July 12, 2021.
Amendment No. 2 to
FORM S-1
GATOS SILVER, INC.†
(Exact Name of Registrant as Specified in Its Charter)
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Delaware (State or Other Jurisdiction of Incorporation or Organization) | | | 1040 (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification Number) | |
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Richard D. Truesdell, Jr. Derek Dostal Davis Polk & Wardwell LLP 450 Lexington Avenue New York, NY 10017 (212) | | | Ryan J. Dzierniejko Michael J. Zeidel Skadden, Arps, Slate, Meagher & Flom LLP One Manhattan West New York, NY 10001 (212) | |
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Large accelerated filer ☐ | | | Accelerated filer ☐ | | ||
| Non-accelerated filer ☒ | | | Smaller reporting company ☒ Emerging growth company ☒ | |
☒ Common Stock, par value $0.001 per share ý
to Be Registered
Aggregate Offering
Price(1)(2)
Registration Fee Common Stock, par value $0.001 per share $ 185,906,240 $ 20,282.37 (1) Title of Each Class of Securities
To Be Registered Proposed Maximum
Aggregate Offering
Price(1)(2) Amount of
Registration Fee(3) $100,000,000 $10,910 (1) offering price of shares of common stock which the underwriters have the right to purchase pursuant to their over-allotment option.option to purchase additional shares of common stock.(2)(3)Previously paid.
| | | Per Share | | | Total | | ||||||
Public offering price | | | | $ | | | | | $ | | | ||
Underwriting discounts and commissions(1) | | | | $ | | | | | $ | | | ||
Proceeds, before expenses, to: | | | | | | | | | | | | | |
Us | | | | $ | | | | | $ | | | ||
The selling stockholders | | | | $ | | | | | $ | | | |
| BMO Capital Markets | | | Goldman Sachs & Co. LLC | | | RBC Capital Markets | |
| Canaccord Genuity | | | | | | CIBC Capital Markets | |
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This Amendment No. 2 SOP held our interest in the Sunshine Complex, which is located in the Coeur d’Alene Mining District in Idaho and is comprised of the Sunshine Mine and the Sunshine Big Creek Refinery. Through the Reorganization, we distributed all of our equity interest in SOP to our stockholders immediately prior to the Reorganization. As used in this prospectus, “SOP” refers to (i) SOP prior to the Reorganization and (ii) SOP Corporation from and after the Reorganization.
CLG Production (100% Basis) | | | Q2 2021 | | | Q1 2021 | | ||||||
Tonnes mined (wet metric tonne – unreconciled) | | | | | 240,047 | | | | | | 209,832 | | |
Tonnes milled (dry metric tonne – reconciled) | | | | | 230,656 | | | | | | 203,479 | | |
Tonnes milled per day (dry metric tonne) | | | | | 2,535 | | | | | | 2,261 | | |
Average Grades | | | | | | | | | | | | | |
Silver grade (g/t) | | | | | 322 | | | | | | 261 | | |
Gold grade (g/t) | | | | | 0.35 | | | | | | 0.32 | | |
Lead grade (%) | | | | | 2.51 | | | | | | 2.00 | | |
Zinc grade (%) | | | | | 4.41 | | | | | | 3.24 | | |
Contained Metal | | | | | | | | | | | | | |
Silver ounces (millions) | | | | | 2.1 | | | | | | 1.5 | | |
Gold ounces – in lead concentrate (thousands) | | | | | 1.5 | | | | | | 1.1 | | |
Lead pounds – in lead concentrate (millions) | | | | | 11.2 | | | | | | 7.6 | | |
Zinc pounds – in zinc concentrate (millions) | | | | | 14.5 | | | | | | 8.7 | | |
CLG Production (100% Basis) | | | Q2 2021 | | | Q1 2021 | | ||||||
Recoveries (combined lead and zinc concentrate) | | | | | | | | | | | | | |
Silver | | | | | 89% | | | | | | 85% | | |
Gold | | | | | 63% | | | | | | 60% | | |
