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, 2021 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 Second Quarter Financial Highlights
- Revenue of $9.5 million and net loss of $17.8 million for
Q2-2021 or a loss of ($0.13) per share, with the loss mostly
attributable to the continued ramp-up at Relief Canyon.
- The Company signed an agreement on July 6, 2021 with the
Mexican Ministries of Economy, Interior and Labour along with union
representatives committing to a reopening of the Cosalá Operations.
The Company anticipates that both the mine and the mill will be at
full capacity by the start of Q4-2021 assuming the compliance of
the agreement by members of the union.
- Galena’s Recapitalization Plan is proceeding well with the
Company continuing to experience higher year-over-year production
in Q2-2021 compared to Q2-2020; silver production increased by 20%
year-over-year while lead production increased by 10%.
- Phase 1 drilling of Galena’s Recapitalization Plan was
completed in the quarter and results will be incorporated into the
updated mineral reserve and resource estimate before the end of
August 2021. Phase 2 drilling has just begun with the first hole
testing the down dip extension of the high-grade Silver Vein
approximately 500 feet below the current drill station.
- Following an extensive review and a challenging ramp-up at
Relief Canyon, the operation proceeded with run-of-mine heap
leaching and continued its efforts to resolve metallurgical
challenges in Q2-2021. On August 13, 2021, the Company and the
Board of Directors decided to temporarily suspend mining operations
at Relief Canyon in order to prioritize capital for the Cosalá
Operations re-start while it continues leaching operations and
ongoing metallurgical test work.
- Consolidated year-to-date operating metrics from YTD-2021 were
generally not comparable to YTD-2020 due to the illegal blockade at
the Cosalá Operations, suspension of operating metrics during the
Galena Recapitalization Plan implementation, and the continued
ramp-up of operations at Relief Canyon to full production.
“I expect the second half of 2021 will showcase the strength of
the Company’s silver portfolio following a challenging start to the
year,” stated Americas Gold and Silver President & CEO Darren
Blasutti. “The anticipated resource update for the Galena Complex
is projected to highlight the significant potential of the asset
while silver production continues to ramp-up quarter over quarter.
Coupled with the anticipated full re-opening of the Cosalá
Operations in Mexico by the start of Q4-2021, the Company’s
profitability and cash flow is expected to improve significantly
given higher silver, zinc and lead prices. At Relief Canyon, the
Company continues to look at alternatives to improve the
metallurgical recovery of the operation and I believe there remains
significant value in the asset despite the initial challenges.”
Cosalá Operations
On July 6, 2021, the Company signed an agreement with the
Mexican Ministries of Economy, Interior and Labour along with union
representatives committing to a re-opening at the Cosalá
Operations. The agreement contemplates immediate right to
possession of the property with joint inspections coordinated by
the Ministry of Labor, so that the mine and mill can re-start
operations in a safe and sustainable manner.
Mexican government inspectors from the Mexican Ministry of
Labour have physically inspected the San Rafael mine and Los
Braceros mill and reviewed the re-start plans, which validated the
existing safe conditions at the operations and puts the Company in
position to recall employees immediately. The Company is ready to
recall all workers before the end of August so long as the union
abides by the signed agreement.
Based on the favourable condition of the mine and mill, the
Company continues to anticipate that both will be operating within
a few weeks of the re-call of employees and for the Cosalá
Operation to be at full capacity by the start of Q4-2021. The
operation also has approximately 70,000 tonnes of ore in stockpile
that can be processed as a contingency.
Upon a restart of operations, higher silver prices will allow
the Company to target the higher-grade silver ores in the Upper
Zone of San Rafael and develop the silver-copper EC120 project.
Mining these 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 Company has completed the Phase 1 drilling program as part
of the Galena Complex Recapitalization Plan. The Company expects to
provide an updated mineral resource estimate by the end of August
2021. The Company is confident that based on the continued
exploration success, from drilling completed during July 2020
through June 2021, that the resource estimate will increase. The
Company’s most recent mineral resource update, which was released
in September 2020, already demonstrated the significant exploration
potential at the property with measured and indicated resource
increasing by 36% and inferred resource increasing by 100%.
