Gatos Silver Reports Fourth Quarter and Full Year 2023 Results and Provides 2024 Guidance
- Strong operational performance with lower AISC per silver ounce in Q4 2023
- Expected silver production of 8.4-9.2 million ounces in 2024 with AISC of $9.50-$11.50 per payable ounce produced
- Significant increase in net income, earnings per share, and EBITDA for Q4 2023
- Debt-free status with a cash balance of $55.5 million
- None.
Insights
The financial results of Gatos Silver, Inc. reflect a mixed performance. The company's net income and EBITDA for Q4 2023 have shown significant improvements year-over-year, indicating effective cost management and operational efficiency. However, revenue has decreased, suggesting a potential drop in silver prices or a reduction in silver sales volume. The increase in cash balance and the company's debt-free status are positive indicators of financial health, providing Gatos Silver with a buffer against market volatility and the flexibility to invest in further growth opportunities.
Investors should note the AISC as a key metric, which has remained at the lower end of the guidance range. This efficiency in maintaining low production costs, even after accounting for by-product credits, can be an attractive point for stakeholders, as it may signal the company's resilience to cost pressures and its potential to sustain profitability in a fluctuating commodities market.
Gatos Silver's operational performance, including the extension of CLG mine's life and the projected increase in silver production for 2024, is a strategic move that could impact the silver market supply dynamics. The company's debottlenecking initiatives and optimization efforts are poised to enhance production capacity, which could lead to increased market share and influence over silver prices. However, the forecasted lower feed grades in the first quarter may temper investor expectations in the short term.
Additionally, the company's focus on exploration and drilling, especially in the South East Deeps zone, underscores its commitment to resource expansion and longevity of operations. The capital allocation towards exploration reflects a long-term growth strategy that could yield significant returns if new silver deposits are discovered and developed efficiently.
The shift in cash distribution from dividends in 2022 to capital distributions in 2023 is a noteworthy change in Gatos Silver's financial strategy. This move, aimed at tax efficiency, requires careful consideration of the legal and regulatory implications, particularly in cross-border operations. Stakeholders should be aware of the potential impact on their individual tax situations and the overall effect on the company's financial statements. It is crucial for the company to maintain transparency and compliance with financial reporting standards to avoid legal complications and retain investor confidence.
VANCOUVER, British Columbia, Feb. 21, 2024 (GLOBE NEWSWIRE) -- Gatos Silver, Inc. (NYSE/TSX: GATO) (“Gatos Silver” or the “Company”) today announced its fourth quarter and full year 2023 financial and operating results. The Company will host an investor and analyst call on February 21, 2024, details of which are provided below.
The Company has a
Dale Andres, CEO said: “During the fourth quarter we continued to add cash to the balance sheet, generated from another quarter of strong operational performance at the LGJV. All-in sustaining cost (“AISC”) per silver ounce was at the lower end of 2023 guidance thanks to improved operating efficiencies, which helped to offset inflationary cost pressures and the impact of the stronger Mexican peso.”
“For 2024, we expect silver production of 8.4 million ounces to 9.2 million ounces at an AISC, after by-product credits, of
Summary
LGJV 2023 results (
- CLG life of mine extended by 2.75 years to the end of 2030 with a
46% increase in total silver production - Cost of sales only
4% higher than 2022, despite mining and processing10% more tonnes year over year - Cash from operating activities of
$142.0 million and free cash flow of$84.9 million 1 - AISC after by-product credits of
$11.33 1 per payable silver ounce produced on our previously disclosed production of 9.2 million ounces
Gatos Silver 2023 results:
- Net income of
$12.9 million or$0.19 per basic and$0.18 per diluted share - Received capital distribution of
$59.5 million from the LGJV - Cash used by operating activities of
$12.0 million and free cash flow of$47.5 million 1 - Year-end cash balance of
$55.5 million and no debt
LGJV Q4 2023 results compared to Q4 2022 (
- Revenue of
$73.5 million , down21% from$93.0 million - Cost of sales
$28.0 million , up10% from$25.5 million - Net income
$24.9 million , down16% from$29.8 million - EBITDA
$38.6 million , down38% from$61.9 million 1 - Cash from operating activities of
$38.2 million , down2% from$39.1 million - Sustaining capital
$11.7 million , down40% from$19.5 million 1 - Free cash flow
$22.3 million , up19% from$18.7 million 1 - Co-product AISC of
$14.73 per ounce of payable silver, down0.5% from$14.80 1 - By-product AISC of
$11.12 per ounce of payable silver, down8% from$12.13 1
Gatos Silver Q4 2023 results compared to Q4 2022:
- Net income of
$12.3 million , up160% from$4.7 million - Basic and diluted earnings per share of
$0.18 , up157% from$0.07 - EBITDA
$11.8 million , up116% from$5.5 million 1 - Cash used in operating activities of
$2.5 million , compared to cash provided by operations of$5.9 million - Free cash flow
$22.0 million , up277% from$5.8 million 1
1 See “Non-GAAP Financial Measures” below
For Gatos Silver, higher net income, earnings per share and EBITDA1 for Q4 2023 were primarily attributable to a decrease in general and administrative expenses and lower legal settlement expenses. The change in operating cash flow was primarily attributable to the dividend payment received in Q4 2022. The increase in free cash flow1 was a result of the capital distribution received in Q4 2023.
