Form 10-K/A - Annual report [Section 13 and 15(d), not S-K Item 405]: [Amend]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Amendment No. 1)

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

For the fiscal year ended December 31, 2023

☐ 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)

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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑

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 ☐

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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.


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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☑☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☑

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

As of June 30, 2023, the aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was $178,256,662 based on the closing price of the registrant’s common stock on the New York Stock Exchange.

As of May 6, 2024, the number of shares of Registrant’s common stock outstanding was 69,181,047.

DOCUMENTS INCORPORATED BY REFERENCE

None.

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EXPLANATORY NOTE

References throughout this Amendment No. 1 to the Annual Report on Form 10-K to “we,” “us,” “Gatos Silver,” “Company” or “our Company” are to Gatos Silver Inc., unless the context otherwise indicates.

This Amendment No. 1 (“Amendment No. 1”) amends the Annual Report on Form 10-K of Gatos Silver, Inc. for the fiscal year ended December 31, 2023 (“Affected Period”), as filed with the Securities and Exchange Commission (“SEC”) on February 20, 2024 (the “Original Filing”).

This Amendment No. 1 contains the restated financial statements for the Company for the Affected Period to correct the classification of the capital distributions received from the Los Gatos Joint Venture (“LGJV”) on the Statement of Cash Flows for the year ended December 31, 2023. Based on management's judgement the Company considered the declaration of the capital distribution (in its legal form) to be the nature of the activity that generated the cash flow and, therefore, classified capital distributions as cash provided by investing activities on the Consolidated Statements of Cash Flows. On further analysis, it was determined that management should have considered the underlying source of the cash flow at the LGJV that generated the funds for the capital distributions when determining its classification on the Company's Consolidated Statements of Cash Flows. The capital distributions received previously classified as cash flow provided by investing activities should have been classified as cash flows provided by operating activities. The Consolidated Balance Sheets and balance of cash and cash equivalents at December 31, 2023, and the Consolidated Statements of Income and Comprehensive Income and the Consolidated Statements of Shareholders’ Equity for the year ended December 31, 2023, are not impacted by this change. The combined financial statements of the LGJV are also not impacted by this misclassification. See Note 3. Restatement of Previously Issued Financial Statements to the consolidated financial statements included herein for additional information.

This Amendment No. 1 contains the following sections:

•Item 1A. Risk Factors - We have identified material weaknesses in our internal control over financial reporting. If we fail to remediate these deficiencies (or fail to identify and/or remediate other possible material weaknesses), we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, which may adversely affect investor confidence in us and, as a result, the value of our common stock.

•Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

•Item 8. Financial Statements and Supplementary Data

•Item 9A. Controls and Procedures; and

•Exhibits 23, 31, 32, 101 and 104 of Item 15. Exhibits and Financial Statement Schedules.

Except as described above and as further described in Note 3 to the consolidated financial statements in this Form 10K/A, this Amendment No. 1 does not amend, update or change any other items or disclosures contained in the Original Filing, and accordingly, this Amendment No. 1 does not reflect or purport to reflect any information or events occurring after the date of the Original Filing or modify or update those disclosures affected by subsequent events. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing and the Company’s other filings with the SEC. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Original Filing.

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		Page
	Part I

Item 1A.	Risk Factors	4





	Part II


Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	17
Item 8.	Financial Statements and Supplementary Data	18
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	55
Item 9A.	Controls and Procedures	55








	Part IV
Item 15.	Exhibits and Financial Statement Schedules	57

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Notice Regarding Mineral Disclosure

Mineral Reserves and Resources

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and applicable Canadian securities laws, and as a result, we have separately reported our mineral reserves and mineral resources according to the standards applicable to those requirements. U.S. reporting requirements are governed by subpart 1300 of Regulation S-K (“S-K 1300”), as issued by the U.S. Securities and Exchange Commission (the “SEC”). Canadian reporting requirements are governed by National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”), as adopted from the definitions provided by the Canadian Institute of Mining, Metallurgy and Petroleum. Both sets of reporting standards have similar goals in terms of conveying an appropriate level of consistency and confidence in the disclosures being reported, but the standards embody slightly different approaches and definitions. All disclosure of mineral resources and mineral reserves in this report is reported in accordance with S-K 1300. See “Item 1A. Risk Factors" - Risks Related to Our Operations-Mineral reserve and mineral resource calculations at the Cerro Los Gatos Mine ("CLG") and at other deposits in the Los Gatos District ("LGD") are only estimates and actual production results and future estimates may vary significantly from the current estimates.

The estimation of measured and indicated resources involve greater uncertainty as to their economic feasibility than the estimation of proven and probable reserves, and therefore investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves reported pursuant to S-K 1300. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources, and, therefore, investors are cautioned not to assume that all or any part of inferred resources exist, or that they can be mined legally or economically. Definitions of technical terms are included below for reference.

Technical Report Summaries and Qualified Persons

The technical information concerning our mineral projects in this Form 10-K have been reviewed and approved by Anthony (Tony) Scott P. Geo, Senior Vice President of Corporate Development and Technical Services. The technical information herein that relates to the Mineral Resource set out in the Los Gatos Technical Report was prepared by or under the supervision of Ronald Turner, MAusIMM(CP), an employee of Golder Associates S.A. The technical information herein that relates to the Mineral Reserve, the life of mine ("LOM") plan and other economic analyses set out in the Los Gatos Technical Report was based upon information prepared by or under the supervision of Stephan Blaho, an employee of WSP Canada Inc. (formerly Golder Associates Ltd.). Each of Mr. Scott, Mr. Turner and Mr. Blaho is a “qualified person” under S-K 1300 and have reviewed the contents of this Form 10-K relevant to their areas. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and mineral resources included in this Form 10-K, as well as data verification procedures and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, sociopolitical, marketing or other relevant factors, please review the Los Gatos Technical Report which is included as an exhibit to this Form 10-K.

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Glossary of Technical Terms

Certain terms and abbreviations used in this Report are defined below:

“Ag” means the chemical symbol for the element silver.

“AISC” means all-in sustaining cost.

“Au” means the chemical symbol for the element gold.

“By-Product” is a secondary metal or mineral product recovered in the milling process. For the CLG operation, silver is the primary metal product by value and zinc, lead and gold are by-products.

“Concentrate” is the product of physical concentration processes, such as flotation or gravity concentration, which involves separating ore minerals from unwanted waste rock. Concentrates require subsequent processing (such as smelting or leaching) to break down or dissolve the ore minerals and obtain the desired elements, usually metals.

“Dilution” is an estimate of the amount of waste or low-grade mineralized rock which will be mined with the ore as part of normal mining practices in extracting an orebody.

“Feasibility Study” is a comprehensive study of a mineral deposit in which all geological, engineering, legal, operating, economic, social, environmental and other relevant factors are considered in sufficient detail that it could reasonably serve as the basis for a final decision by a mining company and/or a financial institution to finance the development of the deposit for mineral production.

“Grade” means the concentration of each ore metal in a rock sample, usually given as weight percent. Where extremely low concentrations are involved, the concentration may be given in grams per tonne (g/t), the grade of an ore deposit is calculated, often using sophisticated statistical procedures, as an average of the grades of a very large number of samples collected from the deposit.

“g/t” means grams per tonne.

“Hectare” is a metric unit of area equal to 10,000 square meters (2.471 acres).

“indicated mineral resources” or “indicated resources” is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve.

“inferred mineral resources” or “inferred resources” is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project, and may not be converted to a mineral reserve.

“LOM” means life of mine.

“Los Gatos Technical Report” means the Technical Report Summary titled “Mineral Resource and Reserve Update, Los Gatos Joint Venture, Chihuahua, Mexico,” prepared by WSP Canada Inc, dated October 20, 2023 with an effective date of July 1, 2023, which was prepared in accordance with the requirements of S-K 1300 and filed with the Securities Exchange Commission. A corresponding technical report was prepared in accordance with the requirements of NI 43-101 and filed with the relevant Canadian securities authority .

“masl” is meters above sea level.

“mineral reserves” or “reserves” are the estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically

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mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted. Mineral reserves quantified herein are on a 100% basis unless otherwise stated.

“mineral resources” or “resources” are a concentration or occurrence of material of economic interest in or on the Earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled. Mineral resources quantified herein are on a 100% basis and stated exclusive of mineral reserves, unless otherwise stated.

“measured mineral resources” is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.

“M&I” means measured mineral resources and indicated mineral resources.

“NI 43-101” means National Instrument 43-101-Standards of Disclosure for Mineral Projects adopted by the Canadian Securities Administrators.

“NSR” means net smelter return: the proceeds returned from the smelter and/or refinery to the mine owner less certain costs.

“oz” means a troy ounce.

“Pb” means the chemical symbol for the element lead.

“probable mineral reserve” means the economically mineable part of an indicated and, in some cases, a measured mineral resource.

“proven mineral reserve” means the economically mineable part of a measured mineral resource and can only result from conversion of a measured mineral resource.

“S-K 1300” means 17.C.F.R § 229.1300 through § 229.1305.

“tailings” is the material that remains after all economically and technically recovered metals have been removed from the ore during processing.

“tonne,” means a metric tonne, equivalent to 1,000 kg or 2,204.6 pounds. “tonne” is referenced under the “Grade” definition.

“Zn” means the chemical symbol for the element zinc.

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PART I

Item 1A. Risk Factors

This Amendment No. 1 should be read in conjunction with the Original Filing and the Company’s other filings with the SEC. The Original Filing includes the Risk Factors that were not impacted by the change as described in Amendment No. 1. The following risk could materially and adversely affect our business, financial condition, cash flows, and results of operations, and the trading price of our common stock could decline. Refer also to the other information set forth in this Report, including our consolidated financial statements and the related notes and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Risks Related to Our Business and Industry

We have identified material weaknesses in our internal control over financial reporting. If we fail to remediate these deficiencies (or fail to identify and/or remediate other possible material weaknesses), we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, which may adversely affect investor confidence in us and, as a result, the value of our common stock.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. generally accepted accounting principles. Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with disclosure protocols and procedures, is designed to prevent fraud.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal controls over financial reporting for fiscal year 2023. This assessment includes disclosure of any material weaknesses identified by our management in our internal controls over financial reporting. Additionally, we are required to disclose changes made in our internal controls and procedures on a quarterly basis.

However, for as long as we are an emerging growth company, or a smaller reporting company that is a non-accelerated filer, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404(b). At such time this attestation will be required, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

We previously identified material weaknesses in our internal controls over financial reporting. Except as identified below regarding the failure to design and maintain effective controls over accounting for current and deferred taxes and the failure to design and maintain effective controls to ensure the accurate classification of distributions from our investment in affiliates in the Consolidated Statements of Cash Flows, we have remediated these historical material weaknesses.

In connection with our review of the internal control related to the preparation of the financial statements for the fiscal year ended December 31, 2023, we identified that additional remedial actions are required to design and to maintain effective controls over accounting for current and deferred taxes in order to consider this material weakness remediated. As part of our remedial efforts during 2023 we engaged a third-party with expertise in each jurisdiction we operate and in relevant U.S. GAAP tax accounting to assist us in accounting for current and deferred taxes; we hired an experienced tax manager at the end of the third quarter to prepare current and deferred tax provisions; and hired a third-party internal controls expert to advise on the design and implementation of tax related internal controls. During 2024 we intend to enhance our processes and controls implemented during 2023, including enhancing our review procedures, to ensure our procedures are designed to accurately account for and disclose current and deferred tax.

We have incurred significant costs to date in connection with efforts to remediate these material weaknesses, and we expect to incur additional costs in the future. Even if we successfully remediate the remaining material weakness described above, we cannot provide any assurance that we will not suffer from these or other material weaknesses in the future.

Our procedures and controls and our ongoing remediation efforts may not enable us to avoid further material weaknesses in the future. We may need to undertake various actions, such as implementing new internal controls and procedures and hiring additional

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accounting staff or external consultants. If we are unable to assert that our internal controls over financial reporting are effective, or if our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal controls to the extent required, we may be unable to accurately report our financial condition and results of operations in a timely matter and could lose investor confidence in the accuracy and completeness of our financial reports, which could cause the price of our common stock to decline.

PART II

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included in “Item 8. Financial Statements and Supplementary Data” and the other information included elsewhere in this Report.

Restatement of previously issued Consolidated Financial Statements for the correction of the classification of capital distributions received from the LGJV on the Statements of Cash Flows

During the preparation of the financial statements for the three months ended March 31, 2024, the Company identified that the capital distributions received from its investment in affiliates classified as cash provided by investing activities on the Consolidated Statements of Cash Flows should have been classified as cash flow provided by operating activities. Based on management's judgement, the Company considered the declaration of the capital distribution (in its legal form) to be the nature of the activity that generated the cash flow and, therefore, classified capital distributions as cash provided by investing activities on the Consolidated Statements of Cash Flows. On further analysis, it was determined that management should have considered the underlying source of the cash flow at the LGJV that generated the funds for the capital distributions when determining its classification on the Company's Statement of Cash Flows. The capital distributions received previously classified as cash flow provided by investing activities should have been classified as cash flows provided by operating activities.

The impact of the correction of the error on the financial statements of the Company is an increase in cash provided by operating activities of $59.5 million and a decrease in cash provided by investing activities of $59.5 million. There is no impact on the net increase in cash and cash equivalents or the balance of cash and cash equivalents at December 31, 2023. The Consolidated Balance Sheets and balance of cash and cash equivalents as of December 31, 2023, and the Consolidated Statements of Income and Comprehensive Income and the Consolidated Statements of Shareholders’ Equity for the year ended December 31, 2023, are not affected by this change. The Combined Financial Statements of the LGJV are also not impacted by this change.

As discussed in the Explanatory Note to this Form 10-K/A and in Note 3 to the consolidated financial statements included in this Annual Report on Form 10-K/A, we have restated the previously issued Consolidated Statement of Cash Flows for the year ended December 31, 2023. The following discussion and analysis of our financial condition and results of operations incorporates the restated Consolidated Statements of Cash Flow amounts.

Overview

We are a Canadian-headquartered, Delaware-incorporated precious metals exploration, development and production company with the objective of becoming a leading silver producer. Our primary efforts are focused on the operation of the LGJV in Chihuahua, Mexico. The LGJV was formed on January 1, 2015, when we entered into the Unanimous Omnibus Partner Agreement with Dowa to further explore, and potentially develop and operate mining properties within the LGD. The LGJV Entities own certain surface and mineral rights associated with the LGD. The LGJV ownership is currently 70% Gatos Silver and 30% Dowa. On September 1, 2019, the LGJV commenced commercial production at CLG, which produces a silver containing lead concentrate and zinc concentrate. We are currently focused on the production and continued development of the CLG and the further exploration and development of the LGD.

2023 Key Highlights

Gatos Silver Inc.

•Reported net income of $12.9 million or $0.19 per basic and $0.18 per diluted share;

•Reported Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")1 of $12.4 million;

•Received capital distributions of $59.5 million from the LGJV;

1 See "Non-GAAP Financial Measures" below.

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•No debt and $50 million available for withdrawal on the Credit Facility after $9.0 million debt repayment made as of July 21, 2023; and

•Operating cash flow of $47.5 million and free cash flow of $47.5 million.

LGJV (100% basis)

Operational

•Achieved record processing throughput of 1,071,400 tonnes, averaging 2,935 tpd for 2023 over 10% higher than in 2022 and over 3,014 tpd in the fourth quarter of 2023;

•Recoveries achieved or exceeded design rates for payable metals with silver, zinc and lead recovery averaging 89.4%, 62.1%, and 88.7%; respectively;

•CLG mine life extended by 2.75 years to the end of 2030 with a 46% increase in expected total silver production per the Los Gatos Technical Report; and

•Completed further drilling in a large zone of mineralization known as South-East Deeps that extends 415m below the reported reserve which resulted in a significant increase in the 2023 mineral reserve and mineral resource reflected in the Los Gatos Technical Report.

Financial

•The LGJV reported revenue, net income and EBITDA1 of $268.7 million, $53.4 million and $135.8 million, respectively;

•Generated cash flow from operations of $142.0 million in 2023, and free cash flow1 of $84.9 million;

•Made $85.0 million in capital distributions to partners of the LGJV;

•Cost of sales totaled $111.3 million and co-product cash cost per ounce of payable silver equivalent1 was $12.11 and by-product cash cost per ounce of payable silver1 was $6.31 in 2023; and

•Co-product AISC per ounce of payable silver equivalent1 was $15.51 and by-product AISC per ounce of payable silver1 was $11.33 in 2023.

Results of Operations

Results of operations Gatos Silver

The following table presents certain information relating to our operating results for the years ended December 31, 2023 and 2022. In accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), these financial results represent the consolidated results of operations of our Company and its subsidiaries (in thousands).


	Year Ended December 31,
(in thousands)	2023		2022
Expenses
Exploration	$	26	$	110
General and administrative	25,688		25,468
Amortization	79		180
Total expenses	25,793		25,758
Other income
Equity income in affiliates	33,622		45,230
Legal settlement loss	(1,500)		(7,900)
Interest expense	(679)		(433)
Interest income	1,332		154
Other income	5,992		4,801
Total net other income	38,767		41,852
Income before taxes	12,974		16,094
Income tax expense	114		1,565
Net income	$	12,860	$	14,529

Year Ended December 31, 2023, Compared to Year Ended December 31, 2022

For the year ended December 31, 2023, we reported net income of $12.9 million compared to net income of $14.5 million for 2022. The following factors contributed to the difference:

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Exploration

During 2023 we had no exploration activity on the Company-owned Santa Valeria property since all exploration efforts were focused on the CLG, and as a result the 2023 exploration costs decreased by approximately $0.1 million, compared to 2022.

General and administrative expenses

During 2023, we incurred general and administration expense of $25.7 million compared to $25.5 million in 2022. In 2023, general and administrative expenses include non-cash stock-based compensation of $6.0 million, non-recurring professional fees related to legal defense fees of $3.2 million, costs related to the restatement of 2021 and 2022 quarterly financial statements of $2.3 million, and severances of $0.2 million. In 2022, general and administrative expenses include non-recurring professional fees related to legal defense of $6.2 million, non-cash stock-based compensation of $2.8 million, costs related to the restatement of 2021 financial statements of $1.3 million, and severances of $1.0 million. The Company also incurs expenses related to providing management and administration services to the LGJV, for which it receives a management fee, included in Other Income ($6.0 million and $5.0 million in 2023 and 2022, respectively).

Equity income in affiliates

The lower equity income in affiliates in 2023 is as a result of the lower net income recorded at the LGJV. See “Results of Operations LGJV.”

Legal settlement loss

We signed a term sheet to settle the Canadian Class Action for a payment of $3.0 million ($1.5 million net of expected insurance proceeds). The $7.9 million settlement loss (net of expected insurance proceeds) recorded in 2022 is related to a settlement agreement reached with the US Class Action lawsuit. These lawsuits are partially covered by our directors and officers insurance. See Note 10. Commitments, Contingencies and Guarantees.

Interest expense

The $0.2 million increase in interest expense was mainly due to the recognition of the outstanding balance of deferred financing costs upon the repayment of the remaining balance of $9.0 million on the Credit Facility.

Interest income

The $1.2 million increase in interest income was due to the increase in cash balance during the year and an increase in the interest rate earned on cash deposits.

Other income

Other income increased primarily due to an increase in the LGJV management fee from $5.0 million in 2022 to $6.0 million in 2023.

Income tax expense

Income tax expense of $0.1 million relates to operations of the Company's Canadian subsidiary. Tax expense of $1.6 million in 2022 reflected withholding tax on dividends received from the LGJV.

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Results of operations LGJV

The following table presents operational information and select financial information of the LGJV for the years ended December 31, 2023 and 2022. The financial information is extracted from the Combined Statements of Income. The financial and operational information of the LGJV and CLG is shown on a 100% basis. As of December 31, 2023 and 2022, our ownership of the LGJV was 70%.


	Year Ended December 31,
(in thousands, except where otherwise stated)	2023			2022
Revenue	$	268,671		$	311,724
Cost of sales	111,266			107,075
Royalties	1,363			3,069
Exploration	2,875			9,800
General and administrative	18,068			14,307
Depreciation, depletion and amortization	75,110			69,380
Total other (income)	(1,601)			(1,429)
Income tax expense	8,147			37,306
Net income	$	53,443		$	72,216
Sustaining capital1	41,571			76,526
Resource development drilling expenditures1	13,464			—
Operating Results
Tonnes milled (dmt)	1,071,400			971,595
Tonnes milled per day (dmt)	2,935			2,662
Average Grades
Silver grade (g/t)	299			368
Gold grade (g/t)	0.29			0.33
Lead grade (%)	1.85			2.31
Zinc grade (%)	3.90			4.37
Contained Metal Produced
Silver ounces (millions)	9.21			10.32
Zinc pounds - in zinc conc. (millions)	57.3			60.7
Lead pounds - in lead conc. (millions)	38.9			43.9
Gold ounces - in lead conc. (thousands)	5.26			5.35
Recoveries2
Silver - in both lead and zinc concentrates	89.4		%	89.8		%
Zinc - in zinc concentrate	62.1		%	64.8		%
Lead - in lead concentrate	88.7		%	88.7		%
Gold - in lead concentrate	52.4		%	52.0		%
Co-product cash cost per ounce of payable silver equivalent1	$	12.11		$	9.41
By-product cash cost per ounce of payable silver1	$	6.31		$	2.17
Co-product AISC per ounce of payable silver equivalent1	$	15.51		$	14.33
By-product AISC per ounce of payable silver1	$	11.33		$	10.24

_________________________________

1.See “Non-GAAP Financial Measures” below.

2.Recoveries are reported for payable metals in the identified concentrate. Recoveries reported previously were based on total metal in both concentrates.

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LGJV

Year Ended December 31, 2023, Compared to Year Ended December 31, 2022

For the year ended December 31, 2023, the LGJV reported net income of $53.4 million compared to net income of $72.2 million for the year ended December 31, 2022. The change in net income was primarily due to the following factors:

Revenue

The table below provides a breakdown of the LGJV’s concentrate sales including volumes of payable metal and realized sales prices for the year ended December 31, 2023 and 2022:


		Year Ended December 31,
		2023	2022
Sales volumes by payable metal
Silver	million oz	8.28	9.48
Zinc	million lb	48.4	51.7
Lead	million lb	36.0	41.7
Gold	oz	4,070	4,179
Average realized price by payable metal
Silver	$/oz	24.33	20.72
Zinc	$/lb	1.10	1.58
Lead	$/lb	0.97	0.90
Gold	$/oz	1,818	1,678
Revenue by payable metal
Silver	$'000	201,462	196,506
Zinc	$'000	53,270	81,393
Lead	$'000	34,981	37,378
Gold	$'000	7,397	7,011
Subtotal		297,110	322,288
Treatment and refining charges	$'000	(17,174)	(21,871)
Subtotal	$'000	279,936	300,417
Provisional revenue adjustment	$'000	(11,265)	11,307
Total revenue	$'000	268,671	311,724

Silver sales represented 68% and 61% of our revenues before treatment and refining charges and the provisional revenue adjustments in 2023 and 2022, respectively. Revenues decreased by 14% in 2023 compared to 2022, as a result of lower sales volumes of silver, zinc and lead, partly offset by increased sales volumes of gold. The decrease in sales volumes was primarily due to a decrease in silver, zinc, lead and gold ore grades of 19%, 11%, 20% and 12%, respectively. The overall decrease in sales volumes was offset by an increase in realized prices of silver, lead and gold of 17%, 8%, and 8%, respectively, partly offset by a decrease in the realized zinc price of 30%. Treatment and refining charges decreased by 21% and the 2023 provisional revenue adjustments resulted in a total revenue decrease of 11.3 million in 2023 compared to an increase of 11.3 million in 2022. Provisional revenue adjustments account for commodity price fluctuations in concentrate sales still subject to final settlement.

Cost of sales

Cost of sales increased by 4% in 2023 compared to 2022, primarily as a result of a 10% increase in mining and milling rates, which included an increase in equipment maintenance costs of $2.5 million and operation of the leaching plant commissioned in 2023 of $1.1 million.

Cash costs1 was $147.9 million in 2023, 1% higher than the $146.3 million incurred in 2022. In 2023 by-product credits1 of $95.6 million were 24% less than the $125.8 million credit in 2022, mainly due to lower realized zinc prices and lower zinc and lead sales in 2023. As a result co-product cash cost1 per ounce of payable silver equivalent and by-product cash cost1 per ounce of payable silver increased by 29% and 191% respectively, to $12.11 and $6.31, respectively, for the year ended 2023. All-in sustaining costs1 were

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$189.4 million in 2023 15% lower than the $222.8 million incurred in 2022. Co-product all-in sustaining cost1 per of payable silver equivalent ounce was $15.51 in 2023 compared to $14.33 in 2022. By-product all-in sustaining cost1 per payable silver ounce was $11.33 in 2023 compared to $10.24 in 2022.

Royalties

Royalty expense decreased by $1.7 million in 2023 compared to 2022 due to the decrease in the royalty rate upon achieving a payment threshold per the royalty agreement.

Exploration

Exploration expenditure decreased by $6.9 million in 2023 primarily due to reduced greenfield exploration, as the focus during 2023 was on the ongoing resource expansion drilling of the South-East Deeps Zone which was capitalized.

General and administrative

General and administrative expenses for 2023 were $3.8 million (26%) higher than in 2022. The increase was primarily due to a $0.9 million increase in audit and consulting fees, $1.0 million increase in management fees payable to Gatos Silver, $0.8 million increase in salaries, $0.5 million increase in insurance expense and $0.4 million increase in concessions costs associated with changes in government regulations.

