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 June 30, 2024.
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.sedarplus.ca, 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
- Consolidated revenue increased to $31.6 million for Q2-2024 or
62% compared to $19.5 million for Q1-2024 due to higher realized
commodity prices and increased silver production at the Galena
Complex, offset slightly by lower silver production from the Cosalá
Operations.
- Positive earnings before interest, taxes, depreciation and
amortization (“EBITDA”) and net income from combined Cosalá and
Galena operations of $11.1 million[1] and $4.4 million,
respectively, compared with negative EBITDA from those combined
operations of $1.5 million and a net loss of $6.3 million in
Q1-2024.
- Decrease in consolidated net loss to $4.0 million or $0.02 per
share for Q2-2024 (Q1-2024 consolidated net loss of $16.2 million
or $0.08 per share), primarily due to higher net revenue from
higher silver and zinc prices.
- As previously reported, Q2-2024 consolidated attributable
silver production of 0.51 million ounces. The Company also produced
8.9 million pounds of zinc and 4.4 million attributable pounds of
lead during Q2-2024. Significant reduction of consolidated
attributable cash costs to $12.42/oz silver produced[1] and all-in
sustaining costs (“AISC”) to $19.58/oz silver produced[1] in
Q2-2024, representing decreases of approximately 40% and 35%,
respectively, compared with Q1-2024.
- Galena Complex quarterly production was the highest on record
since 2013 with silver production of approximately 560,000 ounces
on a 100% basis as the operation benefitted from production from
mining areas in the Upper Country Lead Zone between 2400 and 2800
levels and a strong quarter from the 52-198 Silver Hanging Wall
Vein.
- On August 14, 2024, the Company signed a $15 million secured
Credit and Offtake Agreement for the capital requirements of the
Board-approved EC120 Project at its Cosalá Operations with the goal
of solely producing higher-grade silver-copper concentrates in
Q3-2025.
- The Company commenced negotiations with current convertible
debenture holders and potential new investors to extend the term of
the existing facilities.
“Q2-2024 was a strong quarter for the Company and an initial
demonstration of what our operating assets can deliver as we
transition to over 80% silver revenue over the next year,” stated
Americas President and CEO Darren Blasutti. “With the stronger
commodity prices, the Company was able to significantly improve
both its EBITDA and cash flow from operations. I expect continued
improvement as the Company advances its development projects at
both the Galena Complex and the Cosalá Operations. I am excited to
partner with a world-class metal trader such as Trafigura on
advancing the EC120 Project which will begin to contribute
higher-grade silver-copper production through development over
2025, coinciding well with the recent increases in silver and
copper prices.”
Consolidated Production
Consolidated attributable silver production in Q2-2024 was
approximately 506,000 ounces. Quarterly silver production in
Q2-2024 remained on a steady upward trend and is expected to
continue with increased working faces at the Galena Complex as well
as the exploitation of EC120 Project at the Cosalá Operations. The
EC120 Project has already started contributing to production with
small amounts of development ore and will continue to ramp up
through to achieving commercial production in Q3-2025. The Company
also produced 8.9 million pounds of zinc and 4.4 million
attributable pounds of lead during Q2-2024. The Company’s goal is
to generate more than 80% of its revenue from silver production by
the end of 2025 which would be among the silver industry leaders in
percentage revenue from silver.
Consolidated attributable cash costs and all-in sustaining costs
for Q2-2024 were $12.42 per silver ounce and $19.58 per silver
ounce, respectively. Galena Complex cash costs per silver ounce
benefitted from the significant increase in silver production on a
largely fixed cost base at the Galena Complex. Cash costs per
silver ounce at the Cosalá Operations were reduced because of
increased by-product credits from the increased zinc production and
prices.
Galena Complex
The Galena Complex produced approximately 560,000 ounces of
silver on a 100% basis in Q2-2024 compared to approximately 311,000
ounces of silver in Q1-2024 (an 80% increase in silver production),
and 3.0 million pounds of lead in Q2-2024, compared to 1.9 million
pounds of lead in Q1-2024 (a 60% increase in lead production).
The Galena Complex benefitted from the recent horizontal
development work in the Upper Country Lead Zone between the 2400
and 2800 Levels which allowed the operation to access additional
working areas which is expected to continue to benefit the
operation in subsequent quarters and a strong contribution from the
52-198 Silver Hanging Wall Vein. Development work on the 3700 Level
is expected to be completed in Q3-2024 and is expected to
contribute to high-grade silver production thereafter.
Cash costs decreased to $14.78 per ounce silver in Q2-2024 from
$27.14 per ounce silver in Q1-2024 due to increased silver
production, and AISC also decreased to $21.93 per ounce silver in
Q2-2024 from $40.96 per silver ounce in Q1-2024. Cash costs and
all-in sustaining costs per silver ounce at the Galena Complex are
anticipated to decrease with the projected increase in production
from the 3700 Level and the completion of the Galena Hoist project
as the benefits of economies of scale on the existing cost base are
realized.
