Gatos Silver, Inc. (NYSE:GATO) Q3 2024 Earnings Conference Call November 12, 2024 11:00 AM ET

Company Participants

Dale Andres – Chief Executive Officer
André van Niekerk – Chief Financial Officer

Conference Call Participants

Operator

Thank you for standing by. My name is Janine, and I will be your conference operator. 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 participant lines have been placed on mute for the duration of the presentation to prevent any background noise.

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

Dale Andres

Thank you, operator, and good morning, everyone. I just want to remind everyone that Gatos we will be making forward-looking statements and those are subject to various risks and uncertainties that may cause actual results to vary and Gatos Silver does not assume the obligation to update any forward-looking statements.

Just to start, as you can see on Slide 3, there was a lot going on in the third quarter. On September 5, the company entered into a merger agreement with First Majestic. The proposed merger consolidates three world-class producing silver districts in Mexico, and that creating a leading primary silver producer.

We expect this transformative transaction to close in the first quarter next year, and that's, of course, subject to certain conditions, and I'll describe those a little bit more later in the presentation. The Los Gatos Joint Venture had record cash flow from operations and record free cash flow. This was primarily due to the strong operating performance and higher metal prices in the quarter. We have revised guidance upward in early October, and the third quarter results put us in a strong position to achieve our revised annual guidance.

I would also like to highlight the Los Gatos Joint Venture's free cash flow, and that was $42.6 million in the third quarter which provided sufficient cash flow to allow for $54.2 million of distributions to the joint venture partners during the quarter. As a result of these cash distributions, Gatos Silver had a cash balance of $114.8 million at the end of October. And last week, the joint venture did make another $40 million distribution with our share being $28 million. So far this year, the joint venture has made close to $150 million in distributions to its partners.