Depreciation, depletion and amortization

Depreciation, depletion, and amortization expense increased by approximately 8% year over year primarily as a result of commissioning of the third lift of the tailing storage facility in December 2022, the paste fill plant in March 2023 and the fluorine leaching plant in July 2023. The increase was partly offset by the reduction in depreciation, depletion and amortization as a result of the increase in mineral reserves and the extension of the life of mine effective July 2023.

Other expense (income)

Other income of $1.6 million for the year ended December 31, 2023 consists of $1.6 million of interest income earned on average monthly cash balances and $2.6 million of gain on foreign exchange, offset by $0.7 million of other expense associated with inventory write offs due to obsolescence, $1.1 million of accretion expense and $0.7 million of interest expense on advances from a customer. Other income of $1.4 million for the year ended December 31, 2022, consists of an $0.8 million of gain on disposition of assets and a gain of $2.3 million on foreign exchange, offset by $1.1 million of accretion expense and $0.6 million of interest expense on advances from a customer.

Income tax expense

In 2023, the LGJV had income tax expense of $8.1 million compared to $37.3 million in 2022. Income tax expense decreased mainly due to a decrease in net income before tax and a decrease in the valuation allowance on deferred taxes due to the extension of the expected mine life.

Sustaining capital

During 2023, the sustaining capital expenditures primarily consisted of $21.1 million of mine development, $3.0 million on the construction of dewatering wells, $4.2 million on the construction of the fluorine leaching plant facility, $8.8 million for the purchase of mining equipment and $1.9 million on underground power distribution infrastructure. During 2022, major sustaining capital expenditures included $27.1 million of mine development, $19.5 million on the construction of the paste-fill plant, $8.2 million on the construction of the raise of the tailings storage facility, $2.6 million for the construction of a ventilation raise, $3.5 million for the purchase of mining equipment, $2.9 million on underground power distribution infrastructure.

Resource development drilling expenditures

During 2023, resource development drilling expenditures primarily related to resource expansion drilling of the South-East

Deeps zone at CLG. During 2022, there were no resource development drilling expenditures incurred.

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1 See “Non-GAAP Financial Measures” below.

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Cash Flows

Gatos Silver

The following table presents summarized information of our cash flows for the years ended December 31, 2023 and 2022.


	Year Ended December 31,
(in thousands)	2023		2022
Net cash provided (used) by
Operating activities	$	47,480	$	14,554
Investing activities	—		(60)
Financing activities	(9,000)		(4,106)
Total change in cash	$	38,480	$	10,388

Cash flow provided by operating activities was $47.5 million in 2023, compared to cash provided by operating activities of $14.6 million in 2022. The $32.9 million increase in operating cash flow was primarily due to $59.5 million of capital distributions from the LGJV, compared to $30.8 million in dividends received from the LGJV in 2022.

There was no cash flow from investing activities in 2023, compared to $0.1 million in 2022.

Free cash flow (See "Non-GAAP Financial Measures") totaled $47.5 million in 2023 compared to $14.5 million in 2022. The increase is due to the increase in cash distributions received from the LGJV in 2023.

Cash used by financing activities was $9.0 million in 2023, compared to $4.1 million in 2022. Cash used by financing activities in 2023 consisted of the $9.0 million full repayment of the outstanding Credit Facility balance. Cash used by financing activities in 2022, reflected the $4.0 million partial repayment of the Credit Facility.

LGJV

The following table presents summarized information relating to the LGJV’s cash flows for years ended December 31, 2023 and 2022.


	Year Ended December 31,
(in thousands)	2023		2022
Net cash provided (used) by
Operating activities	$	142,001	$	157,374
Investing activities	(57,087)		(82,279)
Financing activities	(85,547)		(60,439)
Total change in cash	$	(633)	$	14,656

Cash provided by operating activities was $142.0 million and $157.4 million for the years ended December 31, 2023 and 2022, respectively. The $15.4 million decrease in cash provided by operating activities was primarily due to the decrease in revenue partially offset by cash flow from working capital changes.

Cash used by investing activities was $57.1 million and $82.3 million for the years ended December 31, 2023, and 2022, respectively. The $25.2 million decrease in cash used was primarily due to lower capital expenditures incurred during 2023.

Free cash flow (See "Non-GAAP Financial Measures") at the LGJV totaled $84.9 million in 2023 compared to $75.1 million in 2022, reflecting lower sustaining capital expenditures partly offset by lower revenues.

Cash used by financing activities was $85.5 million and $60.4 million for the years ended December 31, 2023 and 2022, respectively. During 2023, the LGJV distributed $85.0 million to the joint venture partners and made $0.5 million in equipment loan payments. During 2022, the LGJV paid dividends of $55.0 million to the joint venture partners and made $5.4 million in equipment loan payments.

Liquidity and Capital Resources

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As of December 31, 2023 and 2022, the Company had cash and cash equivalents of $55.5 million and $17.0 million, respectively. The increase in cash and cash equivalents was primarily due to receipt of $59.5 million in capital contributions and the $6.0 million management fee from the LGJV, partly offset by general and administrative costs incurred in the year.

Sources and Uses of Capital Resources

As at April 30, 2024, our cash and cash equivalents are $85.4 million and we have $50.0 million available to be drawn under the Credit Facility. The LGJV had cash and cash equivalents of $20.0 million as at April 30, 2024. On February 15 and April 22, 2024, the LGJV made a $30.0 million and a $25.0 million capital distribution to the LGJV partners, respectively, of which the Company’s share was $21.0 million and $17.5 million, respectively. We believe we have sufficient cash and access to borrowings and other resources to carry out our business plans for at least the next 12 months. We may decide to increase our current financial resources with external financings if our long-term business needs require us to do so however there can be no assurance that financing will be available to us on acceptable terms, or at all. We manage liquidity risk through our cash balances, credit facility, and the management of our capital structure.

We may be required to provide funds to the LGJV to support operations at the CLG which, depending upon the circumstances, may be in the form of equity, various forms of debt, joint venture funding or some combination thereof. There can be no assurance that additional funds will be available to us on acceptable terms, or at all. If we raise additional funds by issuing equity or convertible debt securities, substantial dilution to existing stockholders may result. Additionally, if we raise additional funds by incurring new debt obligations, the terms of the debt may require significant cash payment obligations, as well as covenants and specific financial ratios that may restrict our ability to operate our business.

Finally, as part of our ongoing business strategy we regularly evaluate our capital structure. We may from time to time use our existing cash to fund opportunities or return capital to shareholders.

Indebtedness and Lines of Credit

On December 13, 2023, we entered into a second amended and restated Credit Facility with BMO, maintaining a credit limit of $50.0 million, with an accordion feature providing up to an additional $50.0 million, subject to certain conditions. Borrowings under the Credit Facility:

•mature on December 31, 2026, and

•bear interest at a rate equal to either a term SOFR rate plus a margin ranging from 2.75% to 3.75% or a U.S. base rate plus a margin ranging from 1.75% to 2.75%, at our option.

The Credit Facility contains affirmative and negative covenants that are customary for agreements of this nature. The affirmative covenants require the Company to comply, at all times, with, among other things, a Leverage Ratio not greater than 3.00 to 1.00, with earnings before interest, tax, depletion depreciation and amortization calculated upon a trailing four fiscal quarter period, a liquidity covenant not less than $20.0 million and an interest coverage ratio not less than 4.00 to 1.00 calculated based on a trailing four fiscal quarter period. The negative covenants include, among other things, limitations on certain specified asset sales, mergers, acquisitions, indebtedness, liens, dividends and distributions, investments and transactions with affiliates. As of December 31, 2023, we had $nil of borrowings outstanding under the Credit Facility.

Contractual Obligations

We and the LGJV entered into commitments with federal and state agencies to lease surface and mineral rights in Mexico related to our exploration activities. These leases are renewable annually.

The LGJV has a renewable energy supply contract with a committed purchase amount of 140,000MW per annum until September 6, 2025. As at December 31, 2023, the expected purchase commitment was $11,400 in 2024 and $9,500 in 2025, for an aggregate of $20,900. Part of the cost depends on the regulated rates by the Mexico Power Market. The LGJV consumed 159,964 MW and 146,750 MW under this contract in the years ended December 31, 2023 and 2022, respectively.

Critical Accounting Policies

Listed below are the accounting policies that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved and the magnitude of the asset, liability or expense that is being reported. For a discussion of recent accounting pronouncements, see Note 2, Summary of Significant Accounting Policies in the notes to the consolidated financial statements.

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Equity Method Investment

We account for our investment in affiliates using the equity method of accounting whereby, after valuing the initial investment, we recognize our proportional share of results of operations of the affiliate in its consolidated financial statements. The value of equity method investments is adjusted if it is determined that there is an other-than-temporary decline in value. The Company reviews equity method investments for an other-than-temporary decline in value when events or circumstances indicate that a decline in the fair value of the investment below its carrying value is other-than-temporary. Our investment in the LGJV is presented as investment in affiliates in the consolidated balance sheet. The difference between the carrying amount of the investment in affiliates and our equity in the LGJV’s net assets is due to value of mineral resources at MPR. Our proportional share of such costs are reported as an investment in affiliate and the residual costs, related to Dowa’s proportional ownership, are reported in the statement of income.

Mineral Properties and Carrying Value of Long-Lived Assets (LGJV)

Mineral property acquisition costs are recorded at cost and are deferred until the viability of the property is determined. Exploration, mineral property evaluation, option payments, related acquisition costs for mineral properties acquired under option agreements, general overhead, administrative and holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. When proven and probable mineral reserves are determined for a property, subsequent development costs on the property are capitalized. If a project were to be put into production, capitalized development costs would be depleted on the units of production basis determined by the proven and probable mineral reserves for that project.

Existing proven and probable mineral reserves and value beyond proven and probable mineral reserves, including mineralization other than proven and probable mineral reserves and other material that is not part of the measured, indicated or inferred resource base, are included when determining the fair value of mine site reporting units at acquisition and, subsequently, in determining whether the assets are impaired. The term “recoverable minerals” refers to the estimated amount of silver and other commodities that will be obtained after taking into account losses during mining, mineral resources processing and treatment and ultimate sale. Estimates of recoverable minerals from such exploration-stage mineral interests are risk-adjusted based on management’s relative confidence in such materials. In estimating future cash flows, assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. We review and evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Asset impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the asset. An impairment loss is measured and recorded based on discounted estimated future cash flows. Future cash flows are estimated based on estimated quantities of recoverable minerals, expected silver and other commodity prices (considering current and historical prices, trends and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on LOM plans. No impairment tests have been required during the periods presented.

Various factors could impact our ability to achieve our forecasted production schedules from proven and probable mineral reserves. Additionally, production, capital and reclamation costs could differ from the assumptions used in the cash flow models used to assess impairment. The ability to achieve the estimated quantities of recoverable minerals from exploration-stage mineral interests involves further risks in addition to those factors applicable to mineral interests where proven and probable mineral reserves have been identified, due to the lower level of confidence that the identified mineral resources could ultimately be mined economically. Assets classified as exploration potential have the highest level of risk that the carrying value of the asset can be ultimately realized, due to the still lower level of geological confidence and economic modeling.

Income and Mining Taxes

We recognize the expected future tax benefit from deferred tax assets when the tax benefit is considered to be more likely than not of being realized. Assessing the recoverability of deferred tax assets requires management to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecasted cash flows and the application of existing tax laws in the United States and Mexico. Refer to “Critical Accounting Policies - Mineral Properties and Carrying Value of Long-Lived Assets” above for a discussion of the factors that could cause future cash flows to differ from estimates. To the extent that future cash flows and taxable income differ significantly from estimates, our ability to realize deferred tax assets recorded at the balance sheet date could be impacted. Additionally, future changes in tax laws in the jurisdictions in which we operate could limit our ability to obtain the future tax benefits represented by our deferred tax assets recorded at the reporting date.

Our properties involve dealing with uncertainties and judgments in the application of complex tax regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from federal, state and Mexico tax audits. We recognize potential liabilities and record tax liabilities for anticipated tax audit issues, if any, in the United States and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. We adjust these reserves in light of changing facts and circumstances; however, due to the

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complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. If our estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If an estimate of tax liabilities proves to be greater than the ultimate assessment, a tax benefit would result. We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

Recently Issued and Adopted Accounting Pronouncements

Refer to Note 2 of our consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Report.

Jumpstart Our Business Startups Act of 2012

The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) permits us, as an “emerging growth company,” to, among other things, take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for public companies that are not emerging growth companies. The decision to opt out of the extended transition period under the JOBS Act is irrevocable.

Non-GAAP Financial Measures

We use certain measures that are not defined by GAAP to evaluate various aspects of our business. These non-GAAP financial measures are intended to provide additional information only and do not have any standardized meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP.

Cash Costs and All-In Sustaining Costs

Cash costs and all-in sustaining costs (“AISC”) are non-GAAP measures. AISC was calculated based on guidance provided by the World Gold Council (“WGC”). WGC is not a regulatory industry organization and does not have the authority to develop accounting standards for disclosure requirements. Other mining companies may calculate AISC differently as a result of differences in underlying accounting principles and policies applied, as well as definitional differences of sustaining versus expansionary (i.e. non-sustaining) capital expenditures based upon each company’s internal policies. Current GAAP measures used in the mining industry, such as cost of sales, do not capture all of the expenditures incurred to discover, develop and sustain production. Therefore, we believe that cash costs and AISC are non-GAAP measures that provide additional information to management, investors and analysts that aid in the understanding of the economics of the Company’s operations and performance and provides investors visibility by better defining the total costs associated with production.

Cash costs include all direct and indirect operating cash costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, treatment and refining costs, general and administrative costs, royalties and mining production taxes. AISC includes total production cash costs incurred at the LGJV’s mining operations plus sustaining capital expenditures. The Company believes this measure represents the total sustainable costs of producing silver from current operations and provides additional information of the LGJV’s operational performance and ability to generate cash flows. As the measure seeks to reflect the full cost of silver production from current operations, new project and expansionary capital at current operations are not included. Certain cash expenditures such as new project spending, tax payments, dividends, and financing costs are not included.

Reconciliation of expenses (GAAP) to non-GAAP measures

The table below presents a reconciliation between the most comparable GAAP measure of the LGJV’s expenses to the non-GAAP measures of (i) cash costs, (ii) cash costs, net of by-product credits, (iii) co-product all-in sustaining costs and (iv) by-product all-in sustaining costs for our operations.

The calculations for determining co-product and by-product cash cost and co-product and by-product AISC per ounce were updated to include period end accruals for sales (both volume and value for payable metals). In addition, the calculation for determining silver equivalent ounces used for co-product cash cost per ounce and co-product AISC per ounce was updated to include final settlements in the calculation of the realized metal prices. The prior period comparatives were updated to reflect this change; however, the cash cost and AISC per ounce calculated on this basis is not materially different from the cash cost and AISC cost per ounce previously reported.

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	Year Ended December 31,
(in thousands, except where otherwise stated)	2023		2022
Cost of sales	$	111,266	$	107,075
Royalties	1,363		3,069
Exploration	2,875		9,800
General and administrative	18,068		14,307
Depreciation, depletion and amortization	75,110		69,380
Total expenses	$	208,682	$	203,631
Depreciation, depletion and amortization	(75,110)		(69,380)
Exploration1	(2,875)		(9,800)
Treatment and refining costs2	17,174		21,871
Cash costs (A)	$	147,871	$	146,322
Sustaining capital3	41,571		76,526
All-in sustaining costs (B)	$	189,442	$	222,848
By-product credits4	(95,648)		(125,782)
All-in sustaining costs, net of by-product credits (C)	$	93,794	$	97,066
Cash costs, net of by-product credits (D)	$	52,223	$	20,540

Payable ounces of silver equivalent5 (E)	12,214		15,552
Co-product cash cost per ounce of payable silver equivalent (A/E)	$	12.11	$	9.41
Co-product all-in sustaining cost per ounce of payable silver equivalent (B/E)	$	15.51	$	14.33

Payable ounces of silver (F)	$	8,282	$	9,482
By-product cash cost per ounce of payable silver (D/F)	$	6.31	$	2.17
By-product all-in sustaining cost per ounce of payable silver (C/F)	$	11.33	$	10.24

_________________________________

1.Exploration costs are not related to current mining operations.

2.Represent reductions on customer invoices and included in Revenue of the LGJV combined statement of income.

3.Sustaining capital excludes resource development drilling costs related to resource development drilling in the South-East Deeps zone.

4.By-product credits reflect realized metal prices of zinc, lead and gold for the applicable period, which includes any final settlement adjustments from prior periods.

5.Silver equivalents utilize the average realized prices during the year ended December 31, 2023, of $24.33/oz silver, $1.10/lb zinc, $0.97/lb lead and $1,818/oz gold and the average realized prices during the year ended December 31, 2022, of $20.72/oz silver, $1.58/lb zinc, $0.90/lb lead and 1,678/oz gold. The average realized prices are determined based on revenue inclusive of final settlements.

Sustaining capital and Resource development drilling

The following table provides a breakdown of cash flows used by investing activities of the LGJV:

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	Twelve Months Ended December 31,
(in thousands)	2023		2022
Cash flow used by investing activities	$	57,087	$	82,279

Sustaining capital	41,571		76,526
Resource development drilling	13,464		—
Materials & supplies	600		327
Amount included in accounts payable	1,452		5,426
Total	$	57,087	$	82,279

EBITDA

Management uses EBITDA to evaluate the Company’s operating performance, to plan and forecast its operations, and assess leverage levels and liquidity measures. The Company believes the use of EBITDA reflects the underlying operating performance of our core mining business and allows investors and analysts to compare results of the Company to similar results of other mining companies. EBITDA does not represent, and should not be considered an alternative to, net income or cash flow from operations as determined under GAAP. The table below reconciles EBITDA, a non-GAAP measure to Net Income:


	Twelve Months Ended December 31,
(in thousands)	2023		2022
Net income	$	12,860	$	14,529
Interest expense	679		433
Interest income	(1,332)		(154)
Income tax expense	114		1,565
Depreciation, depletion and amortization	79		180
EBITDA	$	12,400	$	16,553

The table below reconciles of EBITDA, a non-GAAP measure, to the LGJV’s Net Income:


	Twelve Months Ended December 31,
(in thousands)	2023		2022
Net income and comprehensive income	$	53,443	$	72,216
Interest income	(1,567)		—
Interest expense	660		582
Income tax expense	8,147		37,306
Depreciation, depletion and amortization	75,110		69,380
EBITDA	$	135,793	$	179,484

Free Cash Flow

Management uses Free Cash Flow as a non-GAAP measure to analyze cash flows generated from operations. Free Cash Flow is Cash provided by (used in) operating activities less Cash Flow (used in) from investing Activities as presented on the Consolidated Statements of Cash Flows. The Company believes Free Cash Flow is also useful for investors as one of the bases for comparing the Company’s performance with its competitors. Although Free Cash Flow and similar measures are frequently used as measures of cash flows generated from operations by other companies, the Company’s calculation of Free Cash Flow is not necessarily comparable to such other similarly titled captions of other companies.

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The following table sets forth a reconciliation of Free Cash Flow, a non-GAAP financial measure, to net cash (used) provided by operating activities, which the Company believes to be the GAAP financial measure most directly comparable to Free Cash Flow.


	Twelve Months Ended December 31,
(in thousands)	2023		2022
Net cash (used) provided by operating activities	47,480		$	14,554
Net cash provided (used) by investing activities	—		(60)
Free cash flow	$	47,480	$	14,494

The following table sets forth a reconciliation of Free Cash Flow, a non-GAAP financial measure, to net cash provided by operating activities for the LGJV.


	Twelve Months Ended December 31,
(in thousands)	2023		2022
Net cash provided by operating activities	$	142,001	$	157,374
Net cash used by investing activities	(57,087)		(82,279)
Free cash flow	$	84,914	$	75,095

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company and are not required to provide disclosure pursuant to this Item.

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Item 8. Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS


Gatos Silver, Inc. Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm - Ernst & Young LLP (PCAOB ID 1263)			19
Consolidated Balance Sheets as of December 31, 2023 and 2022			20
Consolidated Statements of Income for the years ended December 31, 2023 and 2022			21
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023 and 2022			22
Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022 (Restated)			23
Notes to the Consolidated Financial Statements			24

Los Gatos Joint Venture Combined Financial Statements
Independent Auditor’s Report - Ernst & Young LLP			40
Combined Balance Sheets as of December 31, 2023 and 2022			42
Combined Statements of Operations for the years ended December 31, 2023 and 2022			43
Combined Statements of Owner’s Capital for the years ended December 31, 2023 and 2022			44
Combined Statements of Cash Flows for the years ended December 31, 2023 and 2022			45
Notes to the Combined Financial Statements			46

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Gatos Silver Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Gatos Silver Inc. (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of income and comprehensive income, stockholder's equity, and cash flows for the years then ended, and the related notes (collectively referred to as “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended in accordance with U.S. generally accepted accounting principles.

Restatement of 2023 Financial Statements

As discussed in Note 3 to the consolidated financial statements, the 2023 consolidated financial statements have been restated to correct a misstatement.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provides a reasonable basis for our opinion.

/s/ Ernst & Young LLP

Chartered Professional Accountants

Licensed Public Accountants

We have served as the Company's auditor since 2022.

Toronto, Canada

February 20, 2024 except for the effects of the restatement disclosed in Note 3, and Notes 11 and 16 of the consolidated financial statements, as to which the date is May 6, 2024.

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GATOS SILVER, INC.

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31,

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



	Notes	2023		2022
ASSETS
Current Assets
Cash and cash equivalents		$	55,484	$	17,004
Related party receivables	7	560		1,773
Other current assets	4	22,642		16,871
Total current assets		78,686		35,648
Non-Current Assets
Investment in affiliates	15	321,914		347,793
Deferred tax assets	13	266		—
Other non-current assets		38		60
Total Assets		$	400,904	$	383,501
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable, accrued and other liabilities	6	$	33,357	$	26,358
Non-Current Liabilities
Credit Facility, net of debt issuance costs	12	—		8,661
Stockholders’ Equity
Common Stock, $0.001 par value; 700,000,000 shares authorized; 69,181,047 and 69,162,223 shares outstanding as of December 31, 2023 and December 31, 2022, respectively		117		117
Paid-in capital		553,319		547,114
Accumulated deficit		(185,889)		(198,749)
Total stockholders’ equity		367,547		348,482
Total Liabilities and Stockholders’ Equity		$	400,904	$	383,501

See accompanying notes to the consolidated financial statements.

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GATOS SILVER, INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31,

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



	Notes	2023		2022
Expenses
Exploration		$	26	$	110
General and administrative		25,688		25,468
Amortization		79		180
Total expenses		25,793		25,758
Other income (expense)
Equity income in affiliates	15	33,622		45,230

Legal settlement loss	11	(1,500)		(7,900)
Interest expense		(679)		(433)
Interest income		1,332		154
Other income	7	5,992		4,801
Total net other income		38,767		41,852
Income before taxes		12,974		16,094
Income tax expense	13	114		1,565
Net income and comprehensive income		$	12,860	$	14,529
Net income per share:
Basic	8	$	0.19	$	0.21
Diluted	8	$	0.18	$	0.21
Weighted average shares outstanding:
Basic		69,163,564		69,162,223
Diluted		69,536,298		69,309,019

See accompanying notes to the consolidated financial statements.

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GATOS SILVER, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(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, 2021	69,162,223		$	117	$	544,383	$	(213,278)	$	331,222
Stock-based compensation	—		—		2,731		—		2,731



Net income	—		—		—		14,529		14,529
Balance at December 31, 2022	69,162,223		$	117	$	547,114	$	(198,749)	$	348,482
Stock-based compensation	—		—		5,336		—		5,336

Deferred Stock Unit compensation	—		—		869		—		869
Deferred Stock Units converted to common stock	18,824		—		—		—		—
Net income	—		—		—		12,860		12,860
Balance at December 31, 2023	69,181,047		$	117	$	553,319	$	(185,889)	$	367,547

See accompanying notes to the consolidated financial statements.

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GATOS SILVER, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31,

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



	Notes	2023		2022
		(restated)

OPERATING ACTIVITIES
Net income		$	12,860	$	14,529

Adjustments to reconcile net loss to net cash used by operating activities:
Amortization		79		180
Stock-based compensation expense	8	5,336		2,840
Equity income in affiliates	15	(33,622)		(45,230)

Other		1,159		199
Deferred tax recovery	13	(266)		—
Distributions and dividends from affiliate	15	59,500		30,775

Changes in operating assets and liabilities:
Receivables from related‑parties		1,213		(180)
Accounts payable and other accrued liabilities		6,992		24,632
Other current assets		(5,771)		(13,191)
Net cash (used) provided by operating activities		47,480		14,554

INVESTING ACTIVITIES
Purchase of property, plant and equipment		—		(60)
Net cash provided (used) by investing activities		—		(60)

FINANCING ACTIVITIES
Credit Facility repayment	12	(9,000)		(4,000)
Financing costs		—		(106)



Net cash used by financing activities		(9,000)		(4,106)
Net increase in cash and cash equivalents		38,480		10,388
Cash and cash equivalents, beginning of period		17,004		6,616
Cash and cash equivalents, end of period		$	55,484	$	17,004

Interest paid		$	417	$	645
Supplemental disclosure of noncash transactions:

Recognition of Right of Use Asset and Lease Liability		$	—	$	128

See accompanying notes to the consolidated financial statements.

