Mr. Dale Andres reports

GATOS SILVER COMPLETES 2021 AND 2022 SECURITIES FILINGS AND ANNOUNCES DATE FOR 2023 ANNUAL STOCKHOLDERS' MEETING

Gatos Silver Inc. has completed disclosure of outstanding 2021 and 2022 securities regulatory filings, and has reached an agreement in principle to settle the U.S. class action lawsuit.

The company also today announced that it has set the date of its 2023 annual meeting of stockholders as Sept. 6, 2023. The record date for the annual meeting is July 14, 2023. The time, format and other details for the annual meeting will be set forth in the company's proxy materials for the annual meeting, which will be filed on both EDGAR and SEDAR.

The company has a 70-per-cent interest in Los Gatos joint venture (LGJV), which in turn owns the Cerro Los Gatos (CLG) mine in Mexico. The company's reporting currency is U.S. dollars.

Dale Andres, chief executive officer of Gatos, said: "We are pleased with how the CLG operation is performing to start the year, and we continue to maintain our current annual production and cost guidance for 2023. We are working to finalize our quarterly report for [first quarter] 2023, which we expect to file shortly. We are also looking forward to providing an updated mineral resource and reserve estimate in the third quarter of this year, including a new life-of-mine plan as we continue our strategic focus on mine life extension, accelerating the drilling on the mineralization discovered at depth in the new South-East Deeps zone and exploration in the highly prospective Los Gatos district."

Completed filings

The company has filed its annual report on Form 10-K for the fiscal year ended Dec. 31, 2022, its amended annual report on Form 10-K/A for the fiscal year ended Dec. 31, 2021, and its amended quarterly reports on Form 10-Q/A for the periods ended March 31, 2022, June 30, 2022, and Sept. 30, 2022, on EDGAR. All of these filings are also posted on the company's website.

Consistent with the company's prior disclosures, the adjustments to the restated financial statements for 2021 and the first three quarters of 2022 were non-cash items, consisting primarily of changes to the timing and recognition of current and deferred tax assets and liabilities at the LGJV and the timing and recognition of the priority distribution obligation on the previously recognized income from affiliates for the company. During the process of correcting the deferred tax assets and liabilities, the company also identified an overstatement in the fair value financial model used to calculate the impairment of the investment in affiliates.

As a result of these adjustments, 2021 restated results include a non-cash impairment of $80.3-million (previously $51.6-million) in Gatos's investment in affiliates. The 2022 results include a loss allowance of $7.9-million for the U.S. class action lawsuit. Additional information regarding the financial results can be found in the company's filings on EDGAR and SEDAR, which are also available on the company's website.

LGJV 2022 results compared with 2021 (100-per-cent basis):

• Revenue of $311.7-million, up 25 per cent from $249.2-million;
• Cost of sales of $107.1-million, up 10 per cent from $97.7-million;
• Net income of $72.2-million, down 8 per cent from $78.6-million;
• Cash flow from operations of $157.4-million, up 31 per cent from $119.8-million;
• Byproduct cash cost of $2.17 per ounce of payable silver, down 56 per cent from $4.98 (1);
• Byproduct all-in sustaining costs (AISC) of $10.24 per ounce of payable silver, down 35 per cent from $15.72 (1).

(1) These measures are non-generally accepted accounting principle measures.

For full-year 2022, Gatos's net income was $14.5-million or 21 cents per share compared with a net loss of $65.9-million or ($1.03) per share in 2021. The improvement in net income for the year 2022 versus 2021 was primarily due to the above-mentioned 2021 impairment charge of $80.3-million and, for 2022, higher equity income from the LGJV resulting from an increase in revenue due to strong production from the CLG mine. Comparisons against 2021 are based on the restated financial statements.

Corporate update

On June 13, 2023, the company reached an agreement in principle to settle the U.S. class action lawsuit for a payment by the company and its insurers of $21-million to a settlement fund, which the company expects will result in a disbursement by the company of no more than $7.9-million. The settlement is subject to certain customary conditions, including class certification and approval of the settlement by the U.S. District Court for the District of Colorado.

The 2023 mineral reserve and mineral resource estimate update, including a new life-of-mine plan, is expected to be announced prior to the end of the third quarter, incorporating drill results from surface and underground holes completed in 2022 and in first quarter 2023. The LGJV currently has six surface drill rigs active on the South-East Deeps zone, and three underground drill rigs operating in the NW and Central zones with a view to further defining and expanding mineral resources.

About Gatos Silver Inc.

Gatos is a silver dominant exploration, development and production company that discovered a new silver and zinc-rich mineral district in southern Chihuahua state, Mexico. As a 70-per-cent owner of Los Gatos joint venture, the company is primarily focused on operating the Cerro Los Gatos mine and on growth and development of Los Gatos district. The LGJV consists of approximately 103,000 hectares of mineral rights, representing a highly prospective and underexplored district with numerous silver-zinc-lead epithermal mineralized zones identified as priority targets.

Qualified person

Scientific and technical disclosure in this press release was approved by Anthony (Tony) Scott, PGeo, senior vice-president of corporate development and technical services of Gatos, who is a qualified person, as defined in S-K 1300 and National Instrument 43-101.

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