Michael has over 20 years of experience representing individual and small business plaintiffs against the world’s large financial institutions, including Visa, Mastercard, and Chase.
On Tuesday, January 25, 2022, silver mining company Gatos Silver, Inc.disclosed that it may have overestimated the metal content at its biggest mineral reserve, due to technical errors in its 2020 report, and that it may have to reduce the reserves estimate by as much as 30% to 50%.
Following this news, Gatos Silver stock price dropped as much as 70% in intraday trading on Wednesday, January 26, 2022, causing significant harm to investors.
Gatos Silver Reports Significant Errors in 2020 Technical Report
On Tuesday, January 25, 2022, silver mining company Gatos Silver disclosed that it had identified errors in a previously issued technical report titled “Los Gatos Project, Chihuahua, Mexico,” and that the company further identified “indications that there is an overestimation in the existing resource model.” Accordingly, the company “now estimates a potential reduction of the metal content of CLG’s mineral reserve ranging from 30% to 50% of the metal content remaining after depletion,” and further concluded that the “mineral resource and reserve estimates in the 2020 Technical Report should not be relied upon.”
Gatos Silver’s press release states that the company is now working with independent engineering consultants to “better understand the magnitude of the overestimation, including conducting a detailed reconciliation of production to previous models and reserve calculation estimates,” but anticipates that this reconciliation work will not be completed until the second half of 2022.
GATO Stock Drops as Much as 70% on January 25, 2022, Harming Investors
Following the news of Gatos Silver’s error-plagued report, the stock plunged as much as 70% on Wednesday, January 26, 2022, causing significant harm to investors. According to the Motley Fool, the news indicates a “huge issue” at Gatos Silver’s mine, which is their “main asset,” and several analysts have downgraded the stock in response.
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