Americas Silver Corporation (TSX: USA) (NYSE American: USAS)
(“Americas Silver” or the “Company”) today announced consolidated
production and operating cost results for the third quarter of 2017
and individually for its Cosalá Operations and Galena Complex. All
figures are in U.S. dollars unless otherwise indicated.
Third Quarter Highlights
- Consolidated silver production for the
quarter of approximately 565,000 silver ounces and 1.1 million
silver equivalent1 ounces, representing an increase of 1% and
decrease of 6%, respectively, when compared to Q2, 2017, and a
decrease of 5% and increase 1%, respectively, year-over-year.
- Consolidated cash costs2 for the
quarter were approximately $12.61 per silver ounce, an increase of
26% year-over-year, while consolidated all-in sustaining costs2
were approximately $15.92 per silver ounce, an increase of 24%
year-over-year.
- The Company processed 69,000 tonnes of
silver-copper El Cajón ore producing 160,000 ounces of silver. El
Cajón ore was mined in the second quarter as transitional feed to
bridge the period until the commencement of San Rafael production.
It was not determined to be in commercial production and was
omitted from the quarterly consolidated cost calculations.
Adjusting for this production, consolidated cash costs and all-in
sustaining costs would have been $11.75 and $14.18 per silver
ounce, respectively.
- San Rafael ore development continued to
increase to approximately 1,000 tonnes per day at the end of
October. The Company expects San Rafael to be the sole source of
mill feed by mid-November 2017 with commercial production expected
before the end of the fourth quarter. The project remains fully
funded and is tracking well to budget.
- The Company has performed two test runs
of San Rafael ore, one at the end of September and the second at
the end of October to test the new flotation and concentrate
re-grind circuits. Both tests confirmed circuit performance
predicted in the San Rafael Prefeasibility Study.
- Guidance for 2017 remains at 2.0 - 2.5
million ounces of silver production and silver equivalent
production of 5.0 - 5.5 million ounces with projected cash costs at
the high end of the $4.00 - $5.00 per silver ounce and all-in
sustaining cash costs of $9.00 - $10.00 per silver ounce ranges
depending on the timing of the declaration of commercial production
of San Rafael.
- The Company has cash and cash
equivalents of $8.7 million at September 30, 2017. The Company
expects to release its third quarter financial results on or before
November 14, 2017.
“The Cosalá team has done an effective job at managing the
development and operations of three different mines and a
successful drill program during 2017,” said Americas Silver
President and CEO Darren Blasutti. “We expect this strong
performance to continue through to the end of 2017 and into 2018
with San Rafael coming into production on time and on budget in the
next couple of weeks. We made a prudent decision to process El
Cajón ore in the third quarter that increased costs in order to
free up working capital that otherwise would have been inaccessible
for years.”
Consolidated Third Quarter Production
Details
Consolidated silver production for the third quarter of 2017 was
564,833 silver ounces which represents an increase of 1% over the
previous quarter and a decrease of 5% year-over-year. Silver
equivalent production was approximately 1.1 million ounces, a
decrease of 6% over the previous quarter and an increase of 1%
year-over-year. The decrease in silver and silver equivalent
production is primarily due to lower tonnage and grade at the
Galena Complex, partially offset by continuing strong production
from the Nuestra Señora and El Cajón mines as the Cosalá Operations
prepares to commence commercial production from San Rafael later in
the quarter.
Table 1 Consolidated Production Highlights
Q3 2017 Q2 2017 Change
Q3 2016 Change Processed Ore (tonnes
milled) 174,677 179,427 -3% 166,770 5% Silver Production (ounces)
564,833 557,892 1% 596,855 -5% Silver Equivalent Production
(ounces) 1,107,874 1,175,836 -6% 1,107,110 1% Silver Grade (grams
per tonne) 111 107 4% 124 -11% Cost of Sales ($ per equiv. ounce
silver)1 $9.17 $11.00 -17% $10.25 -11% Cash Costs ($ per ounce
silver)1 $12.61 $7.21 75% $10.00 26% All-in Sustaining Costs ($ per
ounce silver)1 $15.92 $10.65 50% $12.86 24% Zinc Production
(pounds) 1,433,961 2,904,374 -51% 2,183,814 -34% Lead Production
(pounds) 5,369,482 6,435,048 -17% 7,991,507 -33% Copper Production
(pounds) 507,285 273,475 85% 326,639 55%
1 Cost of sales per silver equivalent ounce, cash costs per
silver ounce, and all-in sustaining costs per silver ounce for Q3,
2017 and Q2, 2017 excludes pre-production of 160,128 and 22,549
silver ounces, respectively, and 238,919 and 32,955 silver
equivalent ounces, respectively, mined from El Cajón during its
commissioning period, and for Q3, 2017 excludes pre-production of
5,146 silver ounces and 30,161 silver equivalent ounces mined from
San Rafael during its commissioning period. Pre-production revenue
and cost of sales from El Cajón and San Rafael are capitalized as
an offset to development costs.
