Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 01, 2021 | |
Document and Entity Information | ||
Entity Registrant Name | GATOS SILVER, INC. | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Entity File Number | 001-39649 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-2654848 | |
Entity Address, Address Line One | 8400 E. Crescent Parkway, Suite 600 | |
Entity Address, City or Town | Greenwood Village | |
Entity Address State Or Province | CO | |
Entity Address, Postal Zip Code | 80111 | |
City Area Code | 303 | |
Local Phone Number | 784-5350 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | GATO | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 69,134,494 | |
Entity Central Index Key | 0001517006 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 12,398 | $ 150,146 |
Related party receivables | 1,280 | 1,727 |
Other current assets | 1,058 | 3,879 |
Total current assets | 14,736 | 155,752 |
Non-Current Assets | ||
Investment in affiliates | 393,608 | 109,597 |
Other non-current assets | 41 | 61 |
Total Assets | 408,385 | 265,410 |
Current Liabilities | ||
Accounts payable and other accrued liabilities | 4,043 | 4,024 |
Non-Current Liabilities | ||
Credit Facility, net of debt issuance costs | 12,583 | |
Shareholders' Equity | ||
Common Stock, $0.001 par value; 700,000,000 shares authorized; 69,134,494 and 59,183,076 shares outstanding as of September 30, 2021 and December 31, 2020 | 117 | 108 |
Paid-in capital | 542,193 | 409,728 |
Accumulated deficit | (150,551) | (147,423) |
Treasury stock, at cost, nil and 144,589 shares as of September 30, 2021 and December 31, 2020, respectively | (1,027) | |
Total owners' capital | 391,759 | 261,386 |
Total Liabilities and Owners' Capital | $ 408,385 | $ 265,410 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 700,000,000 | 700,000,000 |
Common stock, shares outstanding | 69,134,494 | 59,183,076 |
Treasury stock, shares | 0 | 144,589 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Expenses | |||||
Exploration | $ 479 | $ 134 | $ 1,397 | $ 516 | |
General and administrative | 5,994 | 1,965 | 14,008 | 4,345 | |
Amortization | 31 | 7 | 45 | 24 | |
Total expenses | 6,504 | 2,106 | 15,450 | 4,885 | |
Other income (expense) | |||||
Equity income (loss) in affiliates | 1,600 | 3,447 | 22,592 | (18,069) | |
Term Loan closing fee | (10,000) | (10,000) | |||
Other loss | (95) | (908) | (270) | (3,253) | |
Net other income (expense) | (8,495) | 2,539 | 12,322 | (21,322) | |
Net income (loss) from continuing operations | (14,999) | 433 | (3,128) | (26,207) | |
Net loss from discontinued operations | (1,618) | (4,943) | |||
Net loss | $ (14,999) | $ (1,185) | $ (3,128) | $ (31,150) | |
Basic | |||||
Continuing operations | [1] | $ (0.22) | $ 0.01 | $ (0.05) | $ (0.65) |
Discontinued operations | [1] | (0.04) | (0.12) | ||
Total | [1] | (0.22) | (0.03) | (0.05) | (0.77) |
Diluted | |||||
Continuing operations | [1] | (0.22) | 0.01 | (0.05) | (0.65) |
Discontinued operations | [1] | (0.04) | (0.12) | ||
Total | [1] | $ (0.22) | $ (0.03) | $ (0.05) | $ (0.77) |
Weighted average shares outstanding: | |||||
Basic (in shares) | [1] | 67,325,644 | 40,506,144 | 62,210,848 | 40,505,790 |
Diluted (in shares) | [1] | 67,325,644 | 40,506,144 | 62,210,848 | 40,505,790 |
[1] | Prior period results have been adjusted to reflect the two-for-one reverse split in October 2020. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) | 1 Months Ended |
Oct. 31, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |
Reverse stock split ratio | 0.5 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Treasury Stock | Paid-in Capital | Accumulated Deficit | Total | |
Balance at Dec. 31, 2019 | $ 80 | $ (1,027) | $ 375,921 | $ (225,583) | $ 149,391 | |
Balance (in shares) at Mar. 31, 2020 | [1] | 40,323,430 | 144,589 | |||
Stock-based compensation | 1,031 | 1,031 | ||||
DSU compensation | 61 | 61 | ||||
Net income (loss) | (17,821) | (17,821) | ||||
Balance at Mar. 31, 2020 | $ 80 | $ (1,027) | 377,013 | (243,404) | 132,662 | |
Balance (in shares) at Dec. 31, 2019 | [1] | 40,323,430 | 144,589 | |||
Balance at Dec. 31, 2019 | $ 80 | $ (1,027) | 375,921 | (225,583) | 149,391 | |
Balance (in shares) at Sep. 30, 2020 | [1] | 40,323,430 | 144,589 | |||
Net income (loss) | (31,150) | |||||
Balance at Sep. 30, 2020 | $ 80 | $ (1,027) | 379,204 | (256,733) | 121,524 | |
Balance (in shares) at Dec. 31, 2019 | [1] | 40,323,430 | 144,589 | |||
Balance at Mar. 31, 2020 | $ 80 | $ (1,027) | 377,013 | (243,404) | 132,662 | |
Balance (in shares) at Jun. 30, 2020 | [1] | 40,323,430 | 144,589 | |||
Stock-based compensation | 1,086 | 1,086 | ||||
Net income (loss) | (12,144) | (12,144) | ||||
Balance at Jun. 30, 2020 | $ 80 | $ (1,027) | 378,099 | (255,548) | 121,604 | |
Balance (in shares) at Mar. 31, 2020 | [1] | 40,323,430 | 144,589 | |||
Balance (in shares) at Sep. 30, 2020 | [1] | 40,323,430 | 144,589 | |||
Stock-based compensation | 1,105 | 1,105 | ||||
Net income (loss) | (1,185) | (1,185) | ||||
Balance at Sep. 30, 2020 | $ 80 | $ (1,027) | 379,204 | (256,733) | 121,524 | |
Balance (in shares) at Jun. 30, 2020 | [1] | 40,323,430 | 144,589 | |||
Balance at Dec. 31, 2020 | $ 108 | $ (1,027) | 409,728 | (147,423) | 261,386 | |
Balance (in shares) at Mar. 31, 2021 | 59,409,052 | 144,589 | ||||
Stock-based compensation | 1,078 | 1,078 | ||||
Issuance of common stock | 1,559 | 1,559 | ||||
Issuance of common stock (in shares) | 182,453 | |||||
DSUs converted to common stock (in shares) | 43,523 | |||||
Other | (262) | (262) | ||||
Net income (loss) | (1,620) | (1,620) | ||||
Balance at Mar. 31, 2021 | $ 108 | $ (1,027) | 412,103 | (149,043) | 262,141 | |
Balance (in shares) at Dec. 31, 2020 | 59,183,076 | 144,589 | ||||
Balance at Dec. 31, 2020 | $ 108 | $ (1,027) | 409,728 | (147,423) | 261,386 | |
Balance (in shares) at Sep. 30, 2021 | 69,134,494 | |||||
Net income (loss) | (3,128) | |||||
Balance at Sep. 30, 2021 | $ 117 | 542,193 | (150,551) | 391,759 | ||
Balance (in shares) at Dec. 31, 2020 | 59,183,076 | 144,589 | ||||
Balance at Mar. 31, 2021 | $ 108 | $ (1,027) | 412,103 | (149,043) | 262,141 | |
Balance (in shares) at Jun. 30, 2021 | 59,774,201 | 144,589 | ||||
Stock-based compensation | 2,490 | 2,490 | ||||
Issuance of common stock | 2,662 | 2,662 | ||||
Issuance of common stock (in shares) | 331,497 | |||||
DSUs converted to common stock (in shares) | 33,652 | |||||
Other | (7) | (7) | ||||
Net income (loss) | 13,491 | 13,491 | ||||
Balance at Jun. 30, 2021 | $ 108 | $ (1,027) | 417,248 | (135,552) | 280,777 | |
Balance (in shares) at Mar. 31, 2021 | 59,409,052 | 144,589 | ||||
Balance (in shares) at Sep. 30, 2021 | 69,134,494 | |||||
Stock-based compensation | 2,167 | 2,167 | ||||
Issuance of common stock | $ 9 | $ 1,027 | 121,637 | 122,673 | ||
Issuance of common stock (in shares) | 9,288,747 | (144,589) | ||||
DSU compensation | 1,141 | 1,141 | ||||
DSUs converted to common stock (in shares) | 71,546 | |||||
Net income (loss) | (14,999) | (14,999) | ||||
Balance at Sep. 30, 2021 | $ 117 | $ 542,193 | $ (150,551) | $ 391,759 | ||
Balance (in shares) at Jun. 30, 2021 | 59,774,201 | 144,589 | ||||
[1] | Prior period results have been adjusted to reflect the two-for-one reverse split in October 2020. |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) | 1 Months Ended |
Oct. 31, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY | |
Reverse stock split ratio | 0.5 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | |
OPERATING ACTIVITIES | |||
Net loss | $ (3,128) | $ (31,150) | |
Plus net loss from discontinued operations | $ 1,618 | 4,943 | |
Adjustments to reconcile net income (loss) to net cash used by operating activities: | |||
Amortization | 7 | 45 | 24 |
Stock-based compensation expense | 5,755 | 3,043 | |
Equity (income) loss in affiliates | (22,592) | 18,069 | |
Changes in operating assets and liabilities: | |||
Receivables from relatedparties | 446 | (3,788) | |
Accounts payable and other accrued liabilities | 1,159 | 146 | |
