Gatos Silver Announces Delay in Filing Year-end Reporting Documents

Rhea-AI Summary

Gatos Silver (NYSE:GATO) has delayed its annual report filing for the year ended December 31, 2021, beyond the March 31, 2022 deadline. This delay is due to ongoing analysis related to a reduction in metal content from previously stated mineral reserves. The company plans to file the required documents once the analysis is completed, potentially in the second half of 2022. Gatos Silver has applied for a management cease trade order while it continues to provide bi-weekly status reports. The applicable Canadian regulators may issue a general cease trade order for failure to file.

Positive

• Gatos Silver is currently evaluating its life-of-mine plan and updating mineral reserves, indicating proactive management.
• Continued trading on the TSX while under a management cease trade order allows for market participation.

Negative

• The delay in filing the annual report raises concerns about compliance and financial transparency.
• Potential for a general cease trade order from Canadian regulators if required documents are not filed timely.

DENVER--(BUSINESS WIRE)-- Gatos Silver, Inc. (NYSE/TSX: GATO) (“Gatos Silver” or the “Company”) announces today that it intends to delay the filing of its annual report on Form 10-K for the year ended December 31, 2021, which includes its audited consolidated financial statements as at and for the year ended December 31, 2021, together with the auditor’s report thereon and the notes thereto, its management’s discussion and analysis for the year ended December 31, 2021 relating to the audited annual financial statements, and the CEO and CFO certificates relating to its annual filings (collectively, the “Required Documents”), beyond the prescribed deadline of March 31, 2021.

Gatos Silver is focused on producing a new life-of-mine (“LOM”) plan and updating its mineral resources and mineral reserves following its January 25, 2022 announcement regarding a reduction in metal content of its previously stated mineral reserve figures. The delay is due to the ongoing analysis by the Company of any potential impacts the reduction may have on its audited annual financial statements. The Company expects to file the Required Documents once the analysis is complete, which could take place in the second half of 2022. In the interim, the Company has applied to the applicable Canadian securities regulatory authorities for a management cease trade order (“MCTO”), which provides a mechanism restricting the CEO and CFO from trading in the Company securities while allowing the stock to continue trading on the TSX.

There is no certainty that the MCTO will be granted. Until the Required Documents are filed, the Company intends to satisfy the provisions of the alternative information guidelines in accordance with National Policy 12-203 – Management Cease Trade Orders by issuing bi-weekly status reports in the form of news releases until the situation is satisfactorily rectified.

The applicable Canadian securities regulatory authorities may issue a general cease trade order against the Company for failure to file the Required Documents within the prescribed time period or if the Company fails to file its default status reports during the prescribed time limits.

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. More than 85% of the approximately 103,087-hectare mineral rights package has yet to be drilled, representing a highly prospective and under-explored district with numerous silver-zinc-lead epithermal mineralized zones identified as priority targets. As a 70% owner of the LGJV, the Company recently built and commissioned its first operating mine and mineral processing plant at the LGJV’s CLG deposit.

Forward-Looking Statements

This press release may contain certain information that may constitute “forward-looking statements” and “forward looking information” (collectively, “forward-looking statements”) within the meaning of U.S. and Canadian securities laws. The forward-looking statements contained herein include statements about the timing for filing of the Company’s annual report on Form 10-K.

While the Company has based these forward-looking statements on its current expectations about future events, the statements are not guarantees of the Company’s future performance and are subject to risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such risks, uncertainties, assumptions and factors include, amongst others, the results of the ongoing analysis by the Company of the overestimation of its resource and reserve and the timing of an updated technical report.

Further, although the Company has attempted to identify factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

As there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements, readers should not place undue reliance on forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220321005149/en/

For further information, please contact:

Investors and Media Contact

Adam Dubas

Chief Administrative Officer

investors@gatossilver.com

(303) 784-5350

Source: Gatos Silver

FAQ

What is the reason for Gatos Silver's delay in filing its 10-K report for 2021?

Gatos Silver delayed filing its 10-K report due to ongoing analysis of the impact from a reduction in metal content in its mineral reserves.

When does Gatos Silver expect to file its annual report?

Gatos Silver expects to file its annual report in the second half of 2022 after completing its analysis.

What is the management cease trade order (MCTO) that Gatos Silver applied for?

The MCTO restricts the CEO and CFO from trading the company's securities while still allowing the stock to trade on the TSX.

What consequences could Gatos Silver face for failing to file its required documents?

If Gatos Silver does not file its required documents, Canadian regulators may issue a general cease trade order against the company.

How is Gatos Silver maintaining communication with investors during the report filing delay?

Gatos Silver plans to issue bi-weekly status reports until the filing situation is resolved, in accordance with alternative information guidelines.