Cash distributions to the LGJV partners in 2023 have been made through capital distributions which is more tax efficient than distributing cash dividends. As a result, cash distributions are currently shown on the balance sheet as cash flow received from investing activities, as opposed to being included as cash flows from operating activities as in 2022 when dividends were paid by the LGJV.
As of December 31, 2023, the Company had a cash balance of
As of January 31, 2023, the Company had a cash balance of
The Company continues to be debt free with
Financial and Operating Results
Below is select operational and financial information for the three months and years ended December 31, 2023 and 2022. For a detailed discussion of the year ended December 31, 2023 financial and operating results refer to the Form 10-K for the year ended December 31, 2023, filed on February 20, 2024, on both the EDGAR and SEDAR+ systems and posted on the Company’s website at https://gatossilver.com.
Los Gatos Joint Venture
| LGJV Selected Financial Information (Unaudited) | Three Months Ended December 31, | Year Ended December 31, | ||||||||||
| (in millions, except where otherwise stated) | 2023 | 2022 | 2023 | 2022 | ||||||||
| Revenue | ||||||||||||
| Cost of sales | ||||||||||||
| Royalties | ||||||||||||
| Exploration | ||||||||||||
| General and administrative | ||||||||||||
| Depreciation, depletion and amortization | ||||||||||||
| Other (income) expense | ( | ) | ( | ) | ( | ) | ||||||
| Income tax expense | ( | ) | ||||||||||
| Net income | $24.9 | $29.8 | $53.4 | $72.2 | ||||||||
| Sustaining capital1 | ||||||||||||
| Resource development drilling expenditures1 | $— | $— | ||||||||||
| EBITDA1 | ||||||||||||
| Cash provided by operating activities | ||||||||||||
| Free cash flow1 | ||||||||||||
| Operating Results (CLG | ||||||||||||
| Tonnes milled (dmt) | 277,318 | 261,929 | 1,071,400 | 971,595 | ||||||||
| Tonnes milled per day (dmt) | 3,014 | 2,847 | 2,935 | 2,662 | ||||||||
| Average Grades | ||||||||||||
| Silver grade (g/t) | 318 | 387 | 299 | 368 | ||||||||
| Zinc grade (%) | 3.86 | 3.74 | 3.90 | 4.37 | ||||||||
| Lead grade (%) | 1.86 | 1.95 | 1.85 | 2.31 | ||||||||
| Gold grade (g/t) | 0.30 | 0.30 | 0.29 | 0.33 | ||||||||
| Production - Contained Metal | ||||||||||||
| Silver ounces (millions) | 2.6 | 2.9 | 9.2 | 10.3 | ||||||||
| Zinc pounds – in zinc conc. (millions) | 14.6 | 13.5 | 57.3 | 60.7 | ||||||||
| Lead pounds – in lead conc. (millions) | 10.2 | 9.7 | 38.9 | 43.9 | ||||||||
| Gold ounces – in lead conc. (thousands) | 1.4 | 1.3 | 5.3 | 5.3 | ||||||||
| Silver equivalent ounces (millions)2 | 3.9 | 4.2 | 14.3 | 15.8 | ||||||||
| Co-product cash cost per ounce of payable silver equivalent1 | ||||||||||||
| By-product cash cost per ounce of payable silver1 | ||||||||||||
| Co-product AISC per ounce of payable silver equivalent1 | ||||||||||||
| By-product AISC per ounce of payable silver1 | ||||||||||||
1 See Non-GAAP Financial Measures below
2 Totals may not add up due to rounding
3 Silver equivalent production for both 2022 and 2023 is calculated using prices of
Gatos Silver, Inc.
