Gatos Silver (GATO.TO) is a US based silver company focused on high-grade, larger silver deposits in Mexico. Its flagship asset is the Los Gatos District, including the Cerro Los Gatos Mine in Chihuahua, Mexico.
Today, Gatos Silver announced above guidance and record silver production from its 70% owned Cerro Los Gatos (CLG) mine for the quarter and year ended December 31st 2022.
• Silver production up 36% in 2022 vs. 2021
• Silver production up 26% in Q4 2022 vs. Q4 2021
Silver production in 2022 was a record 10.3 million ounces which was up 36% from 7.6 million ounces in 2021. This number was also above the high end of the 2022 guidance range of 9.35 million to 9.65 million ounces.
Zinc, lead and gold production also increased in 2022, with zinc and gold near the high end guidance. Compared with 2021, zinc production increased by 22%, lead production by 10%, and gold production by 2%.
For the quarter, silver production for Q4 2022 was a record of 2.9 million ounces, up 26% from 2.3 million ounces in Q4 2021 and surpassing the previous record of 2.7 million ounces achieved in Q3 2022. Zinc production increased by 5%, lead production declined by 5%, and gold production increased by 8%, compared with Q4 2021.
The higher silver production for the quarter and year ended 2022 was primarily due to higher silver ore grades and higher mill throughput rates. Mill throughput averaged 2,847 tonnes per day during the fourth quarter of 2022, an increase of 9% compared to the fourth quarter of 2021. During 2022 the mill achieved a record 2,662 tonnes per day, which was 7% higher than in 2021. Silver, zinc and lead recoveries for the year ended 2022 were also higher than in 2021.
As of December 31, 2022, the Company had a cash balance of $17 million compared with $15 million at September 30, 2022.
Dale Andres, CEO of Gatos Silver, commented: “Our excellent results reflect the quality of the CLG assets and the management team’s ability to improve operations and maximize cash flows. Our focus in 2023 will be to further optimize operational performance, advance our mine life extension opportunities by converting the higher-grade portion of our current mineral resource into reserves and advancing definition drilling on the mineralization recently discovered at depth in the new South-East Deeps zone. We will also be focusing on exploring our extensive land package in the highly prospective Los Gatos district.”
The stock is up over 11% at time of writing.
What catches my attention is the stock setup. Not only do we have a basing pattern which is going to see a breakout if the stock closes above $6.60 today, but look at the room above.
A huge gap is waiting to be filled. Gap fills tend to be very bullish for the stock. For the fill to be confirmed, Gatos Silver would need to close above $12.00. If this happens, expect the momentum to continue, and increase in strength.