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GATOS SILVER, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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

1. Description of Business

Organization and Nature of Business

Gatos Silver, Inc. and its subsidiaries (“Gatos Silver” or “the Company”) is a silver dominant exploration, development and production company that discovered a new silver, lead and zinc-rich mineral district in southern Chihuahua State, Mexico.

The Company’s primary efforts are focused on the operation of the Los Gatos Joint Venture (“LGJV”) in Chihuahua, Mexico. On January 1, 2015, the Company entered into the LGJV to develop the Los Gatos District (“LGD”) with Dowa Metals and Mining Co., Ltd. (“Dowa”). The LGJV Operating entities consisted of Minera Plata Real S. de R.L. de C.V (“MPR”), Operaciones San Jose del Plata S. de R.L. de C.V. and Servicios San Jose del Plata S. de R.L. de C.V. (“Servicios”) (collectively, the “LGJV Entities”). Effective July 15, 2021, Servicios was merged into MPR.

Dowa acquired a 30% interest in the LGJV and the right to purchase future zinc-concentrate production at market rates by completing its $50,000 funding requirement on April 1, 2016. The LGJV completed a feasibility study in January 2017 and the latest Los Gatos Technical Report was filed on October 20, 2023, with an effective date of July 1, 2023. In May 2019, Dowa increased its ownership interest by 18.5% to 48.5% through the conversion of the Dowa MPR Loan to equity. On March 11, 2021, the Company repurchased the 18.5% interest from Dowa for a total consideration of $71,550, including Dowa holding costs of this incremental interest, increasing the Company’s ownership in the LGJV Entities to 70.0%. These transactions resulted in a $47,400 higher basis than the underlying net assets of the LGJV Entities. See Note 10 - Commitment, Contingencies and Guarantees for further discussion. The LGJV ownership is currently 70% Gatos Silver and 30% Dowa ("LGJV Partners"). Despite owning the majority interest in the LGJV, the Company does not exercise control over the LGJV due to certain provisions contained in the Unanimous Omnibus Partner Agreement that currently require unanimous partner approval of all major operating decisions, as a result the Company accounts for the LGJV as an equity method investment.

On September 1, 2019, the LGJV commenced commercial production of its two concentrate products: a lead concentrate and a zinc concentrate. The LGJV’s lead and zinc concentrates are currently sold to third-party customers.

The Company has two wholly-owned subsidiaries, Minera Luz del Sol S. de R.L. de C.V. (“MLS”) and Gatos Silver Canada Corporation (“GSC”).

2. Summary of Significant Accounting Policies

Basis of Consolidation and Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) and include the accounts of Gatos Silver and its subsidiaries, GSC and MLS. All Company subsidiaries are consolidated. All significant intercompany balances and transactions have been eliminated.

Equity method investment

The Company accounts for its investment in affiliates using the equity method of accounting whereby, after valuing the initial investment, the Company recognizes its proportional share of results of operations of the affiliate in its consolidated financial statements. The value of equity method investments are adjusted if it is determined that there is an other-than-temporary decline in value. The Company’s investment in the LGJV Entities is presented as Investment in affiliates in the consolidated balance sheet. The basis difference between the carrying amount of the investment in affiliates and the Company’s equity in the LGJV Entities’ net assets is due to value of the LGJV mineral resources. This basis difference is amortized on a units of production basis as the mineral resource is mined.

Distributions from Investment in Affiliate

Distributions received are classified on the basis of the nature of the activity or activities of the LGJV that generated the distribution. Returns on capital are recorded as an operating cash flow whereas returns of capital distributions are recorded as an investing cash flow.

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Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates are valuation of stock and stock options; valuation allowances for deferred tax assets; and the fair value of financial instruments and investment in affiliates. At the LGJV, significant items subject to such estimates and assumptions include mineral properties, life of mine revenue and cost assumptions, mineral resource conversion rates to mineral reserves; environmental reclamation and closure obligations and valuation allowances for deferred tax assets.

Functional currency and translation of foreign currencies

The U.S. dollar is the functional currency of the Company and its subsidiaries. Monetary assets and liabilities denominated in foreign currencies are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting gains or losses reported in foreign exchange (gain) loss in the statement of income. Non-monetary assets and liabilities are translated at historical exchange rates. Expenses and income items denominated in foreign currencies are translated into U.S. dollars at historical exchange rates.

Cash and cash equivalents

The Company considers all highly liquid short-term investments with a maturity of three months or less when purchased to be cash equivalents.

Other than temporary impairment - investment

A loss in value of an investment that is other than a temporary decline shall be recognized. Evidence of such losses might include, but are not limited to, absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. A current fair value of an investment that is less than its carrying amount may indicate a loss in value of the investment. If circumstances require an investment is tested for an other than temporary decline in value, the Company will first estimate the fair value of the investment based on discounted cash flows then compare it to the carrying value of the investment. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Stock-based compensation

The Company recognizes all employee stock-based compensation as a cost in the consolidated financial statements. Equity-classified awards are measured at the grant date fair value of the award. Stock-based compensation expense is included as a component of general and administrative expense over the requisite service period of the award.

The fair value of stock options is estimated using the Black-Scholes option-pricing model. The initial fair value of performance share units (“PSUs”), which are subject to vesting based on the Company’s attainment of a pre-established market performance goals, is estimated using a Monte Carlo simulation valuation model. The fair value of Restricted Stock Units ("RSUs") is based on the Company's stock price on the date of grant and vest on the third anniversary of the grant date, unless otherwise specified. The fair value of Deferred Stock Units ("DSUs") is based on the Company's stock price on the date of the grant and DSUs vest on the grant date. The Company’s estimates may be impacted by certain variables including, but not limited to, stock price volatility, estimates of forfeitures, the risk-free interest rate, expected dividend yields, and the Company’s performance. The Company estimates forfeitures of stock-based awards based on historical data and periodically adjusts the forfeiture rate.

Net income per share

Basic and diluted earnings per share are presented for net income attributable to common shareholders. Basic net earnings per share is computed by dividing the net income available to common stockholders by the weighted-average number of common stock shares outstanding, for the respective period presented. Diluted net earnings per share is computed similarly, except that weighted-average common shares is increased to reflect the potential dilution that would occur if stock options were exercised, or DSUs, RSUs and PSUs were converted into common stock. The effects of the Company’s dilutive securities are excluded from the calculation of diluted weighted-average common shares outstanding if their effect would be anti-dilutive based on the treasury stock method or due to a net loss.

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Income taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

Current tax comprises the expected tax payable on the taxable income for the year and any adjustments to the tax payable or receivable in respect of previous years. The amount of current tax payable is the best estimate of the tax amount expected to be paid that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted at the reporting date.

Recently issued and adopted accounting standards

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”) followed by ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”), issued in January 2021, to provide clarifying guidance regarding the scope of Topic 848. ASU 2020-04 was issued to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform. Generally, the guidance is to be applied as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2023. The Company has not elected to use the optional guidance and continues to evaluate the options provided by ASU 2020-04 and ASU 2021-01. The Company concluded that this update does not have a material impact on its financial statements.

In September 2022, the FASB issued ASU 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosures of Supplier Finance Program Obligations. The ASU requires entities that use supplier finance programs (that are in the scope of the ASU) in connection with the purchase of goods and services to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period and potential magnitude. The amendments are effective for all entities for fiscal years beginning after 15 December 2022, including interim periods within those fiscal years, except for the amendment on roll forward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. In the period of initial adoption, the amendments should be applied retrospectively to all periods in which a balance sheet is presented, except for the roll forward requirement, which should be applied prospectively. The Company assessed the new guidance and concluded that this update does not have any impact on the financial statements.

In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative. The amendments in this update modify the disclosure or presentation requirements of a variety of Topics in the Codification. Certain amendments represent clarifications to or technical corrections of the current requirements. Each amendment in the ASU will only become effective if the SEC removes the related disclosure or presentation requirement from its existing regulations by June 30, 2027. The Company is still assessing the impact of the standard.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280). The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments of this udpate are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is still assessing the impact of this standard.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740). The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency, effectiveness and comparability of income tax disclosures. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2024. The Company is still assessing the impact of this standard.

As of December 31, 2023, there are no additional recently issued or adopted accounting standard that could have a material impact on our financial statements.

3. Restatement of Previously Issued Financial Statements

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In accordance with ASC 250, Accounting Changes and Error Corrections (“ASC 250”), the following item is treated as an error to the annual consolidated financial statements for the year ended December 31, 2023, and, therefore, requires that the consolidated financial statements be restated.

Statement of Cash flows

During the preparation of the financial statements for the three months ended March 31, 2024, the Company identified that the capital distributions received from its investment in affiliate classified as cash provided by investing activities on the Consolidated Statements of Cash Flows should have been classified as cash provided by operating activities. Based on management's judgement, the Company considered the declaration of the capital distribution (in its legal form) to be the nature of the activity that generated the cash flow and, therefore, classified capital distributions as cash provided by investing activities on the Consolidated Statements of Cash Flows. On further analysis it was determined that management should have considered the underlying source of the cash flow at the LGJV that generated the funds for the capital distributions when determining its classification on the Company's Consolidated Statements of Cash Flows. The capital distributions received previously classified as cash flow provided by investing activities should have been classified as cash flows provided by operating activities.

The impact of the restatement on the Consolidated Statements of Cash Flows for the year ended December 31, 2023, is presented below. The Consolidated Balance Sheets and balance of cash and cash equivalents as of December 31, 2023, and the Consolidated Statements of Income and Comprehensive Income, Consolidated Statements of Stockholders’ Equity for the year ended December 31, 2023, are not impacted by this error.


	Year Ended December 31, 2023		Year Ended December 31, 2023
	As previously reported	Adjustment	As restated

Consolidated Statement of Cash Flows
Distributions and dividends from affiliate	—	59,500	59,500
Net cash (used) provided by operating activities	(12,020)	59,500	47,480
Capital distribution received from affiliate	59,500	(59,500)	—
Net cash provided by investing activities	59,500	(59,500)	—

4. Other Current Assets


	December 31, 2023		December 31, 2022
Value added tax receivable	$	691	$	730
Prepaid expenses	1,914		2,890
Insurance proceeds receivable	20,000		13,100
Other assets	37		151
Total other current assets	$	22,642	$	16,871

The insurance proceeds receivable represents the insurance payable by the Company’s insurers to claimants on behalf of the Company related to the settlement of the Canadian and U.S. class action lawsuits. See Note 11 Commitments, Contingencies and Guarantees, for further discussion.

5. Property, Plant and Equipment, net

Mineral Properties

Mining Concessions

In Mexico, mineral concessions from the Mexican government can only be held by Mexican nationals or Mexican-incorporated companies. The concessions are valid for 50 years and are extendable provided the concessions are kept in good standing. For concessions to remain in good standing a semi-annual fee must be paid to the Mexican government and an annual report describing the work accomplished on the property must be filed. These concessions may be cancelled without penalty with prior notice to the Mexican government. MLS is the concession holder of a series of claims titles granted by the Mexican government.

Santa Valeria Concession

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The Company holds Santa Valeria concessions. If production commences, the Company is required to make a production royalty payment of 1% of the net smelter returns. The Company may terminate the agreement upon prior notice.

The Company made no mineral lease payments in the years ended December 31, 2023 and 2022.

6. Accounts Payable, Accrued and Other Liabilities


	December 31, 2023		December 31, 2022
Accounts payable	$	2,713	$	586
Accrued expenses	3,031		2,761
Accrued compensation	3,215		1,889
Legal settlement payable	24,000		21,000
Current tax payable	387		—
Other liabilities	11		122
Total accounts payable, accrued and other liabilities	$	33,357	$	26,358

The legal settlement payable is the liability recorded for the settlements of the class action lawsuit. See Note 11 Commitments, Contingencies and Guarantees, for further discussion on the U.S. and Canadian class action lawsuits and related settlement discussion.

7. Related-Party Transactions

LGJV

Under the Unanimous Omnibus Partner Agreement, the Company provides certain management and administrative services to the LGJV. The Company earned $6,000 and $5,000 under this agreement for the years ended December 31, 2023 and 2022, respectively, which have been recorded on the statement of income under other income. The Company received $6,417 and $5,417 in cash from the LGJV under this agreement for the years ended December 31, 2023 and 2022, respectively. The Company had receivables under this agreement of nil and $417 as of December 31, 2023 and 2022, respectively. The Company also incurs certain LGJV costs that are subsequently reimbursed by the LGJV.

The Company seconds certain employees to the LGJV and charged $2,627 and $2,399 related to this arrangement in the years ended December 31, 2023 and 2022, respectively. The Company received $3,489 in cash and had a $250 receivable outstanding at December 31, 2023, and received $1,431 in cash and had $1,112 receivable outstanding at December 31, 2022, related to this arrangement.

8. Stockholders’ Equity

The Company is authorized to issue 700,000,000 shares of $0.001 par value common stock and 50,000,000 shares of $0.001 par value preferred stock. As of December 31, 2023, 69,181,047 shares of common stock are outstanding, and no shares of preferred stock are outstanding.

Stock-Based Compensation

Equity Compensation Plan

The Company has a Long-Term Incentive Plan under which options and shares of the Company’s common stock are authorized for grant or issuance as compensation to eligible employees, consultants, and members of the Board of Directors. Awards under the plan include stock options, stock appreciation rights, stock awards, deferred stock units, and performance awards. Stock options, performance share units, restricted stock units and deferred stock units have been granted by the Company in different periods. As of December 31, 2023, approximately 10.3 million shares of common stock were available for grant under the plan. The Company recognized stock-based compensation expense as follows:

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	Year ended December 31,
	2023		2022
Stock options	$	4,087	$	2,621
Performance share units	203		219
Restricted stock units	1,046		—
Total stock-based compensation	$	5,336	$	2,840

Stock Option Transactions

The Company’s stock options have a contractual term of 10 years and entitle the holder to purchase shares of the Company’s common stock. The stock options granted to the Company’s employees have a service period of three years. The stock options granted to non-employee directors vest immediately.

The Company granted 1,132,520 stock options on September 11, 2023, and 134,225 stock options on November 9, 2023, with the weighted-average grant-date fair value per share of $2.93 and $2.77, respectively. In 2022, 100,000 stock options were granted with a weighted-average grant-date fair value per share of $5.83. The stock options granted in September 2023 represented a portion of 2022 compensation due to the Company being in an extended blackout period in 2022 and a portion of 2023.

Of the stock options granted in 2023, 604,799 vested immediately, including stock options granted to non-employee directors. No stock options were exercised during the years ended December 31, 2023 and 2022.

On December 31, 2023, there was $2,087 of unrecognized stock-based compensation expense related to stock options is expected to be recognized over a weighted-average period of 1.2 years.

The following table summarizes the respective vesting start dates and number of options granted to employees and directors in 2023 and 2022:

Recipient

Options Granted

Vesting Start Date

Grant Date

Employees

100,000

January 18, 2022

Employees

1,044,705

September 11, 2023

Directors

87,815

September 11, 2023

Directors

134,225

November 9, 2023

The following assumptions were used to compute the fair value of the options granted using the Black-Scholes option valuation model:


	Jan. 2022		Sep. 2023		Nov. 2023
Risk-free interest rate	1.74	%	4.39	%	4.52	%
Dividend yield	—		—		—
Estimated volatility	60.75	%	57.67	%	57.85	%
Expected option life	6 years		6 years		6 years

The Company’s estimated volatility computation was based on the historical volatility of a group of peer companies’ common stock over the expected option life and included both exploration stage and development stage companies. Prior to our IPO in October 2020, the Company's common stock was not publicly traded. As a result, the expected volatility assumption was based on peer information due to insufficient market trading history required to calculate a meaningful volatility factor. The computation of the expected option life was determined based on a reasonable expectation of the option life prior to being exercised or forfeited. The risk-free interest rate assumption was based on the U.S. Treasury constant maturity yield at the date of the grant over the expected life of the option. No dividends were expected to be paid.

The following tables summarize the stock option activity for the year ended December 31, 2023:

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Employee & Director Options	Options	Weighted‑ Average Exercise Price		Aggregate Intrinsic Value		Weighted‑ Average Remaining Life (Years)
Outstanding at December 31, 2022	1,701,530	$	12.67
Granted	1,266,745	$	5.01
Forfeited	(289,760)	$	13.99
Expired	(62,000)	$	12.00
Outstanding at December 31, 2023	2,616,515	$	8.83	$	2,090	9.86
Vested at December 31, 2023	1,848,486	$	9.69	$	2,053	9.07

The total fair value of stock options vested during the year ended December 31, 2023, was $6,344.

At December 31, 2023, the Company had 32,393 LGJV-personnel stock options outstanding with weighted-average exercise price of $7.31 and weighted-average remaining life 2.0 years. There were no grants or exercises in the year ended December 31, 2023.

Performance Share Unit Transactions

On December 17, 2021, 119,790 PSUs were granted to the Company’s employees with a weighted average grant date fair value per share of $14.22. As at December 31, 2023, there were 40,802 PSUs outstanding. On December 31, 2023, unrecognized compensation expense related to the PSUs was $166, which is expected to be recognized over a weighted-average period of 1.0 year. There were no grants in the year ended December 31, 2023.

Restricted Stock Unit Transactions

RSUs granted are reported as equity awards with a fair value of each RSU equal to the fair value of the Company's common stock on the grant date and vest on the third anniversary of the grant date or employee start date, in respect of the below-referred grants. Each earned RSU represents the right to receive one share of the Company's common stock.

On September 11, 2023, the Company granted 925,172 RSUs with grant date fair value of $5.04 and have varying vesting dates due to the Company being in an extended blackout period in 2022 and a portion of 2023.

Compensation expense is recognized ratably from the grant date over the requisite vesting period. On December 31, 2023, unrecognized compensation expense related to the RSUs was $3,617, which is expected to be recognized over a weighted-average period of 1.3 years.

Deferred Stock Unit Transactions

DSUs are awarded to non-employee directors at the discretion of the Board of Directors. The DSUs are fully vested on the grant date and each DSU entitles the holder to receive one share of the Company’s common stock upon the director’s cessation of continuous service. Non-employee directors are eligible to elect to defer receipt of any portion of annual retainers or meeting fees and take payment in the form of DSUs. The DSU entitles the holder to receive one share of the Company’s common stock at either a date specified in the deferral election or cessation of service, whichever comes first. The fair value of DSUs are equal to the fair value of the Company’s common stock on the grant date.

The Company granted 174,948 DSUs during the year ended December 31, 2023 and nil during the year ended December 31, 2022. The 2023 grant included DSU compensation related to 2022 that could not be issued due to the Company being in an extended blackout period in 2022 and a portion of 2023.

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Director DSUs	Shares	Weighted‑ Average Grant Price
Outstanding at December 31, 2022	146,796	$	10.88
Granted	174,948	$	4.97
Converted to common stock	(18,824)	$	6.13
Outstanding at December 31, 2023	302,920	$	7.76

The Company recognized DSU expense of $626 and $239 for the years ended December 31, 2023 and 2022, respectively. The DSU expenses accrued for in 2022 during the blackout period were subsequently granted in 2023. In December 2023, 18,824 DSUs were converted to common stock.

At December 31, 2023, 302,920 DSUs remain outstanding with a weighted-average grant date fair value of $7.76 per unit.

9. Net Income per Share

Basic net income per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed similarly, except that weighted-average common shares are increased to reflect the potential dilution that would occur if stock options were exercised or PSUs, DSUs or RSUs were converted into common stock. The dilutive effects are calculated using the treasury stock method.

For the year ended December 31, 2023, all in-the-money stock options, PSUs, RSUs and DSUs have been included in the dilutive earnings per common share calculation. For the year ended December 31, 2022, all options and PSUs were excluded from the diluted earnings per common share calculation as the shares would be anti-dilutive.

A reconciliation of basic and diluted earnings per common share is presented below:


	Year Ended December 31,
	2023		2022
Net income	$	12,860	$	14,529

Weighted average shares:
Basic	69,163,564		69,162,223
Effect of dilutive stock options	1,493		—
Effect of dilutive PSUs	8,364		—
Effect of dilutive RSUs	174,849		—
Effect of dilutive DSUs	188,028		146,796
Diluted	69,536,298		69,309,019

Net income per share:
Basic	$	0.19	$	0.21
Diluted	$	0.18	$	0.21

10. Fair Value Measurements

The Company establishes a framework for measuring the fair value of assets and liabilities in the form of a fair value hierarchy that prioritizes the inputs into valuation techniques used to measure fair value into three broad levels. This hierarchy gives the highest priority to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs. Further, financial assets and liabilities should be classified by level in their entirety based upon the lowest level of input that was significant to the fair value measurement. The three levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.

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Level 2: Quoted prices in inactive markets for identical assets or liabilities, quoted prices for similar assets or liabilities in active markets, or other observable inputs either directly related to the asset or liability or derived principally from corroborated observable market data.

Level 3: Unobservable inputs due to the fact there is little or no market activity. This entails using assumptions in models which estimate what market participants would use in pricing the asset or liability.

The Company’s financial assets and liabilities such as cash and cash equivalents, related party receivables, value added tax receivable, insurance proceeds receivable, accounts payable and debt are approximate fair value due to their short maturities and are classified within Level 1 of the fair value hierarchy.

Assets and Liabilities that are Measured at Fair Value on a Non-recurring Basis

The Company discloses and recognizes its non-financial assets and liabilities at fair value on a non-recurring basis and makes adjustments to fair value, as needed (for example, when there is evidence of impairment).

The Company recorded its initial investment in affiliates at fair value within Level 3 of the fair value hierarchy, as the valuation was determined based on internally developed assumptions with few observable inputs and no market activity.

11. Commitments, Contingencies and Guarantees

In determining its accruals and disclosures with respect to loss contingencies, the Company will charge to income an estimated loss if information available prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Legal expenses associated with the commitments and contingencies are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the combined financial statements when it is at least reasonably possible that a material loss could be incurred.

Environmental Contingencies

The Company’s mining and exploration activities are subject to various laws, regulations and permits governing the protection of the environment. These laws, regulations and permits are continually changing and are generally becoming more restrictive. The Company has made, and expects to make in the future, expenditures to comply with such laws, regulations and permits, but cannot predict the full amount of such future expenditures.

Legal

On February 22, 2022, a purported Company stockholder filed a putative class action lawsuit in the United States District Court for the District of Colorado (the "District Court") against the Company, certain of our former officers, and several directors (the "U.S. Class Action"). An amended complaint was filed on August 15, 2022. The amended complaint, allegedly brought on behalf of certain purchasers of the Company’s common stock and certain traders of call and put options on the Company’s common stock from December 9, 2020 through January 25, 2022, seeks, among other things, damages, costs, and expenses, and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 as well as Sections 11 and 15 of the Securities Act of 1933. The amended complaint alleges that certain individual defendants and the Company, pursuant to the control and authority of the individual defendants, made false and misleading statements and/or omitted certain material information regarding the mineral resources and reserves at the Cerro Los Gatos mine. The Company and all defendants filed a motion to dismiss this action on October 14, 2022. That motion was fully briefed as of December 23, 2022. On April 26, 2023, following a joint motion, the Court postponed its ruling on the defendants’ motion to dismiss until on or after June 16, 2023.

On June 13, 2023, the Company entered into an agreement in principle to settle the U.S. Class Action. Subject to certain conditions, including class certification by the District Court, the execution of a definitive stipulation of settlement and approval of the settlement by the District Court, the settling parties agreed to resolve the U.S. Class Action for an aggregate payment by the Company and its insurers of $21,000 to a settlement fund. On June 16, 2023, the parties filed a joint status report requesting that the Court grant a temporary stay of all proceedings in the case pending submission of proposed settlement documentation on or before July 13, 2023. On July 13, 2023, the plaintiffs filed an unopposed motion for an order preliminarily approving a stipulation of settlement agreed by the parties and providing for class notice which will provide for (i) preliminary approval of the settlement; (ii) approval of the form and manner of giving notice of the settlement to the settlement class; and (iii) a hearing date and time to consider final and approval of the Settlement and related matters (the “Preliminary Order”). On September 12, 2023, the plaintiffs filed an unopposed motion to amend the Preliminary Order to reflect certain changes to the form of release proposed to be executed by the plaintiffs.

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The District Court issued its Preliminary Order on February 29, 2024, approving the proposed settlement. Consistent with the stipulation of settlement requiring that a settlement account be funded within 30 days of the Preliminary Order, the Company and its insurers have fully funded that account, with $1,403 funded by the Company and $19,597 funded by the Company’s insurers. The final fairness hearing is scheduled with the District Court for May 29, 2024.

By Notice of Action issued February 9, 2022, and subsequent Statement of Claim dated March 11, 2022, Izabela Przybylska (the "Plaintiff") commenced a putative class action against the Company, certain of its former officers, and others in the Ontario Superior Court of Justice on behalf of a purported class of all persons or entities, wherever they may reside or be domiciled, who acquired securities of the Company in both the primary and secondary markets during the period from October 28, 2020 until January 25, 2022 (the “Canadian Class Action”). The action asserts claims under Canadian securities legislation and at common law and seeks unspecified monetary damages and other relief in respect of allegations the defendants made false and misleading statements and omitted material information regarding the mineral resources and reserves of the Company.

On January 26, 2024, counsel for the Company and counsel for the Plaintiff executed a term sheet wherein any claims against us and the named individuals would be settled for a payment by the Company of $3,000. Such counsel subsequently agreed to and executed a definitive settlement agreement. On April 16, 2024, the Ontario Superior Court approved the settlement on a preliminary basis. Consistent with the terms of the settlement requiring that an escrow account be funded within 30 days of preliminary court approval, the Company and its insurers have fully funded an escrow account, with $2,597 funded by the Company and $403 funded by the Company’s insurers. The final fairness hearing is scheduled with the Ontario Superior Court for June 28, 2024.

