Gatos Silver Suspends Mine Operations at Cerro Los Gatos

Last week, Gatos Silver announced that it had to temporarily suspend its mine operations at the Cerro Los Gatos Mine (CLG), as its explosives and blasting permit has been suspended on the back of an incident. However, the company hopes to recover its permit soon so that its annual production targets will not be affected.

In April 2022, the Mexican Ministry of Defense suspended CLG's explosives and blasting permit due to an incident in which two explosions were prematurely detonated during underground activities. The company explained that there were no physical injuries, nor significant damage to equipment and infrastructure. However, an investigation of CLG's blasting procedures is being carried out to ensure the safety of its employees.

Gatos Silver explained that its processing plant has continued to operate normally since the suspension of its permit. However, it had to shut down operations on April 28 for maintenance activities. Meanwhile, non-productive activities at the mine will continue as normal, as will the investigation of the incident. The company expects CLG's permit to be reinstated soon, along with the resumption of mine and processing activities. Consequently, the suspension is not expected to affect its 2022 production guidance.

In 1Q22, CLG achieved record silver production of 2.39Moz, representing a 58 percent increase compared to 1Q21. Additionally, lead and zinc production was 10.3 million and 13.8 million pounds, showing an increase of 36 percent and 58 percent respectively compared to 1Q21. The company explained that the higher production was achieved due to higher silver grades, higher plant throughput and improved recoveries. In a previous press release, the company announced that it will increase the plant's production levels to 2,700t/d during2H22.

By 2022, the company expects to produce between 8.5M and 9Moz of silver, from 49M to 54Mlb of zinc, between 36M and 40Mlb of lead and, finally, from 4,000 to 4,500oz of gold. The company emphasized that this year, it will also focus on further exploring the Gatos District, optimizing operations and reducing costs. “We continue to achieve record production while maintaining strong performance in the areas of safety, environmental stewardship, social engagement and continuing to shift our exploration focus to the Los Gatos District. Going forward, our primary objective is to stay the course in all aspects of operating excellence while strengthening our technical capability and updating the Life of Mine plan for Cerro Los Gatos,” said Dale Andres, President, Gatos Silver.

Gatos Silver is a company focused on exploration, development and production of silver at the Cerro Los Gatos mine in Chihuahua, which is now cash-flow positive. In 2021, the company listed its IPO on both the NYSE and TSX.