History
Gatos Silver grew its stake in the Cerro Los Gatos mine, survived a 2022 reserve-overestimate crisis, then was acquired by First Majestic in an all-stock deal in January 2025.
2020-2021: Listing and a bigger stake
Gatos Silver's story centred on the Los Gatos Joint Venture, which owns the Cerro Los Gatos underground silver mine in Chihuahua, Mexico. On 26 October 2020 the exchange certified its securities for listing, clearing them to begin trading. The share count rose from 40,323,430 at the end of 2019 to 59,183,076 at the end of 2020 and 69,162,223 at the end of 2021, though the beats do not explain those increases.
On 12 March 2021 the company exercised its option to buy an extra 18.5% of the joint venture from partner Dowa Metals & Mining for $71.55 million. Dowa kept the remaining 30%, which implies Gatos held 70%. In July 2021 Gatos signed a new $50 million revolving credit line with Bank of Montreal. It also agreed with Dowa to retire the venture's roughly $206.9 million term loan, with Gatos funding 70% and paying Dowa a $10 million closing fee. Closing depended on Gatos raising enough debt or equity by 30 September 2021.
2022-2023: The reserve crisis
On 26 January 2022 Gatos disclosed that errors in its 2020 technical report could cut the mine's reserve metal content remaining after depletion by an estimated 30-50%. Gatos said the 2020 estimates should not be relied on and that a restatement was possible.
The consequences came in a run. In March 2022 the lender capped borrowing under the credit line at $30 million, requiring an updated reserve model and financial statements by September 2022 to lift the cap. In April 2022 the NYSE said Gatos was out of compliance with listing rules because it could not file its 2021 annual report on time. On 30 September 2022 the auditor, KPMG, resigned. It cited a licensing technicality after the executive team moved to British Columbia, not an accounting disagreement. The company was still evaluating a likely material weakness in its internal controls tied to the reserve issue.
The delays continued into 2023. In April a second NYSE notice followed when the 2022 annual report was also late, and the lender again pushed back its deadline, to mid-May. In June, with audited financials still not ready, Gatos won a further filing extension to mid-July and for the first time since the crisis began gave investors unaudited preliminary results for 2022 and early 2023. The share count stayed at 69,162,223 through 2022 and barely moved in 2023.
2023-2024: Rebuilding trust
By 19 December 2023 Gatos was current enough with its lender to restate and upsize its revolver. It stayed at $50 million, with a larger $50 million accordion option and maturity pushed out to the end of 2026. The beats treat this as a sign the worst of the financing squeeze had passed.
2024-2025: Sale to First Majestic
On 5 September 2024 First Majestic Silver agreed to acquire Gatos in an all-stock deal implying about $970 million of equity value, or $13.49 a share, a 16% premium. Each Gatos share would convert into 2.55 First Majestic shares, leaving Gatos shareholders with about 38% of the combined company. It would bring Cerro Los Gatos together with First Majestic's San Dimas and Santa Elena mines.
On 25 September 2024 Gatos released an updated life-of-mine plan extending mining through the end of 2032, with 36% more silver-equivalent production than the prior plan. The beats describe this as an answer to the 2022 reserve scare.
On 3 December 2024 Gatos filed its final proxy statement, setting a shareholder vote for 14 January 2025. The board unanimously recommended approval. Based on First Majestic's $5.94 close on 2 December, the offer was worth $15.15 a share. Mexico's antitrust regulator, COFECE, cleared the deal on 13 December, the only regulatory approval it needed.
The merger closed on 16 January 2025. Every Gatos share converted into 2.55 First Majestic shares, and Gatos became a wholly-owned First Majestic subsidiary. Its exchange filed to remove its securities from listing the same day, and on 27 January 2025 Gatos deregistered its securities, ending its obligation to file reports with the SEC.
Written from the 18 story beats below (2020 to 27 Jan 2025), which come from the company's own announcements and filings.