Gatos Silver prices US $150M IPO on NYSE and TSX

CPE News (10/27/2020) – Gatos Silver, Inc., a portfolio company of The Electrum Group, LLC and The Municipal Employees’ Retirement System (MERS) of Michigan, has priced its proposed initial public offering.

Gatos Silver will issue 21,430,000 shares of its common stock at a price of US $7.00 per share for gross proceeds of approximately US $150 million.

Gatos Silver shares are expected to commence trading on the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX) on October 28, 2020. The offering is expected to close on October 30, 2020.

Immediately following the closing of the offering, Gatos Silver will have 56,600,346 shares outstanding or 59,814,846 shares if the over-allotment option is exercised in full.

Electrum Group (collectively) and Municipal Employees’ Retirement System of Michigan will own 25,575,858 shares and 6,395,960 shares respectively.

Greenwood Village, Colorado based Gatos Silver is a precious metals production, development and exploration company that is expected to own 70% of a new silver and zinc mineral district in Chihuahua state, Mexico, following the consummation of its initial public offering. Upon achieving full production, Cerro Los Gatos is expected to produce silver, zinc, lead and gold averaging 12.2 million silver equivalent ounces annually.

photo credit: Gatos Silver, Inc.

News Release

Gatos Silver Announces Pricing of Initial Public Offering

Denver, CO — October 27, 2020 — Gatos Silver, Inc. (“Gatos Silver”), a U.S.-based precious metals production, development and exploration company that is expected to own 70% of a new silver and zinc mineral district (“Los Gatos District”) in Chihuahua state, Mexico, following the consummation of its initial public offering, announced today the pricing of its initial public offering of 21,430,000 shares of its common stock at a price of US$7.00 per share. The gross proceeds from the offering are expected to be approximately US$150 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by Gatos Silver. In addition, Gatos Silver has granted the underwriters a 30-day option to purchase up to an additional 3,214,500 shares of common stock at the initial public offering price, less underwriting discounts and commissions.

The shares are expected to begin trading on the New York Stock Exchange and the Toronto Stock Exchange on October 28, 2020 on an if, as and when issued basis under the ticker symbol “GATO”. The offering is expected to close on October 30, 2020, subject to customary closing conditions.

Gatos Silver intends to use the net proceeds from the offering to:
· increase Gatos Silver’s ownership in the Los Gatos District to 70%;
· explore and define further mineral resources within the 103,000 hectares of mineral concessions in the Los Gatos District;
· fund a future production expansion study at Cerro Los Gatos;
· fund near-term debt service needs;
· retire high-cost debt; and
· fund general corporate purposes.

BMO Capital Markets, Goldman Sachs & Co. LLC and RBC Capital Markets are acting as joint lead bookrunners and as representatives of the underwriters for the offering. Canaccord Genuity Corp. and CIBC Capital Markets are acting as co-managers for the offering.

The offering is being made only by means of a prospectus. Copies of the prospectus relating to the offering may be obtained from BMO Capital Markets Corp., Attention: Equity Syndicate Department, 3 Times Square, 25th Floor, New York, NY 10036, by telephone at (800) 414-3627 or by email at bmoprospectus@bmo.com; Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, by telephone at (866) 471-2526 or by email at prospectusny@ny.email.gs.com; or RBC Capital Markets, LLC, Attention: Equity Capital Markets, 200 Vesey Street, New York, NY 10281, or by telephone at (877) 822-4089 or by email at equityprospectus@rbccm.com.

A registration statement relating to these securities has been filed with, and declared effective by, the U.S. Securities and Exchange Commission. Gatos Silver has also obtained a receipt for a final base PREP prospectus filed with the securities commissions or similar securities regulatory authorities in each of the provinces of Canada (except Québec) on the date hereof. A copy of the supplemented PREP prospectus containing pricing information and other important information relating to the shares of common stock may, when available, be obtained from the underwriters at the addresses set out above and will be available on the SEDAR website at www.sedar.com under Gatos Silver’s profile.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Gatos Silver

Gatos Silver is a U.S.-based precious metals production, development and exploration company that recently commissioned its first mine, Cerro Los Gatos, at the Los Gatos District in Chihuahua state, Mexico. Upon achieving full production, Cerro Los Gatos is expected to produce silver, zinc, lead and gold averaging 12.2 million silver equivalent ounces annually.

Investors and Media Contact
Adam Dubas
Chief Administrative Officer
investors@gatossilver.com
(303) 784-5350