| Selected Financial Information (Unaudited) | Three Months Ended December 31, | Year Ended December 31, | ||||||||||
| (in millions, except where otherwise stated) | 2023 | 2022 | 2023 | 2022 | ||||||||
| Exploration | $— | $— | $— | |||||||||
| General and Administrative | 6.5 | 8.5 | 25.7 | 25.5 | ||||||||
| Amortization | — | — | 0.1 | 0.2 | ||||||||
| Total expenses | 6.5 | 8.5 | 25.8 | 25.8 | ||||||||
| Equity income in affiliates | 17.7 | 20.7 | 33.6 | 45.2 | ||||||||
| Other income, net | 1.3 | (6.7 | ) | 5.1 | (3.4 | ) | ||||||
| Total net other income | 19.0 | 14.0 | 38.8 | 41.9 | ||||||||
| Income tax expense | 0.1 | 0.7 | 0.1 | 1.6 | ||||||||
| Net income | $12.3 | $4.7 | $12.9 | $14.5 | ||||||||
| Net income per share basic | $0.18 | $0.07 | $0.19 | $0.21 | ||||||||
| Net income per share diluted | ||||||||||||
| EBITDA1 | ||||||||||||
| Cash (used) provided by operating activities | ( | ) | ( | ) | ||||||||
| Free cash flow1 | ||||||||||||
1 See Non-GAAP Financial Measures below
2 Totals may not add up due to rounding
2024 Guidance (CLG
Production and cost guidance for 2024 is shown in the table below:
| CLG 2024 Full Year Guidance ( | |
| Production guidance - Contained Metal | |
| Silver ounces (millions) | 8.4 – 9.2 |
| Zinc pounds - in zinc conc. (millions) | 61 – 69 |
| Lead pounds - in zinc conc. (millions) | 40 – 46 |
| Gold ounces - in zinc conc. (thousands) | 4.5 – 5.5 |
| Silver Equivalent ("AgEq") ounces - (millions)1 | 13.5 – 15.0 |
| All-in Sustaining Cost (AISC)2 | |
| By-product basis ($/oz Ag payable) | |
| Co-product basis ($/oz AgEq payable) | |
1 Silver equivalent production is calculated using prices of
2 Financial metrics assume an exchange rate of 18.50 Mexican Pesos per US
Gatos Silver expects plant throughput to average between 3,000 and 3,300 tonnes processed per day in 2024, compared to 2,935 tonnes per day in 2023. Feed grades to the mill are expected to be lower in the first quarter versus the average grades expected during the year. Following previously disclosed mill throughput tests conducted in December 2023 demonstrating higher capacity with good metallurgical performance, the LGJV plans to continue 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
The Company expects sustaining capital expenditures at CLG (
Exploration and definition drilling expenditures are expected to be approximately
Financial Results Webcast and Conference Call
Investors and analysts are invited to attend the financial results webcast and conference call as follows:
Date: Wednesday, February 21, 2024
Time: 11:00 a.m. ET
Listen-Only Webcast: https://events.q4inc.com/attendee/541149212
Direct Event Registration Link (for Analysts only): https://registrations.events/direct/Q4I90079276
Dial-in number: 1-888-500-3691 or +1-646-307-1951 Conference ID: 90079
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
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 Financial | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| (in thousands, except where otherwise stated) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Expenses | $ | 50,034 | $ | 50,921 | $ | 208,682 | $ | 203,631 | ||||||||
| Depreciation, depletion and amortization | (15,552 | ) | (17,040 | ) | (75,110 | ) | (69,380 | ) | ||||||||
| Exploration1 | (757 | ) | (3,565 | ) | (2,875 | ) | (9,800 | ) | ||||||||
| Treatment and refining costs2 | 4,309 | 5,797 | 17,174 | 21,871 | ||||||||||||
| Cash costs | $ | 38,034 | $ | 36,113 | $ | 147,871 | $ | 146,322 | ||||||||
| Sustaining capital3 | 11,701 | 19,490 | 41,571 | 76,526 | ||||||||||||
| Co-product all-in sustaining costs | $ | 49,735 | $ | 55,603 | $ | 189,442 | $ | 222,848 | ||||||||
| By-product credits4 | (24,241 | ) | (23,243 | ) | (95,648 | ) | (125,782 | ) | ||||||||
| All-in sustaining costs, net of by-product credits | $ | 25,494 | $ | 32,360 | $ | 93,794 | $ | 97,066 | ||||||||
| Cash costs, net of by-product credits | $ | 13,793 | $ | 12,870 | $ | 52,223 | $ | 20,540 | ||||||||
| Payable ounces of silver equivalent5 | 3,377 | 3,756 | 12,214 | 15,552 | ||||||||||||