Lead | | | | | 90% | | | | | | 87% | | |
Zinc | | | | | 75% | | | | | | 71% | | |
| | | Year Ended December 31, | | | Three Months Ended March 31, | | ||||||||||||||||||
| | | 2020 | | | 2019 | | | 2021 | | | 2020 | | ||||||||||||
| | | (in thousands, except for share and per share amounts) | | |||||||||||||||||||||
Statement of Loss Data: | | | | | | | | | | | | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Exploration | | | | $ | 785 | | | | | $ | 923 | | | | | $ | 224 | | | | | $ | 171 | | |
General and administrative | | | | | 7,765 | | | | | | 2,903 | | | | | | 3,603 | | | | | | 837 | | |
Amortization | | | | | 30 | | | | | | 34 | | | | | | 7 | | | | | | 8 | | |
Total expenses | | | | | 8,580 | | | | | | 3,860 | | | | | | 3,834 | | | | | | 1,016 | | |
Other (income) expense: | | | | | | | | | | | | | | | | | | | | | | | | | |
Dilution loss on affiliates | | | | | — | | | | | | 11,231 | | | | | | — | | | | | | — | | |
Equity (income) loss in affiliates | | | | | 17,585 | | | | | | 12,865 | | | | | | (2,701) | | | | | | 13,445 | | |
Arrangement fees | | | | | 4,843 | | | | | | 2,988 | | | | | | 506 | | | | | | 1,575 | | |
Interest expense | | | | | 4,047 | | | | | | — | | | | | | — | | | | | | — | | |
Other (income) loss | | | | | (28) | | | | | | (36) | | | | | | (19) | | | | | | 5 | | |
Net other (income) expense | | | | | 26,447 | | | | | | 27,048 | | | | | | (2,214) | | | | | | 15,025 | | |
Net loss from continuing operations | | | | | 35,027 | | | | | | 30,908 | | | | | | 1,620 | | | | | | 16,041 | | |
Loss from discontinued operations | | | | | 5,414 | | | | | | 6,910 | | | | | | — | | | | | | 1,780 | | |
Net loss | | | | $ | 40,441 | | | | | $ | 37,818 | | | | | $ | 1,620 | | | | | $ | 17,821 | | |
Net loss per share: | | | | | | | | | | | | | | | | | | | | | | | | | |
From continuing operations, basic and diluted(1) | | | | $ | 0.80 | | | | | $ | 0.79 | | | | | $ | 0.03 | | | | | $ | 0.40 | | |
From discontinued operations, basic and diluted(1) | | | | $ | 0.13 | | | | | $ | 0.18 | | | | | | — | | | | | $ | 0.04 | | |
Basic and diluted(1) | | | | $ | 0.93 | | | | | $ | 0.97 | | | | | $ | 0.03 | | | | | $ | 0.44 | | |
Weighted average shares outstanding, basic and diluted(1) | | | | | 43,655,601 | | | | | | 38,967,038 | | | | | | 59,473,566 | | | | | | 40,505,079 | | |
| | | March 31, 2021 | | |||||||||
| | | Actual | | | As Adjusted(1) | | ||||||
| | | (in thousands) | | |||||||||
Balance Sheet Data: | | | | | | | | | | | | | |
Cash and cash equivalents | | | | $ | 31,031 | | | | | $ | 11,976 | | |
Total assets | | | | | 265,680 | | | | | | 390,325 | | |
Total liabilities | | | | | 3,539 | | | | | | 19,950(2) | | |
Total shareholders’ equity | | | | | 262,141 | | | | | | 370,375 | | |
| | | March 31, 2021 | | |||||||||
| | | Actual | | | As Adjusted(1) | | ||||||
| | | (in thousands) | | |||||||||
Cash and cash equivalents | | | | $ | 31,031 | | | | | $ | 11,976 | | |
Investment in affiliates | | | | | 226,060 | | | | | | 369,760 | | |
Long-term debt | | | | | — | | | | | | 16,411(2) | | |
Shareholders’ equity | | | | | | | | | | | | | |
Common stock, $0.001 par value; 700,000,000 shares authorized; 59,409,052 shares outstanding, actual; 65,909,052 shares outstanding, as adjusted | | | | | 108 | | | | | | 115 | | |
Paid in capital | | | | | 412,103 | | | | | | 531,440 | | |
Accumulated deficit | | | | | (149,043) | | | | | | (160,152) | | |
Treasury stock, at cost, 144,589 shares, actual and as adjusted | | | | | (1,027) | | | | | | (1,027) | | |