Other current assets | 2,821 | (4) | |
Operating cash flows from discontinued operations | (3,181) | ||
Net cash used by operating activities | (15,494) | (11,898) | |
INVESTING ACTIVITIES | |||
Investment in affiliates | (261,439) | (8,383) | |
Investing cash flows from discontinued operations | (22) | ||
Net cash used by investing activities | (261,439) | (8,405) | |
FINANCING ACTIVITIES | |||
Relatedparty convertible debt | 15,000 | ||
Credit Facility | 13,000 | ||
Financing costs | (7,274) | (722) | |
Issuance of common stock | 132,873 | ||
Issuance of treasury stock | 1,027 | ||
Other | (441) | 260 | |
Financing cash flows from discontinued operations | 307 | ||
Net cash provided by financing activities | 139,185 | 14,845 | |
Net decrease in cash and cash equivalents | (137,748) | (5,458) | |
Cash and cash equivalents, beginning of period | 150,146 | 9,085 | |
Cash and cash equivalents, end of period | 3,627 | 12,398 | 3,627 |
Less cash of discontinued operations | 619 | 619 | |
Cash of continuing operations, end of period | $ 3,008 | 12,398 | 3,008 |
Interest paid | 67 | ||
Supplemental disclosure of noncash transactions: | |||
Deferred financing costs included in accounts payable and accrued liabilities | 882 | ||
Director fees in accrued liabilities converted to deferred share units | $ 1,141 | 61 | |
Conversion of related party accounts receivable into LGJV capital contributions | $ 9,448 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2021 | |
Description of Business | |
Description of Business | 1. Description of Business Organization and Nature of Business Gatos Silver, Inc. (“Gatos Silver” or “the Company”) is a silver dominant production, development and exploration company that discovered a new silver and zinc-rich mineral district in southern Chihuahua State, Mexico. The Company’s primary efforts are focused on the operation of the Los Gatos Joint Venture (“LGJV”) in Chihuahua, Mexico. On January 1, 2015, the Company entered into the LGJV to develop the Los Gatos District (“LGD”) with Dowa Metals and Mining Co., Ltd. (“Dowa”). Until July 15, 2021, the LGJV operating entities consisted of Minera Plata Real S. de R.L. de C.V (“MPR”), Operaciones San Jose del Plata S. de R.L. de C.V. and Servicios San Jose del Plata S. de R.L. de C.V. (“Servicios”) (collectively the “LGJV Entities”). Effective July 15, 2021, Servicios was merged into MPR. Dowa completed its $50,000 funding requirement to the LGJV on April 1, 2016, thereby acquiring a 30% interest in the LGJV and the right to purchase future zinc-concentrate production at market rates. The LGJV completed a feasibility study in January 2017 and a technical update to the feasibility study in July 2020. In May 2019, Dowa increased its ownership interest by 18.5% to 48.5% through the conversion of the remaining Dowa MPR Loan (as defined in Note 9 —Commitments, Contingencies and Guarantees) to equity. On March 11, 2021, the Company repurchased the 18.5% interest from Dowa. See Note 9—Commitments, Contingencies and Guarantees for further discussion. As of September 30, 2021, the LGJV ownership is 70.0% Gatos Silver and 30.0% Dowa. On September 1, 2019, the LGJV commenced commercial production of its two concentrate products: a lead concentrate and a zinc concentrate. The LGJV’s lead and zinc concentrates are currently sold to third-party customers. The Company continues to perform additional definition drilling to further define and expand mineralization of the Cerro Los Gatos deposit, and is performing definition and exploratory drilling at the nearby Esther deposit. On December 5, 2020, the LGJV began the current infill and extension drilling program at the Cerro Los Gatos deposit. On May 7, 2021, the LGJV restarted drilling at the Esther zone. The Company’s other Mexico exploration efforts are conducted through its wholly-owned subsidiary, Minera Luz del Sol S. de R.L. de C.V. (“MLS”). In March 2021, MLS commenced a 5,400-meter exploration program on its wholly-owned Santa Valeria project, located approximately 15 kilometers from the Cerro Los Gatos deposit. Discontinued Operations In October 2020, the Company completed the distribution of its wholly-owned subsidiary, Silver Opportunity Partners LLC (“SOP”), and SOP has been presented as discontinued operations in the Company’s condensed consolidated financial statements. See Note 11 – Discontinued Operations for additional detail. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Consolidation and Presentation The financial statements represent the condensed consolidated financial position and results of operations of Gatos Silver, Inc. and its subsidiary, MLS. Unless the context otherwise requires, references to Gatos Silver or the Company mean Gatos Silver, Inc. and its consolidated subsidiary. All equity interest in the Company’s wholly-owned subsidiary, SOP, was distributed to its stockholders in October 2020. The accounts for SOP have been presented as discontinued operations in the accompanying interim condensed consolidated financial statements. The interim condensed Summary of Significant Accounting Policies The consolidated financial statements for the year ended December 31, 2020, disclose those accounting policies considered significant in determining results of operations and financial position. There have been no material changes to, or in the application of, the accounting policies previously identified and described in the 2020 10-K. Recent Accounting Pronouncements The Company adopted the provision of Accounting Standards Update No. 2019-12, Income Taxes (Topic 740). This provision did not have a material impact on the financial statements. There have been no additional accounting pronouncements issued or adopted during the nine months ended September 30, 2021, which are expected to have a material impact on the financial statements. |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment, net | |
Property, Plant and Equipment, net | 3. Property, Plant and Equipment, net Mineral Properties Mining Concessions In Mexico, mineral concessions from the Mexican government can only be held by Mexican nationals or Mexican-incorporated companies. The concessions are valid for 50 years and are extendable provided the concessions are kept in good standing. For concessions to remain in good standing a semi-annual fee must be paid to the Mexican government and an annual report describing the work accomplished on the property must be filed. These concessions may be cancelled without penalty with prior notice to the Mexican government. MLS is the concession holder of a series of claims titles granted by the Mexican government. Santa Valeria Concession The Company is required to make a production royalty payment of 1% of the net smelter returns on production. The Company may terminate the agreement upon prior notice. |
Accounts Payable and Other Accr
Accounts Payable and Other Accrued Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Accounts Payable and Other Accrued Liabilities | |
Accounts Payable and Other Accrued Liabilities | 4. Accounts Payable and Other Accrued Liabilities September 30, December 31, 2021 2020 Accounts payable $ 263 $ 560 Accrued expenses 955 1,240 Accrued compensation 2,565 1,964 Other 260 260 Total accounts payable and other current liabilities $ 4,043 $ 4,024 |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related-Party Transactions | |
