Gatos Silver Resumes Operations at Cerro Los Gatos Mine
Gatos Silver has announced the reinstatement of its explosives and blasting permit, with which it has resumed all mining operations. Additionally, Gatos Silver released its 1Q22 operating and financial results, demonstrating that the company remains well positioned to achieve its 2022 guidance.
The blasting permit for the Cerro Los Gatos mine (CLG) was suspended in April by the Mexican Ministry of Defense due to an incident during which two explosions were prematurely detonated underground. The company explained that there were no physical injuries, nor significant damage to equipment and infrastructure. Even so, an investigation of CLG's blasting procedures is underway to ensure the safety of its employees.Gatos Silver explained that its processing plant continued to operate normally following the suspension of its permit. However, it had to shut down operations on April 28 for maintenance activities. Despite the pause, Gatos Silver announced that its 2022 production guidance remains on track as it plans to offset the the lower material processed during 1Q22 with the high-grade ore expected in the coming quarters.
While the company struggled during the past quarter, Gatos Silver announced it achieved record silver production of 2.39Moz during 1Q22, which is 58 percent more than the 1.51Moz produced during 1Q21. Gatos explained that the higher production was achieved due to higher silver grades, higher plant throughput and improved recoveries.
In addition, sales during 1Q22 stood at US$85.6 million, which represents an increase of 85 percent compared to the sales of US$46.3 million during 1Q21. The rise was due to higher metal prices, better production rates and improved ore grades. In addition, the company highlighted that the cost of sales was US$24.4 million for 1Q22, while in 1Q21 it was US$19.8 million, which shows that the company has improved its production while reducing costs.
“With the resumption of operations and strengthening of the management team, coupled with its strong balance sheet and cash flow generating capabilities, Gatos Silver is rapidly securing its spot as a major modern silver producer with valuable zinc and lead byproducts,” said Dale Andres, CEO, Gatos Silver.
The company announced that in 2H22 it will update its mineral resources and reserves, as well as publish a report on its new Life of Mine Plan. The company announced that these two milestones will be the engines for Gatos Silver’s future development in Mexico.By 2022, the company expects to produce between 8.5M and 9Moz of silver a year, from 49M to 54Mlb of zinc, between 36M and 40Mlb of lead and, finally, from 4,000 to 4,500oz of gold. The company previously emphasized that this year, it will also focus on further exploring the Gatos District, optimizing operations and reducing costs.