In October 2020, Gatos conducted its IPO, selling approximately 24,644,500 shares of common stock at a price of $7.00 per share. On January 25, 2022, after the market closed, 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 the mineral reserve ranging from 30% to 50% of the metal content remaining after depletion. On this news, the Company’s stock price fell $7.02, or 69%, to close at $3.17 per share on January 26, 2022, on unusually heavy trading volume. By the commencement of this action, Gatos shares were trading as low as $3.20 per share, a nearly 54% decline from the $7.00 per share IPO price. The complaint filed in this class action alleges that 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’s primary mine, the Cerro Los Gatos deposit, 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.
Notes:
The alleged class includes : All persons and entities that purchased or otherwise acquired Gatos: (a) common stock pursuant and/or traceable to the Registration Statement issued in connection with the Company’s initial public offering conducted on or about October 28, 2020; and/or (b) securities between October 28, 2020 and January 25, 2022, inclusive.[IPO]
For More information as well as to join this case please contact Atara Twersky, Esq. at atara@twerskylawgroup.com or atwersky@aftlaw.com. Atara is Principal at Twersky Law Group and Of counsel at AF&T law firm where she is director of Investor Services. Atara focuses her practice on assisting her clients with increasing their investment portfolio recoveries and ensuring that their portfolios remain healthy and robust. For more information on shareholder recoveries click here and to listen to Atara’s podcast with notable guests in the Pension fund Industry listen to Pension and Investments Podcast, on all matters related to your investment portfolio and more. For more information on Atara and her legal work connected to shareholder protection click here.
