Luis and Lince are expected to be drilled later in the year.
Restatement of Previously Issued Interim and Annual Financial Statements
During preparation of the financial statements for the current quarter, we determined that an accounting classification change was required for the capital distributions received from our investment in affiliate in our consolidated statements of cash flows in 2023. The capital distributions we received should have been classified as “cash provided by operating activities” rather than “cash provided by investing activities” in our condensed consolidated financial statements for the three and nine months ended September 30, 2023, and our consolidated financial statements for the year ended December 31, 2023.
The reclassifications on our consolidated statements of cash flows do not impact our consolidated balance sheets, consolidated statements of income and comprehensive income and consolidated statements of stockholders’ equity, as of and for the periods ended September 30, 2023, and December 31, 2023. The reclassifications also have no effect on our business operations, cash balances or liquidity or the financial statements of the Los Gatos Joint Venture.
On May 6, 2024, we filed an amended Quarterly Report on Form 10-Q/A for the three and nine months ended September 30, 2023, and an amended Annual Report on Form 10-K/A for the year ended December 31, 2023, which restate the consolidated statements of cash flows to correct this misclassification, and revise certain related information, including management discussion and analysis and the discussion of our internal controls and procedures. For further details, refer to the Form 8-K filed on May 6, 2024, on both the EDGAR and SEDAR+ systems.
Financial Results Webcast and Conference Call
Investors and analysts are invited to attend the financial results webcast and conference call as follows:
Date: Tuesday, May 7, 2024
Time: 10:00 a.m. ET
Listen-Only Webcast: https://events.q4inc.com/attendee/863807355
Direct Event Registration Link (for Analysts only): https://registrations.events/direct/Q4I984330
Dial-in number: (800) 715-9871 or +1 646 307 1963 Conference ID: 98433
An archive of the webcast will be available on the Company’s website at: https://gatossilver.com within 24 hours.
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 Los Gatos Joint Venture (“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.
Non-GAAP Financial Measures
We use certain measures that are not defined by GAAP to evaluate various aspects of our business. These non-GAAP financial measures are intended to provide additional information only and do not have any standardized meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP.
Cash Costs and All-In Sustaining Costs
Cash costs and all-in sustaining costs (“AISC”) are non-GAAP measures. AISC was calculated based on guidance provided by the World Gold Council (“WGC”). WGC is not a regulatory industry organization and does not have the authority to develop accounting standards for disclosure requirements. Other mining companies may calculate AISC differently as a result of differences in underlying accounting principles and policies applied, as well as definitional differences of sustaining versus expansionary (i.e. non-sustaining) capital expenditures based upon each company’s internal policies. Current GAAP measures used in the mining industry, such as cost of sales, do not capture all of the expenditures incurred to discover, develop and sustain production. Therefore, we believe that cash costs and AISC are non-GAAP measures that provide additional information to management, investors and analysts that aid in the understanding of the economics of the Company’s operations and performance compared to other producers and provides investors visibility by better defining the total costs associated with production.
Cash costs include all direct and indirect operating cash costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, treatment and refining costs, general and administrative costs, royalties and mining production taxes. AISC includes total production cash costs incurred at the LGJV’s mining operations plus sustaining capital expenditures. The Company believes this measure represents the total sustainable costs of producing silver from current operations and provides additional information of the LGJV’s operational performance and ability to generate cash flows. As the measure seeks to reflect the full cost of silver production from current operations, new project and expansionary capital at current operations are not included. Certain cash expenditures such as exploration, new project spending, tax payments, dividends, and financing costs are not included.
EBITDA
Management uses earnings before interest, income tax, depreciation, depletion and amortization (“EBITDA”) to evaluate the Company’s operating performance, to plan and forecast its operations, and assess leverage levels and liquidity measures. The Company believes the use of EBITDA reflects the underlying operating performance of our core mining business and allows investors and analysts to compare results of the Company to similar results of other mining companies. EBITDA do not represent, and should not be considered an alternative to, net income or cash flow from operations as determined under GAAP.
