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 third quarter of 2020 along with an
operations update.
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 $7.3 million and a net loss of $6.2 million for
Q3-2020 or a loss of ($0.05) per share
- Year-to-date operating metrics were largely unchanged in
Q3-2020 from Q2-2020 due to the illegal blockade at the Cosalá
Operations, suspension of operating metrics during the Galena
Complex recapitalization plan (“Recapitalization Plan”), and
ongoing pre-production at Relief Canyon
- Galena Complex silver production increased by 25%
year-over-year while Galena lead production increased by 65%,
benefitting from the Recapitalization Plan described in detail
below
- At Relief Canyon, the radial stacker is expected to be
installed and operating in the coming week. The Company anticipates
the increase in production from the return of the radial stacker
will allow the Company to declare commercial production by the end
of Q4-2020
- Since placing ore on the 6W leach pad on August 4, 2020, ore
leaching has performed within expected norms
- Benefits from the Galena Complex Recapitalization Plan are
materializing including the significant increase to the mineral
resources. Measured and indicated silver resource, as of June 30,
2020, increased by 36% to 37.3 million ounces1 and inferred silver
resource increased by over 100% to 78.6 million ounces1. This is
based on only 33% of Phase 1 planned drilling and further increases
are expected as the drill program continues
- The Company finalized the option payment for the San Felipe
project and paid the remaining $3.75 million plus VAT obligation in
common shares of the Company on October 8, 2020. The San Felipe
project is now 100% owned by the Company and contains an indicated
silver resource of over 9 million ounces and an inferred silver
resource of over 3 million ounces
- The Company had a cash balance of $22.8 million as at September
30, 2020
“The return of the radial stacker, the gating item to declaring
commercial production at Relief Canyon, is underway and is expected
to be in service in the coming week. With the increased daily
production from the stacker, we are focused on declaring commercial
production at Relief Canyon before the end of Q4-2020,” stated
Americas Gold and Silver President & CEO Darren Blasutti. “The
Galena Complex Recapitalization Plan continues to pay enormous
dividends, beyond increased year-over-year production, as we saw
from the recent increase to the mineral reserves and resources. We
successfully added approximately 10 million silver ounces to the
measured and indicated resource and approximately 40 million silver
ounces to the inferred resource, representing increases of 36% and
over 100% respectfully. This increase was based on only 33% of
planned Phase 1 drilling and we are confident that we will see even
larger increases to next year’s resource update based on the
remaining drill program.”
Relief Canyon
The Company’s radial stacker, which suffered a structural
failure in Q2-2020, is in transit. Upon arrival, the stacker is
expected to resume service within a week after a brief
commissioning period. The radial ore stacker will allow ore
placement to reach the design rate of approximately 16,000 tons per
day. The increased daily stacking rate will allow the operation to
accelerate the amount of material placed on the leach pad, increase
the area under leach, increase daily gold production, and enable
the Company to declare commercial production.
The Company continues to anticipate commercial production will
be reached in Q4-2020, setting the operation up for a strong
2021.
Galena Complex
The Galena Complex is already benefitting from the renewed
exploration focus as evident from the increased year-over-year
production, updated mineral reserve and resources estimate released
on September 14, 2020 with an effective date of June 30, 2020.
Based on only 33% of the Phase 1 drilling plan, measured and
indicated silver resources on a 100% basis (60% Company/40% Eric
Sprott) increased from 27.4 million ounces to 37.3 million ounces
and inferred silver resources increased from 39.0 million ounces to
78.6 million ounces. This represents a 36% and 101% increase,
respectively, from previously reported estimates.
On October 22, 2020, the Company released an additional
exploration update highlighting the Complex’s continued successful
results. The first hole targeting the “triple point”, the
intersection of the 175, 185 and Silver Veins, crossed all three
veins approximately 75 meters below current infrastructure and 75
meters above the expected convergence point. Drilling of the second
deeper hole has commenced to pierce the projected convergence area.
Referencing Hole 55-153:
- 582 g/t silver and 30.7% lead (or 1,695 g/t AgEq2) over 2.2
meters3 (185 Vein)
- 219 g/t silver and 9.5% lead (or 564 g/t AgEq) over 1.9 meters
(175 Vein)
- 271 g/t silver and 2.3% lead (or 365 g/t AgEq) over 1.9 meters
(Silver Vein)
Earlier drilling of the 360 Complex from the 4300 Level was an
important contributor to the increase in the mineral resource
estimates as of June 30, 2020. Since this date, the Company drilled
holes 43-246 and 43-247 which intersected 8 closely spaced,
parallel veins including 4 newly discovered veins. These veins are
close to existing infrastructure with good grades and minable
widths with full assay results detailed in the 360 Complex section.
Key intercepts from 43-246 and 43-247 include and hole 43-239
include:
- Hole 43-246: 548 g/t silver and 18.9% lead (or 1,239 g/t AgEq)
over 3.4 meters
- Hole 43-247: 235 g/t silver and 19.7% lead (or 944 g/t AgEq)
over 6.6 meters
- Hole 43-239: 809 g/t silver and 37.2% lead (or 2,148 g/t AgEq)
over 0.6 meters
Continued drilling of the 72 Vein area yielded more strong
results and will be followed up from new drill stations in early
2021.
