Gatos Silver Amends Joint Venture Agreements with Dowa to Obtain Enhanced Management Rights and Announces Financial Statement Consolidation
Gatos Silver (NYSE/TSX: GATO) has announced amended agreements with Dowa Metals & Mining regarding the Los Gatos Joint Venture (LGJV), effective January 1, 2025. The key changes include expanded management rights for Gatos Silver, enabling full financial statement consolidation instead of the current equity method accounting. While ownership remains at 70% Gatos Silver and 30% Dowa, the amendments strengthen Dowa's zinc concentrate offtake rights and update commercial terms based on world benchmarks.
The new agreements reduce supermajority voting requirements and grant Gatos Silver sole-funding rights for significant mine modifications. This restructuring comes ahead of the anticipated merger with First Majestic, expected to close in January 2025.
Gatos Silver (NYSE/TSX: GATO) ha annunciato accordi modificati con Dowa Metals & Mining riguardo al Joint Venture di Los Gatos (LGJV), a partire dal 1 gennaio 2025. Le principali modifiche includono l'ampliamento dei diritti di gestione per Gatos Silver, consentendo una completa consolidazione del bilancio finanziario invece dell'attuale metodo di contabilità per capitale. Sebbene la proprietà rimanga al 70% per Gatos Silver e al 30% per Dowa, le modifiche rafforzano i diritti di acquisto del concentrato di zinco da parte di Dowa e aggiornano i termini commerciali sulla base di parametri di riferimento globali.
I nuovi accordi riducono i requisiti di voto supermaggiore e conferiscono a Gatos Silver diritti di finanziamento esclusivi per modifiche significative alla miniera. Questa ristrutturazione avviene in previsione della fusione attesa con First Majestic, che dovrebbe concludersi a gennaio 2025.
Gatos Silver (NYSE/TSX: GATO) ha anunciado acuerdos modificados con Dowa Metals & Mining con respecto al Joint Venture de Los Gatos (LGJV), con efecto a partir del 1 de enero de 2025. Los cambios clave incluyen la expansión de los derechos de gestión para Gatos Silver, permitiendo la consolidación total de los estados financieros en lugar del actual método de contabilidad de participación. Aunque la propiedad se mantiene en 70% para Gatos Silver y 30% para Dowa, las enmiendas fortalecen los derechos de compra del concentrado de zinc de Dowa y actualizan los términos comerciales basados en referencias mundiales.
Los nuevos acuerdos reducen los requisitos de votación supermayoritaria y otorgan a Gatos Silver derechos de financiamiento exclusivo para modificaciones significativas en la mina. Esta reestructuración se produce antes de la fusión anticipada con First Majestic, que se espera que se cierre en enero de 2025.
Gatos Silver (NYSE/TSX: GATO)는 2025년 1월 1일부터 발효되는 Los Gatos 합작 투자(LGJV)에 관한 Dowa Metals & Mining과의 수정된 계약을 발표했습니다. 주요 변경 사항은 Gatos Silver의 관리 권한 확대를 포함하여 현재의 지분법 회계 대신 전체 재무제표 통합을 가능케 합니다. 소유권은 여전히 Gatos Silver가 70%, Dowa가 30%를 유지하지만, 수정은 Dowa의 아연 농축물 구매 권리를 강화하고 세계 기준에 따라 상업적 조건을 업데이트합니다.
새로운 계약은 초다수 투표 요구사항을 줄이고 Gatos Silver에 주요 광산 수정에 대한 단독 자금 조달 권한을 부여합니다. 이번 구조 조정은 2025년 1월에 마감될 것으로 예상되는 First Majestic와의 합병을 앞두고 이루어졌습니다.
Gatos Silver (NYSE/TSX: GATO) a annoncé des accords modifiés avec Dowa Metals & Mining concernant le projet commun de Los Gatos (LGJV), prenant effet le 1er janvier 2025. Les changements clés incluent l'élargissement des droits de gestion pour Gatos Silver, permettant une consolidation complète des états financiers au lieu de la méthode comptable actuelle des capitaux propres. Bien que la propriété reste de 70 % pour Gatos Silver et de 30 % pour Dowa, les amendements renforcent les droits de Dowa sur l'achat de concentré de zinc et mettent à jour les conditions commerciales basées sur des références mondiales.
Les nouveaux accords réduisent les exigences de vote supermajoritaire et accordent à Gatos Silver des droits de financement exclusifs pour des modifications significatives de la mine. Cette restructuration survient avant la fusion anticipée avec First Majestic, qui devrait se finaliser en janvier 2025.
