Gatos Silver Announces Pricing of Public Offering

Rhea-AI Summary

Gatos Silver has priced a public offering of 8,930,000 shares at $14.00 each, alongside 2,500,000 shares from selling stockholders, potentially raising $125 million before costs. The offering is set to close on July 19, 2021, pending customary conditions. Underwriters have a 30-day option to purchase additional shares. The registration statement became effective on July 15, 2021. The proceeds will aid in expanding the company's silver and zinc-rich exploration and production initiatives in Mexico's Chihuahua State.

Positive

• Expected gross proceeds of approximately $125 million for business expansion.
• Funds will support Gatos Silver's mineral exploration and production in a highly prospective district.

Negative

• Dilution risk for existing shareholders due to the large number of shares being issued.
• No proceeds from the sale of shares by selling stockholders will benefit Gatos Silver.

Gatos Silver, Inc. (NYSE/TSX: GATO) (“Gatos Silver”) today announced the pricing of a public offering of 8,930,000 shares of common stock by Gatos Silver and 2,500,000 shares of common stock by certain selling stockholders at a price of US $14.00 per share. In addition, Gatos Silver and the selling stockholders have granted the underwriters a 30-day option to purchase up to 1,339,500 and 375,000 additional shares of common stock, respectively, at the public offering price, less underwriting discounts and commissions. The gross proceeds from the offering are expected to be approximately US$125 million for Gatos Silver, before deducting underwriting discounts and commissions and estimated offering expenses payable by Gatos Silver. Gatos Silver will not receive any proceeds from the sale of common stock by the selling stockholders. The offering is expected to close on July 19, 2021, subject to customary closing conditions.

BMO Capital Markets, Goldman Sachs & Co. LLC and RBC Capital Markets are acting as joint lead bookrunners and as representatives of the underwriters for the offering. Canaccord Genuity Corp. and CIBC Capital Markets are acting as co-managers for the offering.

The registration statement relating to the securities being sold in the offering was declared effective on July 15, 2021 by the U.S. Securities and Exchange Commission (the “SEC”) and a prospectus supplement to Gatos Silver’s short form base shelf prospectus dated July 12, 2021 will be filed with the securities regulatory authorities in each of the provinces of Canada, except Québec. Copies of the base shelf prospectus, and when available, copies of the final prospectus, and the prospectus supplement may be obtained from BMO Capital Markets Corp., Attention: Equity Syndicate Department, 3 Times Square, 25th Floor, New York, NY 10036, by telephone at (800) 414-3627 or by email at bmoprospectus@bmo.com; Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, by telephone at (866) 471-2526 or by email at prospectus-ny@ny.email.gs.com; or RBC Capital Markets, LLC, Attention: Equity Capital Markets, 200 Vesey Street, New York, NY 10281, or by telephone at (877) 822-4089 or by email at equityprospectus@rbccm.com. A copy of the base shelf prospectus and, when available, the prospectus supplement can be found on SEDAR at www.sedar.com and a copy of the final prospectus can be found on EDGAR at www.sec.gov. Prospective investors should read the base shelf prospectus, the prospectus supplement and the registration statement, including the documents incorporated by reference therein, and any amendments or supplements, before making an investment decision.

No securities regulatory authority has either approved or disapproved the contents of this press release. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.

For the purposes of TSX approval, the Company is relying on the exemption set forth in Section 602.1 of the TSX Company Manual, which provides that the TSX will not apply its standards to certain transactions involving eligible interlisted issuers on a recognized exchange, such as the New York Stock Exchange.

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. To-date, 14 zones of mineralization have been defined within the district and all are characterized by silver-zinc-lead epithermal mineralization. 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. As a 70%-owner of the Los Gatos Joint Venture (“LGJV”), the Company recently built and commissioned its first operating mine and mineral processing plant at the LGJV’s Cerro Los Gatos deposit.

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 including completion of the offering, filing of a final prospectus and prospectus supplement and the expected closing date. All statements other than statements of historical facts contained in this press release 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 due to various factors described in the registration statement, base shelf prospectus and final prospectus supplement and other filings with the SEC and the securities commissions or similar securities regulatory authorities in each of the provinces or territories of Canada, except Québec. 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.

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FAQ

What is Gatos Silver's recent stock offering?

Gatos Silver is offering 8,930,000 shares at $14.00 each, along with 2,500,000 shares from selling stockholders.

When is the closing date for Gatos Silver's public offering?

The offering is expected to close on July 19, 2021.

How much capital is Gatos Silver expecting to raise from the stock offering?

Gatos Silver anticipates raising approximately $125 million before costs from the offering.

What will Gatos Silver use the proceeds from the stock offering for?

The proceeds will be used to advance the company's mineral exploration and production activities in Mexico.

Are current shareholders affected by Gatos Silver's stock offering?

Yes, current shareholders may face dilution due to the issuance of new shares.