Total shareholders’ equity | | | | | 262,141 | | | | | | 370,375 | | |
Total capitalization | | | | $ | 262,141 | | | | | $ | 386,786 | | |
| Assumed public offering price per share | | | | | | | | | | $ | 19.43 | | |
| Consolidated net tangible book value per share as of March 31, 2021 | | | | $ | 4.41 | | | | | | | | |
| Increase in consolidated net tangible book value per share attributable to investors purchasing shares in this offering | | | | | 0.96 | | | | | | | | |
| As adjusted consolidated net tangible book value per share as of March 31, 2021 after giving effect to this offering | | | | | | | | | | | 5.37 | | |
| Dilution per share to investors purchasing shares in this offering | | | | | | | | | | $ | 14.06 | | |
| | | | | | | | | | | | | | | Percentage of Shares of Common Stock Beneficially Owned | | |||||||||
Name of Beneficial Owner | | | Shares of Common Stock Beneficially Owned | | | Number of Shares of Common Stock Offered Hereby† | | | Before This Offering | | | After This Offering | | ||||||||||||
Greater than 5% Stockholders and Selling Stockholders: | | | | | | | | | | | | | | | | | | | | | | | | | |
Electrum(1): | | | | | | | | | | | | | | | | | | | | | | | | | |
Electrum Silver US LLC | | | | | 19,993,086 | | | | | | 1,268,643 | | | | | | 33.7% | | | | | | 28.4% | | |
Electrum Silver US II LLC | | | | | 4,591,627 | | | | | | 291,357 | | | | | | 7.7% | | | | | | 6.5% | | |
Total | | | | | 24,584,713 | | | | | | 1,560,000 | | | | | | 41.4% | | | | | | 34.9% | | |
Municipal Employees’ Retirement System of Michigan(2) | | | | | 6,232,384 | | | | | | 260,000 | | | | | | 10.5% | | | | | | 9.1% | | |
FMR LLC(3) | | | | | 8,877,461 | | | | | | — | | | | | | 14.9% | | | | | | 13.5% | | |
Directors and Named Executive Officers: | | | | | | | | | | | | | | | | | | | | | | | | | |
Janice Stairs(7)(9) | | | | | 45,561 | | | | | | — | | | | | | * | | | | | | * | | |
Ali Erfan(4)(7)(9) | | | | | 116,860 | | | | | | — | | | | | | * | | | | | | * | | |
Igor Gonzales(7)(9) | | | | | 28,216 | | | | | | — | | | | | | * | | | | | | * | | |
Karl Hanneman(7)(9) | | | | | 61,895 | | | | | | — | | | | | | * | | | | | | * | | |
Charles Hansard(7)(9) | | | | | — | | | | | | — | | | | | | * | | | | | | * | | |
Igor Levental(5)(7)(9) | | | | | 133,446 | | | | | | — | | | | | | * | | | | | | * | | |
Stephen Orr(6)(7) | | | | | 1,356,689 | | | | | | — | | | | | | 2.3% | | | | | | 2.1% | | |
David Peat(7)(9) | | | | | 166,917 | | | | | | — | | | | | | * | | | | | | * | | |
| | | | | | | | | | | | | | | Percentage of Shares of Common Stock Beneficially Owned | | |||||||||
Name of Beneficial Owner | | | Shares of Common Stock Beneficially Owned | | | Number of Shares of Common Stock Offered Hereby† | | | Before This Offering | | | After This Offering | | ||||||||||||
Daniel Muñiz Quintanilla(8) | | | | | — | | | | | | — | | | | | | * | | | | | | * | | |
John Kinyon(7) | | | | | 317,485 | | | | | | — | | | | | | * | | | | | | * | | |
Philip Pyle(7) | | | | | 483,344 | | | | | | — | | | | | | * | | | | | | * | | |
All directors and executive officers as a group (16 persons) | | | | | 3,463,708 | | | | | | — | | | | | | 5.8% | | | | | | 5.3% | | |
PART IIINFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenseschange in control of Issuanceour Company without further action by the stockholders and Distributionmay adversely affect the voting and other rights of the holders of common stock. At present, we have no plans to issue any of the preferred stock.