Consolidated cash costs increased 75% to $12.61 per silver ounce
compared to the previous quarter and 26% year-over-year. All-in
sustaining costs increased 50% to $15.92 per silver ounce compared
to the previous quarter and 24% year-over-year. The increase in
cash costs and all-in sustaining costs was primarily due to lower
tonnage and grade at the Galena Complex as the mine progressed
through lower grade areas of the mine while catching up on
development in higher grade areas and the processing of El Cajón
ore in the quarter. The impact of this beneficial work will be
realized starting in the fourth quarter.
Approximately 69,000 tonnes of ore from the El Cajón mine was
milled in Q3, 2017 as the stockpiled El Cajón silver-copper ore
could not be processed with either silver-zinc-lead Nuestra Señora
or San Rafael ore. The material yielded concentrates containing
approximately 160,000 ounces of silver and 462,000 pounds of
copper. By processing this ore before the San Rafael production
start-up, approximately $3.4 million of pre-production revenue was
realized that would have stayed on the stockpile until the end of
the San Rafael mine life. The criteria necessary to declare
sustainable commercial production of this transitional ore were
determined not to have been met. As a result, the by-product
revenues and pre-production costs were omitted from the
consolidated cash costs and all-in sustaining cost costs
calculation. If El Cajón pre-production revenues and costs were
included, the adjusted consolidated cash costs would have been
approximately $11.75 per silver ounce and all-in sustaining costs
would have been approximately $14.18 per silver ounce for the
quarter.
Cosalá Operations Production
Details
During Q3, 2017, the Cosalá Operations progressed its transition
from the existing Nuestra Señora and El Cajón mines to initial
production from the San Rafael mine. Production for the Cosalá
Operations was primarily sourced from the silver-zinc-lead-copper
Nuestra Señora mine during the first two months of Q3, 2017 and
silver-copper El Cajón ore in September. Nuestra Señora was
originally planned to cease production in early Q2, 2017, but has
been extended to take advantage of additional material sourced from
various areas of the existing workings. It is expected that
stockpiled Nuestra Señora ore will be processed during Q4, 2017 up
to the commencement of San Rafael ore processing in mid-late
November.
The Cosalá Operations produced 277,752 ounces of silver during
the third quarter of 2017 and 528,823 ounces of silver equivalent
inclusive of El Cajón and pre-production material from San Rafael.
Excluding the El Cajón and San Rafael material, the Cosalá
Operations produced 112,478 ounces of silver during the third
quarter of 2017 and 259,743 ounces of silver equivalent during the
same period at cost of sales of $1.32 per silver equivalent ounce,
cash costs and all-in sustaining costs of $3.16 per silver ounce.
While silver production increased 15% compared to the previous
quarter and 14% year-over-year, silver equivalent production
decreased 6% compared to the previous quarter as a result of lower
by-product production of zinc and lead from Nuestra Señora
partially offset by increased copper production. Cash costs and
all-in sustaining costs improved year-over-year by 68% and 73%,
respectively, as Nuestra Señora ore was produced with lower
operating costs and minimal development work.