The initial 21-hole drill program targeting the Silver Vein at
depth is complete with all holes intersecting mineralization. Most
recent high-grade results include:
- Hole 55-183: 3,345 g/t silver and 2.8% copper (3,633 g/t silver
equivalent [1]) over 3.8 m [2] including: 13,800 g/t silver and
11.1% copper (14,900 g/t silver equivalent) over 0.5 m
- Hole 55-143: 2,460 g/t silver and 2.1% copper (2,680 g/t silver
equivalent) over 4.1 m including: 7,060 g/t silver and 5.4% copper
(7,620 g/t silver equivalent) over 0.6 m
- Hole 55-184: 3,966 g/t silver and 4.0% copper (4,372 g/t silver
equivalent) over 2.2 m including: 7,610 g/t silver and 7.6% copper
(8,390 g/t silver equivalent) over 0.5 m
- Hole 55-173: 1,747 g/t silver and 2.0% copper (1,968 g/t silver
equivalent) over 1.5 m including: 12,400 g/t silver and 16.2%
copper (14,100 g/t silver equivalent) over 0.1 m
- Hole 55-181: 1,185 g/t silver and 1.4% copper (1,330 g/t silver
equivalent) over 1.9 m and: 738 g/t silver and 0.5% copper (790 g/t
silver equivalent) over 2.1 m
- Hole 55-186: 2,264 g/t silver and 3.1% copper (2,588 g/t silver
equivalent) over 0.5 m
A full table of the drill results can be found at:
https://americas-gold.com/site/assets/files/4297/dr20210712.pdf
The Phase 2 drill program has commenced with several targets
identified. Drilling at depth will continue to focus on the three
south-east plunging veins which include the 72 Vein, the Silver
Vein and the down-dip extension of the 360 Complex. Drilling has
commenced from a newly developed drill station further east on the
5500-Level to continue to test the extension of the Silver Vein at
depth following the success of the initial 21-hole drill program.
The first drill hole from this station has commenced and is
targeting the Silver Vein approximately 500 feet below the drill
station. Subsequent drill stations are planned further east on the
5500-Level to continue to target the Silver Vein and 360 Complex.
The initial drilling success of the 360 Complex during Phase 1 is
believed to be the top of the system with the potential to extend
at depth. Phase 2 will include continued exploration in gap areas
within this south-east plunging trend to determine continuity and
potential sources of these high-grade mineralized vein systems.
The goal of Phase 2 drilling is to add significant mine life in
known vein systems and to discover new orebodies both at depth and
near surface. The Company is targeting an additional 50 million
ounces of silver from the Phase 2 drilling program, on a 100% basis
for the property.
The Company expects 2021 to be a transitional year at the Galena
Complex but the operation has already begun to benefit from the
Recapitalization Plan with silver and lead production in Q2-2021
increasing by over 20% and 10%, respectively on a year-over-year
basis. The Company is targeting to increase production to a 2
million ounce per year plan by the end of 2022 and longer term,
assuming continued exploration success, the Company anticipates the
operation will again reach peak historical annual production levels
of approximately 5 million ounces per year.
Relief Canyon
While the Company was successful in meeting several important
commissioning targets, including initial construction capital, and
planned mining and crushing rates, the ramp-up at Relief Canyon has
been and continues to be challenging since the first poured gold in
February 2020. During this period, the Company and its consultants
performed extensive analyses and implemented a number of procedural
changes to address the start-up challenges typical of a heap leach
operation. As part of this analysis, the Company has identified
naturally occurring carbonaceous material within the Relief Canyon
pit. The identification of this material was not recognized in the
feasibility study.
The Company began two small run-of-mine test pads in Q1-2021 to
evaluate the possibility of simplifying the flowsheet by by-passing
the crushing and conveying circuits and transitioned to this method
of ore placement in May 2021. Despite the encouraging initial
results, the operation has not seen a sustained material increase
in recoveries to date. Additional improvements in the predictive
ability of the resource model are progressing with incorporation of
the latest geological detail from recent pit mapping as well as new
data from an extensive re-assaying program of 13,000 historic
exploration pulp samples for the presence of carbonaceous material.
Completion of this data compilation and analysis is targeted for
late Q3-2021. Management also initiated several metallurgical test
work programs to investigate ore treatment options, including
Carbon-In-Leach processing. Several of the options present
encouraging preliminary results. Further investigation is planned
in the near term.
The Company is committed to continuing efforts to resolve these
metallurgical challenges and increase production levels at Relief
Canyon as noted above. However, the Company is in the process of
reopening the Cosalá Operations and is currently prioritizing its
capital resources to the re-start. As a result of these capital
allocation decisions, the Company has decided to temporarily
suspend mining operations at Relief Canyon pending improved
consolidated capital and the initial metallurgical test results.
During this time, the Company will continue leaching operations and
working to improve recovery and operations through an extensive
audit of drilling, sampling, ore control, and modelling,
implementing internal QA/QC programs, and metallurgy testing
program on carbonaceous material.
Notice of Intent for the Phase 2 EIS was published in the
Federal Register in Q3-2020. The Phase 2 permit will allow the
Company to continue mining at depth below the water table, expand
the footprint of both the heap leach and waste rock storage
facilities and expand the mining permit boundary. Approval of the
EIS and receipt of the Phase 2 permit is expected before the end of
Q3-2021.
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; 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 and its ability
to finance, develop and operate Relief Canyon, including the
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 the length of
time of the temporary pause in mining operations at Relief Canyon
to address the capital requirements for the re-opening of its
Cosalá Operations and expected timing for the re-start of the
Relief Canyon operations after such pause;. 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 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 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 was calculated using metal prices of
$20.00/oz silver, $3.00/lb copper and $1.05/lb lead and equivalent
metallurgical recoveries were assumed for all metals (silver, lead
and copper). 2 Meters represent “True Width” which is calculated
for significant intercepts only and is 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/20210816005215/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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