Cosalá Operations
The Cosalá Operations decreased silver production in Q2-2024 by
43% to approximately 170,000 ounces of silver compared to
approximately 297,000 ounces of silver in Q1-2024. The Company
focused on mining higher grade zinc and lower grade silver areas of
the San Rafael Main and Upper Zones to maximize its revenue and
cash flow generation by taking advantage of the Q2-2024 increase in
zinc prices. Production of zinc increased to 8.9 million pounds of
zinc while lead production decrease slightly to 2.6 million pounds
of lead in Q2-2024, compared to 8.0 million pounds of zinc, and 2.8
million pounds of lead in Q1-2024. Cash costs per silver ounce
decreased during the quarter to $7.75 per ounce from $16.44 per
ounce in Q1-2024 due primarily to increased zinc prices, which is
treated as a by-product credit.
With the current higher silver and copper price, the Company
decided to expedite the development of its 100%-owned EC120 Project
at the Cosalá Operations. Initial access to the Zone 120 deposit
occurred in Q3-2023 accessed from the San Rafael Upper Zone
development with initial pre-production from development ore from
the area between the San Rafael Upper Zone and Zone 120. The
Company expects to realize an increase in silver production in the
near term due the higher-grade silver areas in the Upper Zone and
EC120 development ore. In addition, the Company continues mining
and processing silver-zinc ore from the San Rafael Main and Upper
Zones and is expecting to benefit from the increase in zinc prices
experienced to date in the second quarter.
On August 14, 2024, the Company signed a $15 million secured
Credit and Offtake Agreement for the capital requirements to
provide financing for the initial capital requirements at the EC120
Project. The Company expects to complete the required development
and preparations to achieve commercial production of higher-grade
silver-copper concentrates from the Project in Q3-2025. The Company
has been and will continue to process Zone 120 and El Cajon
development ore to produce high grade silver-copper concentrates
through the pre-production development period. The 2019 Preliminary
Feasibility Study for the EC120 Project forecasted average annual
metal production of 2.5 million ounces of silver and 4.5 million
pounds of copper with a total of over 12 million ounces of silver
and 23.0 million pounds of copper over the five years of the
project.
Relief Canyon
With the recent significant rise in gold prices, the Company
continues to research possible solutions to increase recoveries at
the project including the possibility of improvements through a
Carbon-In-Leach (“CIL”) plant. The Company is commissioning an
external study with an international engineering consultant to
complete the necessary work. A CIL plant may demonstrate a path to
higher gold recoveries for the deposit with the potential for
improved economics and overall profitability.
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 Cosalá Operations in Sinaloa, Mexico,
manages the 60%-owned Galena Complex in Idaho, USA, and is
re-evaluating the Relief Canyon mine in Nevada, 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
Company’s material mining properties contained herein has been
reviewed and approved by Chris McCann, P.Eng., Vice President,
Technical Services of the Company. The Company’s current Annual
Information Form and the NI 43-101 Technical Reports for its
mineral properties, all of which are available on SEDAR+ at
www.sedarplus.ca, 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’
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 and Cosalá Operations, including the expected number
of producing stopes and production levels; the expected timing and
completion of required development and the expected operational and
production results therefrom, including the anticipated
improvements to production rates and cash costs per silver ounce
and all-in sustaining costs per silver ounce ; and statements
relating to Americas’ EC120 Project, including expected approvals,
the availability of advances under the credit facility, execution
and timing and capital expenditures required to develop such
project and reach production thereat, and expectations regarding
its ability to rely in existing infrastructure, facilities, and
equipment. Guidance and outlook references contained in this press
release were prepared based on current mine plan assumptions with
respect to production, development, costs and capital expenditures,
the metal price assumptions disclosed herein, and assumes no
further adverse impacts to the Cosalá Operations from blockades or
work stoppages, and completion of the shaft repair and shaft rehab
work at the Galena Complex on its expected schedule and budget, the
realization of the anticipated benefits therefrom, and is subject
to the risks and uncertainties outlined below. The ability to
maintain cash flow positive production at the Cosalá Operations,
which includes the EC120 Project, through meeting production
targets and at the Galena Complex through implementing the Galena
Recapitalization Plan, including the completion of the Galena shaft
repair and shaft rehab work on its expected schedule and budget,
allowing the Company to generate sufficient operating cash flows
while facing market fluctuations in commodity prices and
inflationary pressures, are significant judgments in the
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 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 to be materially different from those expressed or
implied by such forward-looking information. With respect to the
business of Americas, these risks and uncertainties include risks
relating to widespread epidemics or pandemic outbreak, actions that
have been and may be taken by governmental authorities to contain
such epidemic or pandemic or to treat its impact and/or the
availability, effectiveness and use of treatments and vaccines
(including the effectiveness of boosters); 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;
potential litigation; 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, risks associated
with generally elevated inflation and inflationary pressures, risks
related to changing global economic conditions, and market
volatility, risks relating to geopolitical instability, political
unrest, war, and other global conflicts may result in adverse
effects on macroeconomic conditions including volatility in
financial markets, adverse changes in trade policies, inflation,
supply chain disruptions and other risks of the mining industry.
