Americas Gold and Silver Corporation (TSX: USA) (NYSE American:
USAS) (“Americas” or the “Company”), a growing North American
precious metals producer, reports consolidated financial and
operational results for the quarter ended September 30, 2021.
This earnings release should be read in conjunction with the
Company’s Management’s Discussion and Analysis, Financial
Statements and Notes to Financial Statements for the corresponding
period, which have been posted on the Americas Gold and Silver
Corporation SEDAR profile at www.sedar.com, and on its EDGAR
profile at www.sec.gov, and which are also available on the
Company’s website at www.americas-gold.com. All figures are in U.S.
dollars unless otherwise noted.
Operational and Third Quarter Financial Highlights
- Revenue of $10.9 million and net loss of $18.6 million for
Q3-2021 or a loss of ($0.13) per share, with the loss mostly
attributable to operating costs at Relief Canyon. With the
temporary suspension of mining at Relief Canyon, the Company has
significantly reduced the monthly spend moving forward. The Company
continues leaching operations and ongoing metallurgical test work
at Relief Canyon.
- The Cosalá Operations are operational with the San Rafael mine
and Los Braceros mill expected to ramp-up to full production of
approximately 1,800 tonnes per day next month. Concentrate
shipments have resumed. A return to revenue and cash flow
generation is expected later in Q4-2021.
- Galena’s Recapitalization Plan is proceeding well with the
Company continuing to experience higher year-over-year silver
production in Q3-2021 compared to Q3-2020. Silver production has
increased by 35% year-over-year.
- Phase 2 drill program at the Galena Complex began in late
August 2021 with the initial focus on expanding the recently
discovered Silver Vein extension at depth from an eastern drill
station on the 5500 Level as well as definition drilling on the
4900 Level. With the completion of Phase 1 drilling midyear, proven
and probable silver ounces increased by 38%, measured and indicated
silver ounces increased by 72% and inferred silver ounces increased
by 36%, year-over-year.
- On November 12, 2021, the Company amended its existing 2024
Convertible Debenture by increasing the outstanding principal
balance by C$6.3 million for a total outstanding of C$17.9 million,
among other terms.
“With the reopening of the Cosalá Operations and the strong
current metal prices, I am confident the Company has turned the
corner with the return to cash flow generation expected in the near
term and the risk of further equity dilution significantly
reduced,” stated Americas Gold and Silver President & CEO
Darren Blasutti.
Cosalá Operations
The Cosalá Operations have re-started and all workers have been
re-called. The Company has addressed over 95% of the
recommendations from the Ministry of Labour report. Outstanding
items are longer-term, caused by the 19-month illegal blockade, and
administrative in nature.
Production from the San Rafael mine is expected to increase over
the next month as the normal mining cycle is re-established. The
Los Braceros processing plant will initially be fed with a
combination of existing stockpiled ore and new production from the
mine. The milling rate is expected to ramp-up in tandem with mine
production with a goal of processing 1,800 tonnes per day.
Including the mill stockpile and the broken ore in the San Rafael
mine, the operation has over 20,000 tonnes of ore ready to be
processed. Approximately 20 loads of existing concentrate were
shipped in late October.
Initial production will focus on maximizing near-term free cash
flow by mining high-grade zinc areas of the Main Zone which were
fully developed prior to the illegal blockade. Over the course of
the next six months, the mine will continue development into the
Upper Zone, which carries silver grades approximately 5-6 times
higher than the Main Zone. Mining the silver-rich areas of the
Cosalá Operations is expected to significantly increase silver
production to over 2.5 million ounces of silver per year.
Galena Complex
The Phase II drill program at the Galena Complex began in late
August 2021. The initial focus is to test the recently discovered
Silver Vein extension to 800 feet below the 5500 Level before year
end. In addition, continued definition drilling from the 4900 Level
to define mineral reserves and increase mineral resources adjacent
to current production areas is part of the Phase II plan. To date,
the Silver Vein extension has been delineated to approximately 350
ft below the 5500 Level. Drilling will continue at depth until the
end of 2021.