Free Cash Flow
Management uses free cash flow as a non-GAAP measure to analyze cash flows generated from operations. Free cash flow is cash provided by (used in) operating activities less cash flow from investing activities as presented on the consolidated statements of cash flows. The Company believes free cash flow is also useful as one of the bases for comparing the Company’s performance with its competitors. Although Free Cash Flow and similar measures are frequently used as measures of cash flows generated from operations by other companies, the Company’s calculation of free cash flow is not necessarily comparable to such other similarly titled captions of other companies.
Reconciliation of GAAP to non-GAAP measures
The table below presents a reconciliation between the most comparable GAAP measure of the LGJV’s expenses to the non-GAAP measures of (i) cash costs, (ii) cash costs, net of by-product credits, (iii) co-product AISC and (iv) by-product AISC for our operations.
| CLG 100% Basis | Three Months Ended | |||||
| Financial | March 31, | |||||
| (in thousands, except where otherwise stated) | 2024 | 2023 | ||||
| Total Expenses | $ | 57,013 | $ | 51,624 | ||
| Depreciation, depletion and amortization | (20,256 | ) | (20,819 | ) | ||
| Exploration1 | (1,371 | ) | (463 | ) | ||
| Treatment and refining costs2 | 3,957 | 4,155 | ||||
| Cash costs (A) | $ | 39,343 | $ | 34,497 | ||
| Sustaining capital3 | 8,944 | 7,642 | ||||
| Co-product AISC (B) | $ | 48,287 | $ | 42,139 | ||
| By-product credits4 | (25,674 | ) | (28,587 | ) | ||
| AISC, net of by-product credits (C) | $ | 22,613 | $ | 13,552 | ||
| Cash costs, net of by-product credits (D) | $ | 13,669 | $ | 5,910 | ||
| Payable ounces of silver equivalent5 (E) | 3,363 | 3,294 | ||||
| Co-product cash cost per ounce of payable silver equivalent (A/E) | $ | 11.70 | $ | 10.47 | ||
| Co-product AISC per ounce of payable silver equivalent (B/E) | $ | 14.36 | $ | 12.79 | ||
| Payable ounces of silver (F) | 2,243 | 2,219 | ||||
| By-product cash cost per ounce of payable silver (D/F) | $ | 6.09 | $ | 2.66 | ||
| By-product AISC per ounce of payable silver (C/F) | $ | 10.08 | $ | 6.11 | ||
1 Exploration costs are not related to current operations.
2 Represent reductions on customer invoices and included in Sales of the LGJV combined statement of income (loss).
3 Sustaining capital excludes resource development drilling costs related to resource development drilling of the South-East Deeps zone.
4 By-product credits reflect realized metal prices of zinc, lead, gold and copper for the applicable period, which includes any final settlement adjustments from prior periods.
5 Payable silver equivalents utilize the average realized prices during the three months ended March 31, 2024, of $22.91/oz silver, $1.07/lb zinc, $0.85/lb lead, $1,939/oz gold and $3.87/lb copper. Payable silver equivalents utilize the average realized prices during the three months ended March 31, 2023, of $26.61/oz silver, $1.43/lb zinc, $1.05/lb lead and $1,787/oz gold. Realized prices include the impact of final settlement adjustments from sales.