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’ filings with the Canadian
Securities Administrators on SEDAR+ and with the SEC. Americas 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 does not give any
assurance (1) that Americas will achieve its expectations, or (2)
concerning the result or timing thereof. All subsequent written and
oral forward‐looking information concerning Americas are expressly
qualified in their entirety by the cautionary statements above.
_______________________________ 1 This metric is a non-GAAP
financial measure or ratio. The Company uses the financial measures
“EBITDA”, “Cash Cost”, “Cash Cost/Ag Oz Produced”, “All-In
Sustaining Cost”, and “All-In Sustaining Cost/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 earnings, cash
costs and total costs of operations. EBITDA is net income less
interest, taxes, depreciation and amortization. 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 Produced(a, b)
Q2-2024
Q1-2024
Cost of sales ('000)
$19,975
$19,675
Less non-controlling interests portion
('000)
(4,040)
(3,426)
Attributable cost of sales ('000)
15,935
16,249
Non-cash costs ('000)
(486)
152
Direct mining costs ('000)
$15,448
$16,401
Smelting, refining and royalty expenses
('000)
4,416
4,343
Less by-product credits ('000)
(13,578)
(10,790)
Cash costs ('000)
$6,286
$9,954
Divided by silver produced (oz)
505,932
483,920
Cash costs/Ag oz produced ($/oz)
$12.42
$20.57
Reconciliation of Cosalá Operations
Cash Costs/Ag Oz Produced(b)
Q2-2024
Q1-2024
Cost of sales ('000)
$9,875
$11,109
Non-cash costs ('000)
(227)
(278)
Direct mining costs ('000)
$9,648
$10,831
Smelting, refining and royalty expenses
('000)
3,573
3,849
Less by-product credits ('000)
(11,905)
(9,783)
Cash costs ('000)
$1,316
$4,887
Divided by silver produced (oz)
169,728
297,262
Cash costs/Ag oz produced ($/oz)
$7.75
$16.44
Reconciliation of Galena Complex Cash
Costs/Ag Oz Produced
Q2-2024
Q1-2024
Cost of sales ('000)
$10,100
$8,566
Non-cash costs ('000)
(432)
716
Direct mining costs ('000)
$9,668
$9,282
Smelting, refining and royalty expenses
('000)
1,405
823
Less by-product credits ('000)
(2,789)
(1,661)
Cash costs ('000)
$8,284
$8,444
Divided by silver produced (oz)
560,340
311,096
Cash costs/Ag oz produced ($/oz)
$14.78
$27.14
Reconciliation of Consolidated All-In
Sustaining Costs/Ag Oz Produced (a,b)
Q2-2024(b)
Q1-2024
Cash costs ('000)
$6,286
$9,954
Capital expenditures ('000)
2,994
3,938
Exploration costs ('000)
626
646
All-in sustaining costs ('000)
$9,906
$14,538
Divided by silver produced (oz)
505,932
483,920
All-in sustaining costs/Ag oz produced
($/oz)
$19.58
$30.04
Reconciliation of Cosalá Operations
All-In Sustaining Costs/Ag Oz Produced(b)
Q2-2024
Q1-2024
Cash costs ('000)
$1,316
$4,887
Capital expenditures ('000)
968
1,881
Exploration costs ('000)
250
123
All-in sustaining costs ('000)
$2,534
$6,891
Divided by silver produced (oz)
169,728
297,262
All-in sustaining costs/Ag oz produced
($/oz)
$14.93
$23.18
Reconciliation of Galena Complex All-In
Sustaining Costs/Ag Oz Produced
Q2-2024
Q1-2024
Cash costs ('000)
$8,284
$8,444
Capital expenditures ('000)
3,377
3,428
Exploration costs ('000)
627
871
All-in sustaining costs ('000)
$12,288
$12,743
Divided by silver produced (oz)
560,340
311,096
All-in sustaining costs/Ag oz produced
($/oz)
$21.93
$40.96
Reconciliation of EBITDA from Cosalá
Operations and Galena Complex
Q2-2024
Q1-2024
Net income (loss) from Cosalá and Galena
('000)
$4,379
$(6,257)
Less interest and financing expense from
Cosalá and Galena ('000)
183
184
Less income tax expense (recovery) from
Cosalá and Galena ('000)
286
(15)
Less depletion and amortization from
Cosalá and Galena ('000)
6,278
4,620
EBITDA from Cosalá and Galena ('000)
$11,126
$(1,468)
(a)
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).
(b)
Throughout this press release, silver
production, silver equivalent production, and cost per ounce
measurements during fiscal 2024 include EC120 Project
pre-production from the Cosalá Operations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240815347605/en/
For more information:
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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