Related-Party Transactions | 5. Related-Party Transactions LGJV The Company has a services agreement with the LGJV to provide certain consulting and administrative services. The Company earned $1,250 and $900 under this agreement for the three months ended September 30, 2021 and 2020, respectively, and during the nine months ended September 30, 2021 and 2020, the Company earned $3,750 and $3,000, respectively. The Company received $4,117 and nil from the LGJV under this agreement for the nine months ended September 30, 2021 and 2020. The Company had receivables under this agreement of $833 and $1,200 as of September 30, 2021 and December 31, 2020, respectively. The Company also incurs certain LGJV costs and provides short term advances that are reimbursed by the LGJV. SSMRC The Company has a Management Services Agreement with Sunshine Silver Mining & Refining Corporation (“SSMRC”) (formerly Silver Opportunity Partners Corporation), pursuant to which the Company provides certain limited executive and managerial advisory services to SSMRC until terminated by either party. SSMRC reimburses the Company for costs of such services. The Company earned nil from SSMRC under this agreement for the three months ended September 30, 2021 and 2020, respectively, and during the nine months ended September 30, 2021 and 2020, the Company earned $16 and nil, respectively. |
Net Income (Loss) per Share
Net Income (Loss) per Share | 9 Months Ended |
Sep. 30, 2021 | |
Net Income (Loss) per Share | |
Net Income (Loss) per Share | 6. Net Income (Loss) per Share Basic net income (loss) per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed similarly, except that weighted average common shares is increased to reflect the potential dilution that would occur if stock options outstanding were exercised or converted into common stock. The dilutive effects are calculated using the treasury stock method. For both the three and nine months ended September 30, 2021 and 2020, all stock options outstanding have been excluded from the dilutive earnings per share calculation as their effect would be anti-dilutive. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity | |
Stockholders' Equity | 7. Stockholders’ Equity The Company is authorized to issue 700,000,000 shares of $0.001 par value common stock and 50,000,000 shares of $0.001 par value preferred stock. On July 19, 2021, the Company completed a public offering of 8,930,000 shares of common stock at a price of $14.00 per share, resulting in net proceeds of $118,894, after deducting underwriting discounts and commissions and expenses paid by the Company. On August 18, 2021, the Company issued an additional 286,962 shares of common stock at a price of $14.00 per share, through the exercise of the over-allotment option, with net proceeds from the additional issuance of $3,837, after deducting underwriting discounts and commissions and expenses paid by the Company. S The Company’s stock options have a contractual term of 10 years and entitle the holder to purchase shares of the Company’s common stock. The options granted to the Company’s employees and LGJV personnel prior to 2020 have a requisite service period of four years and vest in equal annual installments. Starting in 2020, the options granted to the Company’s employees and LGJV personnel generally have a requisite service period of three years. The sign on options granted to the Company’s President in June 2021 vest in three equal tranches, the first of which vested immediately, and the remainder on the first and second anniversaries of employment with the Company, subject to continued employment on such vesting dates. The options granted to non-employee directors prior to 2020 have a requisite service period of one year and vest in equal monthly installments. The options granted to non-employee directors in January 2020 have a requisite service period of one and a half years The Company granted 489,719 and 810,333 stock options during the nine months ended September 30, 2021 and 2020, respectively. The weighted-average grant-date fair value per share was $9.53 and $6.73 for the nine months ended September 30, 2021 and 2020, respectively. The Company received $4,862 from stock options exercised during the nine months ended September 30, 2021. Total unrecognized stock-based compensation expense as of September 30, 2021, was $8,346 which is expected to be recognized over a weighted average period of 1.9 years. Stock option activity for the nine months ended September 30, 2021, is summarized in the following tables: Weighted ‑ Average Director and Employee Options Shares Exercise Price Outstanding at December 31, 2020 5,411,930 $ 12.52 Granted 489,719 $ 16.72 Exercised 585,735 $ 8.30 Forfeited 15,000 $ 7.00 Outstanding at September 30, 2021 5,300,914 $ 13.39 Vested at September 30, 2021 3,366,804 $ 15.11 Weighted ‑ Average LGJV Personnel Options Shares Exercise Price Outstanding at December 31, 2020 43,676 $ 7.23 Outstanding and vested at September 30, 2021 43,676 $ 7.23 Deferred Stock Unit Transactions Deferred stock units (“DSUs”) are awarded to directors at the discretion of the Board of Directors. The DSUs are fully vested on the grant date and each DSU entitles the holder to receive one share of the Company’s common stock upon the director’s cessation of continuous service. In addition, senior executives are eligible to elect to defer receipt of any portion of cash compensation or equity compensation awards other than from the exercise of stock options and take payment in the form of DSUs. Non-employee directors are eligible to elect to defer receipt of any portion of annual retainers or meeting awards and take payment in the form of DSUs. The DSU entitles the holder to receive one share of the Company’s common stock at either a date specified in the deferral election or cessation of service, whichever comes first. The fair value of the DSUs are equal to the fair value of the Company’s common stock on the grant date. At September 30, 2021, there were 144,958 DSUs outstanding. The Company granted 110,965 and 5,103 DSUs during the nine months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021, 148,721 DSUs were converted to common stock. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Measurements | |
Fair Value Measurements | 8. Fair Value Measurements The Company establishes a framework for measuring the fair value of financial assets and liabilities and nonfinancial assets and liabilities, which are measured at fair value on a recurring (annual) basis in the form of a fair value hierarchy that prioritizes the inputs into valuation techniques used to measure fair value into three broad levels. This hierarchy gives the highest priority to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs. Further, financial assets and liabilities should be classified by level in their entirety based upon the lowest level of input that was significant to the fair value measurement. The three levels of the fair value hierarchy are as follows: Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date. Level 2: Quoted prices in inactive markets for identical assets or liabilities, quoted prices for similar assets or liabilities in active markets, or other observable inputs either directly related to the asset or liability or derived principally from corroborated observable market data. Level 3: Unobservable inputs due to the fact there is little or no market activity. This entails using assumptions in models which estimate what market participants would use in pricing the asset or liability. Financial Assets and Liabilities At September 30, 2021, and December 31, 2020, the Company’s financial instruments consisted of cash and cash equivalents, receivables, accounts payable and other current liabilities. The carrying amounts of these financial instruments approximate fair value due to their short maturities. Non-Financial Assets and Liabilities The Company discloses and recognizes its non-financial assets and liabilities at fair value on a non-recurring basis. The estimated fair value for these non-financial assets and liabilities are classified as Level 3 of the fair value hierarchy, as the valuation was determined based on internally developed assumptions that market participants would use in the pricing of such assets without observable inputs and no market activity. The Company recorded its initial investment in affiliates at fair value. The estimated fair value for this non-financial asset is classified as Level 3 of the fair value hierarchy, as the valuation was determined based on internally developed assumptions with few observable inputs and no market activity. |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 9 Months Ended |
