TORONTO, March 24, 2014 /CNW/ - U.S. Silver & Gold Inc. (TSX: USA) (OTCQX: USGIF) ("U.S. Silver & Gold" or the "Company") today reported year-end financial and operational results for 2013.

This earnings release should be read in conjunction with the Company's MD&A, Financial Statements and Notes to Financial Statements for the corresponding period, which have been posted on SEDAR at www.sedar.com and are also available on the Company's website at www.us-silver.com. All figures are in U.S. dollars unless otherwise noted. As a cost containment measure, the Company has discontinued quarterly conference calls until further notice.

Financial Highlights

For the fourth quarter of 2013, the Company reported the following results from continuing operations:

• Production of 450,000 silver ounces and 543,000 silver equivalent¹ ounces at a cash cost of $16.26 and an all-in sustaining cost of $21.00² per ounce, which represent decreases of 3% in production, 8% in cash costs and 9% in all-in sustaining costs per ounce over Q3 2013.
• Revenues of $10.5 million and a net loss of ($0.4) million or ($0.01) cents per share.
• Cash balance of $7.2 million at December 31, 2013 with net working capital of approximately $12.2 million.

For the full year 2013, the Company reported the following results from continuing operations:

• Galena Complex production of 2.12 million silver ounces at a cash cost of $17.76 per ounce and an all-in sustaining cost of $24.24², which represent decreases of 6% in production, 7% in cash costs and 20% in all-in sustaining costs per ounce year-over-year.
• Revenues of $64.2 million and a net loss of ($15.6) million or $0.25 per share, a reduction of 12% year-over-year.
• If Small Mine Plan implementation costs were excluded, the Galena Complex would have made an operating profit of approximately $0.9 million in the second half of the year.

"Our focus over the last year has been on increasing profitability and positive cash flow in a low silver price environment," stated Darren Blasutti, President and CEO of U.S. Silver and Gold. "In 2013, we saw a consistent reduction in costs as we applied disciplined cost containment, implemented a Small Mine Plan, addressed working capital issues and protected our balance sheet through strategic equity, non-core asset sales and debt financing. We exited 2013 mining higher grade ore as planned, and in the first quarter of 2014 began the transition from a majority of silver-copper to silver-lead stopes. This transition will allow us to address the current silver price environment by benefitting from lower cost bulk mining methods and higher silver equivalent grades throughout the remainder of this year, and going forward and over the longer term."

Silver production for 2014 is forecast between 2.0 - 2.4 million ounces with projected cash costs of $14.50 - $15.50 per ounce and all in sustaining costs between $18.00 and $19.00 per ounce. The Galena Complex will transition toward increased silver-lead production and decreased silver-copper production in order to increase the Company's profitability at current silver prices and maintain its long-term viability. This strategy takes advantage of higher silver equivalent grade and lower production costs, as the silver-lead areas are wider on average allowing for bulk mining methods.  Staff re-deployment to silver-lead stopes will occur during the first half of the year with Q1 2014 expected to be the lowest silver production and highest cost quarter, while Q3 and Q4 are expected to be highest silver production and lowest costs quarters of 2014.

Consolidated Production and Operating Costs

In 2013, the Company produced 2.16 million ounces of silver at a by-product cash cost of $18.33 per ounce silver, compared with 2.31 million ounces of silver and cash costs of $18.33 per ounce in 2012. This decrease in production was expected due to workforce reductions following implementation of the Small Mine Plan (SMP) in the third quarter which aimed to reduce costs and increase grade at the Galena Complex.

The Company recorded a consolidated net loss of $15.6 million for the year ended December 31, 2013, compared to net loss of $17.8 million for the year ended 2012.  The decrease in net loss was primarily attributable to lower exploration costs, gain on sale of assets, lower stock-based compensation and management compensation, lower acquisition costs, lower impairment charges, partially offset by lower production and realized metals prices, SMP implementation costs incurred, higher operating loss from the Drumlummon Mine, associated care and maintenance costs and higher finance costs.

Galena Complex

As previously announced in the January 20, 2014 press release, fourth quarter production at the Galena Complex totalled 450,000 silver ounces and 543,000 silver equivalent ounces at a cash cost of $16.26 per ounce and an all-in sustaining cost of $21.00 per ounce.  In December, the Company received an order from the Mine Safety and Health Administration which resulted in the shutdown of an operating shaft for 10 days.  Had this not occurred, the mine would have delivered comparable annual production to 2013 as well as lower cash costs and all-in sustaining costs.  Total production for the year was 2.12 million silver ounces compared with 2.25 million ounces in 2012.

Following implementation of the SMP, head grade increased by 34% for the fourth quarter and 12% for the year, while cash costs fell to their lowest level of the year at $16.26 per ounce silver compared to $17.67 per ounce silver in the third quarter of 2013 despite the 10 day shutdown.  Full-year cash costs also decreased to $17.76 per ounce silver compared to $19.02 per ounce silver in 2012.

Drumlummon Mine

As previously announced, given current gold prices and recent mine performance, production at the Drumlummon Mine in Idaho was discontinued and the mine was put on care and maintenance effective May 31, 2013.  The majority of equipment, materials and supplies were subsequently moved to the Galena Complex in Idaho.  The Company recorded an impairment charge of $1.4 million for the year.

Exploration Update

Given economic conditions and current metal prices, the Company's exploration budget was reduced to $0.7 million for the second half of 2013.  The 2014 exploration focus at the Galena Complex is to develop and further expand immediate and near-term minable, higher-grade silver equivalent resources close to existing infrastructure, including silver-lead stopes between the 2800 and 3700 levels, the 4900 high-grade Caladay silver-lead areas, and the 5200 level silver-lead areas.  Further priorities include completing the block modelling on priority veins and evaluating the remainder of the 2013 drill results.