Gatos Silver (NYSE/TSX: GATO) hat geänderte Vereinbarungen mit Dowa Metals & Mining bezüglich des Los Gatos Joint Ventures (LGJV) bekannt gegeben, die am 1. Januar 2025 in Kraft treten. Zu den wichtigsten Änderungen gehören erweiterte Managementrechte für Gatos Silver, die eine vollständige Konsolidierung der Finanzberichte anstelle der aktuellen Equity-Methode ermöglichen. Während das Eigentum bei 70 % für Gatos Silver und 30 % für Dowa bleibt, stärken die Änderungen die Abnahme rechte von Dowa am Zinkkonzentrat und aktualisieren die kommerziellen Bedingungen auf der Grundlage globaler Benchmarks.
Die neuen Vereinbarungen reduzieren die Anforderungen an die Supermehrheit bei Abstimmungen und gewähren Gatos Silver alleinige Finanzierungsrechte für wesentliche Änderungen an der Mine. Diese Umstrukturierung erfolgt im Vorfeld der erwarteten Fusion mit First Majestic, die für Januar 2025 vorgesehen ist.
- Enhanced management control over LGJV operations
- Ability to fully consolidate financial statements for improved transparency
- Streamlined decision-making through reduced supermajority voting requirements
- New sole-funding rights for mine expansions and modifications
- None.
Insights
VANCOUVER, British Columbia, Dec. 19, 2024 (GLOBE NEWSWIRE) -- Gatos Silver, Inc. (NYSE/TSX: GATO) (“Gatos Silver” or the “Company”) today announced that it has entered into amended and restated agreements (the “Amended Agreements”) with Dowa Metals & Mining Co., Ltd. (“Dowa”) regarding the Los Gatos Joint Venture (the “LGJV”). The Amended Agreements, which are effective on January 1, 2025, expand Gatos Silver’s management rights within the LGJV which will result in the Company being able to fully consolidate the financial statements of the LGJV rather than accounting for its investment in the LGJV under the equity method of accounting as is currently required. The ownership interests of the Company and Dowa in the LGJV are unchanged, at
The Amended Agreements strengthen Dowa’s zinc concentrate offtake rights, including amending pre-defined commercial terms, which continue to be based on world benchmarks, and commitments regarding concentrate production and product quality. The Amended Agreements also update the terms for management services provided by Gatos Silver in its oversight of the LGJV, reduce supermajority voting requirements and provide the Company with a new sole-funding right for significant mine or plant modifications or expansions, among other things.
“The Los Gatos Joint Venture has been very successful since its establishment 10 years ago, founded on the strength of its assets, our team, and our relationship with Dowa as a valued partner,” said Dale Andres, CEO. “The amended joint venture agreements build upon this foundation, and importantly, allow full financial consolidation within Gatos Silver which will streamline financial reporting and provide investors with a focused picture of the Company’s financial performance, including following the merger with First Majestic which we anticipate will close in January 2025.”
Important Information for Investors and Stockholders about the Transaction and Where to Find It
This news release is not intended to and does not constitute an offer to buy or sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities of First Majestic Silver Corp. (“First Majestic”) or Gatos Silver or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities of First Majestic or Gatos Silver in any jurisdiction in contravention of applicable law. This news release may be deemed to be soliciting material relating to First Majestic’s proposed acquisition of all of the issued and outstanding shares of common stock of Gatos Silver (the “Transaction”).
In connection with the Transaction between First Majestic and Gatos Silver pursuant to the previously announced Agreement and Plan of Merger (the “Merger Agreement”), First Majestic filed with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form F-4 that includes a Proxy Statement of Gatos Silver that also constitutes a Prospectus of First Majestic (the “Proxy Statement/Prospectus”) and other documents. Each of First Majestic and Gatos Silver may also file other relevant documents with the SEC regarding the Transaction. The registration statement on Form F-4 was declared effective by the SEC on December 2, 2024. Gatos Silver filed a Proxy Statement/Prospectus with the SEC on December 3, 2024 which it commenced mailing on December 6, 2024 to its stockholders in connection with the Transaction. First Majestic filed the Information Circular in connection with the proposed Transaction with applicable Canadian securities regulatory authorities on December 10, 2024 and commenced mailing the meeting materials to its shareholders on December 10, 2024. This news release is not a substitute for any registration statement, proxy statement, prospectus or other document First Majestic or Gatos Silver has filed or may file with the SEC or Canadian securities regulatory authorities in connection with the pending Transaction. INVESTORS AND SECURITY HOLDERS OF GATOS SILVER AND FIRST MAJESTIC ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND MANAGEMENT PROXY CIRCULAR, RESPECTIVELY, AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC OR CANADIAN SECURITIES REGULATORY AUTHORITIES AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS THERETO CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE TRANSACTION BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT FIRST MAJESTIC, GATOS SILVER, THE TRANSACTION AND RELATED MATTERS. Investors and security holders are able to obtain free copies of the Proxy Statement/Prospectus, the filings with the SEC that are and will be incorporated by reference into the Proxy Statement/Prospectus and other documents filed with the SEC by First Majestic and Gatos Silver containing important information about First Majestic or Gatos Silver and the Transaction through the website maintained by the SEC at www.sec.gov. Investors are also able to obtain free copies of the management proxy circular and other documents filed with Canadian securities regulatory authorities by First Majestic, through the website maintained by the Canadian Securities Administrators at www.sedarplus.com. In addition, investors and security holders are able to obtain free copies of the documents filed by First Majestic with the SEC and Canadian securities regulatory authorities on First Majestic’s website at www.firstmajestic.com or by contacting First Majestic’s investor relations team. Copies of the documents filed with the SEC by Gatos Silver are available free of charge on Gatos Silver’s website or by contacting Gatos Silver’s investor relations team.