Since the settlements of the U.S. Class Action and the Canadian Class Action are subject to conditions, including final court approval, there can be no assurance that either the U.S. Class Action or the Canadian Class Action will be finally resolved pursuant to the agreements that have been reached.

Further, the Company has made a disclosure to the U.S. Department of Justice and the SEC regarding its January 25, 2022 press release and issues related to Cerro Los Gatos’ mineral reserves and mineral resources at the time. The Company is cooperating with those agencies’ investigations and cannot reasonably predict any outcome.

There can be no assurance that any of the foregoing matters individually or in aggregate will not result in outcomes that are materially adverse for the Company.

12. Debt

On July 12, 2021, the Company entered into a $50,000 Revolving Credit Facility (the “Credit Facility”) with Bank of Montreal ("BMO").

On December 13, 2023, the Company entered into a second amended and restated Credit Facility with BMO. The main changes to the terms of the agreement are as follows:

•the maturity date was extended to December 31, 2026;

•$50,000 revolving line of credit with an accordion feature, which allows for an increase in the total line of credit up to $100,000, subject to certain conditions;

•loans under the Credit Facility bear interest at a rate equal to either a term SOFR rate plus a margin ranging from 2.75% to 3.75%, or a U.S. base rate plus a margin ranging from 1.75% to 2.75%, at our option;

•Any drawdown is secured by the Company's assets including the Company's shares in the LGJV Entities.

On July 21, 2023, the Company repaid the full outstanding balance of $9,000 on the Credit Facility. As a result, the outstanding debt balance was $nil at December 31, 2023. The Company was in compliance with all covenants under the Credit Facility as of December 31, 2023.

The Company recognized interest expense of $679, amortization of debt issuance cost of $57 and paid $413 in interest for the year ended December 31, 2023. The Company recognized interest expense of $433, amortization of debt issuance cost of $147 and paid $645 in interest for the year ended December 31, 2022.

13. Income Taxes

The components of income from operations before income taxes were as follows for the years ended December 31:

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	2023		2022
U.S.	$	13,606	$	19,111
Foreign	(632)		(3,017)
Total	$	12,974	$	16,094

The consolidated income tax expense consisted of $114 and $1,565, for the years ended December 31, 2023 and 2022, respectively.

A reconciliation of the actual income tax benefit and the tax computed by applying the applicable U.S. federal rate of 21% to the income before taxes is as follows for the years ended December 31:


	2023		2022
Tax provision from operations	$	2,725	$	3,380
State tax benefit from operations	8		20
Nondeductible expenses	1,298		(594)
Change in valuation allowance	(3,908)		(3,410)
Mexican withholding tax	—		1,565
Effect of change in tax rates	—		927
US/foreign tax rate differential	(9)		(323)

Total income tax expense	$	114	$	1,565

Total income tax expense for the year 2023 arose from the operations of Gatos Silver Canada Corporation.

The components of the deferred tax assets (liabilities) are summarized as follows for the year ended December 31:


	2023		2022
Deferred tax assets
Accrued compensation	$	18	$	354
Contingent liabilities	5,046		1,661
Deferred share unit awards	835		461
LGJV equity investment	—		12,656
Other accrued liabilities	21		21
Mineral properties	2,009		2,009
U.S. operating loss carryforward	19,079		10,234
Stock options	9,596		8,917
Foreign operating loss carryforward	4,804		4,129
Exploration and development	—		41
Other	260		24
Valuation allowances	(38,672)		(39,738)
Total deferred tax assets	$	2,996	$	769

Deferred tax liabilities
Accrued bonus	(280)		—
LGJV equity investment	(1,485)		—
Property, plant and equipment	(178)		(218)
Exploration and development	(18)		—
Prepaid expenses	(769)		(551)
Total deferred tax liabilities	$	(2,730)	$	(769)
Deferred tax assets (liabilities)	$	266	$	—

The realization of deferred income tax assets is dependent upon the generation of sufficient taxable income during future periods in which the temporary differences are expected to reverse.

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Based upon the level of taxable income (loss) and projections of future taxable income (loss) over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will not realize the benefits of these deductible differences, and thus has recorded a valuation allowance from continuing operations against the deferred tax asset balances of $38,672 and $39,738, respectively, for the years ended December 31, 2023 and 2022. If the Company is profitable for a number of years, and the prospects for the realization of the deferred tax assets become more likely than not, the Company will then reverse all or a portion of the valuation allowance that could result in a reduction of future reported income tax expense.

At December 31, 2023, the Company had $90,751 of net operating loss carryforwards from continuing operations in the United States. Of the total net operating loss from continuing operations, $72,408 expire at various dates through 2037, and $18,343 may be carried forward indefinitely. There are also $17,126 of net operating loss carryforwards in Mexico which expire at various dates through 2033. No assets have been recognized for net operating loss carryforwards where the Company believes it is more likely than not that the net operating losses will not be realized. The Company will monitor the valuation on an ongoing basis and will make the appropriate adjustments as necessary should circumstances change.

The Company has adopted the provisions of ASC 740-10, Income Taxes. The Company files income tax returns in the U.S., Mexico, Canada and Colorado. The Company’s foreign assets and operations are owned by entities that have elected to be treated for U.S. tax purposes as corporations and, as a result, the taxable income or loss and other tax attributes of such entities are not included in the Company’s U.S. federal consolidated income tax return. The statute of limitations for tax returns filed in the U.S., Mexico and Canada is three years, five years and seven years, respectively, from the date of filing. The Company’s 2019-2023 U.S. tax returns are subject to examinations by U.S. tax authorities until 2023-2026, respectively. The Company is no longer subject to examinations by Mexico tax authorities for years prior to 2018.

As of December 31, 2023, the Company has not recognized any increases or decreases in unrecognized tax benefits, as it is more likely than not that all tax positions will be upheld by the taxing authorities.

14. Segment Information

The Company operates in a single industry as a corporation engaged in the acquisition, exploration and development of primarily silver mineral interests. The Company has mineral property interests in Mexico. The Company’s reportable segments are based on the Company’s mineral interests and management structure and include Mexico and Corporate segments. The Mexico segment engages in the exploration, development and operation of the Company’s Mexican mineral interests and includes the Company’s investment in the LGJV. Financial information relating to the Company’s segments is as follows:


	Year Ended December 31, 2023						Year Ended December 31, 2022
	Mexico		Corporate		Total		Mexico		Corporate		Total
Exploration	$	26	$	—	$	26	$	83	$	27	$	110
General and administrative	763		24,925		25,688		1,124		24,344		25,468
Amortization	15		64		79		5		175		180
Equity income in affiliates	(33,622)		—		(33,622)		(45,230)		—		(45,230)
Legal settlement loss	—		1,500		1,500		—		7,900		7,900
Interest expense	—		679		679		—		433		433
Interest income	—		(1,332)		(1,332)		—		(154)		(154)
Net other (income) expense	(28)		(5,964)		(5,992)		22		(4,823)		(4,801)
Income tax expense	—		114		114		1,565		—		1,565
Total assets	54,166		346,738		400,904		109,081		274,420		383,501

15. Investment in Affiliates

During the years ended December 31, 2023 and 2022, the Company recognized income of $33,622 and $45,230, respectively, on its investment in the LGJV Entities, representing its ownership share of the LGJV Entities’ results, including the effect of the Priority Distribution Payment ("PDP"). The equity income in affiliate includes amortization of the carrying value of the investment in excess of the underlying net assets of the LGJV Entities. This basis difference is being amortized as the LGJV Entities’ proven and probable reserves are processed. There were no impairment indicators in the years ended December 31, 2023 and 2022.

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On September 6, 2023, the Company reported an updated mineral reserve and mineral resource estimate and life of mine plan for the Cerro Los Gatos mine with an effective date of July 1, 2023. The mine life was extended by 2.75 years and significantly increased the mineral resource. This change in estimate has been applied prospectively, effective July 1, 2023, and resulted in a reduction of depletion, depreciation and amortization expense of $9,438 and reduction in the deferred tax expense of $3,691 for the year ended December 31, 2023 as recorded by the LGJV Entities.

In July and October 2023, the LGJV made two capital distributions of $50,000 and $35,000 to the LGJV Partners, of which the Company’s share was $35,000 and $24,500, respectively. The capital distributions were not subject to withholding taxes.

In April, July and November 2022, the LGJV paid three dividends of $20,000, $15,000 and $20,000 to the LGJV Partners, respectively. The Company’s share of the first dividend was $14,000, before withholding taxes of $700. A payment of $7,365 was subsequently made to Dowa to cover the full amount of the reduced initial priority distribution due, for a net dividend received of $5,935. The Company's share of the second and third dividends was $9,975 and $13,300, before withholding taxes of $525 and $700, respectively.

On March 17, 2022, the Company entered into a definitive agreement with Dowa to build and operate a leaching plant to reduce fluorine levels in zinc concentrates produced at CLG at an expected construction cost of $6,050. As part of the agreement, the initial payment of the $20,000 due to Dowa under the partner’s priority distribution agreement was reduced to $10,300. The reduced priority dividend amount reflects a portion of both the construction ($4,200) and future estimated operating costs of the fluorine leaching plant ($5,500). Should the fluorine leaching plant not operate according to certain parameters during the first five years, portions of the $5,500 reduction could be reinstated. The construction and commissioning of the fluorine leaching plant was completed in July 2023 and placed in operation. As a result, the outstanding priority distribution was reduced from $5,500 at December 31, 2022, to $5,119 at December 31, 2023.

The LGJV combined balance sheets as of December 31, 2023 and 2022, the combined statements of income for the years ended December 31, 2023 and 2022, and the statements cash flows for the years ended December 31, 2023 and 2022 are as follows:

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LOS GATOS JOINT VENTURE

COMBINED BALANCE SHEETS

AS OF DECEMBER 31,


	2023		2022
ASSETS
Current Assets
Cash and cash equivalents	$	34,303	$	34,936
Receivables	12,634		26,655
Inventories	16,397		11,542
VAT receivable	12,610		21,531
Income tax receivable	20,185		27,039
Other current assets	1,253		4,138
Total current assets	97,382		125,841
Non-Current Assets
Mine development, net	234,980		232,515
Property, plant and equipment, net	171,965		198,600
Deferred tax assets	9,568		—
Total non-current assets	416,513		431,115
Total Assets	$	513,895	$	556,956
LIABILITIES AND OWNERS’ CAPITAL
Current Liabilities
Accounts payable and accrued liabilities	$	38,704	$	46,751
Related party payable	560		1,792


Equipment loans	—		480
Total current liabilities	39,264		49,023
Non-Current Liabilities

Lease liability	208		268
Asset retirement obligation	11,593		15,809
Deferred tax liabilities	3,885		1,354
Total non-current liabilities	15,686		17,431
Owners’ Capital
Capital contributions	455,638		540,638
Paid-in capital	18,186		18,186
Accumulated deficit	(14,879)		(68,322)
Total owners’ capital	458,945		490,502
Total Liabilities and Owners’ Capital	$	513,895	$	556,956

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LOS GATOS JOINT VENTURE

COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31,


	2023		2022
Revenue	$	268,671	$	311,724
Expenses
Cost of sales	111,266		107,075
Royalties	1,363		3,069
Exploration	2,875		9,800
General and administrative	18,068		14,307
Depreciation, depletion and amortization	75,110		69,380
Total expenses	208,682		203,631

Other expense (income)
Interest expense	660		582
Interest income	(1,567)		—


Accretion expense	1,145		1,103
Other expense (income)	741		(766)
Foreign exchange gain	(2,580)		(2,348)
	(1,601)		(1,429)

Income before taxes	61,590		109,522
Income tax expense	8,147		37,306
Net income and comprehensive income	$	53,443	$	72,216

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LOS GATOS JOINT VENTURE

COMBINED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31,



	2023		2022
Cash flows from operating activities:
Net income	$	53,443	$	72,216
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	75,110		69,380
Accretion	1,145		1,103

Deferred taxes	(7,623)		21,013
Unrealized gain on foreign currency rate change	(4,523)		(4,434)


Other	—		(174)

Changes in operating assets and liabilities:
VAT receivable	9,619		23,986
Receivables	14,021		(15,393)
Inventories	(5,273)		(353)
Unearned revenue	—		(1,714)
Other current assets	2,494		661
Income tax receivable	10,771		(27,039)
Accounts payable and other accrued liabilities	(5,951)		17,939
Payables to related parties	(1,232)		183


Net cash provided by operating activities	142,001		157,374

Cash flows from investing activities:
Mine development	(36,637)		(44,934)
Purchase of property, plant and equipment	(19,850)		(37,018)
Materials and supplies inventory	(600)		(327)
Net cash used by investing activities	(57,087)		(82,279)

Cash flows from financing activities:
Capital distributions	(85,000)		—
Equipment loan and Lease payments	(547)		(5,439)




Dividends	—		(55,000)
Net cash used by financing activities	(85,547)		(60,439)

Net increase (decrease) in cash and cash equivalents	(633)		14,656
Cash and cash equivalents, beginning of period	34,936		20,280
Cash and cash equivalents, end of period	$	34,303	$	34,936
Interest paid	$	660	$	236

16. Subsequent Events

On February 15, 2024, the LGJV made a $30,000 capital distribution to the LGJV partners, of which the Company’s share was $21,000. On April 22, 2024, the LGJV made a $25,000 capital distribution to the LGJV partners, of which the Company’s share was $17,500.

Except as disclosed above and in 11. Commitments, Contingencies and Guarantees, there are no events or transactions requiring recognition in these consolidated financial statements through May 6, 2024.

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Report of Independent Auditors

To Board of Managers of Los Gatos Joint Venture

Opinion

We have audited the combined financial statements of Los Gatos Joint Venture, which comprise the combined balance sheets as of December 31, 2023 and 2022, the related combined statements of operations and comprehensive income, owners’ capital, and cash flows for the years then ended, and the related notes (collectively referred to as the “combined financial statements”). In our opinion, the accompanying combined financial statements present fairly, in all material respects, the financial position of Los Gatos Joint Venture as at December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Combined Financial Statements section of our report. We are required to be independent of Los Gatos Joint Venture and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Combined Financial Statements

Management is responsible for the preparation and fair presentation of the combined financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free of material misstatement, whether due to fraud or error.

In preparing the combined financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Los Gatos Joint Venture’s ability to continue as a going concern for one year after the date that the combined financial statements are available to be issued.

Auditor’s Responsibilities for the Audit of the Combined Financial Statements

Our objectives are to obtain reasonable assurance about whether the combined financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the combined financial statements.

In performing an audit in accordance with GAAS, we:

•Exercise professional judgment and maintain professional skepticism throughout the audit.

•Identify and assess the risks of material misstatement of the combined financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the combined financial statements.

•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Los Gatos Joint Venture’s internal control. Accordingly, no such opinion is expressed.

•Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the combined financial statements.

•Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Los Gatos Joint Venture’s ability to continue as a going concern for a reasonable period of time.

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We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ Ernst & Young LLP

Chartered Professional Accountants

Licensed Public Accountants

Toronto, Canada

February 20, 2024

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LOS GATOS JOINT VENTURE

COMBINED BALANCE SHEETS

AS OF DECEMBER 31,

(In thousands of United States dollars)



	Notes	2023		2022
ASSETS
Current Assets
Cash and cash equivalents		$	34,303	$	34,936
Receivables	3	12,634		26,655
Inventories	4	16,397		11,542
VAT receivable		12,610		21,531
Income tax receivable		20,185		27,039
Other current assets	5	1,253		4,138
Total current assets		97,382		125,841
Non-Current Assets
Mine development, net		234,980		232,515
Property, plant and equipment, net	6	171,965		198,600
Deferred tax assets	14	9,568		—
Total non-current assets		416,513		431,115
Total Assets		$	513,895	$	556,956
LIABILITIES AND OWNERS’ CAPITAL
Current Liabilities
Accounts payable and accrued liabilities	7	$	38,704	$	46,751
Related party payable		560		1,792

Equipment loans	13	—		480
Total current liabilities		39,264		49,023
Non-Current Liabilities

Lease liability		208		268
Asset retirement obligation	10	11,593		15,809
Deferred tax liabilities	14	3,885		1,354
Total non-current liabilities		15,686		17,431
Owners’ Capital
Capital contributions		455,638		540,638
Paid-in capital		18,186		18,186
Accumulated deficit		(14,879)		(68,322)
Total owners’ capital		458,945		490,502
Total Liabilities and Owners’ Capital		$	513,895	$	556,956

See accompanying notes to the combined financial statements.

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LOS GATOS JOINT VENTURE

COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31,

(In thousands of United States dollars)



	Notes	2023		2022
Revenue	3	$	268,671	$	311,724
Expenses
Cost of sales		111,266		107,075
Royalties		1,363		3,069
Exploration		2,875		9,800
General and administrative		18,068		14,307
Depreciation, depletion and amortization		75,110		69,380
Total expenses		208,682		203,631

Other expense (income)
Interest expense		660		582
Interest income		(1,567)		—


Accretion expense	10	1,145		1,103
Other expense (income)		741		(766)
Foreign exchange gain		(2,580)		(2,348)
		(1,601)		(1,429)

Income before taxes		61,590		109,522
Income tax expense	14	8,147		37,306
Net income and comprehensive income		$	53,443	$	72,216

See accompanying notes to the combined financial statements.

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LOS GATOS JOINT VENTURE

COMBINED STATEMENTS OF OWNERS’ CAPITAL

(In thousands of United States dollars)



	Capital Contributions		Paid-in Capital		Accumulated deficit		Total
Balance at December 31, 2021	$	540,638	$	18,370	$	(85,538)	$	473,470
Dividends	—		—		(55,000)		(55,000)
Costs paid by investor	—		(184)		—		(184)
Net income	—		—		72,216		72,216
Balance at December 31, 2022	$	540,638	$	18,186	$	(68,322)	$	490,502
Capital Distributions	(85,000)		—		—		(85,000)
Net income	—		—		53,443		53,443
Balance at December 31, 2023	$	455,638	$	18,186	$	(14,879)	$	458,945

See accompanying notes to the combined financial statements.

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LOS GATOS JOINT VENTURE

COMBINED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31,

(In thousands of United States dollars)



	Notes	2023		2022
Cash flows from operating activities:
Net income		$	53,443	$	72,216
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		75,110		69,380
Accretion		1,145		1,103

Deferred taxes		(7,623)		21,013
Unrealized gain on foreign currency rate change		(4,523)		(4,434)


Other		—		(174)

Changes in operating assets and liabilities:
VAT receivable		9,619		23,986
Receivables		14,021		(15,393)
Inventories		(5,273)		(353)
Unearned revenue		—		(1,714)
Other current assets		2,494		661
Income tax receivable		10,771		(27,039)
Accounts payable and other accrued liabilities		(5,951)		17,939
Payables to related parties		(1,232)		183


Net cash provided by operating activities		142,001		157,374

Cash flows from investing activities:
Mine development		(36,637)		(44,934)
Purchase of property, plant and equipment		(19,850)		(37,018)
Materials and supplies inventory		(600)		(327)
Net cash used by investing activities		(57,087)		(82,279)

Cash flows from financing activities:
Capital distributions		(85,000)		—
Equipment loan and Lease payments		(547)		(5,439)




Dividends		—		(55,000)
Net cash used by financing activities		(85,547)		(60,439)

Net increase (decrease) in cash and cash equivalents		(633)		14,656
Cash and cash equivalents, beginning of period		34,936		20,280
Cash and cash equivalents, end of period		$	34,303	$	34,936

Interest paid		$	660	$	236

Supplemental disclosure of noncash transactions:
Asset retirement obligation		$	5,364	$	—
Mine development costs included in accrued liabilities		$	10,205	$	3,427
Property, plant and equipment included in accrued liabilities		$	11,046	$	2,648
Materials and supplies included in accrued liabilities		$	1,018	$	202
Recognition of Right of Use Asset and Lease Liability		$	—	$	328

See accompanying notes to the combined financial statements.

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LOS GATOS JOINT VENTURE

NOTES TO THE COMBINED FINANCIAL STATEMENTS

(In thousands of United States dollars)

1. Description of Business and Basis of Preparation

These combined financial statements represent the combined financial position and results of operations of the Los Gatos Joint Venture (“LGJV”). Unless the context otherwise requires, references to LGJV mean the Los Gatos Joint Venture. The combined financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”).

On January 1, 2015, the LGJV was established to develop the Cerro Los Gatos Mine (“CLG”) in northern Mexico. The LGJV consists of Minera Plata Real S. de R.L. de C.V. (‘‘MPR’’), Operaciones San Jose de Plata S. de R.L. de C.V (“OSJ”). and Servicios San Jose de Plata S. de R.L. de C.V. (collectively the ‘‘LGJV Entities’’), until Servicios was merged into MPR, effective July 15, 2021. Upon completion of their $50,000 funding to the LGJV, Dowa Metals & Mining, Ltd. (“Dowa”) acquired a 30% interest in the LGJV Entities and the right to purchase future zinc-concentrate production at market rates. The remaining 70% interest in the LGJV entities was owned by Gatos Silver, Inc. (“Gatos Silver”) (Sunshine Silver Mining & Refining Corporation prior to October 30, 2020). Gatos Silver contributed $18,200 to OSJ in May 2019 to provide funding for a partial repayment of principal and interest related to the Dowa MPR Loan. In late May 2019, the Dowa MPR Loan was fully extinguished with a cash payment of $18,200 and the conversion of the remaining $50,737 of principal and interest. The conversion of the remaining principal and interest increased Dowa’s ownership in the LGJV entities by 18.5% to 48.5%. On March 11, 2021, Gatos Silver repurchased the 18.5% interest from Dowa. The current ownership of the LGJV Entities is 70% Gatos Silver and 30% Dowa ("LGJV Partners").

On September 1, 2019, the CLG commenced commercial production of its two concentrate products: a lead-silver concentrate and a zinc-silver concentrate. The Company’s concentrates are currently sold to third-party customers.

2. Summary of Significant Accounting Policies

Risks and uncertainties

As a mining business, the LGJV’s revenue, profitability and future rate of growth are substantially dependent on prevailing prices for silver, zinc, lead and gold. Historically, the commodity markets have been quite volatile, and there can be no assurance that commodity prices will not be subject to wide fluctuations in the future. A substantial or extended decline in commodity prices could have a material adverse effect on the LGJV’s financial position, results of operations, cash flows, and the quantities of reserves the LGJV can economically produce. The carrying value of the LGJV’s property, plant and equipment, mine development, inventories and stockpiles are particularly sensitive to the outlook for commodity prices. A substantial or extended decline in the LGJV’s price outlook could result in material impairment charges related to these assets. Additionally, changes in other factors such as changes in mine plans, increases in costs, geotechnical failures, and changes in social, environmental or regulatory requirements can adversely affect the LGJV’s ability to recover its investment in certain assets and result in impairment charges.

Calculations of mineral reserves are only estimates and depend on geological interpretation and statistical inferences or assumptions drawn from drilling and sampling analysis, which might prove to be materially inaccurate. There is a degree of uncertainty attributable to the calculation of mineral reserves and mineral resources. Until mineral reserves and mineral resources are actually mined and processed, the quantity of metal and grades must be considered as estimates only and no assurance can be given that the indicated levels of metals will be produced. In making determinations about whether to advance any of our projects to development, we must rely upon estimated calculations for the mineral reserves and mineral resources and grades of mineralization on our properties.

The estimation of mineral reserves and mineral resources is a subjective process that is partially dependent upon the judgment of the persons preparing the estimates. The process relies on the quantity and quality of available data and is based on knowledge, mining experience, statistical analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available.

Estimated mineral reserves and mineral resources may have to be recalculated based on changes in metal prices, further exploration or development activity or actual production experience. This could materially and adversely affect estimates of the volume or grade of mineralization, estimated recovery rates or other important factors that influence mineral reserves and mineral resources estimates. The extent to which mineral resources may ultimately be reclassified as mineral reserves is dependent upon the demonstration of their profitable recovery. Any material changes in volume and grades of mineralization will affect the economic viability of placing a property into production and a property’s return on capital. We cannot provide assurance that mineralization can be mined or processed profitably.

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Mineral reserve and mineral resource estimates have been determined and valued based on assumed future metal prices, cutoff grades and operating costs that may prove to be inaccurate. Extended declines in the market price for silver, lead and zinc may render portions of our mineralization uneconomic and result in reduced reported volume and grades, which in turn could have a material adverse effect on our financial performance, financial position and results of operations.

The LGJV has considered and assessed the risk resulting from its concentrate sales arrangements with its customers. In the event that the LGJV’s relationships with its customers are interrupted for any reason, the LGJV believes that it would be able to locate other customers to purchase its metals concentrates; however, any interruption could temporarily disrupt the LGJV’s sale of its products and adversely affect operating results.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. The LGJV bases its estimates on historical experience and various other assumptions that are believed to be reasonable given the specific circumstances. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include receivables; inventories; mine development; mineral properties: life of mine revenue and cost assumptions; mineral resource conversion rates to mineral reserve; reclamation and closure obligations; valuation allowances for deferred tax assets; depreciation, depletion and accretion and the fair value of financial instruments.

Functional currency and translation of foreign currencies

The U.S. dollar is the LGJV’s functional currency. Monetary assets and liabilities denominated in foreign currencies are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting gains or losses reported in foreign exchange gain (loss) in the computation of net income. Non-monetary assets and liabilities are translated into U.S. dollars at historical exchange rates. Expenses and other income and expense items in foreign currencies are translated into U.S. dollars at average or historical exchange rates.

