Gatos Silver, Inc. (GATO) Announces Errors in Mineral Resource and Reserve Estimates in its 2020 Technical Report
A shareholder filed a class action on behalf of persons and entities that purchased or otherwise acquired Gatos Silver, Inc. (NYSE: GATO) (a) common stock pursuant to the Company’s October 2020 initial public offering (“IPO”) and/or (b) securities between October 28, 2020 and January 25, 2022. Gatos Silver engages in the exploration, development, and production of precious metals.
According to the complaint, defendants made false and misleading statements in the Registration Statement in support of the IPO and during the class period. Specifically, defendants failed to disclose to investors: (1) that the technical report for Gatos Silver’s primary mine contained certain errors, and (2) the mineral reserves had been overstated by as much as 50%.
On January 25, 2022, Gatos Silver provided a resource and reserve update for the Los Gatos Joint Venture, concluding “that there were errors in the technical report entitled ‘Los Gatos Project, Chihuahua, Mexico’ with an effective date of July 1, 2020 (the ‘2020 Technical Report’), as well as indications that there is an overestimation in the existing resource model.” Therefore, “[o]n a preliminary basis, the Company estimates a potential reduction of the metal content of CLG’s mineral reserve ranging from 30% to 50% of the metal content remaining after depletion” and advised that “the mineral resource and reserve estimates in the 2020 Technical Report should not be relied upon.” Following this news, Gatos Silver stock fell by 69% to close at $3.17 per share on January 26, 2022. By the commencement of the lawsuit, Gatos Silver shares were still down significantly from its $7.00 per share IPO price.
Next Steps: If you acquired shares of Gatos Silver, Inc. (GATO) pursuant to the Company’s October 2020 IPO or between October 28, 2020 and January 25, 2022, you have until April 25, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.