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| | Number of shares | | ||||
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Goldman Sachs & Co. LLC | | | | | | | |
RBC Capital Markets, LLC | | | | | | | |
Canaccord Genuity Corp. | | | | | | | |
CIBC World Markets Corp. | | | | | | | |
Total | | | | | 8,320,000 | | |
| | | No exercise | | | Full exercise | | ||||||
Per share | | | | $ | | | | | $ | | | ||
Total paid by us | | | | $ | | | | | $ | | | ||
Total paid by the selling stockholders | | | | $ | | | | | $ | | | |
| | | Amount to Be Paid | | |||
SEC registration fee | | | | $ | 20,282 | | |
FINRA filing fee | | | | | 28,386 | | |
Transfer agents’ fees | | | | | 10,000 | | |
Printing and engraving expenses | | | | | 75,000 | | |
Legal fees and expenses | | | | | 450,000 | | |
Accounting fees and expenses | | | | | 105,000 | | |
Miscellaneous | | | | | 50,000 | | |
Total | | | | $ | 738,668 | | |
The Registrant will pay all of the expenses of this offering listed above. We will reimburse the selling stockholders for certain offering expenses as set forth in the Registration Rights Agreement and have agreed to reimburse the underwriters for the fees and disbursements of their counsel and out-of-pocket costs in an amount not to exceed $500,000, which reimbursement amounts are not included in the table above.
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transaction from which the director derived an improper personal benefit. The Registrant'sRegistrant’s Amended and Restated Certificate of Incorporation provides for such limitation of liability.
persons
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undertakes that:
The undersigned Registrant hereby undertakes that:
(a)
(b)
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| | | | | | | Incorporation by Reference | | |||||||||
| Exhibit Number | | | Description | | | Form | | | File No. | | | Exhibit No. | | | Filing Date | |
| 10.8.1# | | | | | S-1 | | | 333-249224 | | | 10.10.1 | | | October 1, 2020 | | |
| 10.9.1† | | | | | S-8 | | | 333-249782 | | | 99.1 | | | October 30, 2020 | | |
| 10.9.2† | | | | | S-1 | | | 333-249224 | | | 10.12.2 | | | October 8, 2020 | | |
| 10.9.3† | | | | | S-1 | | | 333-249224 | | | 10.12.3 | | | October 8, 2020 | | |
| 10.9.4† | | | | | S-1 | | | 333-249224 | | | 10.12.4 | | | October 8, 2020 | | |
| 10.9.5† | | | | | S-1 | | | 333-249224 | | | 10.12.5 | | | October 8, 2020 | | |
| 10.10.1† | | | | | S-1 | | | 333-249224 | | | 10.13.1 | | | October 8, 2020 | | |
| 10.11.1† | | | | | S-1 | | | 333-249224 | | | 10.14.1 | | | October 8, 2020 | | |
| 10.12.1† | | | | | S-1 | | | 333-249224 | | | 10.15.1 | | | October 1, 2020 | | |
| 10.12.2† | | | | | S-1 | | | 333-249224 | | | 10.15.2 | | | October 1, 2020 | | |
| 10.12.3† | | | | | S-1 | | | 333-249224 | | | 10.15.3 | | | October 1, 2020 | | |
