VANCOUVER, British Columbia, Aug. 08, 2023 (GLOBE NEWSWIRE) -- Gatos Silver, Inc. (NYSE/TSX: GATO) (“Gatos Silver” or the “Company”) today announced its second quarter 2023 financial and operating results. The Company will host an investor and analyst call on August 9, 2023, details of which are provided below.

The Company has a 70% interest in the Los Gatos Joint Venture (“LGJV”), which in turn owns the Cerro Los Gatos (“CLG”) mine in Mexico. Production for the second quarter of 2023 was previously disclosed on July 10, 2023. The Company’s reporting currency is US dollars.

Dale Andres, CEO of Gatos Silver, said: “The LGJV continues to generate robust cash flows and perform in line with our expectations, and we remain on track to achieve 2023 guidance at CLG. We are in a strong financial position with the Company now debt free and with a strong cash balance. We are progressing well with our planned update to CLG’s mineral resource and reserve estimate which we expect to announce later this quarter, including a new life of mine plan.”

Summary

LGJV Q2 2023 results compared to Q2 2022 (100% basis):

Revenue of $58.3 million, up 2% from $57.2 million
Cost of sales $25.8 million, down 7% from $27.8 million
Cash flow from operations of $34.3 million, down 11% from $38.5 million
Net income $0.7 million, down 78% from $3.4 million
Sustaining capital $13.1 million, down 41% from $22.2 million
EBITDA $27.5 million, up 29% from $21.4 million¹
Free cash flow $19.7 million, up 1% from $19.5 million¹
Silver production 2.00 million ounces, down 13% from 2.30 million
Silver equivalent production of 3.30 million ounces, down 12% from 3.73 million²
Co-product all-in sustaining costs (“AISC”) of $17.55 per ounce of payable silver, up 16% from $15.13¹
By-product AISC of $14.32 per ounce of payable silver, up 36% from $10.54¹

¹ See Non-GAAP Financial Measures below
² Silver equivalent production is calculated using prices of $22/oz silver, $1.20/lb zinc, $0.90/lb lead and $1,700/oz gold
In Q2 2023, Gatos Silver’s net loss was $3.6 million or $(0.05) per share compared with net income of $5.2 million or $0.08 per share in Q2 2022. The decline is primarily attributable to lower equity income from the LGJV driven by higher depreciation, depletion and amortization and income tax expenses. Higher general and administrative expenses for the quarter were attributable in part to auditing and consulting costs for the restatement of financial results which are non-recurring expenses.

On July 20, 2023, subsequent to the quarter end, the Company received a $35.0 million cash distribution from the LGJV, of which $9.0 million was used to pay the entire outstanding balance of the Revolving Credit Facility. As of July 31, 2023, the Company is debt free with a cash position of $36.0 million and $50 million available under the Revolving Credit Facility. As of July 31, 2023 the LGJV is debt free and has a cash position of $30.1 million.

Financial and Operating Results

Below is select operational and financial information for the three and six months ended June 30, 2023, and 2022. For a detailed discussion of the three and six months financial and operating results refer to the Form 10-Q for the quarter ended June 30, 2023 filed on August 8, 2023 on both the EDGAR and SEDAR systems and posted on the Company’s website at https://gatossilver.com. Totals may not add due to rounding.

Los Gatos Joint Venture

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