Sep. 30, 2021 | |
Commitments, Contingencies and Guarantees | |
Commitments, Contingencies and Guarantees | 9. Commitments, Contingencies and Guarantees In determining its accruals and disclosures with respect to loss contingencies, the Company will charge to income an estimated loss if information available prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Legal expenses associated with the commitments and contingencies are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred. The Company’s mining and exploration activities are subject to various laws, regulations and permits governing the protection of the environment. These laws, regulations and permits are continually changing and are generally becoming more restrictive. The Company has made, and expects to make in the future, expenditures to comply with such laws, regulations and permits, but cannot predict the full amount of such future expenditures. In July 2017, the LGJV Entities entered into a loan agreement (the “Term Loan”) with Dowa whereby the LGJV Entities could borrow up to $210,000 for LGD development, with a maturity date of December 29, 2027. Interest on the Term Loan accrued daily at LIBOR plus 2.35% per annum, with the interest added to the amount borrowed until commencement of production. During 2018, the LGJV paid Dowa a $4,200 closing fee. Commencing June 30, 2021, repayment of the Term Loan in per annum of On July 26, 2021, the Term Loan was repaid in full through capital contributions made to the LGJV by the Company and Dowa in pro-rata amounts equal to their ownership in the LGJV of 70% and 30%, respectively. In conjunction with the repayment, the Company and the LGJV paid closing fees to Dowa of $10,000 and $1,585, respectively. On January 23, 2018, the LGJV entered into a loan agreement with Dowa (the “Dowa MPR Loan”) whereby the LGJV could borrow up to $65,700 to continue LGD development. Interest on this loan accrued daily at LIBOR plus 1.5% per annum and was added to the amount borrowed. The amount borrowed plus accrued interest was due the earlier of June 30, 2019, or upon the Cerro Los Gatos mine’s substantial completion. If the Company’s 70% portion of the Dowa MPR Loan was not repaid in full on or before the due date, Dowa could elect to convert all or a portion of the principal amount into additional LGJV ownership at a favorable conversion rate. The Company contributed $18,200 to the LGJV in May 2019 to provide funding for a partial repayment of principal and interest related to the Dowa MPR Loan. In late May 2019, the Dowa MPR Loan was fully extinguished with a cash payment of $18,200 and the conversion of the remaining $50,737 of principal and interest. The conversion of the remaining principal and interest increased Dowa’s ownership in the LGJV entities by 18.5% to 48.5%. On March 11, 2021, the Company repurchased the 18.5% interest from Dowa, for a total consideration of $71,550, increasing the Company’s ownership in the LGJV to 70.0%. These transactions resulted in a $47,400 higher basis than the underlying net assets of the LGJV Entities. This basis difference is being amortized over the LGJV Entities proven and probable reserves. On May 30, 2019, the LGJV entered into a working capital facility agreement (the “WCF”) with Dowa whereby the LGJV could borrow up to $60,000 to fund the working capital and sustaining capital requirements of the LGD. Interest on this loan accrued daily at LIBOR plus 3.0% per annum and all outstanding principal and interest was to mature on June 28, 2021. The Company was required to pay an arrangement fee on the borrowing, calculated as 15.0% per annum of 70.0% of the average daily principal amount outstanding under the WCF during such fiscal quarter. On March 11, 2021, the full $60,000 amount outstanding under the WCF was extinguished of which the Company’s pro-rata capital contribution to the LGJV was $42,000. The Company guarantees the payment of all obligations, including accrued interest, under the LGJV equipment loan agreements. As of September 30, 2021, the LGJV had $7,588 outstanding under the LGJV equipment loan agreements, net of unamortized debt discount of $19, with varying maturity dates through August 2023. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt | |
Debt | 10. On July 12, 2021, the Company entered into a Revolving Credit Facility (the “Credit Facility”). The Credit Facility provides for a revolving line of credit in a principal amount of $50,000 and has an accordion feature which allows for an increase in the total line of credit up to $100,000, subject to certain conditions. The Credit Facility matures on July 31, 2024. Loans under the Credit Facility will bear interest at a rate equal to either the LIBOR rate plus a margin ranging from 3.00% to 4.00% or the U.S. Base Rate plus a margin ranging from 2.00% to 3.00%, as selected by the Company, in each case, with such margin determined in accordance with the Company’s consolidated net leverage ratio as of the end of the applicable period. The Credit Facility contains affirmative and negative covenants that are customary for credit agreements of this nature. The affirmative covenants consist of a leverage ratio, a liquidity covenant and an interest coverage ratio. The negative covenants include, among other things, limitations on asset sales, mergers, acquisitions, indebtedness, liens, dividends and distributions, investments and transactions with affiliates. Obligations under the Credit Facility may be accelerated upon the occurrence of certain customary events of default. The Company was in compliance with all covenants under the Credit Facility as of September 30, 2021. On July 19, 2021, the Company borrowed $13,000 under the Credit Facility at a rate of LIBOR plus 3%. The Company has presented the Credit Facility net of the debt issuance costs and will amortize the debt issuance costs on a straight-line basis over the term of the Credit Facility. The Company recognized amortization of debt issuance costs of $25 for both the three and nine months ended September 30, 2021. Unamortized debt issuance cost was $417 as of September 30, 2021. The Company recognized interest expense of $82 for both the three and nine months ended September 30, 2021, which has been recorded on the statements of operations under other loss. The Company paid interest of $67 for both the three and nine months ended September 30, 2021. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations | |
Discontinued Operations | 11. Discontinued Operations In October 2020, the Company completed the distribution of its reportable U.S. segment, which was comprised of SOP. To effect the distribution, the Company distributed, on a pro rata basis, all equity interest of SOP to its stockholders of record immediately prior to completion of the initial public offering. Shareholders received approximately 0.10594 shares of common stock of SOP for every share of the Company’s common stock held. SOP became a wholly owned subsidiary of a newly created Delaware corporation named Silver Opportunity Partners Corporation, subsequently renamed SSMRC. The results of operations for SOP have been reflected as discontinued operations in the condensed consolidated statement of operations for the three and nine months ended September 30, 2020, and consist of the following: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Operating Expenses of Discontinued Operations Exploration $ 102 $ 318 Pre-development 506 1,554 General and administrative 423 1,300 Amortization 588 1,774 Total expenses 1,619 4,946 Other Income of Discontinued Operations Other income (1) (3) Net loss of discontinued operations $ 1,618 $ 4,943 The cash flow activity from discontinued operations for the nine months ended September 30, 2020, have been reflected as discontinued operations in the condensed consolidated statement of cash flows for the nine months ended September 30, 2020, and consists of the following: September 30, 2020 Operating Activities of Discontinued Operations Net loss $ (4,943) Adjustments to reconcile net loss to net cash used by operating activities: Amortization 1,774 Stock compensation expense 179 Accretion expense 82 Changes in operating assets and liabilities: Accounts payable and other accrued liabilities (226) Other current assets (47) Net cash used by operating activities of discontinued operations (3,181) Investing Activities of Discontinued Operations Purchase of property, plant and equipment (22) Net cash used by investing activities of discontinued operations (22) Financing Activities of Discontinued Operations PPP Loan proceeds 307 Net cash provided by financing activities of discontinued operations 307 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Information | |