Cash and cash equivalents

The LGJV considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Receivables

Trade receivables and other receivable balances are reported at outstanding principal amounts, net of an allowance for doubtful accounts, if deemed necessary. Management evaluates the collectability of receivable account balances to determine the allowance, if any. Management considers the other party’s credit risk and financial condition, as well as current and projected economic and market conditions, in determining the amount of the allowance. If management determines a receivable balance is uncollectible, the uncollectible portion will be recognized as a loss.

Metal and materials inventories

The LGJV’s inventories include ore, concentrate and operating materials and supplies. The classification of ore and concentrate inventories is determined by the production stage of the ore. All inventories are stated at the lower of cost or net realizable value. Cost is determined using the average cost method for all inventories and includes applicable taxes and freight. Ore inventory represents stockpiled ore that is available for processing. Concentrate inventory represents stockpiled lead or zinc concentrate that is available for shipment or in transit to customers. Ore and concentrate inventories include applicable operating and overhead costs.

Mine development

Mine development costs incurred subsequent to initial establishment of CLG’s proven and probable mineral reserves in early January 2017 were capitalized as mine development assets until September 1, 2019 when the CLG achieved commercial production. Subsequent to September 1, 2019, costs incurred to further develop the mine including the building of access ways, ventilation shafts, lateral access, drifts, ramps and other infrastructure are capitalized to mine development assets. Upon the commencement of production, capitalized costs are charged to operations as depletion expense using the units-of-production method in the period the applicable mineral reserves are processed over the estimated proven and probable mineral reserve tonnes directly benefiting from the capital expenditures. The Los Gatos Technical Report dated October 20, 2023, provides an update on mineral reserve and mineral

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resource estimate and life of mine plan with an effective date of July 1, 2023. The mine life was extended by 2.75 years and significantly increased the mineral resource. This change in estimate has been applied prospectively, effective July 1, 2023.

Upon abandonment or sale of a mineral property, any remaining capitalized mine development costs relating to such property will be removed from the balance sheet and a gain or loss recognized.

Property, plant and equipment

Property, plant and equipment are recorded at cost and depreciation is calculated on the straight-line method over the estimated useful lives of the assets. The estimated useful lives of plant and equipment and infrastructure range between three years and the end of the proven and probable reserves mine life. The Los Gatos Technical Report dated October 20, 2023, provides an update to the estimated mineral reserves and mineral resources since the technical report issued in 2022. The estimated useful lives of furniture, fixtures and computers range from three to ten years.

Impairment of long-lived assets

Long-lived assets, such as mine development, property, plant and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the LGJV first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. At December 31, 2023, there was no indicators of impairment of long-lived assets; therefore, an impairment test was not required.

Value added tax receivable and payable

Value added taxes (“VAT”) are assessed on purchases of materials, services and sales of products. The LGJV is entitled to recover the taxes they have paid related to purchases of materials and services. The LGJV collects VAT when certain products are sold to customers. The LGJV records the VAT cash flows as operating activities in the combined statement of cash flows, given the short-term, refundable and operating characteristics of these cash flows.

Reclamation and remediation costs (asset retirement obligations)

The LGJV has asset retirement obligations (“ARO”) arising from regulatory requirements to perform certain property and asset reclamation activities at the end of the respective asset life. An ARO is recognized when incurred and is initially measured at fair value and subsequently adjusted for accretion expense and changes in the amount or timing of the estimated cash flows. The corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and amortized over the asset’s remaining useful life. The ARO is based on timing of expected spending for an existing environmental disturbance. The LGJV reviews its ARO every reporting period or when deemed necessary.

Revenue recognition

The LGJV generates revenue by selling silver-bearing lead and zinc concentrates. Concentrate sales are initially recorded based on the provisional sales prices, net of estimated treatment and refining charges, when it satisfies the performance obligation of transferring control of the concentrate to the customer. Concentrate revenue is initially recorded on a provisional basis based on historical prices and provisional assays. Final settlement is based on the final assays and an applicable price as determined by the quotational period at the time of sale, typically one to four months. Market changes in the prices of metals between the delivery and final settlement dates will result in provisional adjustments to revenues related to previously recorded sales of concentrate. The LGJV’s concentrate sales are based on provisional metal prices and; therefore, contain an embedded derivative, which is not designated for hedge accounting, and is marked to market through revenue each period end prior to final settlement.

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Income taxes

The LGJV’s income tax jurisdiction is Mexico. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The LGJV recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The LGJV recognizes tax penalties in income tax expense.

Recently issued accounting standards

In March 2023, ASU No. 2023-01 was issued to provide a practical expedient for private companies in determination whether a related party arrangement between entities under common control is a lease. This update is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The LGJV is currently assessing the impact of this ASU.

In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative. The amendments in this update modify the disclosure or presentation requirements of a variety of Topics in the Codification. Certain amendments represent clarifications to or technical corrections of the current requirements. Each amendment in the ASU will only become effective if the SEC removes the related disclosure or presentation requirement from its existing regulations by June 30, 2027. The LGJV is still assessing the impact of the standard.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740). The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency, effectiveness and comparability of income tax disclosures. For entities other public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2025. The LGJV is still assessing the impact of this standard.

3. Revenue

The LGJV’s concentrate sales for the year ended December 31, are summarized below:


	2023		2022
Lead Concentrate	$	227,121	$	226,494
Zinc Concentrate	69,989		95,794
Treatment and refining charges and penalties	(17,174)		(21,871)
Subtotal	279,936		300,417
Provisional revenue adjustments	(11,265)		11,307
Total revenue	$	268,671	$	311,724

Provisional revenue adjustments account for commodity price fluctuations in concentrate sales still subject to final settlement.

As silver, zinc and lead can be sold through numerous market traders worldwide, the LGJV is not economically dependent on a limited number of customers for the sale of its products. As of December 31, 2023, our total accounts receivable was concentrated with the following customers: Customer 1 (59%) and Customer 2 (41%). The Company does not believe that the loss of any one customer would have a material adverse effect on the Company due to the liquidity of the markets and current availability of alternative customers. The LGJV enters into contracts with institutions management deems credit worthy. The Company does not anticipate non-performance by any of its counterparties.

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4. Inventories

The LGJV’s inventories as of December 31, are summarized below:


	2023		2022
Ore stockpiles	$	2,006	$	843
Concentrate stockpiles	3,850		941
Material & supplies	10,541		9,758
Total inventories	$	16,397	$	11,542

In the year 2023, the LGJV recognized a loss of $728 related to write-down of materials and supplies inventory to net realizable value.

5. Other Current Assets

The LGJV’s other current assets as of December 31, are summarized below:


	2023		2022
Prepaid expenses	$	1,083	$	4,027
Deposits and other	170		111
Total other current assets	$	1,253	$	4,138

6. Property, Plant and Equipment, net

The LGJV’s property, plant and equipment as of December 31, are summarized below:


	2023		2022
Mineral properties	$	832	$	853
Plant & equipment	95,861		112,456
Land	14,422		14,422
Infrastructure & improvements	190,290		168,007
Furniture, fixtures & computers	870		779
Right of use asset	268		328
Property, plant & equipment at cost	$	302,543	$	296,845
Less accumulated amortization	$	(130,578)	$	(98,245)
Total property, plant & equipment, net	$	171,965	$	198,600

Included in property plant and equipment is a Mexico head office lease of $268 with the term until January 30, 2024.

On September 6, 2023, the LGJV reported an updated mineral reserve and mineral resource estimate and life of mine plan with an effective date of July 1, 2023. The mine life was extended by 2.75 years and significantly increased the mineral resource. This change in estimate has been applied prospectively, effective July 1, 2023, and resulted in a reduction of depletion, depreciation and amortization expense of $9,438 and reduction in the deferred tax expense of $3,691 for the year ended December 31, 2023 as recorded by the LGJV Entities.

Mineral Properties

The LGJV conducts exploration activities under mining concessions in Mexico.

The LGJV is required to make mineral and concession lease payments to various entities to secure its claims or surface rights. One of these agreements also requires royalty payments based on the production and sale of minerals.

Mining Concessions and Agreement

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In Mexico, mineral concessions from the Mexican government can only be held by Mexican nationals or Mexican-incorporated companies. The current concessions are valid for 50 years and are extendable provided the concessions are kept in good standing. For concessions to remain in good standing, a semi-annual fee must be paid to the Mexican government and a report must be filed each year which covers the work accomplished on the property during the previous year. These concessions may be cancelled without penalty with prior notice to the Mexican government.

MPR is the concession holder of a series of mineral concessions granted by the Mexican government. The rights to certain concessions are held through exploration agreements with purchase options or a finder’s fee agreement, as discussed below:

La Cuesta International S.A. de C.V. (La Cuesta)

The LGJV is required to pay a production royalty of a) 2% net smelter return on production from the concession until all payments reach $10,000 and b) 0.5% net smelter return on production from the concession after total payments have reached $10,000 and c) 0.5% net smelter return on production from other property within a one-kilometer boundary of the Los Gatos concession. After total payments reach $15,000, the Los Gatos concession ownership will be transferred to the LGJV. The agreement has no expiration date; however, the LGJV may terminate the agreement upon a 30-day notice. The LGJV paid $1,355 and $4,040 for this obligation in the years ended December 31, 2023 and 2022, respectively, resulting in $11,842 paid through December 31, 2023.

As of December 31, 2023, the LGJV’s minimum remaining production royalty obligation is summarized in the table below:


2024	100
2025	100
2026	100
2027	100
Thereafter	2,758
Total	$	3,158

7. Accounts Payable, Accrued and Other Liabilities

The LGJV’s accounts payable and other accrued liabilities as of December 31, are summarized below:


	2023				2022
Accounts payable	$	18,338			$	18,042
Accrued expenses	15,015				20,639
Accrued payroll & taxes	5,351				8,070
Total accounts payable and other accrued liabilities	$	38,704	$	38,704	$	46,751

8. Related-Party Transactions

Under the Unanimous Omnibus Partner Agreement, Gatos Silver provides certain management and administrative services to the LGJV. Certain expenses incurred by the owners on behalf of the LGJV are also reimbursed.

The LGJV incurred $6,000 and $5,000 for these services in the years ended December 31, 2023 and 2022, respectively, and paid $6,417 and $5,417 to Gatos Silver for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023 the LGJV had no outstanding payables under this agreement, whereas on December 31, 2022, the payables amounted to $417.

The LGJV seconds certain employees from Gatos Silver and was charged $2,627 and $2,399 related to this arrangement in the years ended December 31, 2023 and 2022, respectively. The LGJV paid $3,489 in cash and had a $250 payable outstanding at December 31, 2023, and paid $1,431 in cash and had $1,112 payable outstanding at December 31, 2022, related to this arrangement.

9. Owners' Capital

The LGJV made capital distributions of $50,000 on July 20, 2023, and $35,000 on October 30, 2023. There were no capital distributions during the year ended December 31, 2022.

10. Asset Retirement Obligations ("ARO")

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In 2018, the LGJV recognized an ARO related to the development work performed at the CLG. The LGJV estimated the present value of the estimated future cash flows required to reclaim the disturbed areas and perform any required monitoring.

In December 2023, the LGJV performed an assessment of disturbed areas, resulting in a downward adjustment of the estimated closure costs. The LGJV used the discount rate of 7.5% and an inflation rate of 3.4%, to calculate the present value. The change in estimate reduced the ARO balance and the corresponding asset retirement cost, which is included in plant, property and equipment.

The following table summarizes activity in the LGJV’s ARO as of December 31:


	2023		2022
Balance, beginning of period	$	15,809	$	14,706

Change in estimate	(5,361)		—
Accretion expense	1,145		1,103
Balance, end of period	$	11,593	$	15,809

11. Fair Value Measurements

The LGJV establishes a framework for measuring the fair value of financial assets and liabilities which are measured at fair value on a recurring (annual) basis in the form of a fair value hierarchy that prioritizes the inputs into valuation techniques used to measure fair value into three broad levels. This hierarchy gives the highest priority to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs. Further, financial assets and liabilities should be classified by level in their entirety based upon the lowest level of input that was significant to the fair value measurement. The three levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.

Financial Assets and Liabilities

At December 31, 2023, the LGJV’s financial instruments consist of cash and cash equivalents, receivables, other current assets, accounts payable and other current liabilities. The carrying amounts of these financial instruments approximate fair value due to their short maturities and are classified within Level 1 of the fair value hierarchy.

There were no debt obligations as of December 31, 2023. The LGJV’s debt obligations as of December 31, 2022, consisted of equipment loans and were classified within Level 2 of the fair value hierarchy. The carrying value of the equipment loans approximated fair value as the liability was secured by the underlying equipment, guaranteed by Gatos Silver, and lacks significant credit concerns. The fair value as of December 31, 2023 and 2022, was nil and $480, respectively.

12. Commitments and Contingencies

In determining accruals and disclosures with respect to loss contingencies, the LGJV will charge to income an estimated loss if information available prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Legal expenses associated with the commitments and contingencies are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the combined financial statements when it is at least reasonably possible that a material loss could be incurred.

The LGJV’s mining, development and exploration activities are subject to various laws, regulations and permits governing the protection of the environment. These laws, regulations and permits are continually changing and are generally becoming more restrictive. The LGJV has made, and expects to make in the future, expenditures to comply with such laws, regulations and permits, but cannot predict the full amount of such future expenditures.

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From time to time, the LGJV may be involved in legal proceedings related to its business. Management does not believe that adverse decisions in any pending or threatened proceeding or that amounts that may be required to be paid by reason thereof will have a material adverse effect of the LGJV’s combined financial condition or results of operations.

The LGJV has a power supply contract with a committed purchase amount of 140,000MW per annum until September 6, 2025. As at December 31, 2023, the expected purchase commitment was $11,400 in 2024 and $9,500 in 2025, for an aggregate of $20,900. Part of the cost depends on the regulated rates by the Mexico Power Market. The LGJV consumed 159,964 MW and 146,750 MW under this contract in the years ended December 31, 2023 and 2022, respectively.

13. Equipment Loans

During 2021 and 2020, the LGJV Entities entered into equipment loan agreements, with repayment over four years at interest rates ranging from 5.76% to 8.67%, to finance a portion of mining equipment purchases. As of December 31, 2023, and 2022, the LGJV had outstanding loan balances of nil and $480, respectively, net of unamortized debt discount of nil and $3, respectively. For the years ended December 31, 2023, and 2022, the LGJV incurred $3 and $480 of interest on these loans, respectively. Gatos Silver has guaranteed the payment of all obligations, including accrued interest, under the equipment loan agreements.

14. Income Taxes

The combined income before taxes and tax expense for the year ended December 31, were as follows:


	2023		2022
Income before taxes	$	61,590	$	109,522
Deferred tax benefit (expense)	7,841		(19,586)
Current tax expense	(15,988)		(17,720)
Income tax expense	$	(8,147)	$	(37,306)

A reconciliation of the actual income tax expense and the tax computed by applying the Mexico federal rate (30%) to the income before taxes for the year ended December 31, is as follows:


	2023		2022
Tax provision from continuing operations	$	18,478	$	32,856
Nondeductible expenses	(3,839)		(2,267)
Change in valuation allowance	(4,907)		6,047
Deferred Mexico mining tax	1,554		(93)
Current Mexico mining tax	1,643		2,190
Foreign exchange rate differential	(3,526)		—
Net operating loss inflation adjustment	(1,437)		(1,427)
Other	181		—
Total income and mining tax expense	$	8,147	$	37,306

The net operating loss (NOL) inflation rate adjustment relates to historical net operating loss carryforwards in Mexico from 2019 to 2022. These historical carryforwards have been inflation-adjusted based upon an inflation factor published by the the National Institute of Statistics and Geography, as any inflationary adjustment will impact the LGJV’s basis in the net operating losses during the carryforward period.

Table of Contents

A summary of the components of the deferred tax assets (liabilities) for the year ended December 31, is as follows:


	2023		2022
Deferred tax assets
Accrued expenses	$	3,262	4,777

Fixed assets	14,758		10,591
Reclamation obligations	4,159		4,744
Operating loss carryforward	9,987		8,335
Net operating loss inflation adjustment	624		—
Deductible Mexico mining tax	1,166		293
Other	772		—
Valuation allowances	(4,159)		(4,744)
	$	30,569	$	23,996
Deferred tax liabilities
Asset retirement costs	$	(1,016)	$	(2,686)
Unbilled revenue	$	(1,363)	(6,869)
Exploration and development	$	(18,286)	$	(14,643)
Prepaid expenses	$	(336)	$	(1,152)
	$	(21,001)	$	(25,350)
Total deferred income tax asset	$	9,568	$	(1,354)
Deferred Mexico mining tax liability	$	(3,885)	$	—
Net deferred income tax assets (liabilities)	$	5,683	$	(1,354)

As of December 31, 2023, the LGJV’s deferred tax assets primarily consist of net operating losses, fixed assets and accrued expenses not currently deductible. Management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. Based upon the level of taxable income and projections of future taxable income over the periods which the deferred tax assets are deductible, management believes it is more likely than not that the LGJV will not realize the benefits of the asset retirement obligation deferred tax asset of $4,159 and thus has recorded a full valuation allowance against this deferred tax asset.

The change in the net deferred tax asset in the year of $7,037 includes a deferred tax recovery of $7,841 and foreign currency translation of $804.

At December 31, 2023, the LGJV had $35,370 of net operating loss carryforwards in Mexico (net of inflation adjustments) which expire at various dates through 2030.

The owners of the LGJV file income tax returns in the U.S and Mexico. Effective January 1, 2017, the LGJV’s foreign assets and operations are owned by entities that have elected to be treated for U.S. tax purposes as corporations and, as a result, the taxable income or loss and other tax attributes of such entities are not included in the owners of the LGJV’s U.S. federal consolidated income tax return. The statute of limitations for tax returns filed in Mexico is five years from the date of filing. The LGJV tax returns for the years prior to 2018 are no longer subject to examinations by Mexican tax authorities.

As of December 31, 2023, the LGJV has not recognized any increases or decreases in unrecognized tax benefits, as it is more likely than not that all tax positions have a high probability of being upheld by the taxing authorities. The LGJV recognizes penalties and accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented.

15. Subsequent Events

On February 15, 2024, the LGJV made a $30 million capital distribution to the LGJV Partners.

There are no other events or transactions requiring recognition or disclosure in these combined financial statements through May 6, 2024.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of December 31, 2023 due to the material weaknesses in our internal control over financial reporting described below.

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Internal control over financial reporting has inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements will not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Management, including our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework (2013). Based on this assessment, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2023 due to the material weaknesses discussed below.

A “material weakness” is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In connection with our review of the internal control structure related to the preparation of the financial statements for the fiscal year ended December 31, 2022, we determined that the following material weakness remained unremediated:

•we failed to design and maintain effective controls to ensure the accurate accounting and disclosure of current and deferred taxes. While we implemented a number of remedial actions during the year, this material weakness remained unremediated at December 31, 2023, due to management’s failure to accurately identify or record all of the LGJV's deferred tax assets and liabilities.

In connection with our review of the internal control structure related to the preparation of the restated financial statements for the fiscal year ended December 31, 2023, we have identified an additional material weakness in our internal controls over financial reporting relating to the failure to design and maintain effective controls to ensure the accurate classification of distributions from our investment in affiliates in the Consolidated Statement of Cash Flows. Based on management's judgement the Company considered the declaration of the capital distribution (in its legal form) to be the nature of the activity that generated the cash flow and, therefore, classified capital distributions as cash provided by investing activities on the Consolidated Statements of Cash Flows. On further analysis, it was determined that management should have considered the underlying source of the cash flow at the LGJV that generated the funds for the capital distributions when determining its classification on the Company's Consolidated Statements of Cash Flows. The capital distributions received previously classified as cash flow provided by investing activities should have been classified as cash flows provided by operating activities.

Table of Contents

Remediation efforts

During 2023 we have implemented the following measures designed to improve our internal control over the accounting and disclosure of current and deferred taxes:

•Engaged a third-party expert with expertise in each tax jurisdiction in which we operate and with expertise in U.S. GAAP to assist us with the accounting for current and deferred taxes;

•Hired an experienced tax manager at the end of the third quarter 2023 to prepare current and deferred tax provisions; and

•Hired a third-party internal controls expert to advise on the design and implementation of tax related internal controls.

During 2024 we intend to further enhance our processes and controls implemented during 2023, which includes improving our review procedures, to ensure our procedures are designed to accurately account for and disclose current and deferred tax. We are engaging external support with extensive US GAAP knowledge to advise on external financial reporting matters, and are strengthening our review procedures over the preparation of the Statement of Cash Flows.

After giving full consideration to the material weaknesses, and the additional analyses and other procedures that we performed to ensure that our consolidated financial statements included in this Annual Report on Form 10-K/A were prepared in accordance with U.S. GAAP, our management has concluded that our consolidated financial statements present fairly, in all material respects, our financial position, results of operations and cash flows for the periods disclosed in conformity with U.S. GAAP.

We designed and implemented remediation measures over the course of 2023 to address the previously identified material weaknesses (other than the material weakness described above) and to enhance internal controls over financial reporting. We strengthened the internal control framework and risk-based evaluation of internal controls over financial reporting practices to support design and operational effectiveness assessments. Additional measures included the hiring of personnel with adequate accounting and technical expertise – to evaluate and understand the nuances of the complex accounting and technical matters – as well as engagement of third-party consultants with subject matter expertise.

Management of the Company and the Board of Directors take the control and integrity of the Company’s financial statements seriously and believe that the remediation steps described above are essential to maintaining a strong internal controls environment. This is reflected through the efforts undertaken during 2023 to design and implement the required internal controls framework and relevant controls that resulted in the remediation of three of the four material weaknesses that existed at December 31, 2022. We have identified and implemented, and continue to identify and implement, actions to improve the effectiveness of our internal control over financial reporting and to review such actions and progress with the Audit Committee. In addition, we have taken, and continue to take, the actions described above to remediate the current material weaknesses.

Changes in Internal Control over Financial Reporting

Except as described above, there were no changes in our internal control over financial reporting that occurred during the year ended December 31, 2023, that materially affected, or that are reasonably likely to materially affect our internal control over financial reporting.

Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Further, the design of a control system must reflect resource constraints, which require management to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management’s override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Table of Contents

PART IV

Item 15. Exhibits and Financial Statement Schedules

1.Consolidated Financial Statements. For a list of the financial statements included herein, see Index to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data.”

2.Consolidated Financial Statement Schedules. Financial statement schedules have been omitted because they are either not required or not applicable or the information is included in the consolidated financial statements or the notes thereto.

3.Exhibits. The exhibits listed below are filed or incorporated by reference as part of this Annual Report on Form 10-K.



23.1*			Consent of Ernst & Young LLP

24.1*			Power of Attorney (included on signature page)

31.1*			Section 302 Certification of Chief Executive Officer

31.2*			Section 302 Certification of Chief Financial Officer

32.1**			Section 1350 Certification

101.INS*			Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH*			Inline XBRL Taxonomy Extension Schema Document

101.CAL*			Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*			Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*			Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*			Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*			Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

_________________________________

* Filed herewith

** Furnished herewith

† Management contract or compensatory plan or agreement

# Portions of this exhibit have been omitted because they are both (i) not material and (ii) customarily and actually treated by the Company as private and confidential.

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	GATOS SILVER, INC.
May 6, 2024	By:	/s/ Dale Andres
	Dale Andres
	Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Title

Date

/s/ Dale Andres

Chief Executive Officer and Director (principal executive officer)

May 6, 2024

Dale Andres

/s/ André van Niekerk

Chief Financial Officer (principal financial officer and principal accounting officer)

May 6, 2024

André van Niekerk

Chair of the Board of Directors

May 6, 2024

Janice Stairs

Director

May 6, 2024

Ali Erfan

Director

May 6, 2024

Igor Gonzales

Director

May 6, 2024

Karl Hanneman

Director

May 6, 2024

Charles Hansard

Director

May 6, 2024

David Peat

Director

May 6, 2024

Daniel Muñiz Quintanilla

*/s/ André van Niekerk, as attorney-in-fact

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:


1.			Registration Statement on Form S-3 (No. 333-261081) of Gatos Silver, Inc., and
2.			Registration Statements on Form S-8 (Nos. 333-249781 and 333-249782) of Gatos Silver, Inc.,

of our report dated February 20, 2024 (except for the effects of the restatement disclosed in Note 3, and Notes 11 and 16 of the consolidated financial statements, as to which the date is May 6, 2024), with respect to the consolidated financial statements of Gatos Silver, Inc. included in this Annual Report on (Form 10-K/A) for the year ended December 31, 2023.