| Co-product cash cost per ounce of payable silver equivalent | $ | 11.26 | $ | 9.61 | $ | 12.11 | $ | 9.41 | ||||||||
| Co-product AISC per ounce of payable silver equivalent | $ | 14.73 | $ | 14.80 | $ | 15.51 | $ | 14.33 | ||||||||
| Payable ounces of silver | 2,293 | 2,667 | 8,282 | 9,482 | ||||||||||||
| By-product cash cost per ounce of payable silver | $ | 6.02 | $ | 4.83 | $ | 6.31 | $ | 2.17 | ||||||||
| By-product AISC per ounce of payable silver | $ | 11.12 | $ | 12.13 | $ | 11.3 | $ | 10.24 | ||||||||
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 and gold for the applicable period, which includes any final settlement adjustments from prior periods.
5 Payable silver equivalents utilize the average realized prices during the year ended December 31, 2023, of
The following table provides a breakdown of cash flows used by investing activities of the LGJV:
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||
| (in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||
| Cash flow used by investing activities | $ | 15,927 | $ | 20,376 | $ | 57,087 | $ | 82,279 | |||||
| Sustaining capital | $ | 11,701 | $ | 19,490 | $ | 41,571 | $ | 76,526 | |||||
| Resource development drilling | 2,965 | — | 13,464 | — | |||||||||
| Materials & supplies | 97 | (8 | ) | 600 | 327 | ||||||||
| Amount included in accounts payable | 1,164 | 894 | 1,452 | 5,426 | |||||||||
| Total | $ | 15,927 | $ | 20,376 | $ | 57,087 | $ | 82,279 | |||||
The table below reconciles EBITDA, a non-GAAP measure to Net income for the Company:
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| (in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income | $ | 12,330 | $ | 4,744 | $ | 12,860 | $ | 14,529 | ||||||||
| Interest expense | — | 65 | 679 | 433 | ||||||||||||
| Interest income | (656 | ) | (105 | ) | (1,332 | ) | (154 | ) | ||||||||
| Income tax expense | 114 | 700 | 114 | 1,565 | ||||||||||||
| Depreciation, depletion and amortization | 5 | 48 | 79 | 180 | ||||||||||||
| EBITDA | $ | 11,793 | $ | 5,452 | $ | 12,400 | $ | 16,553 | ||||||||
The table below reconciles of EBITDA, a non-GAAP measure, to the LGJV’s Net income:
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
| (in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||
| Net income | $ | 24,943 | $ | 29,822 | $ | 53,443 | $ | 72,216 | ||||||
| Interest expense | 176 | 214 | 660 | 582 | ||||||||||
| Interest income | (420 | ) | — | (1,567 | ) | — | ||||||||
| Income tax expense | (1,667 | ) | 14,818 | 8,147 | 37,306 | |||||||||
| Depreciation, depletion and amortization | 15,552 | 17,040 | 75,110 | 69,380 | ||||||||||
| EBITDA | $ | 38,584 | $ | 61,894 | $ | 135,793 | $ | 179,484 | ||||||
The following table sets forth a reconciliation of Free Cash Flow, a non-GAAP financial measure, to Cash (used) provided 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 December 31, | Twelve Months Ended December 31, | |||||||||||
| (in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||
| Net cash (used) provided by operating activities | ($2,485 | ) | $5,874 | ($12,020 | ) | $14,554 | ||||||
| Net cash provided (used) by investing activities | 24,500 | (33 | ) | 59,500 | (60 | ) | ||||||
| Free cash flow | $22,015 | $5,841 | $47,480 | $14,494 | ||||||||
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 December 31, | Twelve Months Ended December 31, | |||||||||||||||
| (in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net cash provided by operating activities | $ | 38,212 | $ | 39,124 | $ | 142,001 | $ | 157,374 | ||||||||
| Net cash used by investing activities | (15,927 | ) | (20,376 | ) | (57,087 | ) | (82,279 | ) | ||||||||
| Free cash flow | $ | 22,285 | $ | 18,748 | $ | 84,914 | $ | 75,095 | ||||||||
Please see Appendix A for the unaudited balance sheets of the Company and the LGJV as of December 31, 2023 and 2022, the related unaudited consolidated statements of income of the Company, unaudited combined statements of operations of the LGJV, and statement of cash flows for the years then end.
