VANCOUVER, British Columbia, May 06, 2024 (GLOBE NEWSWIRE) -- Gatos Silver, Inc. (TSX:GATO) ("Gatos Silver" or the "Company") today announced its first quarter 2024 financial and operating results. The Company will host an investor and analyst call on May 7, 2024, 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 first quarter of 2024 was previously disclosed on April 9, 2024. The Company's reporting currency is US dollars. Dale Andres, CEO said: "During the first quarter we continued to add cash to the balance sheet mainly because of the previously disclosed strong operational performance at the LGJV. All-in sustaining cost ("AISC") per silver ounce was at the lower end of 2024 guidance thanks to improved operating efficiencies, which helped to offset inflationary cost pressures and the impact of the stronger Mexican peso." "We now expect full year 2024 silver and silver equivalent production to be in the top half and AISC to be in the lower half of our previously announced guidance ranges. We also continue to advance our growth initiatives. Conversion drilling of the South-East Deeps inferred resource to extend mine life progressed well during the quarter and the LGJV has started ramping-up exploration efforts on near-mine and other targets in the highly prospective Los Gatos district." Summary LGJV Q1 2024 results compared to Q1 2023 (100% basis): Revenue of $72.2 million, up 3% from $69.9 million Cost of sales $30.8 million, up 18% from $26.0 million Net income $10.2 million, down 20% from $12.7 million EBITDA $35.1 million1, down 11% from $39.6 million Cash flow from operations of $37.3 million, down 7% from $40.0 million Sustaining capital $8.9 million1, up 17% from $7.6 million Free cash flow $25.5 million1, down 11% from $28.7 million Silver equivalent production of 3.70 million ounces2, consistent with 3.69 million ounces in Q1 2023 Co-product AISC of $14.361 per ounce of payable silver, up 12% from $12.79 By-product AISC of $10.081 per ounce of payable silver, up 65% from $6.11 Gatos Silver Q1 2024 results compared to Q1 2023: Net income of $2.5 million, up 203% from $0.8 million Basic and diluted earnings per share of $0.04, up from $0.01 EBITDA of $1.8 million1, up 107% from $0.9 million Cash flow provided by operating activities of $15.1 million, compared to cash flow used by operating activities of $4.1 million Free cash flow of $15.1 million1, up from negative $4.1 million _________________________________1 See "Non-GAAP Financial Measures" below2 See definition of silver equivalent production below At the LGJV, higher sales volumes compared to Q1 2023 helped to drive higher revenue, partially offset by lower realized metal prices due to final settlement adjustments on sales. There was also a significant provisional revenue adjustment in the comparable quarter in 2023. For Gatos Silver, higher net income, earnings per share and EBITDA1 for Q1 2024 were primarily attributable to the higher equity income from the LGJV, partially offset by an increase in general and administrative expenses including higher legal expenses which are not expected to be recurring beyond 2024. Other G&A expenses were also higher due to non-cash items, including stock-based compensation of $1.7 million. The change in operating cash flow and increase in free cash flow1 was primarily a result of the capital distribution received in Q1 2024. Capital distributions are now shown on the cash flow statement as cash flow received from operating activities, consistent with how cash dividends from the LGJV were treated in 2022. As of March 31, 2024, the Company had a cash balance of $70.6 million, up 27% from $55.5 million at the end of 2023. The increase in cash during the quarter was due to receipt of a $21.0 million capital distribution. Subsequent to quarter end, the LGJV made a capital distribution on April 22, 2024, to its partners of $25.0 million of which the Company received $17.5 million. Also, during March and April the full amount of funding to settle the class action lawsuits in both the US and Canada was placed into escrow accounts, of which the Company's share was $4.0 million, with the remainder, $20.0 million, funded by our insurers. As of April 30, 2024, the Company had a cash balance of $85.4 million and the LGJV had a cash balance of $20.0 million. The Company continues to be debt free with $50.0 million available under the revolving credit facility. Financial and Operating