Gatos Silver Explains Delay in Filing 2022 Year-End Financial Statements and Announces Restatement of Previously Issued Financial Statements for Non-Cash Adjustments - Seite 2

The recognition of the net deferred tax assets in 2021 would have increased the income tax benefit available to the LGJV, and increased LGJV net income by an estimated $10 to $15 million in 2021. These adjustments would have reduced the income tax benefit recognized by the LGJV in the nine months ended September 30, 2022, and would reduce the LGJV net income by approximately $6 to $9 million in the nine months ended September 30, 2022 from the previously reported $53 million.

The Company will file a Form 12b-25 Notification of Late Filing with the Securities and Exchange Commission and it will endeavor to file on, or before, April 17, 2023 its restated Annual Report on Form 10-K/A for the year ended December 31, 2021, the restated Quarterly Reports on Form 10-Q/A for the quarters ended March 31, 2022, June 30, 2022 and September 30, 2022, and the Annual Report on Form 10-K for the year ended December 31, 2022. The Annual Report on Form 10-K and the Quarterly Reports on Form 10-Q for the Affected Periods should no longer be relied upon.

The Company has requested extensions from the TSX to file its financial statements for the year ended December 31, 2022 and to file restated financial statements for the year ended December 31, 2021 and the quarters ended March 31, 2022, June 30, 2022 and September 30, 2022.

The Company acknowledges the existence of an additional material weakness in its internal control over financial reporting as of December 31, 2022, with regards to the design and maintenance of effective controls in response to the risks of material misstatement related to the processes for recording income taxes.

About Gatos Silver

Gatos Silver is a silver dominant exploration, development and production company that discovered a new silver and zinc-rich mineral district in southern Chihuahua State, Mexico. As a 70% owner of the Los Gatos Joint Venture, the Company is primarily focused on operating the Cerro Los Gatos mine and on growth and development of the Los Gatos district. The LGJV consists of approximately 103,000 hectares of mineral rights, representing a highly prospective and under-explored district with numerous silver-zinc-lead epithermal mineralized zones identified as priority targets.