/s/ Ernst & Young LLP

Chartered Professional Accountants, Licensed Public Accountants

Toronto, Canada

May 6, 2024

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dale Andres, certify that:

1.I have reviewed this Annual Report on Form 10-K/A of Gatos Silver, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 6, 2024	By:	/s/ Dale Andres
		Dale Andres
		Chief Executive Officer

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, André van Niekerk, certify that:

1.I have reviewed this Annual Report on Form 10-K/A of Gatos Silver, Inc.;

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 6, 2024	By:	/s/ André van Niekerk
		André van Niekerk
		Chief Financial Officer

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Gatos Silver, Inc. (the “Company”) on Form 10-K/A for the fiscal year ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Dale Andres, as Chief Executive Officer of the Company, and André van Niekerk, as Chief Financial Officer of the Company, each hereby certifies, pursuant to and solely for the purpose of 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ Dale Andres
Dale Andres
Chief Executive Officer
May 6, 2024


/s/ André van Niekerk
André van Niekerk
Chief Financial Officer
May 6, 2024

Cover - USD ($)	12 Months Ended
Cover - USD ($)	Dec. 31, 2023	May 06, 2024	Jun. 30, 2023
Cover [Abstract]
Document Type	10-K/A
Document Annual Report	true
Current Fiscal Year End Date	--12-31
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	001-39649
Entity Registrant Name	GATOS SILVER, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-2654848
Entity Address, Address Line One	925 W Georgia Street
Entity Address, Address Line Two	Suite 910
Entity Address, City or Town	Vancouver
Entity Address, State or Province	BC
Entity Address, Country	CA
Entity Address, Postal Zip Code	V6C 3L2
City Area Code	(604)
Local Phone Number	424-0984
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	GATO
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction [Flag]	true
Document Financial Statement Restatement Recovery Analysis [Flag]	true
Entity Shell Company	false
Entity Public Float			$ 178,256,662
Entity Common Stock, Shares Outstanding		69,181,047
Documents Incorporated by Reference	DOCUMENTS INCORPORATED BY REFERENCE None.
Entity Central Index Key	0001517006
Amendment Flag	true
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Description	EXPLANATORY NOTEReferences throughout this Amendment No. 1 to the Annual Report on Form 10-K to “we,” “us,” “Gatos Silver,” “Company” or “our Company” are to Gatos Silver Inc., unless the context otherwise indicates.This Amendment No. 1 (“Amendment No. 1”) amends the Annual Report on Form 10-K of Gatos Silver, Inc. for the fiscal year ended December 31, 2023 (“Affected Period”), as filed with the Securities and Exchange Commission (“SEC”) on February 20, 2024 (the “Original Filing”).This Amendment No. 1 contains the restated financial statements for the Company for the Affected Period to correct the classification of the capital distributions received from the Los Gatos Joint Venture (“LGJV”) on the Statement of Cash Flows for the year ended December 31, 2023. Based on management's judgement the Company considered the declaration of the capital distribution (in its legal form) to be the nature of the activity that generated the cash flow and, therefore, classified capital distributions as cash provided by investing activities on the Consolidated Statements of Cash Flows. On further analysis, it was determined that management should have considered the underlying source of the cash flow at the LGJV that generated the funds for the capital distributions when determining its classification on the Company's Consolidated Statements of Cash Flows. The capital distributions received previously classified as cash flow provided by investing activities should have been classified as cash flows provided by operating activities. The Consolidated Balance Sheets and balance of cash and cash equivalents at December 31, 2023, and the Consolidated Statements of Income and Comprehensive Income and the Consolidated Statements of Shareholders’ Equity for the year ended December 31, 2023, are not impacted by this change. The combined financial statements of the LGJV are also not impacted by this misclassification. See Note 3. Restatement of Previously Issued Financial Statements to the consolidated financial statements included herein for additional information. This Amendment No. 1 contains the following sections:•Item 1A. Risk Factors - We have identified material weaknesses in our internal control over financial reporting. If we fail to remediate these deficiencies (or fail to identify and/or remediate other possible material weaknesses), we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, which may adversely affect investor confidence in us and, as a result, the value of our common stock.•Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations•Item 8. Financial Statements and Supplementary Data•Item 9A. Controls and Procedures; and•Exhibits 23, 31, 32, 101 and 104 of Item 15. Exhibits and Financial Statement Schedules.Except as described above and as further described in Note 3 to the consolidated financial statements in this Form 10K/A, this Amendment No. 1 does not amend, update or change any other items or disclosures contained in the Original Filing, and accordingly, this Amendment No. 1 does not reflect or purport to reflect any information or events occurring after the date of the Original Filing or modify or update those disclosures affected by subsequent events. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing and the Company’s other filings with the SEC. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Original Filing.

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2023
Audit Information [Abstract]
Auditor Name	Ernst & Young LLP
Auditor Location	Toronto, Canada
Auditor Firm ID	1263

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current Assets
Cash and cash equivalents	$ 55,484	$ 17,004
Related party receivables	560	1,773
Other current assets	22,642	16,871
Total current assets	78,686	35,648
Non-Current Assets
Investment in affiliates	321,914	347,793
Deferred tax assets	266	0
Other non-current assets	38	60
Total Assets	400,904	383,501
Current Liabilities
Accounts payable, accrued and other liabilities	33,357	26,358
Non-Current Liabilities
Credit Facility, net of debt issuance costs	0	8,661
Stockholders’ Equity
Common Stock, $0.001 par value; 700,000,000 shares authorized; 69,181,047 and 69,162,223 shares outstanding as of December 31, 2023 and December 31, 2022, respectively	117	117
Paid-in capital	553,319	547,114
Accumulated deficit	(185,889)	(198,749)
Total stockholders’ equity	367,547	348,482
Total Liabilities and Stockholders’ Equity	$ 400,904	$ 383,501

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	700,000,000	700,000,000
Common stock, shares, outstanding (in shares)	69,181,047	69,162,223

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Expenses
Exploration	$ 26	$ 110
General and administrative	25,688	25,468
Amortization	79	180
Total expenses	25,793	25,758
Other income (expense)
Equity income in affiliates	33,622	45,230
Legal settlement loss	(1,500)	(7,900)
Interest expense	(679)	(433)
Interest income	1,332	154
Other income	5,992	4,801
Total net other income	38,767	41,852
Income before taxes	12,974	16,094
Income tax expense	114	1,565
Net income	12,860	14,529
Comprehensive income	$ 12,860	$ 14,529
Net income per share:
Basic (in dollars per share)	$ 0.19	$ 0.21
Diluted (in dollars per share)	$ 0.18	$ 0.21
Weighted average shares outstanding:
Basic (in shares)	69,163,564	69,162,223
Diluted (in shares)	69,536,298	69,309,019

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Stock options	Deferred Stock Units	Common Stock	Paid-in Capital	Paid-in Capital Stock options	Paid-in Capital Deferred Stock Units	Accumulated deficit
Beginning balance, common stock (in shares) at Dec. 31, 2021				69,162,223
Equity, attributable to parent, beginning balance at Dec. 31, 2021	$ 331,222			$ 117	$ 544,383			$ (213,278)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation and Deferred Stock Unit compensation	2,731				2,731
Net income	$ 14,529							14,529
Ending balance, common stock (in shares) at Dec. 31, 2022	69,162,223			69,162,223
Equity, attributable to parent, ending balance at Dec. 31, 2022	$ 348,482			$ 117	547,114			(198,749)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation and Deferred Stock Unit compensation		$ 5,336	$ 869			$ 5,336	$ 869
Deferred Stock Units converted to common stock (in shares)				18,824
Net income	$ 12,860							12,860
Ending balance, common stock (in shares) at Dec. 31, 2023	69,181,047			69,181,047
Equity, attributable to parent, ending balance at Dec. 31, 2023	$ 367,547			$ 117	$ 553,319			$ (185,889)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
OPERATING ACTIVITIES
Net income	$ 12,860	$ 14,529
Adjustments to reconcile net loss to net cash used by operating activities:
Amortization	79	180
Stock-based compensation expense	5,336	2,840
Equity income in affiliates	(33,622)	(45,230)
Other	1,159	199
Deferred tax recovery	(266)	0
Distributions and dividends from affiliate	59,500	30,775
Changes in operating assets and liabilities:
Receivables from related‑parties	1,213	(180)
Accounts payable and other accrued liabilities	6,992	24,632
Other current assets	(5,771)	(13,191)
Net cash (used) provided by operating activities	47,480	14,554
INVESTING ACTIVITIES
Purchase of property, plant and equipment	0	(60)
Net cash provided (used) by investing activities	0	(60)
FINANCING ACTIVITIES
Credit Facility repayment	(9,000)	(4,000)
Financing costs	0	(106)
Net cash used by financing activities	(9,000)	(4,106)
Net increase in cash and cash equivalents	38,480	10,388
Cash and cash equivalents, beginning of period	17,004	6,616
Cash and cash equivalents, end of period	55,484	17,004
Interest paid	417	645
Supplemental disclosure of noncash transactions:
Recognition of Right of Use Asset and Lease Liability	$ 0	$ 128

Description of Business	12 Months Ended
Description of Business	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business	Description of Business Organization and Nature of Business Gatos Silver, Inc. and its subsidiaries (“Gatos Silver” or “the Company”) is a silver dominant exploration, development and production company that discovered a new silver, lead and zinc-rich mineral district in southern Chihuahua State, Mexico. The Company’s primary efforts are focused on the operation of the Los Gatos Joint Venture (“LGJV”) in Chihuahua, Mexico. On January 1, 2015, the Company entered into the LGJV to develop the Los Gatos District (“LGD”) with Dowa Metals and Mining Co., Ltd. (“Dowa”). The LGJV Operating entities consisted of Minera Plata Real S. de R.L. de C.V (“MPR”), Operaciones San Jose del Plata S. de R.L. de C.V. and Servicios San Jose del Plata S. de R.L. de C.V. (“Servicios”) (collectively, the “LGJV Entities”). Effective July 15, 2021, Servicios was merged into MPR. Dowa acquired a 30% interest in the LGJV and the right to purchase future zinc-concentrate production at market rates by completing its $50,000 funding requirement on April 1, 2016. The LGJV completed a feasibility study in January 2017 and the latest Los Gatos Technical Report was filed on October 20, 2023, with an effective date of July 1, 2023. In May 2019, Dowa increased its ownership interest by 18.5% to 48.5% through the conversion of the Dowa MPR Loan to equity. On March 11, 2021, the Company repurchased the 18.5% interest from Dowa for a total consideration of $71,550, including Dowa holding costs of this incremental interest, increasing the Company’s ownership in the LGJV Entities to 70.0%. These transactions resulted in a $47,400 higher basis than the underlying net assets of the LGJV Entities. See Note 10 - Commitment, Contingencies and Guarantees for further discussion. The LGJV ownership is currently 70% Gatos Silver and 30% Dowa ("LGJV Partners"). Despite owning the majority interest in the LGJV, the Company does not exercise control over the LGJV due to certain provisions contained in the Unanimous Omnibus Partner Agreement that currently require unanimous partner approval of all major operating decisions, as a result the Company accounts for the LGJV as an equity method investment. On September 1, 2019, the LGJV commenced commercial production of its two concentrate products: a lead concentrate and a zinc concentrate. The LGJV’s lead and zinc concentrates are currently sold to third-party customers. The Company has two wholly-owned subsidiaries, Minera Luz del Sol S. de R.L. de C.V. (“MLS”) and Gatos Silver Canada Corporation (“GSC”).

Summary of Significant Accounting Policies	12 Months Ended
Summary of Significant Accounting Policies	Dec. 31, 2023
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Basis of Consolidation and Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) and include the accounts of Gatos Silver and its subsidiaries, GSC and MLS. All Company subsidiaries are consolidated. All significant intercompany balances and transactions have been eliminated. Equity method investment The Company accounts for its investment in affiliates using the equity method of accounting whereby, after valuing the initial investment, the Company recognizes its proportional share of results of operations of the affiliate in its consolidated financial statements. The value of equity method investments are adjusted if it is determined that there is an other-than-temporary decline in value. The Company’s investment in the LGJV Entities is presented as Investment in affiliates in the consolidated balance sheet. The basis difference between the carrying amount of the investment in affiliates and the Company’s equity in the LGJV Entities’ net assets is due to value of the LGJV mineral resources. This basis difference is amortized on a units of production basis as the mineral resource is mined. Distributions from Investment in Affiliate Distributions received are classified on the basis of the nature of the activity or activities of the LGJV that generated the distribution. Returns on capital are recorded as an operating cash flow whereas returns of capital distributions are recorded as an investing cash flow. Use of estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates are valuation of stock and stock options; valuation allowances for deferred tax assets; and the fair value of financial instruments and investment in affiliates. At the LGJV, significant items subject to such estimates and assumptions include mineral properties, life of mine revenue and cost assumptions, mineral resource conversion rates to mineral reserves; environmental reclamation and closure obligations and valuation allowances for deferred tax assets. Functional currency and translation of foreign currencies The U.S. dollar is the functional currency of the Company and its subsidiaries. Monetary assets and liabilities denominated in foreign currencies are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting gains or losses reported in foreign exchange (gain) loss in the statement of income. Non-monetary assets and liabilities are translated at historical exchange rates. Expenses and income items denominated in foreign currencies are translated into U.S. dollars at historical exchange rates. Cash and cash equivalents The Company considers all highly liquid short-term investments with a maturity of three months or less when purchased to be cash equivalents. Other than temporary impairment - investment A loss in value of an investment that is other than a temporary decline shall be recognized. Evidence of such losses might include, but are not limited to, absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. A current fair value of an investment that is less than its carrying amount may indicate a loss in value of the investment. If circumstances require an investment is tested for an other than temporary decline in value, the Company will first estimate the fair value of the investment based on discounted cash flows then compare it to the carrying value of the investment. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Stock-based compensation The Company recognizes all employee stock-based compensation as a cost in the consolidated financial statements. Equity-classified awards are measured at the grant date fair value of the award. Stock-based compensation expense is included as a component of general and administrative expense over the requisite service period of the award. The fair value of stock options is estimated using the Black-Scholes option-pricing model. The initial fair value of performance share units (“PSUs”), which are subject to vesting based on the Company’s attainment of a pre-established market performance goals, is estimated using a Monte Carlo simulation valuation model. The fair value of Restricted Stock Units ("RSUs") is based on the Company's stock price on the date of grant and vest on the third anniversary of the grant date, unless otherwise specified. The fair value of Deferred Stock Units ("DSUs") is based on the Company's stock price on the date of the grant and DSUs vest on the grant date. The Company’s estimates may be impacted by certain variables including, but not limited to, stock price volatility, estimates of forfeitures, the risk-free interest rate, expected dividend yields, and the Company’s performance. The Company estimates forfeitures of stock-based awards based on historical data and periodically adjusts the forfeiture rate. Net income per share Basic and diluted earnings per share are presented for net income attributable to common shareholders. Basic net earnings per share is computed by dividing the net income available to common stockholders by the weighted-average number of common stock shares outstanding, for the respective period presented. Diluted net earnings per share is computed similarly, except that weighted-average common shares is increased to reflect the potential dilution that would occur if stock options were exercised, or DSUs, RSUs and PSUs were converted into common stock. The effects of the Company’s dilutive securities are excluded from the calculation of diluted weighted-average common shares outstanding if their effect would be anti-dilutive based on the treasury stock method or due to a net loss. Income taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Current tax comprises the expected tax payable on the taxable income for the year and any adjustments to the tax payable or receivable in respect of previous years. The amount of current tax payable is the best estimate of the tax amount expected to be paid that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted at the reporting date. Recently issued and adopted accounting standards In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”) followed by ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”), issued in January 2021, to provide clarifying guidance regarding the scope of Topic 848. ASU 2020-04 was issued to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform. Generally, the guidance is to be applied as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2023. The Company has not elected to use the optional guidance and continues to evaluate the options provided by ASU 2020-04 and ASU 2021-01. The Company concluded that this update does not have a material impact on its financial statements. In September 2022, the FASB issued ASU 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosures of Supplier Finance Program Obligations. The ASU requires entities that use supplier finance programs (that are in the scope of the ASU) in connection with the purchase of goods and services to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period and potential magnitude. The amendments are effective for all entities for fiscal years beginning after 15 December 2022, including interim periods within those fiscal years, except for the amendment on roll forward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. In the period of initial adoption, the amendments should be applied retrospectively to all periods in which a balance sheet is presented, except for the roll forward requirement, which should be applied prospectively. The Company assessed the new guidance and concluded that this update does not have any impact on the financial statements. In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative. The amendments in this update modify the disclosure or presentation requirements of a variety of Topics in the Codification. Certain amendments represent clarifications to or technical corrections of the current requirements. Each amendment in the ASU will only become effective if the SEC removes the related disclosure or presentation requirement from its existing regulations by June 30, 2027. The Company is still assessing the impact of the standard. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280). The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments of this udpate are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is still assessing the impact of this standard. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740). The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency, effectiveness and comparability of income tax disclosures. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2024. The Company is still assessing the impact of this standard. As of December 31, 2023, there are no additional recently issued or adopted accounting standard that could have a material impact on our financial statements.

Restatement of Previously Issued Financial Statements

12 Months Ended

Dec. 31, 2023

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Financial Statements

Statement of Cash flows

During the preparation of the financial statements for the three months ended March 31, 2024, the Company identified that the capital distributions received from its investment in affiliate classified as cash provided by investing activities on the Consolidated Statements of Cash Flows should have been classified as cash provided by operating activities. Based on management's judgement, the Company considered the declaration of the capital distribution (in its legal form) to be the nature of the activity that generated the cash flow and, therefore, classified capital distributions as cash provided by investing activities on the Consolidated Statements of Cash Flows. On further analysis it was determined that management should have considered the underlying source of the cash flow at the LGJV that generated the funds for the capital distributions when determining its classification on the Company's Consolidated Statements of Cash Flows. The capital distributions received previously classified as cash flow provided by investing activities should have been classified as cash flows provided by operating activities.


	Year Ended December 31, 2023		Year Ended December 31, 2023
	As previously reported	Adjustment	As restated

Consolidated Statement of Cash Flows
Distributions and dividends from affiliate	—	59,500	59,500
Net cash (used) provided by operating activities	(12,020)	59,500	47,480
Capital distribution received from affiliate	59,500	(59,500)	—
Net cash provided by investing activities	59,500	(59,500)	—

Other Current Assets

12 Months Ended

Dec. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Current Assets


	December 31, 2023		December 31, 2022
Value added tax receivable	$	691	$	730
Prepaid expenses	1,914		2,890
Insurance proceeds receivable	20,000		13,100
Other assets	37		151
Total other current assets	$	22,642	$	16,871

Property, Plant and Equipment, net	12 Months Ended
Property, Plant and Equipment, net	Dec. 31, 2023
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment, net	Property, Plant and Equipment, net Mineral Properties Mining Concessions In Mexico, mineral concessions from the Mexican government can only be held by Mexican nationals or Mexican-incorporated companies. The concessions are valid for 50 years and are extendable provided the concessions are kept in good standing. For concessions to remain in good standing a semi-annual fee must be paid to the Mexican government and an annual report describing the work accomplished on the property must be filed. These concessions may be cancelled without penalty with prior notice to the Mexican government. MLS is the concession holder of a series of claims titles granted by the Mexican government. Santa Valeria Concession The Company holds Santa Valeria concessions. If production commences, the Company is required to make a production royalty payment of 1% of the net smelter returns. The Company may terminate the agreement upon prior notice. The Company made no mineral lease payments in the years ended December 31, 2023 and 2022.

Accounts Payable, Accrued and Other Liabilities

12 Months Ended

Dec. 31, 2023

Payables and Accruals [Abstract]

Accounts Payable, Accrued and Other Liabilities


	December 31, 2023		December 31, 2022
Accounts payable	$	2,713	$	586
Accrued expenses	3,031		2,761
Accrued compensation	3,215		1,889
Legal settlement payable	24,000		21,000
Current tax payable	387		—
Other liabilities	11		122
Total accounts payable, accrued and other liabilities	$	33,357	$	26,358

Related-Party Transactions	12 Months Ended
Related-Party Transactions	Dec. 31, 2023
Related Party Transactions [Abstract]
Related-Party Transactions	Related-Party Transactions LGJV Under the Unanimous Omnibus Partner Agreement, the Company provides certain management and administrative services to the LGJV. The Company earned $6,000 and $5,000 under this agreement for the years ended December 31, 2023 and 2022, respectively, which have been recorded on the statement of income under other income. The Company received $6,417 and $5,417 in cash from the LGJV under this agreement for the years ended December 31, 2023 and 2022, respectively. The Company had receivables under this agreement of nil and $417 as of December 31, 2023 and 2022, respectively. The Company also incurs certain LGJV costs that are subsequently reimbursed by the LGJV. The Company seconds certain employees to the LGJV and charged $2,627 and $2,399 related to this arrangement in the years ended December 31, 2023 and 2022, respectively. The Company received $3,489 in cash and had a $250 receivable outstanding at December 31, 2023, and received $1,431 in cash and had $1,112 receivable outstanding at December 31, 2022, related to this arrangement.

Stockholders' Equity

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Stock-Based Compensation

Equity Compensation Plan


	Year ended December 31,
	2023		2022
Stock options	$	4,087	$	2,621
Performance share units	203		219
Restricted stock units	1,046		—
Total stock-based compensation	$	5,336	$	2,840

Stock Option Transactions

On December 31, 2023, there was $2,087 of unrecognized stock-based compensation expense related to stock options is expected to be recognized over a weighted-average period of 1.2 years.

The following table summarizes the respective vesting start dates and number of options granted to employees and directors in 2023 and 2022:

Recipient

Options Granted

Vesting Start Date

Grant Date

Employees

100,000

January 18, 2022

Employees

1,044,705

September 11, 2023

Directors

87,815

September 11, 2023

Directors

134,225

November 9, 2023

The following assumptions were used to compute the fair value of the options granted using the Black-Scholes option valuation model:


	Jan. 2022		Sep. 2023		Nov. 2023
Risk-free interest rate	1.74	%	4.39	%	4.52	%
Dividend yield	—		—		—
Estimated volatility	60.75	%	57.67	%	57.85	%
Expected option life	6 years		6 years		6 years

The following tables summarize the stock option activity for the year ended December 31, 2023:


Employee & Director Options	Options	Weighted‑ Average Exercise Price		Aggregate Intrinsic Value		Weighted‑ Average Remaining Life (Years)
Outstanding at December 31, 2022	1,701,530	$	12.67
Granted	1,266,745	$	5.01
Forfeited	(289,760)	$	13.99
Expired	(62,000)	$	12.00
Outstanding at December 31, 2023	2,616,515	$	8.83	$	2,090	9.86
Vested at December 31, 2023	1,848,486	$	9.69	$	2,053	9.07

The total fair value of stock options vested during the year ended December 31, 2023, was $6,344.

Performance Share Unit Transactions

Restricted Stock Unit Transactions

Deferred Stock Unit Transactions


Director DSUs	Shares	Weighted‑ Average Grant Price
Outstanding at December 31, 2022	146,796	$	10.88
Granted	174,948	$	4.97
Converted to common stock	(18,824)	$	6.13
Outstanding at December 31, 2023	302,920	$	7.76

At December 31, 2023, 302,920 DSUs remain outstanding with a weighted-average grant date fair value of $7.76 per unit.

Net Income per Share

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Net Income per Share

A reconciliation of basic and diluted earnings per common share is presented below:


	Year Ended December 31,
	2023		2022
Net income	$	12,860	$	14,529

Weighted average shares:
Basic	69,163,564		69,162,223
Effect of dilutive stock options	1,493		—
Effect of dilutive PSUs	8,364		—
Effect of dilutive RSUs	174,849		—
Effect of dilutive DSUs	188,028		146,796
Diluted	69,536,298		69,309,019

Net income per share:
Basic	$	0.19	$	0.21
Diluted	$	0.18	$	0.21

Fair Value Measurements	12 Months Ended
Fair Value Measurements	Dec. 31, 2023
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements The Company establishes a framework for measuring the fair value of assets and liabilities in the form of a fair value hierarchy that prioritizes the inputs into valuation techniques used to measure fair value into three broad levels. This hierarchy gives the highest priority to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs. Further, financial assets and liabilities should be classified by level in their entirety based upon the lowest level of input that was significant to the fair value measurement. The three levels of the fair value hierarchy are as follows: Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date. Level 2: Quoted prices in inactive markets for identical assets or liabilities, quoted prices for similar assets or liabilities in active markets, or other observable inputs either directly related to the asset or liability or derived principally from corroborated observable market data. Level 3: Unobservable inputs due to the fact there is little or no market activity. This entails using assumptions in models which estimate what market participants would use in pricing the asset or liability. The Company’s financial assets and liabilities such as cash and cash equivalents, related party receivables, value added tax receivable, insurance proceeds receivable, accounts payable and debt are approximate fair value due to their short maturities and are classified within Level 1 of the fair value hierarchy. Assets and Liabilities that are Measured at Fair Value on a Non-recurring Basis The Company discloses and recognizes its non-financial assets and liabilities at fair value on a non-recurring basis and makes adjustments to fair value, as needed (for example, when there is evidence of impairment). The Company recorded its initial investment in affiliates at fair value within Level 3 of the fair value hierarchy, as the valuation was determined based on internally developed assumptions with few observable inputs and no market activity.