As part of the 5500 Level Phase I drilling (completed in June
2021) targeting the Silver Vein extension, the Company also
intersected the 220 Vein near existing infrastructure. During the
Phase II drilling plan, the Company is targeting the Silver Vein
extension and 220 Vein intersection and Company geologists believe
both the width and grade increases at the intersection. A short
drill program began in late October to test this area from the 5500
Level. The Company believes this high-grade area can be exploited
in the near term and positively impact silver production. Mining of
the Silver Vein extension will resume in late November 2021 and
continue into 2022. This program is expected to increase silver
production and profitability of the operation even before the new
hoist installation is completed in Q3-2022.
The goal of Phase II drilling is to add significant mine life in
known vein systems and to discover new ore bodies both at depth and
near surface. Drilling at depth will continue to focus on the three
south-east plunging veins which include the 72 Vein, the Silver
Vein extension and the down-dip extension of the 360 Complex. The
Company is targeting an additional 50 million ounces of silver from
the Phase II drill program (on a 100% basis).
Fiscal 2021 is a transitional year at the Galena Complex however
the operation has already benefited from the Recapitalization Plan
with silver and lead production continuing to increase on a yearly
and quarterly basis. The Company is targeting to increase
production to a 2 million ounce per year plan by the end of 2022.
Assuming continued exploration success, the Company anticipates the
operation will again reach peak historical annual production levels
of approximately 5 million ounces per year in the longer term.
Relief Canyon
A record of decision for the Phase 2 Environmental Impact Study
(“EIS”) was published by the Bureau of Land Management on October
4, 2021. The EIS will allow the Company to deepen the existing pit
below the water table, expand the mining permit boundary, expand
and add waste rock storage facilities, heap leach pads, process
ponds, groundwater dewatering facilities, and groundwater
re-infiltration facilities.
The Company is committed to continuing efforts to resolve the
metallurgical challenges at Relief Canyon. However, the Company is
in the process of reopening the Cosalá Operations and is currently
prioritizing its capital resources to the restart. As a result of
these capital allocation decisions, Relief Canyon has temporarily
suspended mining operations as of August 13, 2021 with approval by
the Board of Directors.
The Company continues leaching operations with the most recent
run-of-mine leach pad having recovered over 60% of gold place on
that pad to-date. An extensive audit of drilling, sampling, ore
control, and modelling, implementing internal QA/QC programs, and
metallurgy testing program on carbonaceous material is ongoing in
an effort to improve recoveries and the overall profitability. The
Company plans to update the market in early 2022 on next steps.
Financing
On November 12, 2021, the Company amended its existing 2024
Convertible Debenture by increasing the outstanding principal
balance by C$6.3 million to a total outstanding principal of C$17.9
million, in addition to amending its conversion price of C$3.35 to
C$1.48 (based on a 35% premium to the 5-day VWAP at the time the
increase to the principal amount was originally discussed), and
retraction option terms. The net proceeds raised will be used for
the previously stated purposes relating to the reopening of the
Cosalá Operations and working capital purposes. All other material
terms of the debenture remain unchanged. The effectiveness of the
amendments and the listing of the shares issuable upon conversion
are subject to the approval of the TSX.
The Company continues to deliver gold ounces under the Sandstorm
agreement and expects to meet its near-term delivery requirements.
If the Company is unable to meet its requirements, Sandstorm has
agreed to provide equity funding to support any liquidity with
respect to such requirements in 2022.
Consolidated Operations
Consolidated operating results from YTD-2021 were generally not
comparable to YTD-2020 due to the illegal blockade at the Cosalá
Operations, the Recapitalization Plan at the Galena Complex, and
the temporary suspension of mining operations at Relief Canyon.
Consolidated revenue increased by $3.6 million during Q3-2021
compared to Q3-2020 primarily due to increased silver production
and realized lead prices at the Galena Complex during the period
plus revenue from Relief Canyon following the declaration of
commercial production.