| 10.13.1 | | | Management Services Agreement dated October 30, 2020, between Gatos Silver, Inc. and Silver Opportunity Partners Corporation | | | 8-K | | | 001-39649 | | | 10.1 | | | October 30, 2020 | |
| 10.14.1 | | | Shareholders Agreement dated October 30, 2020, by and among Gatos Silver, Inc. and the stockholders that are signatories thereto | | | 8-K | | | 001-39649 | | | 10.2 | | | October 30, 2020 | |
| 10.15.1 | | | | | S-1 | | | 333-249224 | | | 10.18.1 | | | October 8, 2020 | | |
| 10.16.1 | | | Registration Rights Agreement dated October 30, 2020, by and among Gatos Silver, Inc. and the stockholders that are signatories thereto | | | 8-K | | | 001-39649 | | | 10.3 | | | October 30, 2020 | |
| 10.17.1 | | | Confirmation Agreement, dated July 12, 2021, among Minera Plata Real, S. de R.L. de C.V., Operaciones San Jose de Plata, S. de R.L. de C.V., Servicios San Jose de Plata, S. de R.L. de C.V., Gatos Silver, Inc. and Dowa Metals & Mining Co., Ltd. | | | | | | | | | | | | | |
| | | | | | | Incorporation by Reference | | |||||||||
| Exhibit Number | | | Description | | | Form | | | File No. | | | Exhibit No. | | | Filing Date | |
| 10.18.1 | | | Revolving Credit Facility, dated July 12, 2021, between Gatos Silver, Inc. and Bank of Montreal, Chicago Branch | | | | | | | | | | | | | |
| 21.1 | | | | | 10-K | | | 001-39649 | | | 21.1 | | | March 29, 2021 | | |
| 23.1 | | | | | | | | | | | | | | | | |
| 23.2 | | | | | | | | | | | | | | | | |
| 23.3 | | | | | | | | | | | | | | | | |
| 23.4 | | | | | | | | | | | | | | | | |
| 23.5 | | | Consent of Guillermo Dante Ramírez-Rodríguez | | | | | | | | | | | | | |
| 23.6 | | | | | | | | | | | | | | | | |
| 23.7 | | | | | | | | | | | | | | | | |
| 23.8 | | | | | | | | | | | | | | | | |
| 23.9 | | | | | | | | | | | | | | | | |
| 23.10 | | | | | | | | | | | | | | | | |
| 23.11 | | | | | | | | | | | | | | | | |
| 24.1 | | | | | | | | | | | | | | | | |
| 96.1 | | | | | S-1 | | | 333-249224 | | | 96.1 | | | October 1, 2020 | |
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Name: | ||||||
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| Signature | | | Title | ||
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| /s/ Stephen Orr Stephen Orr | | | Chief Executive Officer and Director (principal executive officer) | ||
| /s/ Roger Johnson Roger Johnson | | | Chief Financial Officer (principal financial officer and principal accounting officer) | ||
/s/ Janice Stairs Janice Stairs | | Chair of the Board of Directors | ||||
/s/ Ali Erfan Ali Erfan | | | ||||
/s/ Igor Gonzales Igor Gonzales | | | ||||
/s/ Karl Hanneman Karl Hanneman | | | ||||
/s/ Charles Hansard Charles Hansard | | | ||||
/s/ Igor Levental Igor Levental | | | ||||
/s/ David Peat David Peat | | | ||||
/s/ Daniel Muñiz Quintanilla | | | Director | |
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