The following table provides a breakdown of cash flows used by investing activities of the LGJV:
| Three Months Ended March 31, |
||||||||
| (in thousands) | 2024 | 2023 | ||||||
| Cash flow used by investing activities | $ | 11,828 | $ | 11,366 | ||||
| Sustaining capital | 8,944 | 7,642 | ||||||
| Resource development drilling | 3,222 | 3,006 | ||||||
| Materials & supplies | — | 512 | ||||||
| Change in capital-related accounts payable | (338 | ) | 206 | |||||
| Total | $ | 11,828 | $ | 11,366 | ||||
The table below reconciles EBITDA, a non-GAAP measure to net income and comprehensive income for the Company:
| Three Months Ended March 31, |
||||||||
| (in thousands) | 2024 | 2023 | ||||||
| Net income and comprehensive income | $ | 2,532 | $ | 835 | ||||
| Interest expense | — | 164 | ||||||
| Interest income | (767 | ) | (161 | ) | ||||
| Income tax expense | 43 | — | ||||||
| Depreciation, depletion and amortization expense | 4 | 37 | ||||||
| EBITDA | $ | 1,812 | $ | 875 | ||||
The table below reconciles of EBITDA, a non-GAAP measure, to the LGJV’s net income and comprehensive income:
| Three Months Ended March 31, |
||||||||
| (in thousands) | 2024 | 2023 | ||||||
| Net income and comprehensive income | $ | 10,172 | $ | 12,701 | ||||
| Interest expense | 195 | 126 | ||||||
| Interest income | (273 | ) | — | |||||
| Income tax expense | 4,775 | 5,957 | ||||||
| Depreciation, depletion and amortization expense | 20,256 | 20,819 | ||||||
| EBITDA | $ | 35,125 | $ | 39,603 | ||||
The following table sets forth a reconciliation of free cash flow, a non-GAAP financial measure, to cash provided (used) by operating activities operating activities for the Company, which the Company believes to be the GAAP financial measure most directly comparable to free cash flow.
| Three Months Ended March 31, |
|||||||
| (in thousands) | 2024 | 2023 | |||||
| Net cash provided (used) by operating activities | $ | 15,136 | $ | (4,103 | ) | ||
| Net cash used by investing activities | — | — | |||||
| Free cash flow | $ | 15,136 | $ | (4,103 | ) | ||
The following table sets forth a reconciliation of free cash flow, a non-GAAP financial measure, to cash provided by operating activities for the LGJV.
| Three Months Ended March 31, |
|||||||
| (in thousands) | 2024 | 2023 | |||||
| Net cash provided by operating activities | $ | 37,325 | $ | 40,044 | |||
| Net cash used by investing activities | (11,828 | ) | (11,366 | ) | |||
| Free cash flow | $ | 25,497 | $ | 28,678 | |||
Please see Appendix A for the unaudited consolidated balance sheets of the Company and the LGJV as of March 31, 2024 and December 31, 2023, the related unaudited consolidated statements of income of the Company, unaudited combined statements of operations of the LGJV, and unaudited statements of cash flows for the three months ended March 31, 2024.
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 prospective drilling and exploration, timing of an updated life of mine plan, guidance for 2024 including processing rates, production, AISC, capital expenditures and exploration expenditures, mine debottlenecking, processing rates beyond 2024, 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.
Investors and Media Contact
André van Niekerk
Chief Financial Officer
[email protected]
(604) 424 0984
APPENDIX A
GATOS SILVER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| March 31, | December 31, | |||||||
| (US$ in thousands) | 2024 | 2023 | ||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 70,586 | $ | 55,484 | ||||
| Related party receivables | 464 | 560 | ||||||
| Other current assets | 2,486 | 22,642 | ||||||
| Total current assets | 73,536 | 78,686 | ||||||
| Non-Current Assets | ||||||||
| Investment in affiliates | 308,202 | 321,914 | ||||||