Results Below is select operational and financial information for the three months ended March 31, 2024 and 2023. For a detailed discussion of financial and operating results refer to the Form 10-Q for the three months ended March 31, 2024, filed on May 6, 2024, on both the EDGAR and SEDAR+ systems and posted on the Company's website at https://gatossilver.com. Los Gatos Joint Venture LGJV 100% BasisSelected Financial Information (Unaudited) Three Months EndedMarch 31, (in millions, except where otherwise stated)   2024     2023   Revenue $ 72.2   $ 69.9   Cost of sales   30.8     26.0   Royalties   0.3     0.4   Exploration   1.4     0.5   General and administrative   4.3     3.9   Depreciation, depletion and amortization   20.3     20.8   Other expense (income)   0.3     (0.4 ) Income tax expense   4.8     6.0   Net income and comprehensive income2 $ 10.2   $ 12.7           Sustaining capital1 $ 8.9   $ 7.6   Resource development drilling expenditures $ 3.2   $ 3.0   EBITDA1 $ 35.1   $ 39.6   Cash provided by operating activities $ 37.3   $ 40.0   Free cash flow1 $ 25.5   $ 28.7           Operating Results (CLG 100% Basis)       Tonnes milled (dmt)   292,114     260,428   Tonnes milled per day (dmt)   3,210     2,894   Average Grades       Silver grade (g/t)   284     329   Zinc grade (%)   3.99     3.93   Lead grade (%)   1.77     1.86   Gold grade (g/t)   0.28     0.30   Production - Contained Metal       Silver ounces (millions)   2.37     2.43   Zinc pounds – in zinc conc. (millions)   15.8     14.0   Lead pounds – in lead conc. (millions)   10.1     9.5   Gold ounces – in lead conc. (thousands)   1.39     1.38   Silver equivalent ounces (millions)3   3.70     3.69   Co-product cash cost per ounce of payable silver equivalent1 $ 11.70   $ 10.47   By-product cash cost per ounce of payable silver1 $ 6.09   $ 2.66   Co-product AISC per ounce of payable silver equivalent1 $ 14.36   $ 12.79   By-product AISC per ounce of payable silver1 $ 10.08   $ 6.11           Sales volume by payable metal       Silver ounces (millions)   2.24     2.22   Zinc pounds – in zinc conc. (millions)   13.7     12.0   Lead pounds – in lead conc. (millions)   10.0     8.9   Gold ounces – in lead conc. (thousands)   1.18     1.12   Copper pounds – in lead conc. (millions)   0.07     —   Average realized price by payable metal       Average realized price per silver ounce4 $ 22.91   $ 26.61   Average realized price per zinc pound4 $ 1.07   $ 1.43   Average realized price per lead pound4 $ 0.85   $ 1.05   Average realized price per gold ounce4 $ 1,939   $ 1,787   Average realized price per copper pound4 $ 3.87   $ —   _________________________________1 See Non-GAAP Financial Measures below2 Totals may not add up due to rounding3 Silver equivalent production for 2024 is calculated using prices of $23/oz silver, $1.20/lb zinc, $0.90/lb lead and $1,800/oz gold to "convert" zinc, lead and gold production contained in concentrate to "equivalent" silver ounces (contained metal, multiplied by price, divided by silver price). For 2023, silver equivalent production was calculated using prices of $22/oz silver, $1.20/lb zinc, $0.90/lb lead and $1,700/oz gold. For comparative purposes, the calculated silver equivalent production for the three months ended March 31, 2023 would be 3.64 million ounces using price assumptions for 2024.4 Realized prices include the impact of final settlement adjustments from sales Gatos Silver, Inc. Selected Financial Information (Unaudited)     Three Months Ended March 31, (in $ millions, except where otherwise stated)       2024     2023   General and Administrative       7.0     5.5   Total expenses       7.0     5.6   Equity income in affiliates       7.3     5.0   Other income, net       2.3     1.4   Total net other income       9.6     6.4   Net income and comprehensive income2     $ 2.5   $ 0.8   Net income per share basic and diluted     $ 0.04   $ 0.01             EBITDA1     $ 1.8   $ 0.9   Cash provided (used) by operating activities     $ 15.1   $ (4.1 ) Free cash flow1     $ 15.1   $ (4.1 ) _________________________________1 See Non-GAAP Financial Measures below2 Totals may not add up due to rounding 2024 Guidance Update (CLG 100% basis) Gatos Silver expects plant throughput in 2024 to average in the top half of our previously announced guidance range of 3,000 and 3,300 tonnes processed per day. This compares to 2,935 tonnes per day in 2023. The LGJV continues 