Gatos Silver, Inc. (NYSE/TSX: GATO) (“Gatos Silver” or the
“Company”) is providing this bi-weekly default status report in
accordance with National Policy 12-203 - Management Cease Trade
Orders (“NP 12-203”). In its March 18, 2022 news release (the
“Notice”), the Company announced the delay in the filing of its
annual report on Form 10-K for the year ended December 31, 2021,
which includes its audited consolidated financial statements as at
and for the year ended December 31, 2021, together with the
auditor’s report thereon and the notes thereto, its management’s
discussion and analysis for the year ended December 31, 2021
relating to the audited annual financial statements, and the Chief
Executive Officer and Chief Financial Officer certificates relating
to its annual filings by the filing deadline of March 31, 2022. In
its May 13, 2022 news release, the Company announced the delay in
the filing of its interim financial filings on Form 10-Q for the
quarterly period ended March 31, 2022, which includes interim
financial statements as at and for the quarterly period ended March
31, 2022, together with its management’s discussion and analysis
for the quarterly period ended March 31, 2022 relating to the
interim financial statements, and the Chief Executive Officer and
Chief Financial Officer certificates relating to its interim
filings by the filing deadline of May 16, 2022. In its August 5,
2022 news release, the Company announced the delay in filing its
interim financial filings on Form 10-Q for the quarterly and year
to date periods ended June 30, 2022, which includes interim
financial statements as at June 30, 2022 and for the quarterly and
year to date periods ended June 30, 2022, together with its
management’s discussion and analysis for the quarterly period ended
June 30, 2022 relating to the interim financial statements, and the
Chief Executive Officer and Chief Financial Officer certificates
relating to its interim filings by the filing deadline of August
15, 2022. In its November 11, 2022 news release, the Company
announced the delay in filing its interim financial filings on Form
10-Q for the quarterly and year to date periods ended September 30,
2022, which includes interim financial statements as at September
30, 2022 and for the quarterly and year to date periods ended
September 30, 2022, together with its management’s discussion and
analysis for the quarterly period ended September 30, 2022 relating
to the interim financial statements, and the Chief Executive
Officer and Chief Financial Officer certificates relating to its
interim filings by the filing deadline of November 14, 2022.
On November 14, 2022, the Company announced the appointment of
Ernst & Young LLP (“EY”) as the Company’s independent
registered public accounting firm, effective immediately. EY will
be auditing and reporting on the Company's consolidated financial
statements for the financial years ended December 31, 2021 and
December 31, 2022, including review of the Company’s quarterly
unaudited interim financial information for 2022. The Company
expects all delayed filings, including the audit of the financial
statements required to be included in its annual report on Form
10-K for the year ended December 31, 2021, and the reviews of its
quarterly reports on Forms 10-Q for the quarters ended March 31,
2022, June 30, 2022 and September 30, 2022, to be completed before
the end of the first quarter of 2023. The Company expects to hold
its annual shareholders’ meeting once such public reports have been
filed.
As previously disclosed, in connection with its ongoing review
of the mineral reserve reporting errors and its preparation of its
2021 annual financial statements and 2022 interim financial
statements, the Company has identified material weaknesses in its
internal controls over financial reporting. The Company has
determined that the material weaknesses relate to its failures to
design and maintain (i) an effective control environment
commensurate with the financial reporting requirements of a public
company in the United States and Canada, and (ii) effective
controls over the assessment of certain key assumptions, inputs and
outputs contained in its 2020 Technical Report. The Company is
continuing to assess the impact of these material weaknesses and
whether any other material weaknesses exist. The Company expects to
provide additional information in its upcoming public reports. On
January 9, 2023, the Company engaged a third-party expert to assist
management in documenting key processes related to the Company’s
internal control environment, designing and implementing an
effective risk assessment and monitoring program to identify risks
of material misstatements and ensuring that the internal controls
have been appropriately designed to address and effectively monitor
identified risks.
A management cease trade order was granted by the Ontario
Securities Commission on April 1, 2022 (the “Original MCTO”) and
the Ontario Securities Commission granted additional management
cease trade orders on April 12, 2022 and July 7, 2022 (the
“Additional MCTOs” and together with the Original MCTO, the
“MCTO”).
Pursuant to NP 12-203, the Company must file bi-weekly status
reports in the form of further news releases during the period from
the Notice until the MCTO is revoked. The Company reports that
since the Notice: (i) there have been no material changes regarding
the information contained in the Notice that have not been
disclosed in a bi-weekly default status report or in a news release
referenced therein; (ii) there have been no failures by the Company
in fulfilling its stated intentions with respect to satisfying the
provisions of the alternative information guidelines under NP
12-203; and (iii) there has not been any specified default
subsequent to the defaults announced in the Notice and the news
releases dated May 13, 2022, August 5, 2022 and November 11,
2022.
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 mine and mineral processing
plant at the LGJV’s Cerro Los Gatos deposit. The LGJV consists of
approximately 103,087-hectares of mineral rights, representing a
highly prospective and under-explored district with numerous
silver-zinc-lead epithermal mineralized zones identified as
priority targets.
Forward-Looking Statements
This press release may contain certain information that may
constitute “forward-looking statements” and “forward looking
information”(collectively, “forward-looking statements”) within the
meaning of U.S. and Canadian securities laws. The forward-looking
statements contained herein include statements about the timing for
filing of the Company’s interim financial information on Forms 10-Q
and the Company’s annual report on Form 10-K, and timing for
holding the annual shareholder meeting. While the Company has based
these forward-looking statements on its current expectations about
future events, the statements are not guarantees of the Company’s
future performance and are subject to risks, uncertainties,
assumptions and other factors that could cause actual results to
differ materially from future results expressed or implied by such
forward-looking statements. Such risks, uncertainties, assumptions
and factors include, amongst others, the evaluation of material
weaknesses in its internal controls and timing for completing the
audit and review of financial statements. Further, although the
Company has attempted to identify factors that could cause actual
actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results not to be as anticipated,
estimated or intended. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as required by law. As there can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements, readers should not place undue
reliance on forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20230120005350/en/
Investors and Media Contact
Tiffany Osburn Director, Financial Reporting & Corporate
Communications investors@gatossilver.com (720) 726 9662
www.gatossilver.com
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