Gatos Silver, Inc. (NYSE:GATO) Q3 2023 Earnings Conference Call November 7, 2023 11:00 AM ET

Company Participants

Dale Andres - CEO

André van Niekerk - CFO

Conference Call Participants

Cosmos Chiu - CIBC

Operator

Hello, ladies and gentlemen, thank you for standing by. Welcome to Gatos Silver Third Quarter 2023 Results Conference Call. Presenting today will be Dale Andres, CEO of Gatos Silver; and André van Niekerk, Chief Financial Officer. We will conclude today's session with a question-and-answer period, where other members of the Gatos Silver management team will be available. [Operator Instructions].

At this time, all participants' lines have been placed on mute for the duration -- excuse me, of the presentation to prevent any background noise.

Turning your attention to Slide 2, please note, today's call contains forward-looking statements. Various risks and uncertainties may cause actual results to vary. Gatos Silver does not assume the obligation to update any forward-looking statements.

I would now like to turn the call over to Mr. Dale Andres. Please go ahead.

Dale Andres

Thank you, operator, and good morning, everyone.

Turning to Slide 3, there are three clear highlights this quarter. We continued to further strengthen the balance sheet increasing the cash balance and reducing debt with continued free cash flow generation. Both, GSI, Gatos Silver and 70% owned Los Gatos joint venture are debt free with a strong cash position.

Number two, operations continued to perform very well with the Cerro Los Gatos mine matching record throughput rates. As a result of continued good operational performance in the first month of the fourth quarter in October along with recent optimization of the mine plan, we are increasing our 2023 full-year silver and silver equivalent production guidance by 16% and 8% respectively based on the mid-point of each guidance range.

And number three and I believe most importantly, in early September, we announced an updated life of mine plan and reserve and resource where we extended the mine life to 2030 and increased the expected silver production over the life of mine by 46%. We are actively infill drilling the new and prospective Southeast Deeps zone and we will be shifting our focus to additional near mine and district drilling through the fourth quarter and into 2024.

Turning to Slide 4, this shows the continued strong operating performance at the Cerro Los Gatos mine. Throughput in the quarter was just over 2,900 tonnes per day, while silver grades improved compared to the prior quarter, which resulted in an 11% increase in silver production of 2.2 million ounces. Silver equivalent production, which includes zinc, lead and gold, was 3.5 million ounces for the quarter.