- Hole 55-152: 1,783 g/t silver and 2.3% Cu (or 2,018 g/t AgEq)
over 0.3 meters
A full table results can be found at:
https://americas-gold.com/site/assets/files/4297/dr20201022.pdf.
The Company is targeting further mineral resource additions for
the remainder of Phase 1 drilling through June 2021 with
expectations of least 50 million ounces of silver.
Cosalá Operations
In August 2020, the Company announced that the illegal blockade
had been resolved to permit some Company personnel the opportunity
to re-enter the mine operations. This access has not been
maintained. With the re-opening of Mexican government offices in
August, the Company’s employees were expected to vote in September
2020 for new union representation and did so on September 17. In
advance of the vote, a number of irregularities came to light,
which indicated that there could not be a fully democratic vote
with freedom of association.
As a result, the Company does not believe there are conditions
currently present to invest the required capital to re-start the
Cosalá Operations. The Company continues to work with all
legitimate stakeholders and remains hopeful that a resolution,
consistent with the rule of law and featuring an election free from
threats and intimidation, can be achieved so that operations can
re-commence in the near term.
Due to the illegal blockade, the Cosalá Operations did not
operate during Q3-2020 and operated for only the first 26 days of
2020. As a result, quarterly and year-to-date operating results are
not generally comparable with previous periods.
Spot silver prices have increased significantly from a low of
almost $12.00 per ounce in March 2020 to over $28.00 per ounce in
September 2020. In 2019, the Company spent approximately $1.5
million on developing into the Upper Zone of the San Rafael mine
which contains significantly higher silver grades than the Main
Zone. With the development into the Upper Zone, the Company
anticipates that it will be able to increase silver production,
allowing it to benefit from the significant increase in the silver
price upon resolution of the illegal blockade.
San Felipe
The Company finalized the option agreement for the San Felipe
project with Minera Hochschild Mexico S.A. de C.V. through payment
of the remaining the $3.75 million plus VAT obligation in common
shares of the Company issued on October 8, 2020.
The Company now owns 100% of the San Felipe project, which is
located 130 km northeast of Hermosillo, Sonora, Mexico. The San
Felipe project has an indicated mineral resource estimate of 4.7
million tonnes grading 5.36% zinc, 60 g/t silver and 2.46% lead and
a mineral inferred resource is estimate of 2.0 million tonnes
grading 3.50% zinc, 47 g/t silver and 1.41% lead with an effective
date of June 30, 2020.
Consolidated Financial and Consolidated Production
Results
Consolidated operating results from Q3-2020 were generally not
comparable to Q3-2019 due to the illegal blockade at the Cosalá
Operations, and the Recapitalization Plan at the Galena Complex.
The Cosalá Operations were put on care and maintenance in response
to the illegal blockade at the end of January 2020. Consolidated
gross revenue decreased by $5.2 million during Q3-2020 compared to
Q3-2019 primarily due to the illegal blockade preventing all access
to the Cosalá Operations.
Further information concerning the consolidated and individual
mine operations is included in the Company’s third quarter
Condensed Interim Consolidated Financial Statements for the three
months and nine months ended September 30, 2020 and Management’s
Discussion and Analysis for the three months and nine months ended
September 30, 2020.
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’s newest asset, the Relief Canyon mine in Nevada, USA, has
poured first gold and is expected to ramp up to full production
over the course of 2021. The Company also owns and operates the
Cosalá Operations in Sinaloa, Mexico and manages the 60%-owned
Galena Complex in Idaho, USA. The Company has completed the
outstanding option acquisition agreement for the San Felipe
development project in Sonora, Mexico. For further information,
please see SEDAR or www.americas-gold.com.
Qualified Persons
Daren Dell, P.Eng., Chief Operating Officer, who is an employee
of the Company and a “qualified person” under National Instrument
43-101, has approved the applicable contents of this news
release.
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 production rates and
results for gold, silver and other precious metals, as well as the
related costs, expenses and capital expenditures, the Company’s
construction, production, development plans and performance
expectations at the Relief Canyon Mine, its ability to finance,
develop and operate Relief Canyon, including the anticipated timing
of commercial production at Relief Canyon, the expected timing of
delivery of the radial stacker to Relief Canyon and the timing of
resumption of service and operations of the radial stacker and
expected increase in production thereafter, the resumption of
mining and processing operations at the Company’s Cosalá Operations
following the end of the illegal blockade and expected silver
production levels at the Cosalá Operations, the effect of temporary
restrictions on all non-essential businesses in Mexico resulting
from the COVID-19 pandemic on the Company’s Cosalá Operations, the
expected drilling results and potential increase in resources to be
realized at the Galena Complex in connection with the
Recapitalization Plan, the Company’s plans with respect to the
EC120 zone and the San Felipe project. 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 develop, complete construction, bring to production and
operate the Relief Canyon Project; and risks associated with the
mining industry such as economic factors (including future
commodity prices, currency fluctuations and energy prices), ground
conditions and other factors limiting mine access, 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 operate. 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 Figures shown on 100% basis. The Galena Complex is 60% owned
by the Company and 40% owned by Eric Sprott. 2 AgEq was calculated
using metal prices of $20.00/oz silver, $3.00/lb copper and
$1.05/lb lead. 3 Meters represent “True Width” which is calculated
for significant intercepts only and based on orientation axis of
core across the estimated dip of the vein.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201113005189/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 (TSX:USA)
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