Americas Silver Corporation (TSX: USA) (NYSE “MKT”: USAS)
(“Americas Silver” or the “Company”) today reported consolidated
financial and operational results for the first quarter of
2017.
This earnings release should be read in conjunction with the
Company’s First Quarter Production and Cost Update, Management’s
Discussion and Analysis, 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.americassilvercorp.com. All figures are in
U.S. dollars unless otherwise noted.
First Quarter Highlights
- Revenues of $15.2 million in Q1, 2017
compared with revenues of $14.9 million in Q1, 2016.
- Cash flow generated from operating
activities1 in Q1, 2017 of approximately $3.1 million compared to
cash generated from operating activities of approximately $0.9
million in Q1, 2016.
- A net loss of ($0.2) million or ($0.00)
cents per share in Q1, 2017, compared with a net loss of ($1.7)
million or ($0.06) cents per share in Q1, 2016.
- Since late April, development rates at
San Rafael have returned to budgeted rates, with ore stockpiling
expected in August in the first development area of the Main Zone,
and in September from the second development area lower in the Main
Zone. San Rafael remains on budget and on time for the start of
production by the end of Q3, 2017.
- As previously released, consolidated
silver production for the quarter decreased by 22% year-over-year
to approximately 524,000 silver ounces, while silver equivalent2
ounces decreased by 13% year-over-year to approximately 1.1 million
ounces as a result of planned lower grade and longer than expected
mill repairs at the Galena Complex offset by greater than expected
output from the Cosalá Operations.
- Consolidated cash costs3 were
approximately $10.49 per silver ounce, an increase of 7%
year-over-year, while consolidated all-in sustaining costs3 were
approximately $14.27 per silver ounce, an increase of 19%
year-over-year.
- Consolidated guidance for 2017 remains
unchanged at 2.0 - 2.5 million ounces in silver production and 5.5
- 6.0 million ounces in silver equivalent production with projected
cash costs of $4.00 - $5.00 per silver ounce and all-in sustaining
cash costs of $9.00 - $10.00 per silver ounce.
- The Company purchased an option on the
San Felipe Project for total payments of $7.0 million (plus VAT) in
March 2017.
- At the end of the first quarter, the
Company drew upon the $15 million Glencore pre-payment facility and
fully repaid its previously existing debt of approximately $8.0
million during the quarter.
- Cash balance at March 31, 2017 of $17.6
million with net working capital of approximately $24.9
million.
“The first quarter showed major improvements in both our cash
flow and net loss compared to the previous year and quarter despite
being our expected lowest production quarter of the year,” said
Americas Silver Corporation President and CEO Darren Blasutti. “We
expect to build on these positive results further through the
second quarter with our operational challenges at Galena behind us,
and in the latter half of the year as San Rafael begins production.
With zinc and lead prices continuing to be strong, the mine will
bring a step change reduction in our company-wide all-in costs in
the fourth quarter.”
Consolidated Production and Operating
Costs
Consolidated Production and Cost Details Q1
2017 Q1 2016 Total ore processed (tonnes milled)
167,493 175,108 Silver produced (ounces) 523,747 672,074 Zinc
produced (pounds) 2,389,133 3,552,522 Lead produced (pounds)
6,160,732 7,121,573 Copper produced (pounds) 308,100 245,808 Silver
equivalent produced (ounces) 1,107,460 1,269,120 Silver recovery
(percent) 90.6 88.4 Silver grade (grams per tonne) 107 135 Silver
sold (ounces) 528,827 671,253 Zinc sold (pounds) 2,500,550
3,683,054 Lead sold (pounds) 6,119,207 7,206,277 Copper sold
(pounds) 295,336 237,808 Cost of sales ($ per silver equivalent
ounce)1 $9.91 $9.53 Silver cash cost ($ per silver ounce) 1 $10.49
$9.82 All-in sustaining cost ($ per silver ounce) 1 $14.27 $12.02
1 Cost of sales per silver equivalent ounce, cash costs per
silver ounce, and all-in sustaining costs per silver ounce in Q1,
2017 excludes pre-production of 62,714 silver ounces and 89,042
silver equivalent ounces mined from El Cajón during its
commissioning period. Pre-production revenue and cost of sales from
El Cajón are capitalized as development costs.
