EXHIBIT 10.1


 


SEPARATION AGREEMENT


 


This Separation Agreement
(the “Agreement”) is made and entered into by and between Gatos Silver, Inc, a Delaware corporation with
its principal business address at 8400 Crescent Parkway, Suite 600, Greenwood Village, CO 80111 (the “Company”),
and John Kinyon an individual, with residential address at 4865 S. Greensferry Road, Coeur d Alene, ID 83814 (the “Executive”
and together with the “Company”, the “Parties”).


 


RECITALS


 


		A.	Executive is Chief Operating Officer for the Company and is employed
                                            as an at-will employee.



 


		B.	Executive executed the Executive Employment Agreement on or about
                                            April 1, 2016, (the “Employment Agreement”), which is attached as
                                            Exhibit A to this Agreement.



 


		C.	Executive executed the Nonqualified Stock Option Agreements detailed
                                            on Exhibit B on the dates stated therein, which are subject to the Company’s
                                            2020 Long Term Incentive Plan (the “Option Agreements”).



 


		D.	As a result of a Company re-alignment of operational priorities, the
                                            Chief Operating Officer role performed by the Executive will be eliminated and the Executive’s
                                            employment relationship with the Company will come to an end.



 


		E.	The Executive and the Company desire to document the separation of
                                            the Executive from the Company and to end their employment relationship in accordance with
                                            the terms of this Agreement.



 


AGREEMENT


 


NOW, THEREFORE, in consideration
of the covenants and agreements set forth herein and for other good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto covenant and agree as follows, effective as of the Effective Date:


 


		1.	Separation from the Company and end of the Employment Relationship.



 


		a.	Separation Date. Executive shall separate from the Company and the
                                            employment relationship will come to an end on August 16, 2021.



 


		b.	Separation Payments and Benefits. Upon separation from the Company,
                                            Executive shall be entitled to the following payments and benefits:



 


		i.	Within seven (7) days of Executive’s execution of this agreement,
                                            the Company shall pay the Executive any Base Salary and Annual Bonus from the previous calendar
                                            year to the extent accrued but unpaid as of the effective date of the Executive’s separation;
                                            one hundred and forty hours of accrued but unused vacation in accordance with Company policy;
                                            and all business expenses that were incurred and not reimbursed but eligible for reimbursement
                                            (collectively, the “Accrued Obligations”) less any withholdings and other
                                            deductions required by law.



 






    


     


    










 


		ii.	The Company shall pay the Executive a prorated amount of the current calendar
                                            year Annual Bonus (as such term is defined in the Employment Agreement), with payment of
                                            such prorated Annual Bonus to be made at the same time as annual bonuses are made to other
                                            executives of the Company in the ordinary course (but in no event later than March 15,
                                            2022) (the “ProRata Bonus”).



 


		iii	Subject to the Executive signing and returning an executed version of
                                            this Agreement to the Company at its headquarters address referred to in the heading of this
                                            Agreement within 21 calendar days of receipt of this Agreement and not timely revoking it,
                                            the Company will pay the Executive:



 


		a)	an amount equal to twelve (12) months of the Executive’s
                                            Base Salary in a lump sum less applicable withholdings and other deductions required by law
                                            within sixty (60) calendar days of the date of separation.



 


		b)	an amount of $294,682.00 equivalent to the preceding year
                                            Bonus, in addition to the preceding year Bonus that Executive has already received, in a
                                            lump sum less applicable withholdings and other deductions required by law within sixty (60)
                                            calendar says of the date of separation.



