The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the District of Colorado on behalf of those who acquired Gatos Silver, Inc. (“Gatos Silver” or the “Company”) (NYSE: GATO): (a) common stock pursuant and/or traceable to the Registration Statement issued in connection with the Company’s initial public offering (the “IPO” or “Offering”) conducted on or about October 28, 2020; and/or (b) securities between October 28, 2020 and January 25, 2022, inclusive (the “Class Period”). Investors have until April 25, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Gatos Silver focuses on the production, development and exploration of silver- and zinc-rich mineral deposits. Its primary efforts are the operation of the Los Gatos Joint Venture in Chihuahua, Mexico with Dowa Metals and Mining Co., Ltd. In addition to commercializing lead and zinc concentrates, the Company performs additional definition drilling to define and expand mineralization of the Cerro Los Gatos deposit (“CLG”).
In October 2020, Gatos Silver conducted its IPO, selling approximately 21,430,000 shares of common stock at a price of $7.00 per share.
On January 25, 2022, after-market hours, Gatos Silver revealed that “there were errors in the technical report entitled ‘Los Gatos Project, Chihuahua, Mexico’ with an effective date of July 1, 2020 . . . , as well as indications that there is an overestimation in the existing resource model.” On a preliminary basis, the Company estimates a potential reduction of the metal content of its CLG’s mineral reserve ranging from 30% to 50% of the metal content remaining after depletion. On this news, the price of Gatos Silver stock declined by $7.02 per share, or approximately 68.9%, from $10.19 per share to close at $3.17 per share on January 26, 2022.
By the commencement of this action, Gatos Silver shares were trading as low as $3.20 per share, a nearly 54% decline from the $7.00 per share IPO price.
The lawsuit alleges throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the technical report for Gatos Silver’s primary mine, the CLG, contained certain errors; (2) that, among other things, the mineral reserves had been overestimated by as much as 50%; and (3) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased or otherwise acquired Gatos Silver securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website: http://www.kmllp.com.
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Contacts
Kirby McInerney LLP
Thomas W. Elrod, Esq.
https://www.kmllp.com
investigations@kmllp.com