Segment Information | 12. Segment Information The Company operates in a single industry as a corporation engaged in the acquisition, exploration and development of primarily silver mineral interests. The Company has mineral property interests in Mexico. The Company’s reportable segments are based on the Company’s mineral interests and management structure and include Mexico and Corporate segments. The Mexico segment engages in the development and exploration on the Company’s Mexican mineral properties and includes the Company’s investment in the LGJV. Financial information relating to the Company’s segments is as follows: Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Mexico Corporate Total Mexico Corporate Total Exploration $ 479 $ — $ 479 $ 134 $ — $ 134 General and administrative 577 5,417 5,994 195 1,770 1,965 Amortization — 31 31 — 7 7 Equity income in affiliates 1,600 — 1,600 3,447 — 3,447 Term Loan closing fee — 10,000 10,000 — — — Net other loss (income) 15 80 95 (2) 910 908 Total assets 61,373 347,012 408,385 37,359 75,574 112,933 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Mexico Corporate Total Mexico Corporate Total Exploration $ 1,397 $ — $ 1,397 $ 516 $ — $ 516 General and administrative 909 13,099 14,008 447 3,898 4,345 Amortization — 45 45 — 24 24 Equity income (loss) in affiliates 22,592 — 22,592 (18,069) — (18,069) Term Loan closing fee — 10,000 10,000 — — — Net other loss 34 236 270 22 3,231 3,253 Total assets $ 61,373 $ 347,012 $ 408,385 $ 37,359 $ 75,574 $ 112,933 |
Investment in Affiliate
Investment in Affiliate | 9 Months Ended |
Sep. 30, 2021 | |
Investment in Affiliate | |
Investment in Affiliate | 13. Investment in Affiliate During the three months ended September 30, 2021 and 2020, the Company recognized $1,600 and $3,447 of income, respectively, and during the nine months ended September 30, 2021 and 2020, the Company recognized $22,592 of income and a $18,069 loss, respectively, on its investment in the LGJV Entities, representing its ownership share of the LGJV Entities’ results. The equity income or loss in affiliate includes amortization of the carrying value of the investment in excess of the underlying net assets of the LGJV Entities. This basis difference is being amortized over the utilization of the LGJV Entities’ proven and probable reserves. The LGJV Entities combined balance sheets as of September 30, 2021, and December 31, 2020, and the combined statements of income (loss) for the three months and nine months ended September 30, 2021 and 2020, are as follows: LOS GATOS JOINT VENTURE COMBINED BALANCE SHEETS (UNAUDITED) (in thousands) September 30, December 31, 2021 2020 ASSETS Current Assets Cash and cash equivalents $ 9,941 $ 1,676 Receivables 6,961 3,988 Inventories 10,027 10,315 VAT receivable 47,096 50,732 Other current assets 2,543 2,891 Total current assets 76,568 69,602 Non ‑ Current Assets Mine development, net 222,128 202,874 Property, plant and equipment, net 192,675 196,942 Total non‑current assets 414,803 399,816 Total Assets $ 491,371 $ 469,418 LIABILITIES AND OWNERS' CAPITAL Current Liabilities Accounts payable and accrued liabilities $ 32,951 $ 35,767 Related party payable 1,299 1,703 Accrued interest 45 101 Unearned revenue — 3,276 Equipment loans 6,365 7,084 Dowa Term Loan — 31,826 Working Capital Facility — 60,000 Total current liabilities 40,660 139,757 Non ‑ Current Liabilities Dowa Term Loan — 187,767 Equipment loans 1,224 6,120 Reclamation obligations 12,846 12,162 Total non‑current liabilities 14,070 206,049 Owners' Capital Capital contributions 540,638 271,368 Paid‑in capital 18,405 16,366 Accumulated deficit (122,402) (164,122) Total owners' capital 436,641 123,612 Total Liabilities and Owners' Capital $ 491,371 $ 469,418 LOS GATOS JOINT VENTURE COMBINED STATEMENTS OF INCOME (LOSS) (UNAUDITED) (in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Sales $ 56,991 $ 44,021 $ 178,326 $ 81,181 Expenses Cost of sales 26,374 17,224 70,275 45,496 Royalties 1,181 1,343 3,480 1,372 Exploration 1,595 166 3,505 574 General and administrative 3,414 1,900 9,493 6,550 Depreciation, depletion and amortization 12,734 11,817 36,388 33,077 Other — — — 3,416 45,298 32,450 123,141 90,485 Other expense Interest expense 847 2,862 5,320 9,805 Loss on Term Loan extinguishment 4,359 — 4,359 — Arrangement fee — 1,576 2,090 6,285 Accretion expense 228 212 684 636 Other income (61) — (80) (108) Foreign exchange loss 47 (867) 342 4,655 5,420 3,783 12,715 21,273 Income (loss) before taxes 6,273 7,788 42,470 (30,577) Mexico mining tax 750 — 750 — Net income (loss) $ 5,523 $ 7,788 $ 41,720 $ (30,577) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
Basis of Consolidation and Presentation and Summary of Significant Accounting Policies | Basis of Consolidation and Presentation The financial statements represent the condensed consolidated financial position and results of operations of Gatos Silver, Inc. and its subsidiary, MLS. Unless the context otherwise requires, references to Gatos Silver or the Company mean Gatos Silver, Inc. and its consolidated subsidiary. All equity interest in the Company’s wholly-owned subsidiary, SOP, was distributed to its stockholders in October 2020. The accounts for SOP have been presented as discontinued operations in the accompanying interim condensed consolidated financial statements. The interim condensed Summary of Significant Accounting Policies The consolidated financial statements for the year ended December 31, 2020, disclose those accounting policies considered significant in determining results of operations and financial position. There have been no material changes to, or in the application of, the accounting policies previously identified and described in the 2020 10-K. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company adopted the provision of Accounting Standards Update No. 2019-12, Income Taxes (Topic 740). This provision did not have a material impact on the financial statements. There have been no additional accounting pronouncements issued or adopted during the nine months ended September 30, 2021, which are expected to have a material impact on the financial statements. |
Accounts Payable and Other Ac_2
Accounts Payable and Other Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounts Payable and Other Accrued Liabilities | |
Schedule of components of accounts payable and other accrued liabilities | September 30, December 31, 2021 2020 Accounts payable $ 263 $ 560 Accrued expenses 955 1,240 Accrued compensation 2,565 1,964 Other 260 260 Total accounts payable and other current liabilities $ 4,043 $ 4,024 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity | |
Schedule of stock option activity | Weighted ‑ Average Director and Employee Options Shares Exercise Price Outstanding at December 31, 2020 5,411,930 $ 12.52 Granted 489,719 $ 16.72 Exercised 585,735 $ 8.30 Forfeited 15,000 $ 7.00 Outstanding at September 30, 2021 5,300,914 $ 13.39 Vested at September 30, 2021 3,366,804 $ 15.11 Weighted ‑ Average LGJV Personnel Options Shares Exercise Price Outstanding at December 31, 2020 43,676 $ 7.23 Outstanding and vested at September 30, 2021 43,676 $ 7.23 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations | |
Schedule of results of operations and cash flow activity from discontinued operations | Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Operating Expenses of Discontinued Operations Exploration $ 102 $ 318 Pre-development 506 1,554 General and administrative 423 1,300 Amortization 588 1,774 Total expenses 1,619 4,946 Other Income of Discontinued Operations Other income (1) (3) Net loss of discontinued operations $ 1,618 $ 4,943 September 30, 2020 Operating Activities of Discontinued Operations Net loss $ (4,943) Adjustments to reconcile net loss to net cash used by operating activities: Amortization 1,774 Stock compensation expense 179 Accretion expense 82 Changes in operating assets and liabilities: Accounts payable and other accrued liabilities (226) Other current assets (47) Net cash used by operating activities of discontinued operations (3,181) Investing Activities of Discontinued Operations Purchase of property, plant and equipment (22) Net cash used by investing activities of discontinued operations (22) Financing Activities of Discontinued Operations PPP Loan proceeds 307 Net cash provided by financing activities of discontinued operations 307 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Information | |
Schedule of segment financial information | Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Mexico Corporate Total Mexico Corporate Total Exploration $ 479 $ — $ 479 $ 134 $ — $ 134 General and administrative 577 5,417 5,994 195 1,770 1,965 Amortization — 31 31 — 7 7 Equity income in affiliates 1,600 — 1,600 3,447 — 3,447 Term Loan closing fee — 10,000 10,000 — — — Net other loss (income) 15 80 95 (2) 910 908 Total assets 61,373 347,012 408,385 37,359 75,574 112,933 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Mexico Corporate Total Mexico Corporate Total Exploration $ 1,397 $ — $ 1,397 $ 516 $ — $ 516 General and administrative 909 13,099 14,008 447 3,898 4,345 Amortization — 45 45 — 24 24 Equity income (loss) in affiliates 22,592 — 22,592 (18,069) — (18,069) Term Loan closing fee — 10,000 10,000 — — — Net other loss 34 236 270 22 3,231 3,253 Total assets $ 61,373 $ 347,012 $ 408,385 $ 37,359 $ 75,574 $ 112,933 |
Investment in Affiliate (Tables
Investment in Affiliate (Tables) - Los Gatos Joint Venture ("LGJV") | 9 Months Ended |
Sep. 30, 2021 | |
Investment in Affiliate | |
Schedule of combined balance sheets | September 30, December 31, 2021 2020 ASSETS Current Assets Cash and cash equivalents $ 9,941 $ 1,676 Receivables 6,961 3,988 Inventories 10,027 10,315 VAT receivable 47,096 50,732 Other current assets 2,543 2,891 Total current assets 76,568 69,602 Non ‑ Current Assets Mine development, net 222,128 202,874 Property, plant and equipment, net 192,675 196,942 Total non‑current assets 414,803 399,816 Total Assets $ 491,371 $ 469,418 LIABILITIES AND OWNERS' CAPITAL Current Liabilities Accounts payable and accrued liabilities $ 32,951 $ 35,767 Related party payable 1,299 1,703 Accrued interest 45 101 Unearned revenue — 3,276 Equipment loans 6,365 7,084 Dowa Term Loan — 31,826 Working Capital Facility — 60,000 Total current liabilities 40,660 139,757 Non ‑ Current Liabilities Dowa Term Loan — 187,767 Equipment loans 1,224 6,120 Reclamation obligations 12,846 12,162 Total non‑current liabilities 14,070 206,049 Owners' Capital Capital contributions 540,638 271,368 Paid‑in capital 18,405 16,366 Accumulated deficit (122,402) (164,122) Total owners' capital 436,641 123,612 Total Liabilities and Owners' Capital $ 491,371 $ 469,418 |
Schedule of combined results of loss | Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Sales $ 56,991 $ 44,021 $ 178,326 $ 81,181 Expenses Cost of sales 26,374 17,224 70,275 45,496 Royalties 1,181 1,343 3,480 1,372 Exploration 1,595 166 3,505 574 General and administrative 3,414 1,900 9,493 6,550 Depreciation, depletion and amortization 12,734 11,817 36,388 33,077 Other — — — 3,416 45,298 32,450 123,141 90,485 Other expense Interest expense 847 2,862 5,320 9,805 Loss on Term Loan extinguishment 4,359 — 4,359 — Arrangement fee — 1,576 2,090 6,285 Accretion expense 228 212 684 636 Other income (61) — (80) (108) Foreign exchange loss 47 (867) 342 4,655 5,420 3,783 12,715 21,273 Income (loss) before taxes 6,273 7,788 42,470 (30,577) Mexico mining tax 750 — 750 — Net income (loss) $ 5,523 $ 7,788 $ 41,720 $ (30,577) |
Description of Business (Detail
Description of Business (Details) $ in Thousands | Mar. 11, 2021 | Sep. 01, 2019product | Mar. 31, 2021m | May 31, 2019 | Sep. 30, 2021 | Jul. 26, 2021 | Apr. 01, 2016USD ($) |
Minera Luz del Sol S. de R.L. de C.V. ("MLS") | |||||||
Description of Business and Basis of Preparation of Financial Statements | |||||||
Area of exploration program commenced (in meters) | m | 5,400 | ||||||
Los Gatos Joint Venture ("LGJV") | |||||||
Description of Business and Basis of Preparation of Financial Statements | |||||||
Ownership interest (as a percent) | 70.00% | 70.00% | 70.00% | ||||
Ownership interest repurchased | 18.50% | ||||||
Los Gatos Joint Venture ("LGJV") | Dowa Metals and Mining Co., Ltd. ("Dowa") | |||||||
Description of Business and Basis of Preparation of Financial Statements | |||||||
Ownership interest repurchased | 18.50% | ||||||
Dowa Metals and Mining Co., Ltd. ("Dowa") | |||||||
Description of Business and Basis of Preparation of Financial Statements | |||||||
Ownership interest (as a percent) | 30.00% | 30.00% | |||||
Dowa Metals and Mining Co., Ltd. ("Dowa") | Los Gatos Joint Venture ("LGJV") | |||||||
Description of Business and Basis of Preparation of Financial Statements | |||||||
Funding requirement made | $ | $ 50,000 | ||||||
Ownership interest (as a percent) | 48.50% | 30.00% | |||||
Increase in ownership interest through the conversion of loan to equity | 18.50% | ||||||
Los Gatos Joint Venture ("LGJV") | |||||||
Description of Business and Basis of Preparation of Financial Statements | |||||||
Number of concentrate products | product | 2 |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Mineral properties | |
Property, Plant and Equipment, net | |
Royalty payments, as a percentage of net smelter returns | 1.00% |
Accounts Payable and Other Ac_3
Accounts Payable and Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Accounts Payable and Other Accrued Liabilities | ||
Accounts payable | $ 263 | $ 560 |
Accrued expenses | 955 | 1,240 |
Accrued compensation | 2,565 | 1,964 |
Other | 260 | 260 |
Total accounts payable and other current liabilities | $ 4,043 | $ 4,024 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Related-Party Transactions | |||||
Receivables from related party | $ 1,280 | $ 1,280 | $ 1,727 | ||
Los Gatos Joint Venture ("LGJV") | |||||
Related-Party Transactions | |||||
Revenue from related parties | 4,117 | $ 0 | |||
Receivables from related party | 833 | 833 | $ 1,200 | ||
Los Gatos Joint Venture ("LGJV") | Consulting and administrative services agreement | |||||
Related-Party Transactions | |||||
Revenue from related parties | 1,250 | $ 900 | 3,750 | 3,000 | |
Sunshine Silver Mining & Refining Corporation ("SSMRC") | Management Services Agreement | |||||
Related-Party Transactions | |||||
Revenue from related parties | $ 0 | $ 0 | $ 16 | $ 0 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock and Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 18, 2021 | Jul. 19, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Stockholders' Equity | ||||
Common stock, shares authorized | 700,000,000 | 700,000,000 | ||
Common stock, par value | $ 0.001 | $ 0.001 | ||
Preferred stock, shares authorized | 50,000,000 | |||
Preferred stock, par value | $ 0.001 | |||
Issuance of common stock | $ 132,873 | |||
Follow-on public offering | ||||
Stockholders' Equity | ||||
