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 March 31, 2022.
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.
Highlights
- Revenue of $26.4 million and net loss of $0.3 million or a net
loss of ($0.00)2 per share in Q1-2022, representing an increase of
$16.0 million in revenue and a significant decrease of $91.5
million in net loss compared to Q1-2021.
- Aggregate net income from the Cosalá Operations and 60% owned
Galena Complex operating segments of $8.5 million during the
quarter. The Cosalá Operations net income increased to $5.6 million
(+347%) and the Galena Complex net income to $2.9 million (+290%)
during Q1-2022 over Q1-2021.
- Cash generated from operating activities2, before changes in
non-cash working capital items, increased by $13.6 million in
Q1-2022 over Q1-2021.
- Significantly improved balance sheet with the resumption of
mining at the Cosalá Operations with a return to full production in
Q1-2022. The Company had a cash and cash equivalents balance of
$7.1 million as of March 31, 2022, compared to a balance of $2.9
million as of December 31, 2021. Over the same period, net working
capital2 improved by $17.6 million.
- The Company previously reported Q1-2022 consolidated
attributable production of approximately 300,000 silver ounces and
1,274,000 silver equivalent1 ounces. This improvement represents a
45% increase in silver production and an 80% increase in silver
equivalent production compared with Q4-2021.
- The Company’s consolidated Q1-2022 cash costs2 per silver ounce
was negative $9.55 per ounce and consolidated Q1-2022 all-in
sustaining costs2 per silver ounce was negative $2.67 per ounce.
Cash costs benefitted from the strong zinc and lead prices, which
are both higher than the Company’s budget and may continue to
positively impact cash and all-in sustaining costs moving
forward.
- The Company's silver and silver equivalent production guidance
remains unchanged at 1.4 – 1.8 million ounces and 4.8 – 5.2 million
ounces, respectively for 2022. Further increases in silver
production to a range of 3.4 – 3.8 million ounces and silver
equivalent production to 7.0 – 7.4 million ounces are projected for
2024, representing increases of approximately 425% and 380%,
respectively, compared with 2021 production.
“The first quarter of 2022 demonstrated the potential of the
Cosalá Operations” stated Americas Gold and Silver President &
CEO Darren Blasutti. “With strong silver, zinc, and lead prices,
the Company generated positive operating cash flow, significantly
improved the Company’s balance sheet, and funded the Galena Complex
growth capital, which will allow the Galena Complex to double
silver production over the next two years. I expect this positive
trend to continue in subsequent quarters with continued strong
production and increasing silver grades at the Cosalá Operations
and the commissioning of the Galena Hoist project in Q4-2022.”
Cosalá Operations
The Cosalá Operations benefitted from its first full quarter of
production in Q1-2022 following the resolution of the illegal
blockade in Q4-2021. The Cosalá Operations produced approximately
127,000 ounces of silver, 9.6 million pounds of zinc and 3.9
million pounds of lead in Q1-2022. Cash costs per silver ounce and
all-in sustaining costs per silver ounce were negative $48.86 and
negative $42.51, respectively, as the Cosalá Operations benefitted
from strong zinc and lead prices. The price of both zinc and lead
have continued to increase in Q2-2022 on an average basis compared
to Q1-2022 with further potential benefit from these two
commodities anticipated.
The Cosalá Operations is expected to increase silver production
through 2022 due to the growing contribution from higher-grade
silver areas in the Upper Zone of the San Rafael mine in the second
half of 2022. Silver production from the Cosalá Operations for the
year continues to be estimated at 0.7 to 0.9 million ounces. Zinc
production from the Cosalá Operations is expected to be
approximately 36 to 40 million pounds while lead production is
expected to be 13 to 15 million pounds.
Galena Complex
Attributable production from the Galena Complex was
approximately 174,000 ounces of silver and 2.5 million pounds of
lead in Q1-2022. Silver production is estimated to increase in
H2-2022 from mining higher tonnage in higher-grade silver copper
stopes. The Company aims to commission the Galena Hoist project in
Q4-2022 which will increase hoisting capacity at the operation in
the near term. Cash costs per silver ounce and all-in sustaining
costs (excluding the Galena Hoist project) per silver were $19.17
and $26.44, respectively. Cash costs per silver ounce and all-in
sustaining costs per silver ounce at the Galena Complex are
anticipated to improve given that most of the operating costs are
fixed and are expected to decrease on a per silver ounce basis
assuming expected higher silver and lead production beyond
2022.
Attributable metal production from the Galena Complex in 2022 is
estimated to be 0.7 to 0.9 million silver ounces and 9 to 11
million pounds of lead.