 


		c)	Provided the Executive timely elects continuation coverage
                                            under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
                                            the Company shall also pay, on the Executive’s behalf, the portion of monthly premiums
                                            for the Executive’s group health insurance, including coverage for the Executive’s
                                            dependents, that the Company paid immediately prior to the date of separation, during the
                                            eighteen (18) month period following the date of separation, subject to the Executive’s
                                            continued eligibility for COBRA coverage. The Company will pay for such COBRA coverage for
                                            eligible dependents only for those dependents who were enrolled immediately prior to the
                                            date of separation. The Executive will continue to be required to pay that portion of the
                                            premium for the Executive’s health coverage, including coverage for the Executive’s
                                            eligible dependents, that the Executive was required to pay as an active employee immediately
                                            prior to the date of separation. Notwithstanding the foregoing, in the event that under applicable
                                            guidance the reimbursement of COBRA premiums causes the Company’s group health plan
                                            to violate any applicable nondiscrimination rule, the parties agree to negotiate in good
                                            faith a mutually agreeable alternative arrangement.



 






    


     


    







 


		d)	an amount equivalent to 50% of attorney’s fees, not
                                            to exceed $2,500 payable directly to the Law Office of David Lichtenstein, LLC within fifteen
                                            (15) days from receipt of the corresponding invoice



 


		e)	All Executive’s Stock Options shall fully vest and remain
                                            exercisable until the earlier of (x) the date of October 13, 2022 or (y) the
                                            expiration of the original option term.



 


		iv	Executive shall resign from all positions with the Company, including any
                                            of its parent, subsidiary, or affiliate companies, effective as of the Separation Date.



 


d.            Adequate
Consideration. The Parties agree that this Agreement is supported by adequate consideration based on the mutual covenants and promises
set forth herein. Moreover, Executive acknowledges that the Severance Payment provided pursuant to this Agreement is provided solely
as consideration for the mutual promises set forth in this Agreement.


 


e.            No
Other Payments. Except as provided herein, Executive acknowledges that no other compensation, wages, payment, bonus, accelerator,
reimbursement, equity awards, vesting or benefit of any nature whatsoever is due and owing by the Company to Executive. Executive represents
that he has previously reported all hours worked for the Company in strict accordance with Company policy and that he is not owed any
salary, reimbursement, or compensation for any hours worked. Executive further represents that, as of the Effective Date, he has previously
been reimbursed for all expenses and costs for which the company is or may be responsible.


 


f.            Reporting.
Executive acknowledges and agrees that as a public company, the Company, may have certain reporting or disclosure obligations relating
to the parties, Executive’s title or status, or the fulfillment of the parties’ respective rights and obligations as provided
for in this Agreement or pursuant to Executive’s employment with the Company. Executive acknowledges and agrees that the Company
shall make whatever report or disclosure it believes is required by law or is reasonably prudent. Executive further acknowledges and
agrees that the Company makes no representation or warranty regarding the form, substance, or timing of any such report or disclosure,
or the number of reports or disclosures it may decide to make.


 


		2.	Release of Claims by Executive.



 


		a.	In exchange for the consideration provided in this Agreement, including
                                            without limitation the Severance Payment, Executive, for himself and his heirs, executors,
                                            representatives, agents, assigns, and all persons and entities claiming by, through, or under
                                            him, hereby irrevocably and unconditionally fully and forever waives, releases, and discharges
                                            the Company, including the Company’s parents, subsidiaries, affiliates, predecessors,
                                            successors, and assigns, and each of its and their respective officers, directors, employees,
                                            shareholders, and partners, in their corporate and individual capacities (both individually
                                            and collectively, the “Released Parties”), from any and all claims, liabilities,
                                            charges, obligations, demands, grievances, lawsuits, causes of action, attorney fees, costs,
                                            and liabilities of any kind or nature whatsoever, including without limitation claims for
                                            contribution, subrogation, or indemnification, whether known or unknown (collectively, “Claims”),
                                            which Executive may have or has ever had as of the Effective Date against the Released Parties
                                            in any way related to any way related to the Executive’s hire, benefits, employment,
                                            termination, or separation from employment with the Company by reason of any actual or alleged
                                            act, omission, transaction, practice, conduct, occurrence, or other matter (the “Released
                                            Claims”).