Number of shares issued | 8,930,000 | |||
Price per share | $ 14 | |||
Issuance of common stock | $ 118,894 | |||
Over-allotment option | ||||
Stockholders' Equity | ||||
Number of shares issued | 286,962 | |||
Price per share | $ 14 | |||
Issuance of common stock | $ 3,837 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Stockholders' Equity | ||
Stock options granted (in shares) | 489,719 | 810,333 |
Value received from exercise of stock options | $ 4,862 | |
Stock options | ||
Stockholders' Equity | ||
Contractual term of options | 10 years | |
Weighted average grant date fair value of options per share | $ 9.53 | $ 6.73 |
Total unrecognized stock based compensation expense | $ 8,346 | |
Total unrecognized stock based compensation expense, recognition period | 1 year 10 months 24 days | |
Stock options | Employees and LGJV personnel | ||
Stockholders' Equity | ||
Requisite service period for options | 4 years | |
Stock options | Awards granted prior to 2020 | Non-employee directors | ||
Stockholders' Equity | ||
Requisite service period for options | 1 year | |
Stock options | Awards granted in January 2020 | Non-employee directors | ||
Stockholders' Equity | ||
Requisite service period for options | 1 year 6 months | |
Stock options | Awards granted in June 2020 | Non-employee directors | ||
Stockholders' Equity | ||
Requisite service period for options | 1 year |
Stockholders' Equity - Stock _2
Stockholders' Equity - Stock option activity (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Shares | ||
Granted | 489,719 | 810,333 |
Stock options | LGJV | ||
Shares | ||
Outstanding at December 31, 2020 | 43,676 | |
Outstanding at September 30, 2021 | 43,676 | |
Weighted-Average Exercise Price | ||
Outstanding at December 31, 2020 | $ 7.23 | |
Outstanding at September 30, 2021 | $ 7.23 | |
Stock options | Director and Employee | ||
Shares | ||
Outstanding at December 31, 2020 | 5,411,930 | |
Granted | 489,719 | |
Exercised | 585,735 | |
Forfeited | 15,000 | |
Outstanding at September 30, 2021 | 5,300,914 | |
Vested at September 30, 2021 | 3,366,804 | |
Weighted-Average Exercise Price | ||
Outstanding at December 31, 2020 | $ 12.52 | |
Granted | 16.72 | |
Exercised | 8.30 | |
Forfeited | 7 | |
Outstanding at September 30, 2021 | 13.39 | |
Vested at September 30, 2021 | $ 15.11 |
Stockholders' Equity - Deferred
Stockholders' Equity - Deferred Stock Unit Transactions (Details) - DSUs - shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Stockholders' Equity | ||
Number of shares underlying that each unit entitles | 1 | |
Awards outstanding (in shares) | 144,958 | |
Awards granted (in shares) | 110,965 | 5,103 |
Shares converted to common stock | 148,721 |
Commitments, Contingencies an_2
Commitments, Contingencies and Guarantees (Details) $ in Thousands | Jul. 26, 2021USD ($) | Jul. 19, 2021 | Mar. 11, 2021USD ($) | May 30, 2019USD ($) | Jan. 23, 2018USD ($) | May 31, 2019USD ($) | Jul. 31, 2018D | Jul. 31, 2017USD ($) | Dec. 31, 2018USD ($)payment | Sep. 30, 2021USD ($) | Jul. 12, 2021USD ($) | Apr. 01, 2016 |
Commitments, Contingencies and Guarantees | ||||||||||||
Maximum borrowing capacity | $ 50,000 | |||||||||||
LIBOR | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Basis spread on variable rate (as a percent) | 3.00% | |||||||||||
Los Gatos Joint Venture ("LGJV") | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Ownership interest (as a percent) | 70.00% | 70.00% | 70.00% | |||||||||
Ownership interest repurchased | 18.50% | |||||||||||
Consideration paid for ownership interest repurchased | $ 71,550 | |||||||||||
Los Gatos Joint Venture ("LGJV") | Term loan | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Payments for closing fees | $ 10,000 | |||||||||||
Los Gatos Joint Venture ("LGJV") | Dowa MPR Loan | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Repayment of debt | $ 18,200 | |||||||||||
Los Gatos Joint Venture ("LGJV") | Dowa Metals and Mining Co., Ltd. ("Dowa") | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Ownership interest repurchased | 18.50% | |||||||||||
Los Gatos Joint Venture ("LGJV") | Dowa Metals and Mining Co., Ltd. ("Dowa") | Term loan | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Maximum borrowing capacity | $ 210,000 | |||||||||||
Payments for closing fees | $ 4,200 | |||||||||||
Number of consecutive semi annual equal payments commencing June 30, 2021 | payment | 14 | |||||||||||
Arrangement fee (as a percent) | 70.00% | |||||||||||
Arrangement fee payment, number of business days | D | 2 | |||||||||||
Percentage of excess cash flow used to determine amount of additional payments | 70.00% | |||||||||||
Los Gatos Joint Venture ("LGJV") | Dowa Metals and Mining Co., Ltd. ("Dowa") | Term loan | LIBOR | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Interest rate basis | LIBOR plus 2.35% per annum | |||||||||||
Basis spread on variable rate (as a percent) | 2.35% | |||||||||||
Los Gatos Joint Venture ("LGJV") | Dowa Metals and Mining Co., Ltd. ("Dowa") | Dowa MPR Loan | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Maximum borrowing capacity | $ 65,700 | |||||||||||
Percentage of the joint venture loan for which the Company is responsible | 70.00% | |||||||||||
Repayment of debt | 18,200 | |||||||||||
Principal and interest converted | $ 50,737 | |||||||||||
Los Gatos Joint Venture ("LGJV") | Dowa Metals and Mining Co., Ltd. ("Dowa") | Dowa MPR Loan | LIBOR | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Interest rate basis | LIBOR plus 1.5% per annum | |||||||||||
Basis spread on variable rate (as a percent) | 1.50% | |||||||||||
Los Gatos Joint Venture ("LGJV") | Dowa Metals and Mining Co., Ltd. ("Dowa") | Working capital facility agreement | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Maximum borrowing capacity | $ 60,000 | |||||||||||
Arrangement fee, percentage of outstanding principal balance considered (as a percent) | 15.00% | |||||||||||
Arrangement fee (as a percent) | 70.00% | |||||||||||
Outstanding balance | $ 60,000 | |||||||||||
Company's pro-rata capital contribution | 42,000 | |||||||||||
Los Gatos Joint Venture ("LGJV") | Dowa Metals and Mining Co., Ltd. ("Dowa") | Working capital facility agreement | LIBOR | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Interest rate basis | LIBOR plus 3.0% per annum | |||||||||||
Basis spread on variable rate (as a percent) | 3.00% | |||||||||||
Los Gatos Joint Venture ("LGJV") | Dowa Metals and Mining Co., Ltd. ("Dowa") | Equipment loan agreements | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Outstanding balance | $ 7,588 | |||||||||||
Unamortized debt discount | $ 19 | |||||||||||
Dowa Metals and Mining Co., Ltd. ("Dowa") | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Ownership interest (as a percent) | 30.00% | 30.00% | ||||||||||
Dowa Metals and Mining Co., Ltd. ("Dowa") | Los Gatos Joint Venture ("LGJV") | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Ownership interest (as a percent) | 48.50% | 30.00% | ||||||||||
Increase in ownership interest through the conversion of loan to equity | 18.50% | |||||||||||
Dowa Metals and Mining Co., Ltd. ("Dowa") | Los Gatos Joint Venture ("LGJV") | Term loan | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Payments for closing fees | $ 1,585 | |||||||||||
Arrangement fee, percentage of outstanding principal balance considered (as a percent) | 2.00% | |||||||||||
Los Gatos Joint Venture ("LGJV") | ||||||||||||
Commitments, Contingencies and Guarantees | ||||||||||||
Proven and probable reserves, basis difference | $ 47,400 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Jul. 19, 2021 | Jul. 12, 2021 | Sep. 30, 2021 | Sep. 30, 2021 |
Line of Credit Facility [Line Items] | ||||
Borrowing capacity | $ 50,000 | |||
Contingent increase, additional borrowing capacity | $ 100,000 | |||
Amount borrowed | $ 13,000 | $ 13,000 | ||
Amortization of debt issuance costs | $ 25 | 25 | ||
Unamortized debt issuance cost | 417 | 417 | ||
Interest Expense, Debt | 82 | 82 | ||