Relief Canyon
The Company is committed to continuing efforts to resolve the
metallurgical challenges at Relief Canyon. An independent
metallurgical lab has been contracted to complete a metallurgical
test program to evaluate process modifications, including the use
of blinding agents, to minimize the impact of naturally occurring
carbonaceous material on gold recovery. The initial phase is
expected to be completed by end of Q2-2022. Based on the success of
the initial phase, the Company is expected to initiate larger scale
testing in the second half of 2022, but does not anticipate making
a final determination on proceeding with larger scale testing until
this initial phase has been completed and the results have been
analyzed.
Financial Liquidity and Update on Annual Filings
The Company’s liquidity has improved significantly with the
restart of the Cosalá Operations and continuing operational
improvements at the Galena Complex in the current metal price
environment leading to improvements in operating cash flow, working
capital, net income, and metal production. The Company refers to
its audited consolidated financial statements for the fiscal year
ended December 31, 2021, included in the Company’s Annual Report on
Form 40-F, which contained an audit report from its independent
registered public accounting firm with a going concern
qualification.3 The Company’s current financial statements for the
first quarter do not include going concern disclosure.
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 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.
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 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 metals, the
expected prices of gold, silver and other metals, as well as the
related costs, expenses and capital expenditures; production from
the Galena Complex, including the expected production levels and
potential additional mineral resources thereat; mining and
processing operations at the Cosalá Operations continuing,
including expected production levels and the continuity of legal
access for employees and contractors; and the goal and results of
test work intended to address metallurgical challenges at Relief
Canyon. Guidance and outlook contained in this press release was
prepared based on current mine plan assumptions with respect to
production, costs and capital expenditures, the metal price
assumptions disclosed herein, and assumes no adverse impacts to
operations from the COVID 19 pandemic and no further adverse
impacts to the Cosalá Operations from blockades and is subject to
the risks and uncertainties outlined below. Considering the recent
illegal blockade, the ability to maintain cash flow positive
production at the Cosalá Operations, allowing the Company to
generate sufficient operating cash flows, is a significant judgment
in the Q1-2022 condensed interim consolidated financial statements
with respect to the Company’s liquidity. Should the Company
experience negative operating cash flows in future periods, the
Company may need to raise additional funds through the issuance of
equity or debt securities. 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.
1 Silver equivalent ounces for the 2022 guidance, and 2023 and
2004 outlook references were calculated based on $22.00/oz silver,
$0.95/lbs lead and $1.30/lbs zinc throughout this press release.
Silver equivalent ounces for Q1-2022 and prior periods in fiscal
2021 were calculated based on all metals production at average
realized silver, zinc, and lead prices during each respective
period throughout this press release.
2 This metric is a non-GAAP financial measure or ratio. The
Company uses the financial measures “Cash Costs”, “Cash Costs/Ag Oz
Produced”, “All-In Sustaining Costs”, and “All-In Sustaining
Costs/Ag Oz Produced” in accordance with measures widely reported
in the silver mining industry as a benchmark for performance
measurement and because it understands that, in addition to
conventional measures prepared in accordance with IFRS, certain
investors and analysts use this information to evaluate the
Company’s underlying cash costs and total costs of operations. Cash
costs are determined on a mine-by-mine basis and include mine site
operating costs such as mining, processing, administration,
production taxes and royalties which are not based on sales or
taxable income calculations, while all-in sustaining costs is the
cash costs plus all development, capital expenditures, and
exploration spending.
