Gatos Silver Provides Updated Cerro Los Gatos Mineral

• Mine Life Extended by 2.75 Years to the End of 2030 with 46% Increase in Total Silver Production
• Significant Opportunities Available for Further Optimization, Growth and Mine Life Extension

VANCOUVER, British Columbia, Sept. 06, 2023 (GLOBE NEWSWIRE) — Gatos Silver, Inc. (NYSE/TSX: GATO) (“Gatos Silver” or the “Company”) today reported an updated mineral reserve estimate (the “2023 Mineral Reserve”), mineral resource estimate (the “2023 Mineral Resource”) and life of mine (“LOM”) plan (the “2023 LOM Plan”, and together with the 2023 Mineral Reserve and 2023 Mineral Resource, the “2023 Updates”) for the Cerro Los Gatos Mine (“CLG”) with an effective date of July 1, 2023. The Company will host an investor and analyst call on September 7, 2023, details of which are provided below.

The Company has a 70% interest in the Los Gatos Joint Venture (“LGJV”), which in turn owns the CLG mine in Mexico. All dollar amounts are expressed in, and references to “$” refer to, United States dollars unless otherwise noted.

Dale Andres, CEO of Gatos Silver said: “We have achieved significant life extension objectives with this updated mineral reserve estimate, exceeding our target of adding one to two years. The new life of mine plan, which is based on recent operating performance, demonstrates our continued confidence in CLG’s ability to deliver robust margins and consistent cash flow. Gatos Silver has a strong balance sheet and remains debt free, with regular cash distributions to the joint venture partners expected throughout CLG’s mine life.   We continue to believe there remains substantial additional value at CLG and we are now analyzing a number of projects with the potential to further improve margins and mine life as we move forward. In the near term, the LGJV is continuing to define the South-East Deeps area and ramp up exploration efforts in the Los Gatos district with the mobilization of a seventh surface drill rig this month.”

Summary

• Robust CLG 2023 LOM Plan with strong and consistent annual cash flow profile (100% basis):
  • Mine life extended from early 2028 through to the end of 2030, an addition of 2.75 years
  • Average annual after-tax free cash flow¹ of $75 million, resulting in an after-tax net present value (“NPV”)² of $462 million, an increase of $123 million from the 2022 LOM from July 1, 2023 onwards
  • Sustaining capital costs of $160 million, a $93 million increase from the 2022 LOM to support the longer mine life including additional underground mine development and tailings storage capacity
  • Attractive by-product all-in sustaining costs (“AISC”)¹ of $7.70³ per ounce of payable silver
  • Total silver production over the remaining mine life expected to increase by 46% and total silver equivalent production⁴ expected to increase by 50%
  • Average annual production of 7.7 million ounces of silver expected during the 2024 to 2026 period
  • Average annual production over the LOM of 6.6 million ounces of silver, 65 million pounds of zinc and 47 million pounds of lead, or 12.4 million ounces of silver equivalent⁴ production
• Additional drilling has delivered a significant increase to the 2023 Mineral Reserve:
  • 2023 Mineral Reserve of 8.1 million tonnes at 217 g/t silver, 4.32% zinc, 2.20% lead, 0.25 g/t gold and 0.15% copper, with 56.3 million ounces of contained silver
  • 61,520 additional metres of diamond drilling used in the block model estimation including 284 underground holes and 51 surface holes, an increase of 28%
  • 1.8 million tonnes of the 2023 Mineral Reserve increase is in the South-East zone, inclusive of 328,000 tonnes below 1,100 metre elevation level in the South-East Deeps area
• South-East Deeps discovery in 2022 has resulted in a significant increase to the 2023 Mineral Resource:
  • As first announced in October 2022, a deeper zone of mineralization, South-East Deeps, was discovered extending up to 415m below the 2022 Mineral Reserve
  • The first stage of drilling completed on the South-East Deeps zone (up until March 31, 2023) has resulted in an inferred resource estimate for CLG of 4.6 million tonnes at 100 g/t silver, 3.40% zinc, 2.32% lead, 0.21 g/t gold and 0.40% copper
  • 2023 Mineral Resource includes 0.4 million tonnes of measured and indicated resource at 93 g/t silver, 3.55% zinc, 1.88% lead, 0.25 g/t gold and 0.14% copper
• Substantial opportunities remain to increase mine life and further improve margins at CLG:
  • As previously announced, the infill drilling and exploration budget for 2023 was increased by $3 million to $16 million with a seventh surface drill rig being mobilized this month
  • Current drilling is focused on converting the higher-grade portions of the inferred resource in the South-East Deeps zone to measured and indicated resources, with a target…