| Deferred tax assets | 246 | 266 | ||||||
| Other non-current assets | 415 | 38 | ||||||
| Total Assets | $ | 382,399 | $ | 400,904 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and other accrued liabilities | $ | 10,376 | $ | 33,357 | ||||
| Non-Current Liabilities | ||||||||
| Lease liability | 255 | — | ||||||
| Stockholders’ Equity | ||||||||
| Common Stock, $0.001 par value; 700,000,000 shares authorized; 69,181,047 and 69,181,047 shares outstanding as of March 31, 2024 and December 31, 2023, respectively | 117 | 117 | ||||||
| Paid-in capital | 555,008 | 553,319 | ||||||
| Accumulated deficit | (183,357 | ) | (185,889 | ) | ||||
| Total stockholders’ equity | 371,768 | 367,547 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 382,399 | $ | 400,904 | ||||
GATOS SILVER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
| (US$ in thousands, except for share data) | Three months ended March 31, | |||||||
| 2024 | 2023 | |||||||
| Expenses | ||||||||
| Exploration | $ | 31 | $ | 26 | ||||
| General and administrative | 6,963 | 5,536 | ||||||
| Amortization | 4 | 37 | ||||||
| Total expenses | 6,998 | 5,599 | ||||||
| Other income (expense) | ||||||||
| Equity income in affiliates | 7,288 | 5,011 | ||||||
| Interest expense | — | (164 | ) | |||||
| Interest income | 767 | 161 | ||||||
| Other income | 1,518 | 1,426 | ||||||
| Other income | 9,573 | 6,434 | ||||||
| Income before taxes | 2,575 | 835 | ||||||
| Income tax expense | 43 | — | ||||||
| Net income and comprehensive income | $ | 2,532 | $ | 835 | ||||
| Net income per share: | ||||||||
| Basic and Diluted | $ | 0.04 | $ | 0.01 | ||||
| Weighted average shares outstanding: | ||||||||
| Basic | 69,181,047 | 69,162,223 | ||||||
| Diluted | 70,419,665 | 69,309,019 | ||||||
GATOS SILVER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Three months ended March 31, | ||||||||
| (US$ in thousands) | 2024 | 2023 | ||||||
| OPERATING ACTIVITIES | ||||||||
| Net income | $ | 2,532 | $ | 835 | ||||
| Adjustments to reconcile net income to net cash provided (used) by operating activities: | ||||||||
| Amortization | 4 | 37 | ||||||
| Stock-based compensation expense | 1,681 | 743 | ||||||
| Equity income in affiliates | (7,288 | ) | (5,011 | ) | ||||
| Deferred tax recovery | 14 | — | ||||||
| Other | (37 | ) | — | |||||
| Distribution received from affiliate | 21,000 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables from related‑parties | 96 | 1,104 | ||||||
| Accounts payable and other accrued liabilities | (23,053 | ) | (2,289 | ) | ||||
| Other current assets | 20,187 | 478 | ||||||
| Net cash provided (used) by operating activities | 15,136 | (4,103 | ) | |||||
| INVESTING ACTIVITIES | ||||||||
| Net cash used by investing activities | — | — | ||||||
| FINANCING ACTIVITIES | ||||||||
| Lease payments | (34 | ) | — | |||||
| Net cash used by financing activities | (34 | ) | — | |||||
| Net increase (decrease) in cash and cash equivalents | 15,102 | (4,103 | ) | |||||
| Cash and cash equivalents, beginning of period | 55,484 | 17,004 | ||||||
| Cash and cash equivalents, end of period | $ | 70,586 | $ | 12,901 | ||||
| Interest paid | $ | 4 | $ | 173 | ||||
| Interest earned | $ | 767 | $ | 161 | ||||
LOS GATOS JOINT VENTURE
COMBINED BALANCE SHEETS
(UNAUDITED)
| March 31, | December 31, | ||||||
| (US$ in thousands) | 2024 | 2023 | |||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 29,784 | $ | 34,303 | |||
| Receivables | 12,221 | 12,634 | |||||
| Inventories | 14,598 | 16,397 | |||||
| VAT receivable | 10,117 | 12,610 | |||||
| Income tax receivable | 18,828 | 20,185 | |||||
| Other current assets | 2,770 | 1,253 | |||||
| Total current assets | 88,318 | 97,382 | |||||
| Non-Current Assets | |||||||
| Mine development, net | 234,083 | 234,980 | |||||