Table 2 Cosalá Operations Highlights
Q3 2017 Q2 2017 Change
Q3 2016 Change Processed Ore (tonnes milled)
134,273 134,778 -1% 121,875 10% Silver Production (ounces) 277,752
242,523 15% 242,916 14% Silver Equivalent Production (ounces)
528,823 564,112 -6% 436,774 21% Silver Grade (grams per tonne) 74
66 12% 75 -1% Cost of Sales ($ per equiv. ounce silver)1 $1.32
$7.57 -83% $9.96 -87% Cash Costs ($ per ounce silver)1 $3.16
($2.81) 213% $9.84 -68% All-in Sustaining Costs ($ per ounce
silver)1 $3.16 ($2.81) 213% $11.72 -73% Zinc Production (pounds)
1,433,961 2,904,374 -51% 2,183,814 -34% Lead Production (pounds)
793,058 1,351,258 -41% 885,560 -10% Copper Production (pounds)
507,285 273,475 85% 326,639 55%
1 Cost of sales per silver equivalent ounce, cash costs per
silver ounce, and all-in sustaining costs per silver ounce for Q3,
2017 and Q2, 2017 excludes pre-production of 160,128 and 22,549
silver ounces, respectively, and 238,919 and 32,955 silver
equivalent ounces, respectively, mined from El Cajón during its
commissioning period, and for Q3, 2017 excludes pre-production of
5,146 silver ounces and 30,161 silver equivalent ounces mined from
San Rafael during its commissioning period. Pre-production revenue
and cost of sales from El Cajón and San Rafael are capitalized as
an offset to development costs.
The Company provided an exploration update for its Cosalá
properties on August 24, 2017. The Company expects to complete up
to 12 additional holes in Q4, 2017 to further define the geological
controls and extent of mineralization in and around the known Zone
120 resource. Further exploration drilling is being proposed for
2018. Results from the ongoing 2017 drilling are expected to be
released in early 2018.
San Rafael Update
The Company continued to advance towards production at the San
Rafael project during the quarter. Underground development is
progressing as expected with ore production ramping up from
multiple working faces. The reconfigured Los Braceros mill has been
successfully tested with San Rafael ore. Concentrates containing
approximately 5,000 ounces of silver, 211,000 pounds of zinc and
134,000 pounds of lead were produced from approximately 6,000
tonnes processed during the quarter. A second trial campaign of
approximately 7,000 tonnes occurred in late October to further
refine operating parameters. The results of the two campaigns were
positive with recoveries and concentrate grades supportive of
estimates used in the April 2016 Prefeasibility Study. The surface
ore stockpile contains approximately 20,000 tonnes of San Rafael
ore and is increasing by nearly one thousand tonnes per day. The
mill is expected to shift to San Rafael ore on a full-time basis in
mid-November with commercial production to be declared before the
end of the quarter. The project remains fully funded and tracking
well to budget.
Galena Complex Production
Details
The Galena Complex produced 287,081 ounces of silver during the
third quarter of 2017 and 579,051 ounces of silver equivalent
during the same period at cost of sales of $12.69 per silver
equivalent ounce, cash costs of $16.31 per silver ounce and all-in
sustaining costs of $20.92 per silver ounce. Silver and silver
equivalent production decreased 9% and 5%, respectively, compared
to the previous quarter, and decreased 19% and 14%, respectively,
year-over-year. Cash costs increased by 15% compared to the
previous quarter and 61% year-over-year and all-in sustaining costs
were up 4% compared to the previous quarter and 53% year-over-year.
Both silver and lead production were below expectations in the
third quarter due to a shortfall in tonnage and grade. With the San
Rafael transition going as expected, management is focused on
returning Galena to an acceptable level of operating performance by
advancing several planning-related initiatives, including grade
optimization, in order to recapture and build on the gains which
were made in 2015 and 2016.
Table 3 Galena Complex Highlights Q3
2017 Q2 2017 Change Q3
2016 Change Processed Ore (tonnes milled) 40,404
44,649 -10% 44,895 -10% Silver Production (ounces) 287,081 315,369
-9% 353,939 -19% Silver Equivalent Production (ounces) 579,051
611,724 -5% 670,336 -14% Silver Grade (grams per tonne) 233 231 1%
258 -10% Cost of Sales ($ per equiv. ounce silver) $12.69 $13.98
-9% $10.44 22% Cash Costs ($ per ounce silver) $16.31 $14.20 15%
$10.10 61% All-in Sustaining Costs ($ per ounce silver) $20.92
$20.03 4% $13.63 53% Lead Production (pounds) 4,576,424 5,083,790
-10% 7,105,947 -36%
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 Mine 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 the successful 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 Silver equivalent production throughout this press release was
calculated based on silver, zinc, lead and copper realized prices
during each respective period.
2 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. The performance
measures for the quarter ended September 30, 2017 are preliminary
throughout this press release subject to refinement from the
Company’s third quarter financial results to be released on or
before November 14, 2017.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171031006483/en/
Americas Silver CorporationDarren Blasutti,
416‐848‐9503President and CEO
Americas Gold and Silver (AMEX:USAS)
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