gato-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number: 001-39649

GATOS SILVER, INC.

(Exact name of registrant as specified in its charter)


Delaware			27-2654848
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

925 W Georgia Street, Suite 910

Vancouver, British Columbia, Canada V6C 3L2

(Address of principal executive offices) (Zip Code)

(604) 424-0984

(Registrant’s telephone number, including area code)

N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

GATO

New York Stock Exchange

Toronto Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
		Emerging growth company	☑

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The Company has 700,000,000 shares of common stock, par value $0.001, authorized of which 69,341,227 were issued and outstanding as of August 6, 2024.

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TABLE OF CONTENTS


		Page
	Part I
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Stockholders' Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33
Item 4.	Controls and Procedures	33
	Part II
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 5.	Other Information	35
Item 6.	Exhibits	35

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

GATOS SILVER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands of United States dollars, except share amounts)



	Notes	June 30, 2024		December 31, 2023
ASSETS
Current Assets
Cash and cash equivalents		$	82,476	$	55,484
Related party receivables	5	155		560
Other current assets	3	1,593		22,642
Total current assets		84,224		78,686
Non-Current Assets
Investment in affiliates	11	305,228		321,914
Deferred tax assets		200		266
Other non-current assets	3	382		38
Total Assets		$	390,034	$	400,904
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable and other accrued liabilities	4	$	8,938	$	33,357
Non-Current Liabilities
Lease liability		218		—
Stockholders’ Equity
Common Stock, $0.001 par value; 700,000,000 shares authorized; 69,341,227 and 69,181,047 shares outstanding as of June 30, 2024 and December 31, 2023, respectively		117		117
Paid-in capital		554,962		553,319
Accumulated deficit		(174,201)		(185,889)
Total stockholders’ equity		380,878		367,547
Total Liabilities and Stockholders' Equity		$	390,034	$	400,904

See accompanying notes to the condensed consolidated financial statements.

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GATOS SILVER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(In thousands of United States dollars, except share amounts)



		Three Months Ended June 30,				Six Months Ended June 30,
	Notes	2024		2023		2024		2023
Expenses
Exploration		$	44	$	—	$	75	$	26
General and administrative		7,872		6,127		14,835		11,663
Amortization		3		34		7		71
Total expenses		7,919		6,161		14,917		11,760
Other income (expense)
Equity income in affiliates	11	14,526		1,474		21,814		6,485

Interest expense		—		(183)		—		(347)
Interest income		1,117		126		1,884		287
Other income	5	1,561		1,151		3,079		2,577
Other income		17,204		2,568		26,777		9,002
Income (loss) before taxes		9,285		(3,593)		11,860		(2,758)
Income tax expense		129		—		172		—
Net income (loss) and comprehensive income (loss)		$	9,156	$	(3,593)	$	11,688	$	(2,758)
Net income (loss) per share:	7
Basic and Diluted		$	0.13	$	(0.05)	$	0.17	$	(0.04)

Weighted average shares outstanding:
Basic		69,217,512		69,162,223		69,199,280		69,162,223
Diluted		71,096,361		69,162,223		70,793,043		69,162,223

See accompanying notes to the condensed consolidated financial statements.

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GATOS SILVER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(In thousands of United States dollars, except share amounts)



	Number	Amount
	Common Stock		Common Stock	Paid-in Capital	Accumulated deficit	Total
Balance at December 31, 2023	69,181,047		117	553,319	(185,889)	367,547
Stock-based compensation	—		—	1,681	—	1,681
DSU compensation	—		—	8	—	8
Net income and comprehensive income	—		—	—	2,532	2,532
Balance at March 31, 2024	69,181,047		117	555,008	(183,357)	371,768
Stock-based compensation	—		—	1,615	—	1,615
RSU settlement	139,839		—	(1,778)	—	(1,778)
Stock options exercises	20,341		—	110	—	110
DSU compensation	—		—	7	—	7
Net income and comprehensive income	—		—	—	9,156	9,156
Balance at June 30, 2024	69,341,227		117	554,962	(174,201)	380,878

SEC Form 10-Q filed by Gatos Silver Inc.