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 the progress of conversion drilling and exploration, production and cost guidance for 2024, and expected or potential feed grades, mine debottlenecking, processing rates, capital costs and exploration expenditures, 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
investors@gatossilver.com
604-424 0984
APPENDIX A
GATOS SILVER, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| As of December 31, | |||||||
| (US$ in thousands) | 2023 | 2022 | |||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 55,484 | $ | 17,004 | |||
| Related party receivables | 560 | 1,773 | |||||
| Other current assets | 22,642 | 16,871 | |||||
| Total current assets | 78,686 | 35,648 | |||||
| Non-Current Assets | |||||||
| Investment in affiliates | 321,914 | 347,793 | |||||
| Deferred tax assets | 266 | — | |||||
| Other non-current assets | 38 | 60 | |||||
| Total Assets | $ | 400,904 | $ | 383,501 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable, accrued and other liabilities | $ | 33,357 | $ | 26,358 | |||
| Non-Current Liabilities | |||||||
| Credit Facility, net of debt issuance costs | — | 8,661 | |||||
| Stockholders’ Equity | |||||||
| Common Stock, | 117 | 117 | |||||
| Paid-in capital | 553,319 | 547,114 | |||||
| Accumulated deficit | (185,889 | ) | (198,749 | ) | |||
| Total stockholders’ equity | 367,547 | 348,482 | |||||
| Total Liabilities and Stockholders’ Equity | $ | 400,904 | $ | 383,501 | |||
GATOS SILVER, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
| (US$ in thousands, except for share data) | Three Months Ended December 31, | Year Ended December 31, | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Expenses | |||||||||||||||
| Exploration | $ | — | $ | — | $ | 26 | $ | 110 | |||||||
| General and administrative | 6,531 | 8,501 | 25,688 | 25,468 | |||||||||||
| Amortization | 5 | 48 | 79 | 180 | |||||||||||
| Total expenses | 6,536 | 8,549 | 25,793 | 25,758 | |||||||||||
| Other income | |||||||||||||||
| Equity income in affiliates | 17,700 | 20,703 | 33,622 | 45,230 | |||||||||||
| Legal settlement loss | (1,500 | ) | (7,900 | ) | (1,500 | ) | (7,900 | ) | |||||||
| Interest expense | — | (65 | ) | (679 | ) | (433 | ) | ||||||||
| Interest income | 656 | 105 | 1,332 | 154 | |||||||||||
| Other income | 2,124 | 1,150 | 5,992 | 4,801 | |||||||||||
| Total net other income | 18,980 | 13,993 | 38,767 | 41,852 | |||||||||||
| Income before taxes | 12,444 | 5,444 | 12,974 | 16,094 | |||||||||||
| Income tax expense | 114 | 700 | 114 | 1,565 | |||||||||||
| Net income | $ | 12,330 | $ | 4,744 | $ | 12,860 | $ | 14,529 | |||||||
| Net income per share: | |||||||||||||||
| Basic | $ | 0.18 | $ | 0.07 | $ | 0.19 | $ | 0.21 | |||||||
| Diluted | $ | 0.18 | $ | 0.07 | $ | 0.18 | $ | 0.21 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 69,167,601 | 69,162,223 | 69,163,564 | 69,162,223 | |||||||||||
| Diluted | 70,074,615 | 69,309,019 | 69,536,298 | 69,309,019 | |||||||||||
GATOS SILVER, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the year ended December 31, | |||||||
| (US$ in thousands) | 2023 | 2022 | |||||
| OPERATING ACTIVITIES | |||||||
| Net income | $ | 12,860 | $ | 14,529 | |||
| Adjustments to reconcile net loss to net cash used by operating activities: | |||||||
| Amortization | 79 | 180 | |||||
| Stock-based compensation expense | 5,336 | 2,840 | |||||
| Equity income in affiliates | (33,622 | ) | (45,230 | ) | |||
| Other | 1,159 | 199 | |||||