 






    


     


    










 


		b.	The Released Claims include, but are not limited to, any matters,
                                            causes, or things whatsoever that were, have been, or in any way could have been alleged
                                            as of the Effective Date including but not limited to, any and all claims arising under federal,
                                            state, or local employment, civil rights, labor, wage and hour, wage payment, back pay or
                                            similar laws, including, without limitation, claims of wrongful discharge, breach of express
                                            or implied contract, fraud, misrepresentation, defamation, whistle-blowing or liability in
                                            tort, common law claims, claims of any kind that may be brought in any court or administrative
                                            agency, any claims arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§
                                            1981- 1988, the Civil Rights Act of 1991, the Equal Pay Act, the Age Discrimination in Employment
                                            Act, the Older Workers’ Benefit Protection Act, the Americans with Disabilities Act,
                                            the Worker Adjustment and Retraining Notification Act, the Rehabilitation Act of 1973, the
                                            Fair Labor Standards Act, the Executive Retirement Income Security Act, the Family and Medical
                                            Leave Act, the Genetic Information Nondiscrimination Act, the National Labor Relations Act,
                                            the Fair Credit Reporting Act, Executive Order I 1246, the Immigration Reform and Control
                                            Act of 1986, and all other federal, state or local statutes, ordinances, and regulations.
                                            Executive understands that the Released Claims include a release of claims arising under
                                            the Age Discrimination in Employment Act.



 


		c.	Provided, however, notwithstanding anything to the contrary set forth
                                            herein, this Section 2 shall not (i) extend to any obligations of the Company under
                                            this Agreement or any claims that cannot be waived under applicable law; (ii) prohibit
                                            any claims by Executive for unemployment insurance benefits or worker’s compensation
                                            benefits; (iii) prohibit Executive from filing charges with the Equal Employment Opportunity
                                            Commission or state anti-discrimination agencies for violation of state or federal employment
                                            laws within the jurisdiction of those agencies, except that Executive does specifically waive
                                            Executive’s right to personal monetary recovery in connection with such charges; (iv) eliminate
                                            any vested rights that Executive may have under any employee pension or welfare benefit plan
                                            in which he participated as an employee of the Company; and/or (v) prohibit Executive’s
                                            participation in the Company’s employee health benefit plan, as allowed by COBRA and
                                            the terms, conditions, and limitations of the plan. In addition, notwithstanding anything
                                            to the contrary contained herein, nothing in this Agreement prohibits Executive from reporting
                                            possible violations of federal law or regulation to any United States governmental agency
                                            or entity in accordance with the provisions of and rules promulgated under Section 21
                                            F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of
                                            2002, or any other whistleblower protection provisions of state or federal law or regulation
                                            (including the right to receive an award for information provided to any such government
                                            agencies).



 






    


     


    







 


		d.	Executive acknowledges that he may hereafter discover facts different
                                            from or in addition to those he now knows or believes to be true with respect to the Released
                                            Claims, and Executive expressly agrees to assume the risk of the possible discovery of additional
                                            or different facts, and agrees that this Agreement shall remain effective in all respects,
                                            regardless of such additional or different facts.



 


3.    Release
of Claims by Company. In consideration of the promises made by Executive in this Agreement, the sufficiency of
which is hereby acknowledged, Company, on behalf of itself, its present and former agents, shareholders, partners, officers, directors,
manager, supervisors, employees, attorneys, subsidiaries, corporations, licensees, affiliated corporations, parent or other affiliated
corporations, specifically agrees to fully and forever release and discharge Executive, his heirs and assigns, from any and all debts,
claims, demands, damages, actions, administrative complaints or charges, and causes of action of any kind whatsoever, whether known or
unknown or unforeseen, which Company now has, claims to have or hereafter may have against Executive, for or by reason of any matter,
cause or thing, except to the extent it relates to any act of fraud, knowingly illegal act or willful violation of Company’s policy
on the part of Executive, occurring at any time prior to or contemporaneous with the execution of this Agreement, including without limitation
on the foregoing, those arising out of, or in any way related to, Executive’s employment by Company and its affiliated corporations
and the separation of that employment.