Commitments, Contingencies and Guarantees	12 Months Ended
Commitments, Contingencies and Guarantees	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments, Contingencies and Guarantees	Commitments, Contingencies and Guarantees In determining its accruals and disclosures with respect to loss contingencies, the Company will charge to income an estimated loss if information available prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Legal expenses associated with the commitments and contingencies are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the combined financial statements when it is at least reasonably possible that a material loss could be incurred. Environmental Contingencies The Company’s mining and exploration activities are subject to various laws, regulations and permits governing the protection of the environment. These laws, regulations and permits are continually changing and are generally becoming more restrictive. The Company has made, and expects to make in the future, expenditures to comply with such laws, regulations and permits, but cannot predict the full amount of such future expenditures. Legal On February 22, 2022, a purported Company stockholder filed a putative class action lawsuit in the United States District Court for the District of Colorado (the "District Court") against the Company, certain of our former officers, and several directors (the "U.S. Class Action"). An amended complaint was filed on August 15, 2022. The amended complaint, allegedly brought on behalf of certain purchasers of the Company’s common stock and certain traders of call and put options on the Company’s common stock from December 9, 2020 through January 25, 2022, seeks, among other things, damages, costs, and expenses, and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 as well as Sections 11 and 15 of the Securities Act of 1933. The amended complaint alleges that certain individual defendants and the Company, pursuant to the control and authority of the individual defendants, made false and misleading statements and/or omitted certain material information regarding the mineral resources and reserves at the Cerro Los Gatos mine. The Company and all defendants filed a motion to dismiss this action on October 14, 2022. That motion was fully briefed as of December 23, 2022. On April 26, 2023, following a joint motion, the Court postponed its ruling on the defendants’ motion to dismiss until on or after June 16, 2023. On June 13, 2023, the Company entered into an agreement in principle to settle the U.S. Class Action. Subject to certain conditions, including class certification by the District Court, the execution of a definitive stipulation of settlement and approval of the settlement by the District Court, the settling parties agreed to resolve the U.S. Class Action for an aggregate payment by the Company and its insurers of $21,000 to a settlement fund. On June 16, 2023, the parties filed a joint status report requesting that the Court grant a temporary stay of all proceedings in the case pending submission of proposed settlement documentation on or before July 13, 2023. On July 13, 2023, the plaintiffs filed an unopposed motion for an order preliminarily approving a stipulation of settlement agreed by the parties and providing for class notice which will provide for (i) preliminary approval of the settlement; (ii) approval of the form and manner of giving notice of the settlement to the settlement class; and (iii) a hearing date and time to consider final and approval of the Settlement and related matters (the “Preliminary Order”). On September 12, 2023, the plaintiffs filed an unopposed motion to amend the Preliminary Order to reflect certain changes to the form of release proposed to be executed by the plaintiffs. The District Court issued its Preliminary Order on February 29, 2024, approving the proposed settlement. Consistent with the stipulation of settlement requiring that a settlement account be funded within 30 days of the Preliminary Order, the Company and its insurers have fully funded that account, with $1,403 funded by the Company and $19,597 funded by the Company’s insurers. The final fairness hearing is scheduled with the District Court for May 29, 2024. By Notice of Action issued February 9, 2022, and subsequent Statement of Claim dated March 11, 2022, Izabela Przybylska (the "Plaintiff") commenced a putative class action against the Company, certain of its former officers, and others in the Ontario Superior Court of Justice on behalf of a purported class of all persons or entities, wherever they may reside or be domiciled, who acquired securities of the Company in both the primary and secondary markets during the period from October 28, 2020 until January 25, 2022 (the “Canadian Class Action”). The action asserts claims under Canadian securities legislation and at common law and seeks unspecified monetary damages and other relief in respect of allegations the defendants made false and misleading statements and omitted material information regarding the mineral resources and reserves of the Company. On January 26, 2024, counsel for the Company and counsel for the Plaintiff executed a term sheet wherein any claims against us and the named individuals would be settled for a payment by the Company of $3,000. Such counsel subsequently agreed to and executed a definitive settlement agreement. On April 16, 2024, the Ontario Superior Court approved the settlement on a preliminary basis. Consistent with the terms of the settlement requiring that an escrow account be funded within 30 days of preliminary court approval, the Company and its insurers have fully funded an escrow account, with $2,597 funded by the Company and $403 funded by the Company’s insurers. The final fairness hearing is scheduled with the Ontario Superior Court for June 28, 2024. Since the settlements of the U.S. Class Action and the Canadian Class Action are subject to conditions, including final court approval, there can be no assurance that either the U.S. Class Action or the Canadian Class Action will be finally resolved pursuant to the agreements that have been reached. Further, the Company has made a disclosure to the U.S. Department of Justice and the SEC regarding its January 25, 2022 press release and issues related to Cerro Los Gatos’ mineral reserves and mineral resources at the time. The Company is cooperating with those agencies’ investigations and cannot reasonably predict any outcome. There can be no assurance that any of the foregoing matters individually or in aggregate will not result in outcomes that are materially adverse for the Company.

Debt	12 Months Ended
Debt	Dec. 31, 2023
Debt Disclosure [Abstract]
Debt	Debt On July 12, 2021, the Company entered into a $50,000 Revolving Credit Facility (the “Credit Facility”) with Bank of Montreal ("BMO"). On December 13, 2023, the Company entered into a second amended and restated Credit Facility with BMO. The main changes to the terms of the agreement are as follows: •the maturity date was extended to December 31, 2026; •$50,000 revolving line of credit with an accordion feature, which allows for an increase in the total line of credit up to $100,000, subject to certain conditions; •loans under the Credit Facility bear interest at a rate equal to either a term SOFR rate plus a margin ranging from 2.75% to 3.75%, or a U.S. base rate plus a margin ranging from 1.75% to 2.75%, at our option; •Any drawdown is secured by the Company's assets including the Company's shares in the LGJV Entities. On July 21, 2023, the Company repaid the full outstanding balance of $9,000 on the Credit Facility. As a result, the outstanding debt balance was $nil at December 31, 2023. The Company was in compliance with all covenants under the Credit Facility as of December 31, 2023. The Company recognized interest expense of $679, amortization of debt issuance cost of $57 and paid $413 in interest for the year ended December 31, 2023. The Company recognized interest expense of $433, amortization of debt issuance cost of $147 and paid $645 in interest for the year ended December 31, 2022.

Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

The components of income from operations before income taxes were as follows for the years ended December 31:


	2023		2022
U.S.	$	13,606	$	19,111
Foreign	(632)		(3,017)
Total	$	12,974	$	16,094

The consolidated income tax expense consisted of $114 and $1,565, for the years ended December 31, 2023 and 2022, respectively.

A reconciliation of the actual income tax benefit and the tax computed by applying the applicable U.S. federal rate of 21% to the income before taxes is as follows for the years ended December 31:


	2023		2022
Tax provision from operations	$	2,725	$	3,380
State tax benefit from operations	8		20
Nondeductible expenses	1,298		(594)
Change in valuation allowance	(3,908)		(3,410)
Mexican withholding tax	—		1,565
Effect of change in tax rates	—		927
US/foreign tax rate differential	(9)		(323)

Total income tax expense	$	114	$	1,565

Total income tax expense for the year 2023 arose from the operations of Gatos Silver Canada Corporation.

The components of the deferred tax assets (liabilities) are summarized as follows for the year ended December 31:


	2023		2022
Deferred tax assets
Accrued compensation	$	18	$	354
Contingent liabilities	5,046		1,661
Deferred share unit awards	835		461
LGJV equity investment	—		12,656
Other accrued liabilities	21		21
Mineral properties	2,009		2,009
U.S. operating loss carryforward	19,079		10,234
Stock options	9,596		8,917
Foreign operating loss carryforward	4,804		4,129
Exploration and development	—		41
Other	260		24
Valuation allowances	(38,672)		(39,738)
Total deferred tax assets	$	2,996	$	769

Deferred tax liabilities
Accrued bonus	(280)		—
LGJV equity investment	(1,485)		—
Property, plant and equipment	(178)		(218)
Exploration and development	(18)		—
Prepaid expenses	(769)		(551)
Total deferred tax liabilities	$	(2,730)	$	(769)
Deferred tax assets (liabilities)	$	266	$	—

The realization of deferred income tax assets is dependent upon the generation of sufficient taxable income during future periods in which the temporary differences are expected to reverse.

Segment Information

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segment Information


	Year Ended December 31, 2023						Year Ended December 31, 2022
	Mexico		Corporate		Total		Mexico		Corporate		Total
Exploration	$	26	$	—	$	26	$	83	$	27	$	110
General and administrative	763		24,925		25,688		1,124		24,344		25,468
Amortization	15		64		79		5		175		180
Equity income in affiliates	(33,622)		—		(33,622)		(45,230)		—		(45,230)
Legal settlement loss	—		1,500		1,500		—		7,900		7,900
Interest expense	—		679		679		—		433		433
Interest income	—		(1,332)		(1,332)		—		(154)		(154)
Net other (income) expense	(28)		(5,964)		(5,992)		22		(4,823)		(4,801)
Income tax expense	—		114		114		1,565		—		1,565
Total assets	54,166		346,738		400,904		109,081		274,420		383,501

Investment in Affiliates

12 Months Ended

Dec. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Investment in Affiliates

LOS GATOS JOINT VENTURE

COMBINED BALANCE SHEETS

AS OF DECEMBER 31,


	2023		2022
ASSETS
Current Assets
Cash and cash equivalents	$	34,303	$	34,936
Receivables	12,634		26,655
Inventories	16,397		11,542
VAT receivable	12,610		21,531
Income tax receivable	20,185		27,039
Other current assets	1,253		4,138
Total current assets	97,382		125,841
Non-Current Assets
Mine development, net	234,980		232,515
Property, plant and equipment, net	171,965		198,600
Deferred tax assets	9,568		—
Total non-current assets	416,513		431,115
Total Assets	$	513,895	$	556,956
LIABILITIES AND OWNERS’ CAPITAL
Current Liabilities
Accounts payable and accrued liabilities	$	38,704	$	46,751
Related party payable	560		1,792


Equipment loans	—		480
Total current liabilities	39,264		49,023
Non-Current Liabilities

Lease liability	208		268
Asset retirement obligation	11,593		15,809
Deferred tax liabilities	3,885		1,354
Total non-current liabilities	15,686		17,431
Owners’ Capital
Capital contributions	455,638		540,638
Paid-in capital	18,186		18,186
Accumulated deficit	(14,879)		(68,322)
Total owners’ capital	458,945		490,502
Total Liabilities and Owners’ Capital	$	513,895	$	556,956

LOS GATOS JOINT VENTURE

COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31,


	2023		2022
Revenue	$	268,671	$	311,724
Expenses
Cost of sales	111,266		107,075
Royalties	1,363		3,069
Exploration	2,875		9,800
General and administrative	18,068		14,307
Depreciation, depletion and amortization	75,110		69,380
Total expenses	208,682		203,631

Other expense (income)
Interest expense	660		582
Interest income	(1,567)		—


Accretion expense	1,145		1,103
Other expense (income)	741		(766)
Foreign exchange gain	(2,580)		(2,348)
	(1,601)		(1,429)

Income before taxes	61,590		109,522
Income tax expense	8,147		37,306
Net income and comprehensive income	$	53,443	$	72,216

LOS GATOS JOINT VENTURE

COMBINED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31,



	2023		2022
Cash flows from operating activities:
Net income	$	53,443	$	72,216
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	75,110		69,380
Accretion	1,145		1,103

Deferred taxes	(7,623)		21,013
Unrealized gain on foreign currency rate change	(4,523)		(4,434)


Other	—		(174)

Changes in operating assets and liabilities:
VAT receivable	9,619		23,986
Receivables	14,021		(15,393)
Inventories	(5,273)		(353)
Unearned revenue	—		(1,714)
Other current assets	2,494		661
Income tax receivable	10,771		(27,039)
Accounts payable and other accrued liabilities	(5,951)		17,939
Payables to related parties	(1,232)		183


Net cash provided by operating activities	142,001		157,374

Cash flows from investing activities:
Mine development	(36,637)		(44,934)
Purchase of property, plant and equipment	(19,850)		(37,018)
Materials and supplies inventory	(600)		(327)
Net cash used by investing activities	(57,087)		(82,279)

Cash flows from financing activities:
Capital distributions	(85,000)		—
Equipment loan and Lease payments	(547)		(5,439)




Dividends	—		(55,000)
Net cash used by financing activities	(85,547)		(60,439)

Net increase (decrease) in cash and cash equivalents	(633)		14,656
Cash and cash equivalents, beginning of period	34,936		20,280
Cash and cash equivalents, end of period	$	34,303	$	34,936
Interest paid	$	660	$	236

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On February 15, 2024, the LGJV made a $30,000 capital distribution to the LGJV partners, of which the Company’s share was $21,000. On April 22, 2024, the LGJV made a $25,000 capital distribution to the LGJV partners, of which the Company’s share was $17,500. Except as disclosed above and in 11. Commitments, Contingencies and Guarantees, there are no events or transactions requiring recognition in these consolidated financial statements through May 6, 2024.

Summary of Significant Accounting Policies (Policies)	12 Months Ended
Summary of Significant Accounting Policies (Policies)	Dec. 31, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Consolidation and Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) and include the accounts of Gatos Silver and its subsidiaries, GSC and MLS.
Basis of Consolidation	All Company subsidiaries are consolidated. All significant intercompany balances and transactions have been eliminated.
Equity method investment and Distributions from Investment in Affiliate	Equity method investment The Company accounts for its investment in affiliates using the equity method of accounting whereby, after valuing the initial investment, the Company recognizes its proportional share of results of operations of the affiliate in its consolidated financial statements. The value of equity method investments are adjusted if it is determined that there is an other-than-temporary decline in value. The Company’s investment in the LGJV Entities is presented as Investment in affiliates in the consolidated balance sheet. The basis difference between the carrying amount of the investment in affiliates and the Company’s equity in the LGJV Entities’ net assets is due to value of the LGJV mineral resources. This basis difference is amortized on a units of production basis as the mineral resource is mined. Distributions from Investment in Affiliate Distributions received are classified on the basis of the nature of the activity or activities of the LGJV that generated the distribution. Returns on capital are recorded as an operating cash flow whereas returns of capital distributions are recorded as an investing cash flow.
Use of estimates	Use of estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates are valuation of stock and stock options; valuation allowances for deferred tax assets; and the fair value of financial instruments and investment in affiliates. At the LGJV, significant items subject to such estimates and assumptions include mineral properties, life of mine revenue and cost assumptions, mineral resource conversion rates to mineral reserves; environmental reclamation and closure obligations and valuation allowances for deferred tax assets.
Functional currency and translation of foreign currencies	Functional currency and translation of foreign currencies The U.S. dollar is the functional currency of the Company and its subsidiaries. Monetary assets and liabilities denominated in foreign currencies are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting gains or losses reported in foreign exchange (gain) loss in the statement of income. Non-monetary assets and liabilities are translated at historical exchange rates. Expenses and income items denominated in foreign currencies are translated into U.S. dollars at historical exchange rates.
Cash and cash equivalents	Cash and cash equivalents The Company considers all highly liquid short-term investments with a maturity of three months or less when purchased to be cash equivalents.
Other than temporary impairment - investments	Other than temporary impairment - investment A loss in value of an investment that is other than a temporary decline shall be recognized. Evidence of such losses might include, but are not limited to, absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. A current fair value of an investment that is less than its carrying amount may indicate a loss in value of the investment. If circumstances require an investment is tested for an other than temporary decline in value, the Company will first estimate the fair value of the investment based on discounted cash flows then compare it to the carrying value of the investment. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.
Stock-based compensation	Stock-based compensation The Company recognizes all employee stock-based compensation as a cost in the consolidated financial statements. Equity-classified awards are measured at the grant date fair value of the award. Stock-based compensation expense is included as a component of general and administrative expense over the requisite service period of the award. The fair value of stock options is estimated using the Black-Scholes option-pricing model. The initial fair value of performance share units (“PSUs”), which are subject to vesting based on the Company’s attainment of a pre-established market performance goals, is estimated using a Monte Carlo simulation valuation model. The fair value of Restricted Stock Units ("RSUs") is based on the Company's stock price on the date of grant and vest on the third anniversary of the grant date, unless otherwise specified. The fair value of Deferred Stock Units ("DSUs") is based on the Company's stock price on the date of the grant and DSUs vest on the grant date. The Company’s estimates may be impacted by certain variables including, but not limited to, stock price volatility, estimates of forfeitures, the risk-free interest rate, expected dividend yields, and the Company’s performance. The Company estimates forfeitures of stock-based awards based on historical data and periodically adjusts the forfeiture rate.
Net income per share	Net income per share Basic and diluted earnings per share are presented for net income attributable to common shareholders. Basic net earnings per share is computed by dividing the net income available to common stockholders by the weighted-average number of common stock shares outstanding, for the respective period presented. Diluted net earnings per share is computed similarly, except that weighted-average common shares is increased to reflect the potential dilution that would occur if stock options were exercised, or DSUs, RSUs and PSUs were converted into common stock. The effects of the Company’s dilutive securities are excluded from the calculation of diluted weighted-average common shares outstanding if their effect would be anti-dilutive based on the treasury stock method or due to a net loss.
Income taxes	Income taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Current tax comprises the expected tax payable on the taxable income for the year and any adjustments to the tax payable or receivable in respect of previous years. The amount of current tax payable is the best estimate of the tax amount expected to be paid that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted at the reporting date.
Recently issued and adopted accounting standards	Recently issued and adopted accounting standards In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”) followed by ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”), issued in January 2021, to provide clarifying guidance regarding the scope of Topic 848. ASU 2020-04 was issued to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform. Generally, the guidance is to be applied as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2023. The Company has not elected to use the optional guidance and continues to evaluate the options provided by ASU 2020-04 and ASU 2021-01. The Company concluded that this update does not have a material impact on its financial statements. In September 2022, the FASB issued ASU 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosures of Supplier Finance Program Obligations. The ASU requires entities that use supplier finance programs (that are in the scope of the ASU) in connection with the purchase of goods and services to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period and potential magnitude. The amendments are effective for all entities for fiscal years beginning after 15 December 2022, including interim periods within those fiscal years, except for the amendment on roll forward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. In the period of initial adoption, the amendments should be applied retrospectively to all periods in which a balance sheet is presented, except for the roll forward requirement, which should be applied prospectively. The Company assessed the new guidance and concluded that this update does not have any impact on the financial statements. In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative. The amendments in this update modify the disclosure or presentation requirements of a variety of Topics in the Codification. Certain amendments represent clarifications to or technical corrections of the current requirements. Each amendment in the ASU will only become effective if the SEC removes the related disclosure or presentation requirement from its existing regulations by June 30, 2027. The Company is still assessing the impact of the standard. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280). The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments of this udpate are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is still assessing the impact of this standard. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740). The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency, effectiveness and comparability of income tax disclosures. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2024. The Company is still assessing the impact of this standard. As of December 31, 2023, there are no additional recently issued or adopted accounting standard that could have a material impact on our financial statements.
Fair Value Measurements	The Company establishes a framework for measuring the fair value of assets and liabilities in the form of a fair value hierarchy that prioritizes the inputs into valuation techniques used to measure fair value into three broad levels. This hierarchy gives the highest priority to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs. Further, financial assets and liabilities should be classified by level in their entirety based upon the lowest level of input that was significant to the fair value measurement. The three levels of the fair value hierarchy are as follows: Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date. Level 2: Quoted prices in inactive markets for identical assets or liabilities, quoted prices for similar assets or liabilities in active markets, or other observable inputs either directly related to the asset or liability or derived principally from corroborated observable market data. Level 3: Unobservable inputs due to the fact there is little or no market activity. This entails using assumptions in models which estimate what market participants would use in pricing the asset or liability. The Company’s financial assets and liabilities such as cash and cash equivalents, related party receivables, value added tax receivable, insurance proceeds receivable, accounts payable and debt are approximate fair value due to their short maturities and are classified within Level 1 of the fair value hierarchy. Assets and Liabilities that are Measured at Fair Value on a Non-recurring Basis The Company discloses and recognizes its non-financial assets and liabilities at fair value on a non-recurring basis and makes adjustments to fair value, as needed (for example, when there is evidence of impairment). The Company recorded its initial investment in affiliates at fair value within Level 3 of the fair value hierarchy, as the valuation was determined based on internally developed assumptions with few observable inputs and no market activity.

Restatement of Previously Issued Financial Statements (Tables)

12 Months Ended

Dec. 31, 2023

Accounting Changes and Error Corrections [Abstract]

Schedule of Error Corrections and Prior Period Adjustments


	Year Ended December 31, 2023		Year Ended December 31, 2023
	As previously reported	Adjustment	As restated

Consolidated Statement of Cash Flows
Distributions and dividends from affiliate	—	59,500	59,500
Net cash (used) provided by operating activities	(12,020)	59,500	47,480
Capital distribution received from affiliate	59,500	(59,500)	—
Net cash provided by investing activities	59,500	(59,500)	—

Other Current Assets (Tables)

12 Months Ended

Dec. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Current Assets


	December 31, 2023		December 31, 2022
Value added tax receivable	$	691	$	730
Prepaid expenses	1,914		2,890
Insurance proceeds receivable	20,000		13,100
Other assets	37		151
Total other current assets	$	22,642	$	16,871

Accounts Payable, Accrued and Other Liabilities (Tables)

12 Months Ended

Dec. 31, 2023

Payables and Accruals [Abstract]

Schedule of Accounts Payable and Accrued Liabilities


	December 31, 2023		December 31, 2022
Accounts payable	$	2,713	$	586
Accrued expenses	3,031		2,761
Accrued compensation	3,215		1,889
Legal settlement payable	24,000		21,000
Current tax payable	387		—
Other liabilities	11		122
Total accounts payable, accrued and other liabilities	$	33,357	$	26,358

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Share-Based Payment Arrangement, Activity

The Company recognized stock-based compensation expense as follows:


	Year ended December 31,
	2023		2022
Stock options	$	4,087	$	2,621
Performance share units	203		219
Restricted stock units	1,046		—
Total stock-based compensation	$	5,336	$	2,840

Share-Based Payment Arrangement, Option, Activity

The following table summarizes the respective vesting start dates and number of options granted to employees and directors in 2023 and 2022:

Recipient

Options Granted

Vesting Start Date

Grant Date

Employees

100,000

January 18, 2022

Employees

1,044,705

September 11, 2023

Directors

87,815

September 11, 2023

Directors

134,225

November 9, 2023

The following tables summarize the stock option activity for the year ended December 31, 2023:


Employee & Director Options	Options	Weighted‑ Average Exercise Price		Aggregate Intrinsic Value		Weighted‑ Average Remaining Life (Years)
Outstanding at December 31, 2022	1,701,530	$	12.67
Granted	1,266,745	$	5.01
Forfeited	(289,760)	$	13.99
Expired	(62,000)	$	12.00
Outstanding at December 31, 2023	2,616,515	$	8.83	$	2,090	9.86
Vested at December 31, 2023	1,848,486	$	9.69	$	2,053	9.07

Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions

The following assumptions were used to compute the fair value of the options granted using the Black-Scholes option valuation model:


	Jan. 2022		Sep. 2023		Nov. 2023
Risk-free interest rate	1.74	%	4.39	%	4.52	%
Dividend yield	—		—		—
Estimated volatility	60.75	%	57.67	%	57.85	%
Expected option life	6 years		6 years		6 years

Share-Based Payment Arrangement, Outstanding Award, Activity, Excluding Option


Director DSUs	Shares	Weighted‑ Average Grant Price
Outstanding at December 31, 2022	146,796	$	10.88
Granted	174,948	$	4.97
Converted to common stock	(18,824)	$	6.13
Outstanding at December 31, 2023	302,920	$	7.76

Net Income per Share (Tables)

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

A reconciliation of basic and diluted earnings per common share is presented below:


	Year Ended December 31,
	2023		2022
Net income	$	12,860	$	14,529

Weighted average shares:
Basic	69,163,564		69,162,223
Effect of dilutive stock options	1,493		—
Effect of dilutive PSUs	8,364		—
Effect of dilutive RSUs	174,849		—
Effect of dilutive DSUs	188,028		146,796
Diluted	69,536,298		69,309,019

Net income per share:
Basic	$	0.19	$	0.21
Diluted	$	0.18	$	0.21

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

The components of income from operations before income taxes were as follows for the years ended December 31:


	2023		2022
U.S.	$	13,606	$	19,111
Foreign	(632)		(3,017)
Total	$	12,974	$	16,094

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the actual income tax benefit and the tax computed by applying the applicable U.S. federal rate of 21% to the income before taxes is as follows for the years ended December 31:


	2023		2022
Tax provision from operations	$	2,725	$	3,380
State tax benefit from operations	8		20
Nondeductible expenses	1,298		(594)
Change in valuation allowance	(3,908)		(3,410)
Mexican withholding tax	—		1,565
Effect of change in tax rates	—		927
US/foreign tax rate differential	(9)		(323)

Total income tax expense	$	114	$	1,565

Schedule of Deferred Tax Assets and Liabilities

The components of the deferred tax assets (liabilities) are summarized as follows for the year ended December 31:


	2023		2022
Deferred tax assets
Accrued compensation	$	18	$	354
Contingent liabilities	5,046		1,661
Deferred share unit awards	835		461
LGJV equity investment	—		12,656
Other accrued liabilities	21		21
Mineral properties	2,009		2,009
U.S. operating loss carryforward	19,079		10,234
Stock options	9,596		8,917
Foreign operating loss carryforward	4,804		4,129
Exploration and development	—		41
Other	260		24
Valuation allowances	(38,672)		(39,738)
Total deferred tax assets	$	2,996	$	769

Deferred tax liabilities
Accrued bonus	(280)		—
LGJV equity investment	(1,485)		—
Property, plant and equipment	(178)		(218)
Exploration and development	(18)		—
Prepaid expenses	(769)		(551)
Total deferred tax liabilities	$	(2,730)	$	(769)
Deferred tax assets (liabilities)	$	266	$	—

Segment Information (Tables)

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Financial information relating to the Company’s segments is as follows:


	Year Ended December 31, 2023						Year Ended December 31, 2022
	Mexico		Corporate		Total		Mexico		Corporate		Total
Exploration	$	26	$	—	$	26	$	83	$	27	$	110
General and administrative	763		24,925		25,688		1,124		24,344		25,468
Amortization	15		64		79		5		175		180
Equity income in affiliates	(33,622)		—		(33,622)		(45,230)		—		(45,230)
Legal settlement loss	—		1,500		1,500		—		7,900		7,900
Interest expense	—		679		679		—		433		433
Interest income	—		(1,332)		(1,332)		—		(154)		(154)
Net other (income) expense	(28)		(5,964)		(5,992)		22		(4,823)		(4,801)
Income tax expense	—		114		114		1,565		—		1,565
Total assets	54,166		346,738		400,904		109,081		274,420		383,501