A net loss of ($0.2) million was recorded for the quarter,
compared to a net loss of ($1.7) million for the first quarter of
2016. The improvement in net loss is primarily attributable to
higher net revenue on concentrate sales, lower cost of sales, and
lower care, maintenance and restructuring costs, partially offset
by lower metal production, higher one-time corporate general and
administrative expenses related to the NYSE “MKT” listing and
share-based compensation. Further information is available in the
Company’s Management’s Discussion and Analysis for the three months
ending March 31, 2017.
Consolidated silver production for the first quarter of 2017 was
523,747 ounces which represents a decrease of 22% year-over-year.
Silver equivalent production was approximately 1.1 million ounces,
down 13% year-over-year. Consolidated cash costs increased 7% to
$10.49 per silver ounce year-over-year, and all-in sustaining costs
increased 19% to $14.27 per silver ounce year-over-year.
Consolidated production levels for the remainder of the year are
expected to improve and become similar to fiscal 2016 production
levels subsequent to the mill repairs at the Galena Complex during
the quarter.
During the first quarter, the Company obtained a low-interest,
$15.0 million concentrate pre-payment facility with a subsidiary of
Glencore PLC to fund a portion of the project costs for San Rafael.
At the end of the quarter, the facility was drawn in full and the
Company fully repaid its previously outstanding debt of
approximately $8.0 million during the quarter. In addition, the
Company made a payment of approximately $7.0 million for purchase
of the option to acquire 100% interest of the San Felipe property
located in Sonora, Mexico. The cash balance as at March 31, 2017
was $17.6 million and the Company expects to be able to fully fund
the development of San Rafael.
The Company expects to provide a separate update on its progress
on its San Rafael project as well as drilling results from both the
Cosalá Operations and the Galena Complex before the end of the
second quarter.
Further information concerning the consolidated and individual
mine operations is included in the Company’s first quarter
Condensed Interim Consolidated Financial Statements for the three
months ended March 31, 2017 and Management’s Discussion and
Analysis for the same period.
About Americas Silver
Corporation
Americas Silver is a silver mining company focused on growth in
precious metals from its existing asset base and execution of
targeted accretive acquisitions. It owns and operates the Cosalá
Operations in Sinaloa, Mexico and the Galena Complex in Idaho, USA.
The Company has acquired an option on the San Felipe development
project in Sonora, Mexico.
Daren Dell, Chief Operating Officer and a Qualified Person under
Canadian Securities Administrators guidelines, has approved the
applicable contents of this news release. For further information
please see SEDAR or americassilvercorp.com.
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, the Company’s
expectations intentions, plans, assumptions and beliefs with
respect to, among other things, the realization of operational and
development plans (including completion of the San Rafael Project),
the Cosalá Operations and Galena Complex as well as the Company’s
financing efforts. Often, but not always, forward‐looking
information can be identified by forward‐looking words such as
“anticipate”, “believe”, “expect”, “goal”, “plan”, “intend”,
“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 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 Cosalá and Galena properties, risks associated with
the mining industry such as economic factors (including future
commodity prices, currency fluctuations and energy prices), ground
conditions and factors 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 expenditures, reclamation activities, social and
political developments 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. By its nature, forward-looking information involves
numerous assumptions, inherent risks and uncertainties, both
general and specific that 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.
1 Cash flow generated from operating activities is a non-IFRS
financial measure calculated as net cash flow used in operating
activities less changes in non-cash working capital items such as
trade and other receivables, inventories, prepaid expenses, and
trade and other payables.2 Silver equivalent production throughout
this press release was calculated based on average silver, zinc,
lead and copper spot prices during each respective period.3 Cash
cost per ounce and all-in sustaining cost per ounce are non-IFRS
performance measures with no standardized definition. For further
information and detailed reconciliations, please refer to the
Company’s 2016 year-end and quarterly MD&A.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170511006288/en/
Americas Silver CorporationDarren Blasutti,
416-848-9503President and CEO
Americas Gold and Silver (TSX:USA)
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