| Deferred tax asset | (266 | ) | — | ||||
| Dividends from affiliates | — | 30,775 | |||||
| Changes in operating assets and liabilities: | |||||||
| Receivables from related‑parties | 1,213 | (180 | ) | ||||
| Accounts payable and other accrued liabilities | 6,992 | 24,632 | |||||
| Other current assets | (5,771 | ) | (13,191 | ) | |||
| Net cash (used) provided by operating activities | (12,020 | ) | 14,554 | ||||
| INVESTING ACTIVITIES | |||||||
| Purchase of property, plant and equipment | — | (60 | ) | ||||
| Capital distribution received from affiliate | 59,500 | — | |||||
| Net cash provided (used) by investing activities | 59,500 | (60 | ) | ||||
| FINANCING ACTIVITIES | |||||||
| Credit Facility repayment | (9,000 | ) | (4,000 | ) | |||
| Financing costs | — | (106 | ) | ||||
| Net cash used by financing activities | (9,000 | ) | (4,106 | ) | |||
| Net increase in cash and cash equivalents | 38,480 | 10,388 | |||||
| Cash and cash equivalents, beginning of period | 17,004 | 6,616 | |||||
| Cash and cash equivalents, end of period | $ | 55,484 | $ | 17,004 | |||
| Interest paid | $ | 417 | $ | 645 | |||
| Supplemental disclosure of noncash transactions: | |||||||
| Recognition of Right of Use Asset and Lease Liability | $ | — | $ | 128 | |||
LOS GATOS JOINT VENTURE
COMBINED BALANCE SHEETS
(UNAUDITED)
| As of December 31, | |||||||
| (US$ in thousands) | 2023 | 2022 | |||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 34,303 | $ | 34,936 | |||
| Receivables | 12,634 | 26,655 | |||||
| Inventories | 16,397 | 11,542 | |||||
| VAT receivable | 12,610 | 21,531 | |||||
| Income tax receivable | 20,185 | 27,039 | |||||
| Other current assets | 1,253 | 4,138 | |||||
| Total current assets | 97,382 | 125,841 | |||||
| Non-Current Assets | |||||||
| Mine development, net | 234,980 | 232,515 | |||||
| Property, plant and equipment, net | 171,965 | 198,600 | |||||
| Deferred tax assets | 9,568 | — | |||||
| Total non-current assets | 416,513 | 431,115 | |||||
| Total Assets | $ | 513,895 | $ | 556,956 | |||
| LIABILITIES AND OWNERS’ CAPITAL | |||||||
| Current Liabilities | |||||||
| Accounts payable and accrued liabilities | $ | 38,704 | $ | 46,751 | |||
| Related party payable | 560 | 1,792 | |||||
| Equipment loans | — | 480 | |||||
| Total current liabilities | 39,264 | 49,023 | |||||
| Non-Current Liabilities | |||||||
| Lease liability | 208 | 268 | |||||
| Asset retirement obligation | 11,593 | 15,809 | |||||
| Deferred tax liabilities | 3,885 | 1,354 | |||||
| Total non-current liabilities | 15,686 | 17,431 | |||||
| Owners’ Capital | |||||||
| Capital contributions | 455,638 | 540,638 | |||||
| Paid-in capital | 18,186 | 18,186 | |||||
| Accumulated deficit | (14,879 | ) | (68,322 | ) | |||
| Total owners’ capital | 458,945 | 490,502 | |||||
| Total Liabilities and Owners’ Capital | $ | 513,895 | $ | 556,956 | |||
LOS GATOS JOINT VENTURE
COMBINED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| (US$ in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Revenue | $ | 73,509 | $ | 92,994 | $ | 268,671 | $ | 311,724 | |||||||
| Expenses | |||||||||||||||
| Cost of sales | 28,011 | 25,525 | 111,266 | 107,075 | |||||||||||
| Royalties | 339 | 330 | 1,363 | 3,069 | |||||||||||
| Exploration | 757 | 3,565 | 2,875 | 9,800 | |||||||||||
| General and administrative | 5,375 | 4,461 | 18,068 | 14,307 | |||||||||||
| Depreciation, depletion and amortization | 15,552 | 17,040 | 75,110 | 69,380 | |||||||||||
