Q2 2024 Gatos Silver Inc Earnings Call Transcript
Key Points
- Gatos Silver Inc (GATO) reported record revenues, cash flow from operations, and free cash flow for the second quarter of 2024, driven by strong operating performance and higher metal prices.
- The Los Gatos joint venture achieved a record mill throughput, positioning the company well to meet its annual guidance.
- All-in sustaining costs per payable ounce of silver were significantly lower than the previous year and below the guidance range for 2024.
- The company has a strong cash position with nearly $109 million at the end of July, following a $40 million distribution from the joint venture.
- Gatos Silver Inc (GATO) remains debt-free, providing financial flexibility for future growth initiatives.
- Cash costs for the quarter increased by 14% compared to the same period last year, primarily due to higher production rates.
- Cost of sales rose by 24%, driven by increased tonnage of concentrates sold and higher mining and processing costs.
- The company faced inflationary pressures and a strong Mexican peso, which impacted cost performance.
- Income tax expense increased significantly to $12.5 million, reflecting higher taxable income.
- General and administrative expenses rose by $1.7 million, partly due to non-recurring costs such as stock-based compensation and legal fees.
Ladies and gentlemen, thank you for standing by, and welcome to Gatos Silver second quarter 2024 results conference call. Presenting today will be Dale Andres, CEO of Gatos Silver; and Andre Van Niekerk, Chief Financial Officer. We will conclude today's session with a question-and-answer period where other members of Gatos Silver management team will be available. (Operator Instructions)
Turning your attention to slide 2. Please note today's call contains forward-looking statements. Various risks and uncertainties may cause actual results to vary. Gatos Silver does not assume the obligation to update any forward-looking statements.
And now I would like to turn the call over to Dale Andres. Please go ahead, sir.
Thank you, operator, and good morning, everyone. Turning to slide 3. I'd like to start with highlighting the excellent financial performance in the quarter. The Los Gatos joint venture had record revenues, record cash flow from operations and record free cash flow. This
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