| Property, plant and equipment, net | 165,411 | 171,965 | |||||
| Deferred tax assets | 7,389 | 9,568 | |||||
| Total non-current assets | 406,883 | 416,513 | |||||
| Total Assets | $ | 495,201 | $ | 513,895 | |||
| LIABILITIES AND OWNERS’ CAPITAL | |||||||
| Current Liabilities | |||||||
| Accounts payable and accrued liabilities | $ | 39,649 | $ | 38,704 | |||
| Related party payable | 485 | 560 | |||||
| Total current liabilities | 40,134 | 39,264 | |||||
| Non-Current Liabilities | |||||||
| Lease liability | 188 | 208 | |||||
| Asset retirement obligation | 11,810 | 11,593 | |||||
| Deferred tax liabilities | 3,952 | 3,885 | |||||
| Total non-current liabilities | 15,950 | 15,686 | |||||
| Owners’ Capital | |||||||
| Capital contributions | 425,638 | 455,638 | |||||
| Paid-in capital | 18,186 | 18,186 | |||||
| Accumulated deficit | (4,707 | ) | (14,879 | ) | |||
| Total owners’ capital | 439,117 | 458,945 | |||||
| Total Liabilities and Owners’ Capital | $ | 495,201 | $ | 513,895 | |||
LOS GATOS JOINT VENTURE
COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)
| Three months ended March 31, | |||||||
| (US$ in thousands) | 2024 | 2023 | |||||
| Revenue | $ | 72,218 | $ | 69,865 | |||
| Expenses | |||||||
| Cost of sales | 30,771 | 25,988 | |||||
| Royalties | 330 | 418 | |||||
| Exploration | 1,371 | 463 | |||||
| General and administrative | 4,285 | 3,936 | |||||
| Depreciation, depletion and amortization | 20,256 | 20,819 | |||||
| Total expenses | 57,013 | 51,624 | |||||
| Other expense (income) | |||||||
| Accretion expense | 217 | 296 | |||||
| Interest expense | 195 | 126 | |||||
| Interest income | (273 | ) | — | ||||
| Other income | (5 | ) | (12 | ) | |||
| Foreign exchange loss (gain) | 124 | (827 | ) | ||||
| 258 | (417 | ) | |||||
| Income before taxes | 14,947 | 18,658 | |||||
| Income tax expense | 4,775 | 5,957 | |||||
| Net income and comprehensive income | $ | 10,172 | $ | 12,701 | |||
LOS GATOS JOINT VENTURE
COMBINED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Three months ended March 31, | ||||||||
| (US$ in thousands) | 2024 | 2023 | ||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 10,172 | $ | 12,701 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation, depletion and amortization | 20,256 | 20,819 | ||||||
| Accretion | 217 | 296 | ||||||
| Deferred taxes | 2,341 | 907 | ||||||
| Unrealized loss (gain) on foreign currency rate change | 346 | (414 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| VAT receivable | 2,517 | 2,521 | ||||||
| Receivables | 413 | 13,277 | ||||||
| Inventories | 1,232 | (1,075 | ) | |||||
| Other current assets | (1,517 | ) | (2,610 | ) | ||||
| Income tax receivable | 1,037 | 4,187 | ||||||
| Accounts payable and other accrued liabilities | 386 | (9,459 | ) | |||||
| Payables to related parties | (75 | ) | (1,106 | ) | ||||
| Net cash provided by operating activities | 37,325 | 40,044 | ||||||
| Cash flows from investing activities: | ||||||||
| Mine development | (9,993 | ) | (8,312 | ) | ||||
| Purchase of property, plant and equipment | (1,835 | ) | (2,542 | ) | ||||
| Materials and supplies inventory | — | (512 | ) | |||||
| Net cash used by investing activities | (11,828 | ) | (11,366 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Equipment loan and lease payments | (16 | ) | (290 | ) | ||||
| Capital distribution | (30,000 | ) | — | |||||
| Net cash used by financing activities | (30,016 | ) | (290 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | (4,519 | ) | 28,388 | |||||
| Cash and cash equivalents, beginning of period | 34,303 | 34,936 | ||||||
| Cash and cash equivalents, end of period | $ | 29,784 | $ | 63,324 | ||||
| Interest paid | $ | 195 | $ | 126 | ||||
| Interest earned | $ | 273 | $ | — | ||||
Bay Street News