| Total expenses | 50,034 | 50,921 | 208,682 | 203,631 | |||||||||||
| Other expense (income) | |||||||||||||||
| Interest expense | 176 | 214 | 660 | 582 | |||||||||||
| Interest income | (420 | ) | — | (1,567 | ) | — | |||||||||
| Accretion expense | 279 | 276 | 1,145 | 1,103 | |||||||||||
| Other expense (income) | 728 | (766 | ) | 741 | (766 | ) | |||||||||
| Foreign exchange gain | (564 | ) | (2,291 | ) | (2,580 | ) | (2,348 | ) | |||||||
| 199 | (2,567 | ) | (1,601 | ) | (1,429 | ) | |||||||||
| Income before taxes | 23,276 | 44,640 | 61,590 | 109,522 | |||||||||||
| Income tax expense/(recovery) | (1,667 | ) | 14,818 | 8,147 | 37,306 | ||||||||||
| Net income | $ | 24,943 | $ | 29,822 | $ | 53,443 | $ | 72,216 | |||||||
LOS GATOS JOINT VENTURE
COMBINED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the year ended December 31, | |||||||
| (US$ in thousands) | 2023 | 2022 | |||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 53,443 | $ | 72,216 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation, depletion and amortization | 75,110 | 69,380 | |||||
| Accretion | 1,145 | 1,103 | |||||
| Deferred taxes | (7,623 | ) | 21,013 | ||||
| Unrealized gain on foreign currency rate change | (4,523 | ) | (4,434 | ) | |||
| Other | — | (174 | ) | ||||
| Changes in operating assets and liabilities: | |||||||
| VAT receivable | 9,619 | 23,986 | |||||
| Receivables | 14,021 | (15,393 | ) | ||||
| Inventories | (5,273 | ) | (353 | ) | |||
| Unearned revenue | — | (1,714 | ) | ||||
| Other current assets | 2,494 | 661 | |||||
| Income tax receivable | 10,771 | (27,039 | ) | ||||
| Accounts payable and other accrued liabilities | (5,951 | ) | 17,939 | ||||
| Payables to related parties | (1,232 | ) | 183 | ||||
| Net cash provided by operating activities | 142,001 | 157,374 | |||||
| Cash flows from investing activities: | |||||||
| Mine development | (36,637 | ) | (44,934 | ) | |||
| Purchase of property, plant and equipment | (19,850 | ) | (37,018 | ) | |||
| Materials and supplies inventory | (600 | ) | (327 | ) | |||
| Net cash used by investing activities | (57,087 | ) | (82,279 | ) | |||
| Cash flows from financing activities: | |||||||
| Capital distributions | (85,000 | ) | — | ||||
| Equipment loan and Lease payments | (547 | ) | (5,439 | ) | |||
| Partner dividends | — | (55,000 | ) | ||||
| Net cash used by financing activities | (85,547 | ) | (60,439 | ) | |||
| Net increase (decrease) in cash and cash equivalents | (633 | ) | 14,656 | ||||
| Cash and cash equivalents, beginning of period | 34,936 | 20,280 | |||||
| Cash and cash equivalents, end of period | $ | 34,303 | $ | 34,936 | |||
| Interest paid | $ | 660 | $ | 236 | |||
| Supplemental disclosure of noncash transactions: | |||||||
| Asset retirement obligation | $ | 5,364 | $ | — | |||
| Mine development costs included in accrued liabilities | $ | 10,205 | $ | 3,427 | |||
| Property, plant and equipment included in accrued liabilities | $ | 11,046 | $ | 2,648 | |||
| Materials and supplies included in accrued liabilities | $ | 1,018 | $ | 202 | |||
| Recognition of Right of Use Asset and Lease Liability | $ | — | $ | 328 | |||
FAQ
What were Gatos Silver's expected silver production and AISC guidance for 2024?
How did Gatos Silver's net income, earnings per share, and EBITDA perform in Q4 2023?
What is the current debt status of Gatos Silver?
What was the Company's cash balance as of December 31, 2023?
What was the revenue and net income for Gatos Silver in Q4 2023 compared to Q4 2022?