About Americas Gold and Silver Corporation
Americas Gold and Silver Corporation is a high-growth precious
metals mining company with multiple assets in North America. The
Company owns and operates the Relief Canyon mine in Nevada, USA,
the Cosalá Operations in Sinaloa, Mexico and manages the 60%-owned
Galena Complex in Idaho, USA. The Company also owns the San Felipe
development project in Sonora, Mexico. For further information,
please see SEDAR or www.americas-gold.com.
Technical Information and Qualified Persons
The scientific and technical information relating to the
operation of the Company’s material operating mining properties
contained herein has been reviewed and approved by Daren Dell,
P.Eng., Chief Operating Officer of the Company. The scientific and
technical information relating to mineral resources and exploration
contained herein has been reviewed and approved by Niel de Bruin,
Director of Geology of the Company. Each of Messrs. Dell and de
Bruin are "qualified persons" for the purposes of NI 43-101.
The Company’s current Annual Information Form and the NI 43-101
Technical Reports for its other material mineral properties, all of
which are available on SEDAR at www.sedar.com, and EDGAR at
www.sec.gov contain further details regarding mineral reserve and
mineral resource estimates, classification and reporting
parameters, key assumptions and associated risks for each of the
Company’s material mineral properties, including a breakdown by
category.
The diamond drilling program used NQ-size core. Americas Gold
and Silver’s standard QA/QC practices were utilized to ensure the
integrity of the core and sample preparation at the Galena Complex
through delivery of the samples to the assay lab. The drill core
was stored in a secure facility, photographed, logged and sampled
based on lithologic and mineralogical interpretations. Standards of
certified reference materials, field duplicates and blanks were
inserted as samples shipped with the core samples to the lab.
Analytical work was carried out by American Analytical Services
Inc. (“AAS”) located in Osburn, Idaho. AAS is an independent,
ISO-17025 accredited laboratory. Sample preparation includes a
30-gram pulp sample analyzed by atomic absorption spectrometry
(“AA”) techniques to determine silver, copper, and lead, using aqua
regia for pulp digestion. Samples returning values over 514g/t Ag
are re-assayed using fire-assay techniques for silver.
Additionally, samples returning values over 23% Pb are re-assayed
using titration techniques.
Duplicate pulp samples were sent out quarterly to ALS Global, an
independent, ISO-17025 accredited laboratory based in Reno, Nevada
to perform an independent check analysis. A conventional AA
technique was used for the analysis of silver, copper and lead at
ALS Global with the same industry standard procedures as those used
by AAS. The assay results listed in this report did not show any
significant contamination during sample preparation or sample bias
of analysis.
All mining terms used herein have the meanings set forth in
National Instrument 43-101 – Standards of Disclosure for Mineral
Projects (“NI 43-101”), as required by Canadian securities
regulatory authorities. These standards differ significantly from
the requirements of the SEC that are applicable to domestic United
States reporting companies. Any mineral reserves and mineral
resources reported by the Company in accordance with NI 43-101 may
not qualify as such under SEC standards. Accordingly, information
contained in this news release may not be comparable to similar
information made public by companies subject to the SEC’s reporting
and disclosure requirements.
