DENVER—February 27, 2023—Denver-based Berens Law LLC (www.jberenslaw.com/) today announced it is investigating potential claims on behalf of Gatos Silver, Inc. (NYSE: GATO) against certain of its officers and directors following the initiation of a class action, Bilinsky v. Gatos Silver, Inc. et al., filed against the company in the United States District Court for the District of Colorado.
What is Berens Law investigating? Berens Law’s investigation concerns whether Gatos Silver’s officers and/or directors have breached their fiduciary duties to the company such that they should be held responsible for any damages experienced by Gatos Silver due to their false and/or materially misleading public statements concerning the reserves at the company’s Cerro Los Gatos Mine.
What actions may I take at this time? If you are a current, long-term shareholder of Gatos shares you may have standing to hold Gatos harmless from the alleged harm caused by the company’s officers and directors by making them personally responsible. You may also be able to assist in reforming the company’s corporate governance to prevent future wrongdoing.
For a free consultation regarding your legal options, please contact Jeffrey A. Berens, Esq., at 303-861-1764 (call or text), via email at email@example.com, or visit our website at www.jberenslaw.com for additional information.
What are the allegations in the pending complaint? Gatos Silver is a mining company previously headquartered in Greenwood Village, Colorado and focused on developing the Cerro Los Gatos Mine in Chihuahua, Mexico. In July 2020, Gatos Silver commissioned a technical report that purportedly found the Cerro Los Gatos mine contains 10.4 million tons of measured and indicated resources.
On October 29, 2020, Gatos Silver conducted an IPO selling over 24 million shares at $7 per share for over $170 million in gross proceeds. Then, on July 15, 2021, Gatos Silver and its largest shareholder, The Electrum Group LLC, conducted a secondary public offering selling over 11 million shares at $14 per share for over $160 million in total gross proceeds. Gatos Silver’s Cerro Los Gatos technical report was used to solicit investors in both offerings.
But, on January 25, 2022, Gatos Silver issued a release disclosing that the reserves contained in the Cerro Los Gatos technical report had been massively inflated as a result of “errors” and “an overestimation in the existing resource model.” According to the release, “[o]n a preliminary basis, [Gatos Silver] estimates a potential reduction of the metal content of [Cerro Los Gatos]’s mineral reserve ranging from 30% to 50% of the metal content remaining after depletion.” On this news, the price of Gatos Silver stock plummeted nearly 70% to just $3.17 per share.
About Berens Law LLC. Berens Law LLC, located in Denver, Colorado, represents investors in securities class action and shareholder derivative lawsuits, and over the years has recovered hundreds of millions of dollars for clients. Attorney advertising. Past results do not guarantee future outcomes.
Jeffrey A. Berens, Esq.
Berens Law LLC
2373 Central Park Boulevard
Denver, CO 80238-2300
Tel: (303) 861-1764