 


4.    Twenty
One Days Consideration Period. The Company provided this Agreement to Executive on August 25, 2021. Executive may elect to take
up to twenty One (21) days to consider whether to accept this Agreement, although Executive may sign this Agreement before then. Changes
to this Agreement, whether material or immaterial, do not restart the running of the 21-day period. If Executive fails to execute this
Agreement within the twenty one (21) day period, then the terms and conditions contained in this Agreement are automatically withdrawn
without further action or notice by the Company.


 


5.    Seven
Day Revocation Period. Following execution of this Agreement, Executive shall have seven (7) calendar days to revoke this Agreement.
To be effective, the revocation must be in writing, signed by Executive, and delivered to 8400 Crescent Parkway, Suite 600, Greenwood
Village, CO 80111 email: rmonroy@gatossilver.com, on or before 5 p.m. MDT of the 7th day. This
Agreement shall become effective on the eighth (8th) day following execution of this Agreement (the
 “Effective Date”). If Executive revokes this Agreement, Executive shall not be eligible to receive any compensation or benefits
under this Agreement and the Company shall have no obligations hereunder.


 


6.    Executive
Representations. Executive warrants and represents that he has not filed any claims, complaints, or actions of any kind against the
Company with any court or local, state or federal government agency; that he has been properly paid for all hours worked for the Company;
that he has received all salary, wages, commissions, bonuses, and other compensation due to the Executive; and that he has not engaged
in any unlawful conduct relating to the business of the Company.


 


Nothing in this Agreement prohibits
or restricts Executive from filing a charge or complaint with the Securities and Exchange Commission, the Financial Industry Regulatory
Authority, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration,
or any other federal or state regulatory authority (collectively, “Agencies”). Executive further understands that this Agreement
does not limit Executive’s ability to communicate with any of the Agencies or otherwise participate in any investigation or proceeding
that may be conducted by any of the Agencies in connection with reporting a possible securities law violation without notice to the Employer.
This Agreement does not limit the Executive’s right to receive an award for information provided to any securities regulatory agency
or authority.


 






    


     


    

 


7.     Return
of Company Property. In accordance with Executive’s obligations under Sections 5 of the Employment Agreement, Executive covenants
and represents that he has returned to the Company all Confidential Information, including without limitation: (i) all documents,
whether in print or electronic form, or other information about the Company, including without limitation confidential, proprietary or
trade secret information, whether developed by Executive or any other employee of the Company; (ii) all electronic equipment and
electronic storage devices (e.g., computers, thumb drives, etc.) except for Executive’s Laptop and cellular phone (all Company’s
information to be permanently deleted from such devices); and (iii) all company property, credit cards, office keys, and other property
that Executive obtained or that were made available to him as a consequence of his employment with the Company. Executive further affirmatively
acknowledges that he has removed all Confidential Information belonging to the Company from Executive’s personal electronic devices,
including without limitation his mobile phone. Executive acknowledges and agrees that Executive’s obligations pursuant to Section 5
of the Employment Agreement expressly survive the termination of Executive’s employment with the Company.


 


8.    Confidential
Agreement. Executive agrees that the terms of this Agreement shall be and remain confidential, and Executive promises and covenants
not to disclose, publicize, or cause to be publicized any of the terms and conditions of this Agreement except to (i) Executive’s
spouse or partner, legal counsel, and financial or tax advisor, upon condition that each such person be advised by Executive of Executive’s
confidentiality obligations hereunder and that any disclosure by such person will be deemed a disclosure by Executive; (ii) as required
by validly issued subpoena, court order, or federal or state law or regulation; or (iii) in legal proceedings for breach of or to
enforce the terms of this Agreement.


 


		9.	Non-disparagement.



 


		a.	Executive’s Obligations. Executive agrees that he shall
                                            not do or say anything that a reasonable person would expect at the time would have the effect
                                            of diminishing or constraining the goodwill, good reputation, and/or business opportunities
                                            of the Released Parties or their business, products, services, or personal lives. This obligation
                                            shall include, but shall not be limited to, refraining from making negative statements about
                                            the Released Parties or their methods of doing business, the effectiveness of their business
                                            policies, or the quality of any of their products, services or personnel. This section also
                                            expressly includes the making or publication of such statements on any social media platform,
                                            regardless of whether the statements are accessible to the general public or limited to “friends”
                                            or others to whom Executive has expressly granted access. This is a continuing obligation
                                            that shall survive this Agreement.



