Robbins Geller Rudman & Dowd LLP announces an investigation into potential violations of U.S. federal securities laws by Gatos Silver, Inc. (NYSE: GATO) focused on whether Gatos Silver and certain of its officers and directors made false and misleading statements and/or failed to disclose material information to investors.
If you have information that could assist in this investigation or if you are a Gatos Silver investor who suffered a loss and would like to learn more, you can provide your information by clicking here. You can also contact attorney Brian E. Cochran of Robbins Geller by calling 800/449-4900 or via e-mail at bcochran@rgrdlaw.com.
THE COMPANY: Gatos Silver is a mining company based in Greenwood Village, Colorado focused on developing the Cerro Los Gatos Mine in Chihuahua, Mexico. In July 2020, Gatos Silver commissioned a technical report that purportedly found the Cerro Los Gatos mine contains 10.4 million tons of measured and indicated resources.
On October 29, 2020, Gatos Silver conducted an initial public offering (the “IPO”) selling over 24 million shares at $7 per share for over $170 million in gross proceeds. Then, on July 15, 2021, Gatos Silver and its largest shareholder, The Electrum Group LLC, conducted a secondary public offering (the “SPO”) selling over 11 million shares at $14 per share for over $160 million in total gross proceeds. Gatos Silver’s Cerro Los Gatos technical report was used to solicit investors in the IPO and the SPO.
THE REVELATION: On January 25, 2022, Gatos Silver issued a release disclosing that the reserves contained in the Cerro Los Gatos technical report had been massively inflated as a result of “errors” and “an overestimation in the existing resource model.” According to the release, “[o]n a preliminary basis, [Gatos Silver] estimates a potential reduction of the metal content of [Cerro Los Gatos]’s mineral reserve ranging from 30% to 50% of the metal content remaining after depletion.”
On this news, the price of Gatos Silver stock plummeted, falling nearly 70% in a single day to just $3.17 per share.
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Contacts
Robbins Geller Rudman & Dowd LLP
655 W. Broadway, San Diego, CA 92101
Brian E. Cochran, 800-449-4900
bcochran@rgrdlaw.com