Reconciliation of Consolidated Cash
Costs/Ag Oz Produced1
Q1-2022
Q1-20212
Cost of sales ('000)
$ 16,554
-
Less non-controlling interests portion
('000)
(3,478)
-
Attributable cost of sales ('000)
13,076
-
Non-cash costs ('000)
(1,796)
-
Direct mining costs ('000)
$ 11,280
-
Smelting, refining and royalty expenses
('000)
5,627
-
Less by-product credits ('000)
(19,775)
-
Cash costs ('000)
$ (2,868)
-
Divided by silver produced (oz)
300,316
-
Cash costs/Ag oz produced ($/oz)
$ (9.55)
-
Reconciliation of Cosalá Operations Cash
Costs/Ag Oz Produced
Q1-2022
Q1-20212
Cost of sales ('000)
$ 7,859
-
Non-cash costs ('000)
(1,441)
-
Direct mining costs ('000)
$ 6,418
-
Smelting, refining and royalty expenses
('000)
4,699
-
Less by-product credits ('000)
(17,311)
-
Cash costs ('000)
$ (6,194)
-
Divided by silver produced (oz)
126,767
-
Cash costs/Ag oz produced ($/oz)
$ (48.86)
-
Reconciliation of Galena Complex Cash
Costs/Ag Oz Produced
Q1-2022
Q1-20212
Cost of sales ('000)
$ 8,695
-
Non-cash costs ('000)
(592)
-
Direct mining costs ('000)
$ 8,103
-
Smelting, refining and royalty expenses
('000)
1,547
-
Less by-product credits ('000)
(4,106)
-
Cash costs ('000)
$ 5,544
-
Divided by silver produced (oz)
289,249
-
Cash costs/Ag oz produced ($/oz)
$ 19.17
-
Reconciliation of Consolidated All-In
Sustaining Costs/Ag Oz Produced1
Q1-2022
Q1-20212
Cash costs ('000)
$ (2,868)
-
Capital expenditures ('000)
1,623
-
Exploration costs ('000)
444
-
All-in sustaining costs ('000)
$ (801)
-
Divided by silver produced (oz)
300,316
-
All-in sustaining costs/Ag oz produced
($/oz)
$ (2.67)
-
Reconciliation of Cosalá Operations All-In
Sustaining Costs/Ag Oz Produced
Q1-2022
Q1-20212
Cash costs ('000)
$ (6,194)
-
Capital expenditures ('000)
371
-
Exploration costs ('000)
434
-
All-in sustaining costs ('000)
$ (5,389)
-
Divided by silver produced (oz)
126,767
-
All-in sustaining costs/Ag oz produced
($/oz)
$ (42.51)
-
Reconciliation of Galena Complex All-In
Sustaining Costs/Ag Oz Produced
Q1-2022
Q1-20212
Cash costs ('000)
$ 5,544
-
Capital expenditures ('000)
2,086
-
Exploration costs ('000)
17
-
All-in sustaining costs ('000)
$ 7,647
-
Galena Complex Recapitalization Plan costs
('000)
1,547
-
All-in sustaining costs with Galena
Recapitalization Plan ('000)
$ 9,194
-
Divided by silver produced (oz)
289,249
-
All-in sustaining costs/Ag oz produced
($/oz)
$ 26.44
-
All-in sustaining costs with Galena
Recapitalization Plan/Ag oz produced ($/oz)
$ 31.79
-
1
Throughout this press release,
consolidated production results and consolidated operating metrics
are based on the attributable ownership percentage of each
operating segment (100% Cosalá Operations and 60% Galena
Complex).
2
Production results are nil for the Cosalá
Operations from Q2-2020 to Q3-2021 due to it being placed under
care and maintenance effective February 2020 as a result of the
illegal blockade, and exclude the Galena Complex due to suspension
of certain operating metrics during the Galena Recapitalization
Plan implementation.
The Company uses the financial measure “net loss per share”,
“net cash generated from operating activities”, and “working
capital” because it understands that, in addition to conventional
measures prepared in accordance with IFRS, certain investors and
analysts use this information to evaluate the Company’s liquidity,
operational efficiency, and short-term financial health.
Net loss per share is consolidated net loss divided by the
weighted average number of common shares outstanding during the
period.
Reconciliation of Net Loss per Share
Q1-2022
Q1-2021
Consolidated net loss ('000)
$ (296)
$ (91,800)
Divided by weighted average number of
common shares outstanding
172,903,384
127,270,944
Net loss per share
$ (0.00)
$ (0.72)
Net cash generated from operating activities is a financial
measure disclosed in the Company’s statements of cash flows
determined as net cash generated from operating activities, before
changes in non-cash working capital items.
Reconciliation of Net Cash Generated from
Operating Activities
Q1-2022
Q1-2021
Net cash used in operating activities
('000)
$ (1,823)
$ (16,313)
Less changes in non-cash working capital
items ('000)
8,272
9,121
Net cash generated from (used in)
operating activities ('000)
$ 6,449
$ (7,192)
Working capital is the excess of current assets over current
liabilities.
Reconciliation of Working Capital
Q1-2022
Q1-2021
Current Assets ('000)
$ 28,974
$ 27,679
Less current liabilities ('000)
(33,540)
(27,884)
Working capital ('000)
$ (4,566)
$ (205)
3
Reference to this information is required
by Section 610(b) of the NYSE American Company Guide. It does not
represent any change or amendment to any of the Company’s filings
for the fiscal year ended December 31, 2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220511005329/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 (AMEX:USAS)
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