Gatos Silver Signs Definitive Agreement to Retire Los Gatos Joint Venture Term Loan

Rhea-AI Summary

Gatos Silver has finalized an agreement with Dowa Metals & Mining to retire its approximately $154.8 million Los Gatos Joint Venture Term Loan. This move is expected to close soon and is viewed as a significant deleveraging event for the company. CEO Stephen Orr emphasized that this agreement marks a crucial step in creating value for stakeholders and strengthens Gatos Silver's position in the silver market. The company continues to develop its silver and zinc-rich mineral district in southern Chihuahua, Mexico, where it holds a 70% stake in the joint venture.

Positive

• Retirement of $154.8 million Term Loan enhances financial stability.
• Agreement strengthens relationships with Dowa Metals & Mining.
• Deleveraging event positions Gatos Silver favorably for future growth in the silver market.

Negative

• None.

Gatos Silver, Inc. (NYSE: GATO) (TSX: GATO) (“Gatos Silver” or the “Company”) is pleased to announce it has reached a definitive agreement with Dowa Metals & Mining Co., Ltd. (“Dowa”) to retire the outstanding Los Gatos Joint Venture (“LGJV”) Term Loan (“Term Loan”). Gatos Silver’s attributable portion of the Term Loan and related fees is approximately $154.8 million. The Term Loan retirement is expected to close soon.

Stephen Orr, the Company’s Chief Executive Officer, stated, “The successful completion of this definitive agreement is a significant value-catalyst and deleveraging event for the LGJV. This agreement also reaffirms our commitment to creating value for our Gatos Silver stakeholders while continuing to position Gatos Silver as the prominent “go-to” company for silver exposure. We are grateful for Dowa’s ongoing support to the LGJV and look forward to continuing our accretive relationship.”

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 underexplored district. 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 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. All statements other than statements of historical facts contained in this press release, including statements regarding the expected average annual production 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 our filings with the U.S. Securities and Exchange Commission and Canadian securities commissions. Certain forward-looking statements are based on assumptions, qualifications and procedures which are set out only in the technical report entitled “Los Gatos Project, Chihuahua, Mexico,” dated July, 2020 with an effective date of July 1, 2020 (the “Los Gatos Technical Report”) filed with the U.S. Securities and Exchange Commission and Canadian securities commissions. Scientific and technical disclosures in this press release were approved by Philip Pyle, Vice President of Exploration and Chief Geologist of Gatos Silver who is a “Qualified Person,” as defined in NI 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators. For a complete description of assumptions, qualifications and procedures associated with such information, reference should be made to the full text of the Los Gatos Technical Report. 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210712005709/en/

FAQ

What is the significance of Gatos Silver's Term Loan retirement?

The retirement of the $154.8 million Term Loan is a significant deleveraging event that enhances the company’s financial stability and positions it favorably for future growth.

When is Gatos Silver's Term Loan retirement expected to close?

The retirement of the Term Loan is expected to close soon, although a specific date has not been provided.

How does the agreement with Dowa impact Gatos Silver?

The agreement with Dowa reinforces Gatos Silver's commitment to creating value for stakeholders and strengthens its ongoing partnership with Dowa Metals & Mining.

What are Gatos Silver's future plans after the Term Loan retirement?

Post-Term Loan retirement, Gatos Silver aims to focus on further developing its mineral district in southern Chihuahua, Mexico, where more than 85% of its mineral rights remain unexplored.