Gatos Silver reports net loss of $15 million in third quarter as it becomes net debt free
(Kitco News) - Gatos Silver (NYSE/TSX: GATO) reported Monday that the company produced 1.7 million ounces of silver, 1.3 thousand ounces of gold, 10.8 million pounds of lead and 13.5 million pounds of zinc in Q3 2021.
The company said that Cerro Los Gatos (CLG) achieved record above-design plant throughput during Q3 2021 and continued to have strong recoveries in all payable metals.
During October 2021, CLG has seen a "dramatic" improvement in its mined grades, averaging 316 g/t silver, 4.4% zinc and 2.6% lead, while achieving record plant throughout of 2,620 tonnes per day, the company added.
The company's net loss for Q3 was ($15) million, or ($0.22) per share, compared to net income of $0.4 million, or $0.01 per share, in the third quarter of 2020.
Gatos explained that the decrease in net income was primarily due to non-recurring items including the LGJV Term Loan closing fee, accelerated expensing of LGJV Term Loan origination costs and severance costs, as well as higher public company costs related to increased compensation, insurance, and consulting expenses.
CEO Stephen Orr stated, "We are pleased with Gatos Silver's accomplishments in Q3. As previously communicated, 2021 is a year of optimization and CLG is continuing to achieve record mine and plant throughput with above-design metal recoveries. Additionally, after a successful $133 million follow-on offering and subsequent LGJV debt repayment, we improved our financial flexibility, resulting in Gatos Silver and the LGJV becoming net debt free. The debt repayment has enhanced our ability to fund optimization initiatives with CLG cash flow to enhance long-term value for our shareholders."
Gatos Silver said it continues to expect CLG's 2021 silver production to be approximately 7.4 million silver ounces contained in concentrate, as disclosed in the company's Q3 production report. The company expects annual zinc and lead production to be consistent with the lower range of previously communicated guidance.
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 LGJV, the company recently built and commissioned its first operating mine and mineral processing plant at the LGJV's Cerro Los Gatos deposit.
By Vladimir BasovFor Kitco News
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