 


Nothing in this Section 9 shall restrict
Executive’s right to file any charge with or cooperate in any investigation conducted by the Agencies, as set forth more fully
in Section 6 above, or is intended to preclude or dissuade Executive from engaging in legally protected activities protected by
state and federal law, including the National Labor Relations Act or federal securities laws, including the Dodd- Frank Act, to the extent
such rights cannot be waived by agreement.


 






    


     


    







 


		b.	The Company’s Obligations. The Company agrees that it shall
                                            not do or say anything that would be slanderous, libelous or defamatory in nature regarding
                                            the Executive and in in response to any inquiries from prospective employers shall only provide
                                            Executive’s job title and dates of employment.



 


10.   Breach.
Executive acknowledges and understands that (a) the provisions of Sections 8 and 9; (b) the provisions of Section 5
of the Employment Agreement are each material terms of this Agreement and that the Company would not be willing to enter into this Agreement,
or the Employment Agreement without such provisions. Therefore, if Executive breaches the terms of Sections 8 or 9 of this Agreement;
or Section 5 of the Employment Agreement, then Executive acknowledges and agrees that the Company, in its sole discretion, may exercise
any remedies available to Company under the law or otherwise. In addition, Executive acknowledges that he will remain liable for any
actual damages suffered by any of the Released Parties arising from or relating to Executive’s breach of the aforementioned sections.


 


11.   Remedies.
In the event of a breach or threatened breach by the Executive of any of the provisions of this Agreement, the Executive hereby consents
and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or
other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing
any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other
security. Any equitable relief shall be in addition to, not instead of, legal remedies, monetary damages, or other available relief.


 


12.   Confirmation
of Prior Agreements. Notwithstanding anything in this Agreement to the contrary, Executive understands and agrees that nothing in
this Agreement shall alter, limit, or void the respective rights and obligations of the parties under the Option Agreements (except as
amended herein); the sections that survive termination of the Employment Agreement or any other agreement entered into between Executive
and the Company prior to the date hereof. Any covenants in those prior agreements that were designed to restrict Executive’s actions
during employment or that were intended to survive separation of employment shall continue in full force and effect, including without
limitation the non-solicitation, and confidentiality provisions of any of those prior agreements.


 


13.   Not
an Admission. This Agreement is not an admission by any party hereto that either has violated any contract, law, or regulation or
that the Company or Executive has discriminated against the other or otherwise infringed on the other’s rights and privileges or
done any other wrongful act. Rather, the Parties have entered into this Agreement with the intention to avoid disputes and any attendant
inconvenience and expense.


 


14.   Entire
Document. With the exception of the Option Agreements (except as amended herein), and those provisions that survive Executive’s
separation pursuant to Section 12 above, this Agreement is the entire, integrated agreement between the parties regarding the subject
matter of this Agreement. No other promises or agreements regarding the subject matter of this Agreement have been made to either Executive
or the Company other than those contained in this Agreement. In electing to sign this Agreement, neither the Executive nor the Company
has relied on any representation or promise, whether oral or written, not specifically set forth in this Agreement.


 


15.   No
Assignment of Claims. Executive represents that he has not made, and will not make, any assignment of Claim(s) released by this
Agreement and that no other person or entity had or has any interest in any Claim(s) released by Executive under this Agreement.
Executive agrees to indemnify and hold harmless the Company from any and all claims, demands, expenses, costs, attorneys’ fees,
and causes of action asserted by any person or entity due to a violation of this non- assignment provision.


