On December 19, 2024, Gatos Silver, Inc. (?Gatos Silver? or the ?Company?), Dowa Metals & Mining Co., Ltd. (?Dowa?), Minera Plata Real, S. de R.L. de C.V. (?MPR?) and Operaciones San José de Plata, S. de R.L. de C.V. (?OpCo?) entered into an amended and restated joint venture agreement (the ?Amended and Restated Joint Venture Agreement?) regarding the Los Gatos Joint Venture (?LGJV?) to explore, develop and operate the Los Gatos concessions including the Cerro Los Gatos Mine (?CLG?) in northern Mexico. The Amended and Restated Joint Venture Agreement amends and restates the Unanimous Omnibus Partner Agreement effective as of January 1, 2015, as amended, among the Company, Dowa, MPR, Servicios San José De Plata, S de R.L. de C.V. (?SSJ?, which merged into MPR, effective July 15, 2021) and OpCo.
In addition, on December 19, 2024, OpCo and Dowa entered into an amended and restated offtake agreement (the ?Amended and Restated Offtake Agreement?) regarding Dowa?s purchase of the zinc concentrates produced at CLG. The Amended and Restated Offtake Agreement amends and restates the Zinc Offtake Agreement dated as of June 27, 2019, as amended, among OpCo and Dowa. Also on December 19, 2024 Gatos Silver, MPR and OpCo entered into an amended and restated services agreement (the ?Amended and Restated Services Agreement?) regarding Gatos Silver oversight and direction of OpCo and the provision of services by OpCo to MPR.
The Amended and Restated Services Agreement amends and restates the Services Agreement dated as of January 23, 2015, as amended, among Gatos Silver, MPR and OpCo. The Amended and Restated Joint Venture Agreement, the Amended and Restated Offtake Agreement and the Amended and Restated Services Agreement are collectively referred to as the ?Amended and Restated LGJV Agreements.? The Amended and Restated LGJV Agreements will be effective January 1, 2025.
The Amended and Restated Joint Venture Agreement: (i) establishes certain obligations of Gatos Silver to cause MPR and OpCo to use commercially reasonable efforts to meet certain quality criteria for zinc concentrates and to maintain certain levels of production; (ii) reduces supermajority voting requirements within the LGJV (the effect of which will be to provide Gatos Silver with control over a variety of ordinary-course operational, budgeting and planning decisions); and (iii) provides a new sole-funding right to Gatos Silver for mine or plant modifications or expansions, allowing Gatos Silver to require that the same be undertaken and to dilute Dowa?s interest in the LGJV if Dowa elects not to participate, among other amendments.