Investment in Affiliates (Tables)

12 Months Ended

Dec. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

Condensed Balance Sheet

LOS GATOS JOINT VENTURE

COMBINED BALANCE SHEETS

AS OF DECEMBER 31,


	2023		2022
ASSETS
Current Assets
Cash and cash equivalents	$	34,303	$	34,936
Receivables	12,634		26,655
Inventories	16,397		11,542
VAT receivable	12,610		21,531
Income tax receivable	20,185		27,039
Other current assets	1,253		4,138
Total current assets	97,382		125,841
Non-Current Assets
Mine development, net	234,980		232,515
Property, plant and equipment, net	171,965		198,600
Deferred tax assets	9,568		—
Total non-current assets	416,513		431,115
Total Assets	$	513,895	$	556,956
LIABILITIES AND OWNERS’ CAPITAL
Current Liabilities
Accounts payable and accrued liabilities	$	38,704	$	46,751
Related party payable	560		1,792


Equipment loans	—		480
Total current liabilities	39,264		49,023
Non-Current Liabilities

Lease liability	208		268
Asset retirement obligation	11,593		15,809
Deferred tax liabilities	3,885		1,354
Total non-current liabilities	15,686		17,431
Owners’ Capital
Capital contributions	455,638		540,638
Paid-in capital	18,186		18,186
Accumulated deficit	(14,879)		(68,322)
Total owners’ capital	458,945		490,502
Total Liabilities and Owners’ Capital	$	513,895	$	556,956

Condensed Income Statement

LOS GATOS JOINT VENTURE

COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31,


	2023		2022
Revenue	$	268,671	$	311,724
Expenses
Cost of sales	111,266		107,075
Royalties	1,363		3,069
Exploration	2,875		9,800
General and administrative	18,068		14,307
Depreciation, depletion and amortization	75,110		69,380
Total expenses	208,682		203,631

Other expense (income)
Interest expense	660		582
Interest income	(1,567)		—


Accretion expense	1,145		1,103
Other expense (income)	741		(766)
Foreign exchange gain	(2,580)		(2,348)
	(1,601)		(1,429)

Income before taxes	61,590		109,522
Income tax expense	8,147		37,306
Net income and comprehensive income	$	53,443	$	72,216

Condensed Cash Flow Statement

LOS GATOS JOINT VENTURE

COMBINED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31,



	2023		2022
Cash flows from operating activities:
Net income	$	53,443	$	72,216
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	75,110		69,380
Accretion	1,145		1,103

Deferred taxes	(7,623)		21,013
Unrealized gain on foreign currency rate change	(4,523)		(4,434)


Other	—		(174)

Changes in operating assets and liabilities:
VAT receivable	9,619		23,986
Receivables	14,021		(15,393)
Inventories	(5,273)		(353)
Unearned revenue	—		(1,714)
Other current assets	2,494		661
Income tax receivable	10,771		(27,039)
Accounts payable and other accrued liabilities	(5,951)		17,939
Payables to related parties	(1,232)		183


Net cash provided by operating activities	142,001		157,374

Cash flows from investing activities:
Mine development	(36,637)		(44,934)
Purchase of property, plant and equipment	(19,850)		(37,018)
Materials and supplies inventory	(600)		(327)
Net cash used by investing activities	(57,087)		(82,279)

Cash flows from financing activities:
Capital distributions	(85,000)		—
Equipment loan and Lease payments	(547)		(5,439)




Dividends	—		(55,000)
Net cash used by financing activities	(85,547)		(60,439)

Net increase (decrease) in cash and cash equivalents	(633)		14,656
Cash and cash equivalents, beginning of period	34,936		20,280
Cash and cash equivalents, end of period	$	34,303	$	34,936
Interest paid	$	660	$	236

Description of Business (Details) $ in Thousands			1 Months Ended
Description of Business (Details) $ in Thousands	Mar. 11, 2021 USD ($)	Sep. 01, 2019 product	May 31, 2019	Dec. 31, 2023 subsidiary	Apr. 01, 2016 USD ($)
Schedule of Equity Method Investments [Line Items]
Number of wholly-owned subsidiaries \| subsidiary				2
Los Gatos Joint Venture
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership percentage	70.00%			70.00%
Equity method investment, ownership percentage, repurchased	18.50%
Payments to acquire equity method investments	$ 71,550
Equity method investment, difference between carrying amount and underlying equity	$ 47,400
Los Gatos Joint Venture
Schedule of Equity Method Investments [Line Items]
Number of concentrate products \| product		2
Dowa Metals And Mining Co. Ltd \| Los Gatos Joint Venture
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership percentage			48.50%	30.00%	30.00%
Equity method investment, aggregate cost					$ 50,000
Increase in ownership interest through the conversion of loan to equity			18.50%

Restatement of Previously Issued Financial Statements (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Distributions and dividends from affiliate	$ 59,500	$ 30,775
Net cash (used) provided by operating activities	47,480	14,554
Capital distribution received from affiliate	0
Net cash provided by investing activities	0	$ (60)
As previously reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Distributions and dividends from affiliate	0
Net cash (used) provided by operating activities	(12,020)
Capital distribution received from affiliate	59,500
Net cash provided by investing activities	59,500
Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Distributions and dividends from affiliate	59,500
Net cash (used) provided by operating activities	59,500
Capital distribution received from affiliate	(59,500)
Net cash provided by investing activities	$ (59,500)

Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Value added tax receivable	$ 691	$ 730
Prepaid expenses	1,914	2,890
Insurance proceeds receivable	20,000	13,100
Other assets	37	151
Total other current assets	$ 22,642	$ 16,871

Property, Plant and Equipment, net (Details)	12 Months Ended
Property, Plant and Equipment, net (Details)	Dec. 31, 2023
Property, Plant and Equipment [Abstract]
Royalty payment, percentage	1.00%

Accounts Payable, Accrued and Other Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accounts payable	$ 2,713	$ 586
Accrued expenses	3,031	2,761
Accrued compensation	3,215	1,889
Legal settlement payable	24,000	21,000
Current tax payable	387	0
Other liabilities	11	122
Total accounts payable, accrued and other liabilities	$ 33,357	$ 26,358

Related-Party Transactions (Details) - USD ($)	12 Months Ended
Related-Party Transactions (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Related Party Transaction [Line Items]
Related party receivables	$ 560,000	$ 1,773,000
Related Party
Related Party Transaction [Line Items]
Proceeds from fees received	3,489,000	1,431,000
Related party receivables	250,000	1,112,000
Related party transaction, amounts of transaction	2,627,000	2,399,000
Related Party \| Unanimous Omnibus Partner Agreement
Related Party Transaction [Line Items]
Revenue	6,000,000	5,000,000
Proceeds from fees received	6,417,000	5,417,000
Related party receivables	$ 0	$ 417,000

Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended	12 Months Ended
	Nov. 09, 2023	Sep. 11, 2023	Dec. 17, 2021	Dec. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock, shares authorized (in shares)				700,000,000	700,000,000	700,000,000
Common stock, par value (in dollars per share)				$ 0.001	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)				50,000,000	50,000,000
Preferred stock, par value (in dollars per share)				$ 0.001	$ 0.001
Preferred stock, shares outstanding (in shares)				0	0
Share-based compensation arrangement by share-based payment award, number of shares available for grant (in shares)				10,300,000	10,300,000
Vested (in shares)					604,799
Exercises in period (in shares)					0	0
Stock options
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based payment arrangement, expiration period					10 years
Share-based payment arrangement, service period					3 years
Granted (in shares)	134,225	1,132,520				100,000
Share-based compensation arrangement by share-based payment award, options, grants in period, weighted average grant date fair value (in dollars per share)	$ 2.77	$ 2.93				$ 5.83
Share-based payment arrangement, nonvested award, cost not yet recognized, amount				$ 2,087	$ 2,087
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition					1 year 2 months 12 days
Share-based compensation arrangement by share-based payment award, options, vested in period, fair value					$ 6,344
Stock options \| Los Gatos Joint Venture
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Granted (in shares)					0
Exercises in period (in shares)					0
Share-based compensation arrangement by share-based payment award, options, outstanding, number (in shares)				32,393	32,393
Share-based compensation arrangement by share-based payment award, options, outstanding, weighted average exercise price (in dollars per share)				$ 7.31	$ 7.31
Weighted-average remaining life, outstanding					2 years
Performance share units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition					1 year
Share-based payment award, equity instruments other than options, grants in period (in shares)			119,790		0
Share-based payment award, equity instruments other than options, grants in period, weighted average grant date fair value (in dollars per share)			$ 14.22
Share-based compensation arrangement by share-based payment award, non-option equity instruments, outstanding, number (in shares)				40,802	40,802
Share-based payment arrangement, nonvested award, excluding option, cost not yet recognized, amount				$ 166	$ 166
Restricted stock units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition					1 year 3 months 18 days
Share-based payment award, equity instruments other than options, grants in period (in shares)		925,172
Share-based payment award, equity instruments other than options, grants in period, weighted average grant date fair value (in dollars per share)		$ 5.04
Share-based payment arrangement, nonvested award, excluding option, cost not yet recognized, amount				$ 3,617	$ 3,617
Deferred Stock Units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based payment award, equity instruments other than options, grants in period (in shares)					174,948	0
Share-based payment award, equity instruments other than options, grants in period, weighted average grant date fair value (in dollars per share)					$ 4.97
Share-based compensation arrangement by share-based payment award, number of shares underlying each award (in shares)					1
Share-based payment arrangement, expense					$ 626	$ 239
Deferred Stock Units converted to common stock (in shares)				18,824
Share-based payment award, equity instruments other than options, nonvested, number (in shares)				302,920	302,920	146,796
Share-based compensation arrangement by share-based payment award, equity instruments other than options, nonvested, weighted average grant date fair value (in dollars per share)				$ 7.76	$ 7.76	$ 10.88

Stockholders' Equity - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	$ 5,336	$ 2,840
Stock options
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	4,087	2,621
Performance share units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	203	219
Restricted stock units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	$ 1,046	$ 0

Stockholders' Equity - Schedule of Vesting Start Dates and Number Of Stock Options Granted (Details) - Stock options - shares				12 Months Ended
	Nov. 09, 2023	Sep. 11, 2023	Jan. 18, 2022	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options granted (in shares)	134,225	1,132,520		100,000
Employees
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options granted (in shares)		1,044,705	100,000
Directors
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options granted (in shares)	134,225	87,815

Stockholders' Equity - Schedule of Valuation Assumptions (Details) - USD ($)	1 Months Ended
	Nov. 30, 2023	Sep. 30, 2023	Jan. 31, 2022
Equity [Abstract]
Risk-free interest rate	4.52%	4.39%	1.74%
Dividend yield	$ 0	$ 0	$ 0
Estimated volatility	57.85%	57.67%	60.75%
Expected option life	6 years	6 years	6 years

Stockholders' Equity - Summary of Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands			12 Months Ended
	Nov. 09, 2023	Sep. 11, 2023	Dec. 31, 2023	Dec. 31, 2022
Options
Granted (in shares)	134,225	1,132,520		100,000
Employee & Director Options
Options
Outstanding, beginning balance (in shares)			1,701,530
Granted (in shares)			1,266,745
Forfeited (in shares)			(289,760)
Expired (in shares)			(62,000)
Outstanding, ending balance (in shares)			2,616,515	1,701,530
Outstanding and vested (in shares)			1,848,486
Weighted‑ Average Exercise Price
Weighted-average exercise price, outstanding, beginning balance (in dollars per share)			$ 12.67
Granted (in dollars per share)			5.01
Forfeited (in dollars per share)			13.99
Expired (in dollars per share)			12.00
Weighted-average exercise price, outstanding, ending balance (in dollars per share)			8.83	$ 12.67
Outstanding and vested (in dollars per share)			$ 9.69
Aggregate intrinsic value, outstanding			$ 2,090
Aggregate intrinsic value, vested			$ 2,053
Weighted-average remaining life, outstanding			9 years 10 months 9 days
Weighted-average remaining life, vested			9 years 25 days

Stockholders' Equity - Schedule of Deferred Stock Unit Activity (Details) - Deferred Stock Units - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Shares
Beginning balance, outstanding (in shares)	146,796
Granted (in shares)	174,948	0
Converted to common stock (in shares)	(18,824)
Ending balance, outstanding (in shares)	302,920	146,796
Weighted‑ Average Grant Price
Beginning balance, weighted-average exercise price (in dollars per share)	$ 10.88
Granted (in dollars per share)	4.97
Converted to common stock (in dollars per share)	6.13
Ending balance, weighted-average exercise price (in dollars per share)	$ 7.76	$ 10.88

Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net income	$ 12,860	$ 14,529
Weighted average shares outstanding:
Basic (in shares)	69,163,564	69,162,223
Diluted (in shares)	69,536,298	69,309,019
Net income per share:
Basic (in dollars per share)	$ 0.19	$ 0.21
Diluted (in dollars per share)	$ 0.18	$ 0.21
Stock options
Weighted average shares outstanding:
Effect of dilutive units (in shares)	1,493	0
Performance share units
Weighted average shares outstanding:
Effect of dilutive units (in shares)	8,364	0
Restricted stock units
Weighted average shares outstanding:
Effect of dilutive units (in shares)	174,849	0
Deferred Stock Units
Weighted average shares outstanding:
Effect of dilutive units (in shares)	188,028	146,796

Commitments, Contingencies and Guarantees (Details) - U.S. Class Action - USD ($) $ in Thousands	Apr. 16, 2024	Feb. 29, 2024	Jan. 26, 2024	Jun. 13, 2023
Loss Contingencies [Line Items]
Loss contingency, damages sought, value				$ 21,000
Subsequent Event
Loss Contingencies [Line Items]
Loss contingency, escrow account, maximum funding period	30 days	30 days
Payments for legal settlements	$ 2,597	$ 1,403
Litigation settlement, expense			$ 3,000
Subsequent Event \| Company's Insurers
Loss Contingencies [Line Items]
Payments for legal settlements	$ 403	$ 19,597

Debt (Details) - Revolving Credit Facility - USD ($)			12 Months Ended
Debt (Details) - Revolving Credit Facility - USD ($)	Dec. 13, 2023	Jul. 21, 2023	Dec. 31, 2023	Dec. 31, 2022	Jul. 12, 2021
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	$ 50,000,000				$ 50,000,000
Line of credit facility, maximum borrowing capacity, accordion feature	$ 100,000,000
Repayments of debt		$ 9,000,000
Long-term debt, gross			$ 0
Interest expense, debt			679,000	$ 433,000
Amortization of debt issuance costs			57,000	147,000
Payments for interest, line of credit			$ 413,000	$ 645,000
Secured Overnight Financing Rate (SOFR) \| Minimum
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate	2.75%
Secured Overnight Financing Rate (SOFR) \| Maximum
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate	3.75%
Base Rate \| Minimum
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate	1.75%
Base Rate \| Maximum
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate	2.75%

Income Taxes - Schedule of Income From Operations Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
U.S.	$ 13,606	$ 19,111
Foreign	(632)	(3,017)
Income before taxes	$ 12,974	$ 16,094

Income Taxes - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
Income Taxes - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Income Tax Examination [Line Items]
Income tax expense	$ 114	$ 1,565
Valuation allowances	38,672	$ 39,738
Operating loss carryforwards, subject to expiration	72,408
Operating loss carryforward, not subject to expiration	18,343
Foreign
Income Tax Examination [Line Items]
Operating loss carryforwards	17,126
U.S.
Income Tax Examination [Line Items]
Operating loss carryforwards	$ 90,751

Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Tax provision from operations	$ 2,725	$ 3,380
State tax benefit from operations	8	20
Nondeductible expenses	1,298	(594)
Change in valuation allowance	(3,908)	(3,410)
Mexican withholding tax	0	1,565
Effect of change in tax rates	0	927
US/foreign tax rate differential	(9)	(323)
Income tax expense	$ 114	$ 1,565

Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets
Accrued compensation	$ 18	$ 354
Contingent liabilities	5,046	1,661
Deferred share unit awards	835	461
LGJV equity investment	0	12,656
Other accrued liabilities	21	21
Mineral properties	2,009	2,009
U.S. operating loss carryforward	19,079	10,234
Stock options	9,596	8,917
Foreign operating loss carryforward	4,804	4,129
Exploration and development	0	41
Other	260	24
Valuation allowances	(38,672)	(39,738)
Total deferred tax assets	2,996	769
Deferred tax liabilities
Accrued bonus	(280)	0
LGJV equity investment	(1,485)	0
Property, plant and equipment	(178)	(218)
Exploration and development	(18)	0
Prepaid expenses	(769)	(551)
Total deferred tax liabilities	(2,730)	(769)
Deferred tax assets (liabilities)	$ 266	$ 0

Segment Information (Details) - USD ($) $ in Thousands	12 Months Ended
Segment Information (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Segment Reporting Information [Line Items]
Exploration	$ 26	$ 110
General and administrative	25,688	25,468
Amortization	79	180
Equity income in affiliates	(33,622)	(45,230)
Legal settlement loss	1,500	7,900
Interest expense	679	433
Interest income	(1,332)	(154)
Net other (income) expense	(5,992)	(4,801)
Income tax expense	114	1,565
Total assets	400,904	383,501
Mexico
Segment Reporting Information [Line Items]
Exploration	26	83
General and administrative	763	1,124
Amortization	15	5
Equity income in affiliates	(33,622)	(45,230)
Legal settlement loss	0	0
Interest expense	0	0
Interest income	0	0
Net other (income) expense	(28)	22
Income tax expense	0	1,565
Total assets	54,166	109,081
Corporate
Segment Reporting Information [Line Items]
Exploration	0	27
General and administrative	24,925	24,344
Amortization	64	175
Equity income in affiliates	0	0
Legal settlement loss	1,500	7,900
Interest expense	679	433
Interest income	(1,332)	(154)
Net other (income) expense	(5,964)	(4,823)
Income tax expense	114	0
Total assets	$ 346,738	$ 274,420

Investment in Affiliates - Additional Information (Details) - USD ($) $ in Thousands			1 Months Ended					6 Months Ended	12 Months Ended
	Sep. 06, 2023	Mar. 17, 2022	Oct. 31, 2023	Jul. 31, 2023	Nov. 30, 2022	Jul. 31, 2022	Apr. 30, 2022	Dec. 31, 2023	Dec. 31, 2023	Dec. 31, 2022	Mar. 18, 2022
Schedule of Equity Method Investments [Line Items]
Equity income in affiliates									$ 33,622	$ 45,230
Distributions and dividends from affiliate									59,500	30,775
Construction payable, decrease in estimated distribution agreement, construction costs		$ 4,200
Construction payable, decrease in estimated distribution agreement, operating costs		5,500
Dowa Metals And Mining Co. Ltd
Schedule of Equity Method Investments [Line Items]
Expected construction costs with affiliates		6,050
Construction payable, current		$ 20,000						$ 5,119	5,119	5,500	$ 10,300
Contingent construction, contract duration		5 years
Construction payable, contingent portion of contract		$ 5,500
Los Gatos Joint Venture
Schedule of Equity Method Investments [Line Items]
Equity income in affiliates									$ 33,622	$ 45,230
Mineral reserve, life	2 years 9 months
Accumulated depreciation, depletion and amortization, property, plant and equipment, period increase (decrease)								(9,438)
Valuation allowance, deferred tax asset, increase (decrease), amount								$ (3,691)
Los Gatos Joint Venture \| Los Gatos Joint Venture
Schedule of Equity Method Investments [Line Items]
Capital distribution			$ 35,000	$ 50,000
Payments of ordinary dividends			$ 24,500	$ 35,000
Payments of distributions to affiliates					$ 20,000	$ 15,000	$ 20,000
Distributions and dividends from affiliate					13,300	9,975	14,000
Payments of dividend, tax withheld					$ 700	$ 525	700
Los Gatos Joint Venture \| Dowa Metals And Mining Co. Ltd \| Los Gatos Joint Venture
Schedule of Equity Method Investments [Line Items]
Payments of distributions to affiliates, net							7,365
Payments of distributions to affiliates, net received							$ 5,935

Investment in Affiliates - Schedule of Combined Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current Assets
Cash and cash equivalents	$ 55,484	$ 17,004
Value added tax receivable	691	730
Other current assets	22,642	16,871
Total current assets	78,686	35,648
Non-Current Assets
Total Assets	400,904	383,501
Current Liabilities
Related party payable	11	122
Owners’ Capital
Paid-in capital	553,319	547,114
Accumulated deficit	(185,889)	(198,749)
Total Liabilities and Stockholders’ Equity	400,904	383,501
Equity Method Investment, Nonconsolidated Investee or Group of Investees
Current Assets
Cash and cash equivalents	34,303	34,936
Receivables	12,634	26,655
Inventories	16,397	11,542
Value added tax receivable	12,610	21,531
Income tax receivable	20,185	27,039
Other current assets	1,253	4,138
Total current assets	97,382	125,841
Non-Current Assets
Mine development, net	234,980	232,515
Property, plant and equipment, net	171,965	198,600
Deferred tax assets	9,568	0
Total non-current assets	416,513	431,115
Total Assets	513,895	556,956
Current Liabilities
Accounts payable and accrued liabilities	38,704	46,751
Related party payable	560	1,792
Equipment loans	0	480
Total current liabilities	39,264	49,023
Non-Current Liabilities
Lease liability	208	268
Asset retirement obligation	11,593	15,809
Deferred tax liabilities	3,885	1,354
Total non-current liabilities	15,686	17,431
Owners’ Capital
Capital contributions	455,638	540,638
Paid-in capital	18,186	18,186
Accumulated deficit	(14,879)	(68,322)
Total owners’ capital	458,945	490,502
Total Liabilities and Stockholders’ Equity	$ 513,895	$ 556,956

Investment in Affiliates - Schedule of Combined Statements of Operations and Comprehensive Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Expenses
Exploration	$ 26	$ 110
General and administrative	25,688	25,468
Other expense (income)
Interest expense	679	433
Interest income	(1,332)	(154)
Total other income, net	(38,767)	(41,852)
Income before taxes	12,974	16,094
Income tax expense	114	1,565
Comprehensive income	12,860	14,529
Net income	12,860	14,529
Equity Method Investment, Nonconsolidated Investee or Group of Investees
Schedule of Equity Method Investments [Line Items]
Revenue	268,671	311,724
Expenses
Cost of sales	111,266	107,075
Royalties	1,363	3,069
Exploration	2,875	9,800
General and administrative	18,068	14,307
Depreciation, depletion and amortization	75,110	69,380
Total expenses	208,682	203,631
Other expense (income)
Interest expense	660	582
Interest income	(1,567)	0
Accretion expense	1,145	1,103
Other expense (income)	741	(766)
Foreign exchange gain	(2,580)	(2,348)
Total other income, net	(1,601)	(1,429)
Income before taxes	61,590	109,522
Income tax expense	8,147	37,306
Comprehensive income	53,443	72,216
Net income	$ 53,443	$ 72,216

Investment in Affiliates - Schedule of Combined Cash Flow Statements (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net income	$ 12,860	$ 14,529
Adjustments to reconcile net loss to net cash used by operating activities:
Deferred tax recovery	(266)	0
Other	1,159	199
Changes in operating assets and liabilities:
Other current assets	(5,771)	(13,191)
Accounts payable and other accrued liabilities	6,992	24,632
Net cash (used) provided by operating activities	47,480	14,554
Cash flows from investing activities:
Purchase of property, plant and equipment	0	(60)
Net cash provided (used) by investing activities	0	(60)
Cash flows from financing activities:
Net cash used by financing activities	(9,000)	(4,106)
Net increase in cash and cash equivalents	38,480	10,388
Cash and cash equivalents, beginning of period	17,004	6,616
Cash and cash equivalents, end of period	55,484	17,004
Interest paid	417	645
Equity Method Investment, Nonconsolidated Investee or Group of Investees
Cash flows from operating activities:
Net income	53,443	72,216
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation, depletion and amortization	75,110	69,380
Accretion	1,145	1,103
Deferred tax recovery	(7,623)	21,013
Unrealized gain on foreign currency rate change	(4,523)	(4,434)
Other	0	(174)
Changes in operating assets and liabilities:
VAT receivable	9,619	23,986
Receivables	14,021	(15,393)
Inventories	(5,273)	(353)
Unearned revenue	0	(1,714)
Other current assets	2,494	661
Income tax receivable	10,771	(27,039)
Accounts payable and other accrued liabilities	(5,951)	17,939
Payables to related parties	(1,232)	183
Net cash (used) provided by operating activities	142,001	157,374
Cash flows from investing activities:
Mine development	(36,637)	(44,934)
Purchase of property, plant and equipment	(19,850)	(37,018)
Materials and supplies inventory	(600)	(327)
Net cash provided (used) by investing activities	(57,087)	(82,279)
Cash flows from financing activities:
Capital distributions	(85,000)	0
Equipment loan and Lease payments	(547)	(5,439)
Dividends	0	(55,000)
Net cash used by financing activities	(85,547)	(60,439)
Net increase in cash and cash equivalents	(633)	14,656
Cash and cash equivalents, beginning of period	34,936	20,280
Cash and cash equivalents, end of period	34,303	34,936
Interest paid	$ 660	$ 236