Cautionary Statement on Forward-Looking Information:
This news release contains “forward-looking information” within
the meaning of applicable securities laws. Forward-looking
information includes, but is not limited to, Americas Gold and
Silver’s expectations, intentions, plans, assumptions and beliefs
with respect to, among other things, estimated and targeted
production rates and results for gold, silver and other precious
metals, the expected prices of gold, silver and other precious
metals, as well as the related costs, expenses and capital
expenditures; the recapitalization plan at the Galena Complex,
including the expected production levels and potential additional
mineral resources thereat; the resumption of mining and processing
operations at the Cosalá Operations following the resolution of the
illegal blockade, including expected production levels and the
continuity of legal access for employees and contractors; the
expected capital costs required in connection with the resumption
of mining and processing operations at the Cosalá Operations; the
expectations regarding the level of support from the Mexican
government with respect to the long-term stability of Cosalá
Operations, and its ability to maintain such support in the near-
and long-term; the Company’s production, development plans and
performance expectations at the Relief Canyon Mine, the Company’s
efforts to resolve metallurgical challenges at Relief Canyon, and
its ability to finance, develop and operate Relief Canyon,
including any expected improvement of operations and overall
project economics in connection therewith, the timing and
conclusions of the data compilation and analysis occurring at
Relief Canyon and the length of time of the temporary suspension in
mining operations at Relief Canyon. Often, but not always,
forward-looking information can be identified by forward-looking
words such as “anticipate”, “believe”, “expect”, “goal”, “plan”,
“intend”, “potential’, “estimate”, “may”, “assume” and “will” or
similar words suggesting future outcomes, or other expectations,
beliefs, plans, objectives, assumptions, intentions, or statements
about future events or performance. Forward-looking information is
based on the opinions and estimates of Americas Gold and Silver as
of the date such information is provided and is subject to known
and unknown risks, uncertainties, and other factors that may cause
the actual results, level of activity, performance, or achievements
of Americas Gold and Silver to be materially different from those
expressed or implied by such forward-looking information. With
respect to the business of Americas Gold and Silver, these risks
and uncertainties include risks relating to widespread epidemics or
pandemic outbreak including the COVID-19 pandemic; the impact of
COVID-19 on our workforce, suppliers and other essential resources
and what effect those impacts, if they occur, would have on our
business, including our ability to access goods and supplies, the
ability to transport our products and impacts on employee
productivity, the risks in connection with the operations, cash
flow and results of the Company relating to the unknown duration
and impact of the COVID-19 pandemic; interpretations or
reinterpretations of geologic information; unfavorable exploration
results; inability to obtain permits required for future
exploration, development or production; general economic conditions
and conditions affecting the industries in which the Company
operates; the uncertainty of regulatory requirements and approvals;
fluctuating mineral and commodity prices; the ability to obtain
necessary future financing on acceptable terms or at all; the
ability to operate the Company’s projects; and risks associated
with the mining industry such as economic factors (including future
commodity prices, currency fluctuations and energy prices), ground
conditions, illegal blockades and other factors limiting mine
access or regular operations without interruption, failure of
plant, equipment, processes and transportation services to operate
as anticipated, environmental risks, government regulation, actual
results of current exploration and production activities, possible
variations in ore grade or recovery rates, permitting timelines,
capital and construction expenditures, reclamation activities,
labor relations or disruptions, social and political developments
and other risks of the mining industry. The potential effects of
the COVID-19 pandemic on our business and operations are unknown at
this time, including the Company’s ability to manage challenges and
restrictions arising from COVID-19 in the communities in which the
Company operates and our ability to continue to safely operate and
to safely return our business to normal operations. The impact of
COVID-19 on the Company is dependent on a number of factors outside
of its control and knowledge, including the effectiveness of the
measures taken by public health and governmental authorities to
combat the spread of the disease, global economic uncertainties and
outlook due to the disease, and the evolving restrictions relating
to mining activities and to travel in certain jurisdictions in
which it operates. Although the Company has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking information,
there may be other factors that cause results not to be as
anticipated, estimated, or intended. Readers are cautioned not to
place undue reliance on such information. Additional information
regarding the factors that may cause actual results to differ
materially from this forward-looking information is available in
Americas Gold and Silver’s filings with the Canadian Securities
Administrators on SEDAR and with the SEC. Americas Gold and Silver
does not undertake any obligation to update publicly or otherwise
revise any forward-looking information whether as a result of new
information, future events or other such factors which affect this
information, except as required by law. Americas Gold and Silver
does not give any assurance (1) that Americas Gold and Silver will
achieve its expectations, or (2) concerning the result or timing
thereof. All subsequent written and oral forward-looking
information concerning Americas Gold and Silver are expressly
qualified in their entirety by the cautionary statements above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211115006166/en/
Stefan Axell VP, Corporate Development & Communications
Americas Gold and Silver Corporation 416-874-1708
Darren Blasutti President and CEO Americas Gold and Silver
Corporation 416-848-9503
Americas Gold and Silver (TSX:USA)
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