Interest paid | $ 67 | $ 67 | ||
LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Spread on variable rate | 3.00% | |||
LIBOR | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Spread on variable rate | 3.00% | |||
LIBOR | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Spread on variable rate | 4.00% | |||
Base Rate | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Spread on variable rate | 2.00% | |||
Base Rate | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Spread on variable rate | 3.00% |
Discontinued Operations - Resul
Discontinued Operations - Results of operations (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Oct. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | |
Other Income of Discontinued Operations | |||
Net loss of discontinued operations | $ 1,618 | $ 4,943 | |
Silver Opportunity Partners Corporation | |||
Operating Activities of Discontinued Operations | |||
Number of shares of SOP received by Company's stockholders | 0.10594 | ||
Silver Opportunity Partners Corporation | Spin off | |||
Operating Expenses of Discontinued Operations | |||
Exploration | 102 | 318 | |
Pre-development | 506 | 1,554 | |
General and administrative | 423 | 1,300 | |
Amortization | 588 | 1,774 | |
Total expenses | 1,619 | 4,946 | |
Other Income of Discontinued Operations | |||
Other income | (1) | (3) | |
Net loss of discontinued operations | $ 1,618 | $ 4,943 |
Discontinued Operations - Cash
Discontinued Operations - Cash flow activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Discontinued Operating Activities | ||
Net loss from discontinued operations | $ (1,618) | $ (4,943) |
Changes in operating assets and liabilities: | ||
Net cash used by operating activities of discontinued operations | (3,181) | |
Investing Activities of Discontinued Operations | ||
Net cash used by investing activities of discontinued operations | (22) | |
Financing Activities of Discontinued Operations | ||
Net cash provided by financing activities of discontinued operations | 307 | |
Silver Opportunity Partners Corporation | Spin off | ||
Discontinued Operating Activities | ||
Net loss from discontinued operations | (1,618) | (4,943) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Amortization | $ 588 | 1,774 |
Stock compensation expense | 179 | |
Accretion expense | 82 | |
Changes in operating assets and liabilities: | ||
Accounts payable and other accrued liabilities | (226) | |
Other current assets | (47) | |
Net cash used by operating activities of discontinued operations | (3,181) | |
Investing Activities of Discontinued Operations | ||
Purchase of property, plant and equipment | (22) | |
Net cash used by investing activities of discontinued operations | (22) | |
Financing Activities of Discontinued Operations | ||
PPP Loan proceeds | 307 | |
Net cash provided by financing activities of discontinued operations | $ 307 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Segment Information | |||||
Exploration | $ 479 | $ 134 | $ 1,397 | $ 516 | |
General and administrative | 5,994 | 1,965 | 14,008 | 4,345 | |
Amortization | 31 | 7 | 45 | 24 | |
Equity income (loss) in affiliates | 1,600 | 3,447 | 22,592 | (18,069) | |
Term Loan closing fee | 10,000 | 10,000 | |||
Net other loss (income) | 95 | 908 | 270 | 3,253 | |
Total Assets | 408,385 | 112,933 | 408,385 | 112,933 | $ 265,410 |
Mexico. | |||||
Segment Information | |||||
Exploration | 479 | 134 | 1,397 | 516 | |
General and administrative | 577 | 195 | 909 | 447 | |
Equity income (loss) in affiliates | 1,600 | 3,447 | 22,592 | (18,069) | |
Net other loss (income) | 15 | (2) | 34 | 22 | |
Total Assets | 61,373 | 37,359 | 61,373 | 37,359 | |
Corporate | |||||
Segment Information | |||||
General and administrative | 5,417 | 1,770 | 13,099 | 3,898 | |
Amortization | 31 | 7 | 45 | 24 | |
Term Loan closing fee | 10,000 | 10,000 | |||
Net other loss (income) | 80 | 910 | 236 | 3,231 | |
Total Assets | $ 347,012 | $ 75,574 | $ 347,012 | $ 75,574 |
Investment in Affiliate - Combi
Investment in Affiliate - Combined Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||||||||
Cash and cash equivalents | $ 12,398 | $ 150,146 | ||||||
Other current assets | 1,058 | 3,879 | ||||||
Total current assets | 14,736 | 155,752 | ||||||
Non-Current Assets | ||||||||
Total Assets | 408,385 | 265,410 | $ 112,933 | |||||
Non-Current Liabilities | ||||||||
Dowa Term Loan | 12,583 | |||||||
Owners' Capital | ||||||||
Paid-in capital | 542,193 | 409,728 | ||||||
Accumulated deficit | (150,551) | (147,423) | ||||||
Total owners' capital | 391,759 | $ 280,777 | $ 262,141 | 261,386 | $ 121,524 | $ 121,604 | $ 132,662 | $ 149,391 |
Total Liabilities and Owners' Capital | 408,385 | 265,410 | ||||||
Los Gatos Joint Venture ("LGJV") | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | 9,941 | 1,676 | ||||||
Receivables | 6,961 | 3,988 | ||||||
Inventories | 10,027 | 10,315 | ||||||
VAT receivable | 47,096 | 50,732 | ||||||
Other current assets | 2,543 | 2,891 | ||||||
Total current assets | 76,568 | 69,602 | ||||||
Non-Current Assets | ||||||||
Mine development, net | 222,128 | 202,874 | ||||||
Property, plant and equipment, net | 192,675 | 196,942 | ||||||
Total noncurrent assets | 414,803 | 399,816 | ||||||
Total Assets | 491,371 | 469,418 | ||||||
Current Liabilities | ||||||||
Accounts payable and accrued liabilities | 32,951 | 35,767 | ||||||
Related party payable | 1,299 | 1,703 | ||||||
Accrued interest | 45 | 101 | ||||||
Unearned revenue | 3,276 | |||||||
Equipment loans | 6,365 | 7,084 | ||||||
Dowa Term Loan | 31,826 | |||||||
Working Capital Facility | 60,000 | |||||||
Total current liabilities | 40,660 | 139,757 | ||||||
Non-Current Liabilities | ||||||||
Dowa Term Loan | 187,767 | |||||||
Equipment loans | 1,224 | 6,120 | ||||||
Reclamation obligations | 12,846 | 12,162 | ||||||
Total noncurrent liabilities | 14,070 | 206,049 | ||||||
Owners' Capital | ||||||||
Capital contributions | 540,638 | 271,368 | ||||||
Paid-in capital | 18,405 | 16,366 | ||||||
Accumulated deficit | (122,402) | (164,122) | ||||||
Total owners' capital | 436,641 | 123,612 | ||||||
Total Liabilities and Owners' Capital | $ 491,371 | $ 469,418 |
Investment in Affiliate - Com_2
Investment in Affiliate - Combined Statement of income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Expenses | ||||||||
Exploration | $ 479 | $ 134 | $ 1,397 | $ 516 | ||||
General and administrative | 5,994 | 1,965 | 14,008 | 4,345 | ||||
Total expenses | 6,504 | 2,106 | 15,450 | 4,885 | ||||
Other expense | ||||||||
Arrangement fee | 25 | 25 | ||||||
Other income | 95 | 908 | 270 | 3,253 | ||||
Net loss | (14,999) | $ 13,491 | $ (1,620) | (1,185) | $ (12,144) | $ (17,821) | (3,128) | (31,150) |
Income (Loss) from Equity Method Investments | 1,600 | 3,447 | 22,592 | (18,069) | ||||
Los Gatos Joint Venture ("LGJV") | ||||||||
Investment in Affiliate | ||||||||
Sales | 56,991 | 44,021 | 178,326 | 81,181 | ||||
Expenses | ||||||||
Cost of sales | 26,374 | 17,224 | 70,275 | 45,496 | ||||
Royalties | 1,181 | 1,343 | 3,480 | 1,372 | ||||
Exploration | 1,595 | 166 | 3,505 | 574 | ||||
General and administrative | 3,414 | 1,900 | 9,493 | 6,550 | ||||
Depreciation, depletion and amortization | 12,734 | 11,817 | 36,388 | 33,077 | ||||
Other | 3,416 | |||||||
Total expenses | 45,298 | 32,450 | 123,141 | 90,485 | ||||
Other expense | ||||||||
Interest expense | 847 | 2,862 | 5,320 | 9,805 | ||||
Loss on Term Loan extinguishment | 4,359 | 4,359 | ||||||
Arrangement fee | 1,576 | 2,090 | 6,285 | |||||
Accretion expense | 228 | 212 | 684 | 636 | ||||
Other income | (61) | (80) | (108) | |||||
Foreign exchange loss | 47 | (867) | 342 | 4,655 | ||||
Other (income) expense | 5,420 | 3,783 | 12,715 | 21,273 | ||||
Income (loss) before taxes | 6,273 | 7,788 | 42,470 | (30,577) | ||||
Mexico mining tax | 750 | 750 | ||||||
Net loss | 5,523 | 7,788 | 41,720 | (30,577) | ||||
Income (Loss) from Equity Method Investments | $ 1,600 | $ 3,447 | $ 22,592 | $ (18,069) |