Mr. Dale Andres reports

GATOS SILVER REPORTS 2023 SILVER PRODUCTION NEAR TOP END OF GUIDANCE

Gatos Silver Inc. has released production results for the quarter and year ended Dec. 31, 2023, at its 70-per-cent-owned Cerro Los Gatos (CLG) mine in Mexico. Silver production and silver equivalent production were both near the top end of the 2023 guidance range, even after taking into account an upward guidance revision in November, 2023.

Dale Andres, chief executive officer of Gatos Silver, commented: "The CLG mine performed very well during the fourth quarter and full year 2023. The operation achieved another record for mill throughput, with a quarterly average higher than 3,000 tonnes per day during the fourth quarter. This was the fourth consecutive quarterly increase in mill throughput rate, partially offsetting the expected lower grades of ore mined in 2023 compared with 2022. We are very encouraged by recent mill throughput tests, which indicate that 3,500 tonnes per day is possible without significant capital investment. We are also continuing to evaluate mill expansion options up to 4,000 tonnes per day in conjunction with further mine life extension opportunities."

Due to the continued strong performance of CLG during 2023 and changes to mine plan sequencing, Gatos Silver increased production guidance for silver and silver equivalent on Nov. 6, 2023, from the original levels provided on Feb. 23, 2023. Production guidance for zinc, lead and gold did not change after Feb. 23, 2023. Gatos Silver expects to provide annual production and cost guidance for 2024 toward the end of February.

As shown in an attached table, 2023 silver production of 9.21 million ounces and silver equivalent production of 14.33 million ounces were both close to the high end of upwardly revised guidance. For metals with no guidance change during 2023, lead production of 38.9 million pounds was close to the high end of guidance, zinc production of 57.3 million pounds was slightly higher than the low end of guidance and gold production was slightly below guidance.

Production results (100-per-cent basis)

CLG comparative production highlights are summarized in an attached table.

Mill throughput averaged 3,014 tonnes per day during the fourth quarter of 2023, an increase of 6 per cent compared with the fourth quarter of 2022, and averaged 2,935 tonnes per day during 2023, an increase of 10 per cent compared with 2022.

As expected, overall metal production in 2023 was lower than 2022 because lower ore grades more than offset improved mill throughput. Silver production in 2023 declined by 11 per cent from a record 10.32 million ounces in 2022. Zinc production declined by 6 per cent, lead production by 12 per cent and gold production by 2 per cent.

Silver production in the fourth quarter of 2023 was 2.56 million ounces, 12 per cent below the record 2.92 million ounces in the fourth quarter of 2022. However, zinc, lead and gold production increased by 8 per cent, 5 per cent and 2 per cent, respectively, compared with the fourth quarter of 2022.

Increased fourth quarter and 2023 mill throughput rates were supported by continued debottlenecking and optimization efforts focused on achieving higher mining rates through increased productivity and improved mine plan flexibility.

During December, various mill throughput capacity tests were completed to better understand current plant capabilities and future bottlenecks. The mill operated for 27.3 days during December and achieved an average of 3,573 tonnes per operational day with the highest being 4,096 tonnes with good metallurgical performance. During the test period, minor electrical modifications were made to the mill motors and mill programming. After taking into account maintenance downtime and the additional downtime for electrical upgrades during the month, the mill averaged 3,145 tonnes per day during the month.

The testwork has identified further plant optimization work necessary for the plant to achieve 3,500 tonnes per day consistently, and those modifications are expected to be made during first half 2024 at a cost of less than $500,000 (U.S.). The mine continues to have the constraint of improving mill throughput beyond 3,000 tonnes per day on a sustainable basis. During 2024, the operation will be focused on further debottlenecking efforts in the mine and life extension to take advantage of both current and future mill capabilities.

About Gatos Silver Inc.

Gatos Silver 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 the Los Gatos joint venture (LGJV), 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 Silver, who is a qualified person as defined in S-K 1300 and National Instrument 43-101.

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