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 40% above original design capacity. As a result of strong plant throughput performance anticipated in 2024, both silver and silver equivalent production is now expected to be in the top half of our previously announced guidance ranges of 8.4 to 9.2 million ounces and 13.5 to 15.0 million ounces respectively. The Company expects full year co-product and by-product AISCs to remain in the lower half of our original guidance ranges of $14.00 to $16.00 per ounce of payable silver equivalent and $9.50 to $11.50 per ounce of payable silver. The Company continues to expect sustaining capital expenditures at CLG (100% basis) to be approximately $45 million in 2024, the majority of which is for underground development primarily to access the lower levels of the NW and Central zones and to further develop access to the SE zone. The expected expenditures also include projects to help improve operating efficiencies and to support debottlenecking efforts in the mine. There is no change to anticipated exploration and definition drilling expenditures of $18 million in 2024, of which $9 million is expected to be capitalized and incurred on resource development drilling primarily in the SE Deeps zone and $9 million expensed and incurred on greenfields exploration. The focus in the first quarter was primarily on continuing to infill the SE Deeps zone to approximately 50 metre spacing for the 2024 mineral resource and mineral reserve update anticipated to be announced in the third quarter of 2024. The focus for the surface drilling rigs is now shifting to other district targets. Drill testing of near mine targets at Portigueño is already underway and drilling at the NW Deeps target is expected to commence this month. San Luis and Lince are expected to be drilled later in the year. Restatement of Previously Issued Interim and Annual Financial Statements During preparation of the financial statements for the current quarter, we determined that an accounting classification change was required for the capital distributions received from our investment in affiliate in our consolidated statements of cash flows in 2023. The capital distributions we received should have been classified as "cash provided by operating activities" rather than "cash provided by investing activities" in our condensed consolidated financial statements for the three and nine months ended September 30, 2023, and our consolidated financial statements for the year ended December 31, 2023. The reclassifications on our consolidated statements of cash flows do not impact our consolidated balance sheets, consolidated statements of income and comprehensive income and consolidated statements of stockholders' equity, as of and for the periods ended September 30, 2023, and December 31, 2023. The reclassifications also have no effect on our business operations, cash balances or liquidity or the financial statements of the Los Gatos Joint Venture. On May 6, 2024, we filed an amended Quarterly Report on Form 10-Q/A for the three and nine months ended September 30, 2023, and an amended Annual Report on Form 10-K/A for the year ended December 31, 2023, which restate the consolidated statements of cash flows to correct this misclassification, and revise certain related information, including management discussion and analysis and the discussion of our internal controls and procedures. For further details, refer to the Form 8-K filed on May 6, 2024, on both the EDGAR and SEDAR+ systems. Financial Results Webcast and Conference Call Investors and analysts are invited to attend the financial results webcast and conference call as follows: Date: Tuesday, May 7, 2024Time: 10:00 a.m. ETListen-Only Webcast: https://events.q4inc.com/attendee/863807355Direct Event Registration Link (for Analysts only): https://registrations.events/direct/Q4I984330Dial-in number: (800) 715-9871 or +1 646 307 1963 Conference ID: 98433 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 70% owner of the Los Gatos Joint Venture ("LGJV"), the Company is primarily focused on operating the Cerro Los Gatos mine and on growth and development of the Los Gatos district. The LGJV includes approximately 103,000 hectares of mineral rights, representing a highly prospective and under-explored district with numerous silver-zinc-lead epithermal mineralized zones identified as priority targets. 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 ...