 






    


     


    

 


16.   Miscellaneous.
This Agreement shall be governed by the laws of the State of Colorado. Notwithstanding any Colorado statutory or case law to the contrary,
this Agreement may not be modified except by a document signed by a duly authorized representative of the Company and the Executive,
whether or not such claimed modification is supported by separate consideration. Any waiver by any party hereto of any breach of any
kind or character whatsoever by any other party, whether such waiver be direct or implied, shall not be construed as a continuing waiver
of, or consent to, any subsequent breach of this Agreement on the part of the other party. In addition, no course of dealing between
the parties, nor any delay in exercising any rights or remedies hereunder or otherwise, shall operate as a waiver of any of the rights
or remedies of the parties. This Agreement shall inure to and bind the heirs, devisees, executors, administrators, personal representatives,
successors, and assigns, as applicable, of the respective parties hereto.


 


Subject to Section 11, the Parties shall attempt in good faith
to resolve any dispute arising out of or relating to this Agreement promptly by negotiation. If the matter has not been resolved within
thirty (30) calendar days of a Party’s request for negotiation, either Party may initiate proceedings or arbitration only as provided
herein. Subject to Section 5(d), if any dispute arising out of or relating to this Agreement or the breach, termination or validity
thereof has not been resolved by negotiation, such dispute shall be settled by binding arbitration in accordance with the then current
rules of JAMS by a single independent and impartial arbitrator who is located in Denver, Colorado. The arbitrator selected must
have an expertise in the matter(s) in dispute. Each party shall bear her/its own fees and costs; the fees, costs and all administrative
expenses of arbitration shall be borne equally by the Company and the Executive. The Parties understand and agree that the arbitration
is subject to the rules of JAMS; that the arbitrator’s decision and award shall be final and binding as to all claims that
were, or could have been, raised in arbitration; and that judgment upon the award rendered by the arbitrator may be entered in any court
having competent jurisdiction. Any award rendered hereunder shall include an award of attorneys’ fees and costs, including the
arbitrator’s fee, but shall not include punitive damages. The statute of limitations of the state of New York applicable to the
commencement of a lawsuit shall apply to the commencement of an arbitration.


 


17.   Severability.
The provisions of the Agreement are severable. If any part of this Agreement is found to be unenforceable by a court of competent
jurisdiction, the other provisions shall remain fully valid and enforceable. Such a finding shall not affect the validity of the remainder
of this Agreement, which shall remain in full force and effect and continue to be binding on the Parties.


 


18.   Knowing
and Voluntary Execution. Executive acknowledges that Company has specifically recommended Executive to seek the advice of legal counsel
of his choosing to review the terms and conditions of this Agreement and Executive specifically represents that he has carefully read
and fully understands all of the provisions of this Agreement and to the extent that he has deemed appropriate, he has sought the advice
of legal counsel, and that he is voluntarily and knowingly entering into it. Executive also specifically represents that prior to signing
this Agreement, he was provided a reasonable period of time within which to consider whether to accept this Agreement.


 






    


     


    







 


19.   Authority to Enter
Agreement. The Company warrants and represents that it has full authority to enter into this Agreement, and to consummate the transactions
contemplated hereby. The Company further warrants and represents that this Agreement is not in conflict with any other agreement to which
the Company is a party or by which it may be bound. In addition, the Company warrants and represents that the individuals executing this
Agreement on behalf of the Company have the full power and authority to bind the Company to the terms hereof and have been authorized
to do so in accordance with the Company’s corporate structure and organization.


 


20.   Counterparts. This
Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute
one and the same instrument. Facsimile or other electronically delivered copies of signature pages to this Agreement shall be treated
between the parties as original signatures for all purposes.


 


(signature page follows)


 


IN WITNESS WHEREOF, the undersigned hereby execute
this Agreement knowingly and voluntarily intending to be legally bound by its terms.


 


	Gatos Silver Inc	 	Executive
	 	 	 
	/s/ Stephen
    Orr	 	/s/ John
    Kinyon
	By: Stephen Orr	 	John Kinyon
	Title: Chief Executive Officer	 	Date: 31 August, 2021
	Date: 1 September, 2021