The Company had drilled over 60,600 feet underground by the end of the fourth quarter 2013 and exploration was focused on defining areas of high-grade ore to supplement the mining plan introduced earlier in the year.  Further evaluation of the Caladay Zone continued in areas of known mineralization between the 4900 and 5200 level with more than 23,550 feet completed in 2013. As a result, a plan was implemented at year-end to advance development into an area with thick diamond drill intersections of high-grade silver-lead mineralization on the 4900 level.

Private Placement

Subsequent to the year-end, the Company completed a private placement for aggregate gross proceeds of approximately C$6.7 million on March 21, 2014.  Approximately C$4.7 million of these proceeds were received upon closing through issuance of units. Each unit consists of one common share and one quarter of one common share purchase warrant where each whole warrant is exercisable for one common share at an exercise price of C$0.73 for a period of two years.  Approximately C$2.0 million of the aggregate gross proceeds are held in escrow through issuance of subscription receipts pending approval from shareholders in May 2014, after which the subscription receipts will be exchanged for units (see Company press release dated Friday March, 21 2014 for further detail).

Adoption of Advance Notice By-Law

The Company's board of directors (the "Board") has adopted amendments to the Company's By-Laws, introducing an advance notice requirement in connection with shareholders intending to nominate directors in certain circumstances (the "By-Law Amendments").  In particular, the By-Law Amendments set forth a procedure requiring advance notice to the Company by any shareholder who intends to nominate any person for election as director of the Company other than pursuant to (i) a proposal made in accordance with the provisions of the Business Corporations Act (Ontario) (the "Act") or (ii) a requisition of the shareholders made in accordance with the provisions of the Act. Among other things, the By-Law Amendments set a deadline by which such shareholders must notify the Company in writing of an intention to nominate directors prior to any meeting of shareholders at which directors are to be elected and set forth the information that the shareholder must include in the notice for it to be valid.

The Board believes that the By-Law Amendments provide a clear and transparent process for all shareholders to follow if they intend to nominate directors. In that regard the By-Law Amendments provide a reasonable time frame for shareholders to notify the Company of their intention to nominate directors and require shareholders to disclose information concerning the proposed nominees that is mandated by applicable securities laws. The Board will be able to evaluate the proposed nominees' qualifications and suitability as directors and respond as appropriate in the best interests of the Company as part of an orderly and efficient meeting process.

In the case of an annual meeting of shareholders, notice to the Company must be made not less than 30 and not more than 65 days prior to the date of the annual meeting; provided, however, that in the event that the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be made not later than the close of business on the 10th day following such public announcement.  In the case of a special meeting of shareholders (which is not also an annual meeting) called for the purpose of electing directors, notice to the Company must be made not later than the close of business on the 15th day on which the first public announcement of the date of the special meeting was made.

The By-Law Amendments are effective immediately and will be placed before shareholders for ratification at the annual and special meeting of shareholders of the Company to be held in May 2013 (the "Meeting"). A copy of the By-Law Amendments will filed under the Company's profile at www.sedar.com.  The By-Law Amendments are in effect until they are confirmed, confirmed as amended or rejected by shareholders at the Meeting and, if the By-Law Amendments are confirmed at the Meeting, they will continue in effect in the form in which they were so confirmed.

Quality Assurance / Quality Control ("QA/QC")

U.S. Silver & Gold maintains a QA/QC Program for all assays, whether completed at the Drumlummon laboratory or at a contract laboratory including the use of standards, blanks and duplicates. All QA/QC results are evaluated using a program of QA/QC monitoring.  Both the contract laboratory and the Drumlummon laboratory maintain programs of QA/QC as well.  Assays for the Caladay Zone were prepared by a commercial laboratory located in Osburn, Idaho.

About U.S. Silver & Gold Inc.

U.S. Silver & Gold is a silver and gold mining company focused on growth from its existing asset base and execution of targeted accretive acquisitions. It owns and operates the Galena Mine Complex in the heart of the Silver Valley/Coeur d'Alene Mining District, Shoshone County, Idaho which produces high-grade silver ore and is the second most prolific silver mine in U.S. history, delivering over 200 million ounces to date. U.S. Silver & Gold also owns the Drumlummon Mine Complex in Lewis and Clark County, Montana.

Mr. Jim Atkinson, Vice President, Exploration and a Qualified Person under Canadian Securities Administrators guidelines, has approved the contents of this news release.

For further information please see SEDAR or www.us-silver.com for the NI 43-101 compliant Technical Report on the Galena Project dated March 22, 2013.

Cautionary Statement Regarding 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, the Company's expectations intentions, plans, and beliefs with respect to, among other things, the Galena Complex and the Drumlummon Mine. Often, but not always, forward‐looking information can be identified by forward‐looking words such as "anticipate", "believe", "expect", "goal", "plan", "intend", "estimate", "may", 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 the Company 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 the Company to be materially different from those expressed or implied by such forward looking information. This includes the ability to develop and operate the Galena and Drumlummon properties, risks associated with the mining industry such as economic factors (including future commodity prices, currency fluctuations and energy prices), failure of plant, equipment, processes and transportation services to operate as anticipated, environmental risks, government regulation, actual results of current exploration activities, possible variations in ore grade or recovery rates, permitting timelines, capital expenditures, reclamation activities, social and political developments and other risks of the mining industry. Although U.S. Silver and Gold 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. By its nature, forward‐looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific those contribute to the possibility that the predictions, forecasts, and projections of various future events will not occur. The Company undertakes no 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.

SOURCE U.S. Silver & Gold Inc.