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Gatos Silver, Inc. (TSX: GATO)

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OVERVIEW

On February 9, 2022, a proposed class action lawsuit was filed in Ontario against Gatos Silver, Inc. (TSX: GATO) and other defendants.

Gatos is a US-based precious metals production and exploration company focused primarily on silver. Their key operating project is the Cerro Los Gatos (“CLG”) mine in Chihuahua, Mexico. The action alleged, among other things, that the defendants misrepresented the reliability of a 2020 mineral reserve and estimate pertaining to CLG.

The plaintiff alleged that these misrepresentations were corrected on January 25, 2022, when the Company announced that there were errors in the technical report underpinning CLG. When this news was revealed to the market, the value of Gatos’s shares declined by almost 70%.

A copy of the Fresh as Amended Statement of Claim is available under Documents.

SETTLEMENTS

Tetra Tech Defendants

On December 19, 2023, the Plaintiff and Tetra Tech, Inc., Guillermo Dante Ramirez-Rodriguez and Kira Lyn Johnson (collectively, the “Tetra Tech Defendants”) reached a proposed settlement in this action for CAD$1 million to resolve the claims asserted against them on behalf of all persons and entities (other than certain “excluded persons”), wherever they may reside or be domiciled, who:

  • purchased Gatos Silver securities under Gatos Silver’s Canadian prospectuses filed in October 2020 and July 2021 and in the distributions to which they related; and
  • acquired Gatos Silver securities during the period from October 28, 2020 until January 25, 2022 at 6:52 p.m. Eastern Standard Time (“Class Period”) on any Canadian exchange (including, without limitation, the Toronto Stock Exchange) or any Canadian alternative trading system (the “Tetra Tech Settlement Agreement”).

A copy of the Tetra Tech Settlement Agreement is available under Documents.

On January 4, 2024, the parties appeared before the Ontario Superior Court of Justice to certify the action as against the Tetra Tech Defendants. Copies of the reasons and order are available under Documents.

A motion to approve the Tetra Tech Settlement Agreement was heard on April 10, 2024 and approved by the Ontario Superior Court of Justice on April 16, 2024. A copy of the reasons and order are available in the Documents.

Gatos Silver and the Other Defendants

On April 2, 2024, the Plaintiff and Gatos Silver, Stephen Orr, Roger Johnson, Philip Pyle, The Electrum Group LLC, Electrum Silver US LLC, and Electrum Silver US II LLC (collectively the “Gatos Defendants”) reached a proposed settlement in this action for USD$3 million to resolve the claims asserted against them on behalf of all persons and entities (other than certain “excluded persons”), wherever they may reside or be domiciled, who:

  • purchased Gatos securities under the Impugned Prospectuses and in the distributions to which they related; and
  • acquired Gatos securities during the Class Period on any Canadian exchange (including, without limitation, the Toronto Stock Exchange) or any Canadian alternative trading system (the “Gatos Settlement Agreement”).

A copy of the Gatos Settlement Agreement is available under Documents.

On April 10, 2024, the parties appeared before the Ontario Superior Court of Justice to certify the action as against the Gatos Defendants. Copies of the reasons and order are available under Documents.

The Gatos Agreement is subject to approval by the Ontario Superior Court of Justice. A settlement approval hearing has been set for June 28, 2024 at 10:00 a.m.

If the settlement is approved, all Class Members (who did not previously opt out) will be bound by it.

If you wish to object to the Gatos Settlement Agreement, you must do so by no later than June 7, 2024.

For complete details regarding the Gatos Settlement Agreement, including how to object/comment, please consult the long-form notices available in the Documents.

Discontinuance Against Underwriter Defendants

On January 4, 2024, the Ontario Superior Court of Justice granted permission to the Plaintiff to discontinue the action as against BMO Nesbitt Burns Inc., Goldman Sachs Canada Inc., RBC Dominion Securities Inc., Canaccord Genuity Corp., and CIBC World Markets Inc. (“Underwriter Defendants”), without costs. A copy of the order is available under Documents.

Plan of Allocation

At the motion to approve the Gatos Settlement Agreement, Class Counsel will put forth a Plan of Allocation for the distribution of the net settlement funds to eligible Class Members. Class Members who wish to object to or comment on the Plan of Allocation should do so by no later than June 7, 2024.

To be eligible for compensation from the settlements with Tetra Tech and Gatos Silver, Class Members must submit a Claim Form to the Administrator at www.cdngatossettlement.com by October 30, 2024.

 

DOCUMENTS

For more information please contact Sharon Wong, Paralegal at (604) 689-7555 or by email at [email protected].




Gatos Silver, Inc. (TSX: GATO) - Status Updates:

May 8, 2024

Gatos Silver Inc. Approved Settlement - View

February 9, 2024

Gatos Silver Inc. Proposed Settlement - View

February 10, 2022

Gatos Silver, Inc. (TSX: GATO) - View

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