Participants in the Merger Solicitation
First Majestic, Gatos Silver and certain of their respective directors, executive officers and employees may be considered participants in the solicitation of proxies in connection with the proposed Transaction. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the shareholders of First Majestic and the stockholders of Gatos Silver in connection with the Transaction, including a description of their respective direct or indirect interests, by security holdings or otherwise, is included in the Proxy Statement/Prospectus described above and other relevant documents filed with the SEC and Canadian securities regulatory authorities in connection with the Transaction. Additional information regarding First Majestic’s directors and executive officers is also included in First Majestic’s Notice of Annual Meeting of Shareholders and 2024 Proxy Statement, which was filed with the SEC and Canadian securities regulatory authorities on April 15, 2024, and information regarding Gatos Silver’s directors and executive officers is also included in Gatos Silver’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 20, 2024, as amended by Amendment No. 1 to such annual report filed with the SEC on May 6, 2024 and Gatos Silver’s 2024 Proxy Statement for its 2024 Annual Meeting of Stockholders, which was filed with the SEC on April 25, 2024. These documents are available free of charge as described above.
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
On September 5, 2024, Gatos Silver and First Majestic Silver Corp. (“First Majestic”) announced that they entered into a definitive merger agreement pursuant to which First Majestic will acquire all of the issued and outstanding common shares of Gatos Silver (the “Merger”). The proposed Merger would consolidate three world-class, producing silver mining districts in Mexico to create a leading intermediate primary silver producer. Information relating to the proposed Merger can be found at the Company’s website at www.gatossilver.com.
Cautionary Note Regarding Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor created by such sections and other applicable laws and “forward-looking information” under applicable Canadian securities laws (collectively, “forward-looking statements”). These statements relate to future events of First Majestic and/or Gatos Silver that are based on assumptions of management of First Majestic and/or Gatos Silver made in good faith in light of management’s experience and perception of future developments. Forward-looking statements in this news release include, but are not limited to, statements with respect to: the timing of the effectiveness of the Amended Agreements and their impact on Gatos Silver’s financial statements, and the timing of closing of the Transaction. Assumptions may prove to be incorrect and actual results may differ materially from those anticipated. Consequently, guidance cannot be guaranteed. As such, investors are cautioned not to place undue reliance upon guidance and forward-looking statements as there can be no assurance that the plans, assumptions or expectations upon which they are placed will occur.
Actual results may vary from forward-looking statements. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results to materially differ from those expressed or implied by such forward-looking statements, including but not limited to those factors discussed in (a) the section entitled “Description of the Business - Risk Factors” in First Majestic’s most recently filed Annual Information Form, available under its profile on SEDAR+ at www.sedarplus.com, and as an exhibit to its most recently filed Form 40-F available on EDGAR at www.sec.gov/edgar or on First Majestic’s website and (b) the Gatos Silver’s Annual Report on Form 10-K for the year ended December 31, 2023, available on EDGAR at www.sec.gov/edgar or on Gatos Silver’s website. First Majestic is not affirming or adopting any statements or reports attributed to Gatos Silver in this news release or made by Gatos Silver outside of this news release. Gatos Silver is not affirming or adopting any statements or reports attributed to First Majestic in this news release or made by First Majestic outside of this news release. Although First Majestic and Gatos Silver have attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
First Majestic and Gatos Silver believe that the expectations reflected in these forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included herein should not be unduly relied upon. These statements speak only as of the date hereof. First Majestic and Gatos Silver do not intend, and do not assume any obligation, to update these forward-looking statements or forward-looking information, except as required by applicable laws.
Investors and Media Contact
André van Niekerk
Chief Financial Officer
investors@gatossilver.com
(604) 424 0984
FAQ
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