Americas Silver Corporation (TSX: USA) (NYSE American: USAS)
(“Americas Silver” or the “Company”) today reported fourth quarter
and year-end financial and operational results for 2017.
This earnings release should be read in conjunction with the
Company’s Annual 2017 Production and Costs Update, Management’s
Discussion and Analysis, Financial Statements and Notes to
Financial Statements for the corresponding period, which have been
posted on the Americas Silver Corporation SEDAR profile at
www.sedar.com, on its EDGAR profile at www.sec.gov, and are also
available on the Company’s website at www.americassilvercorp.com.
All figures are in U.S. dollars unless otherwise noted.
Year-end and Fourth Quarter
Highlights
- Revenues of $54.3 million in 2017,
excluding $9.8 million of El Cajón and San Rafael pre-production
revenues, which were capitalized to development costs, compared
with revenues of $58.9 million in 2016.
- A net loss of ($3.5) million or ($0.09)
cents per share in 2017, compared with a net loss of ($5.2) million
or ($0.15) cents per share in 2016.
- Cash flow generated from operating
activities1 in 2017 of $5.5 million, compared to cash flow
generated from operating activities in 2016 of $5.7 million.
- Consolidated year-end production was
approximately 2.1 million silver ounces and 4.7 million silver
equivalent2 ounces at cost of sales of $10.13 per silver equivalent
ounce, by-product cash costs3 of $9.45 per silver ounce, and all-in
sustaining costs3 of $13.29 per silver ounce.
- Consolidated fourth quarter production
was approximately 400,000 silver ounces and 1.4 million silver
equivalent ounces at cost of sales of $10.16 per silver equivalent
ounce, by-product cash costs of $8.75 per silver ounce, and all-in
sustaining costs of $14.20 per silver ounce.
- The San Rafael mine declared commercial
production effective December 19, 2017 and was constructed for
approximately $16.3 million, 32% lower than the initial project
guidance.
- Guidance for 2018 is 1.6 - 2.0 million
silver ounces and 7.2 - 8.0 million silver equivalent ounces at
cash costs of negative ($10.00) to negative ($5.00) per silver
ounce and all-in sustaining costs of negative ($1.00) to $4.00 per
silver ounce.
- Cash balance at December 31, 2017 of
$9.3 million with net working capital of approximately $11.8
million.
Fiscal 2017 Overview
Fiscal 2017 was an eventful and transitional year for Americas
Silver. Management accomplished its goal of developing the San
Rafael mine with mill modifications to commercial production, on
time and under budget. The mine was developed from existing cash
and cash generated from operations with no dilution to existing
shareholders. The development was completed while operating both
the El Cajón and Nuestra Señora mines, accumulating a 57,000 tonnes
stockpile from Nuestra Señora.
Fiscal 2018 is expected to be a transformative year for the
Company as cash flow from the San Rafael mine is used to advance
the exploration and development of its land holdings. To this end,
a $2 million exploration program was executed in 2017 on the
100%-owned Zone 120 silver-copper deposit to further explore the
extent and concentration of mineralization of the deposit with
significant results released to date. The 2018 drilling was
subsequently approved by the Board with an additional budget of
over $4 million to continue this program. Results to date have
increased the footprint of the mineralization, indicating the
presence of a significant mineralized system consisting of multiple
lenses over mineable widths and strike lengths.
On the corporate development side, an option was purchased on
the zinc-silver San Felipe project in Sonora, Mexico for $7 million
plus VAT. The Company also entered into a low-cost, $15 million
pre-payment facility with a division of Glencore PLC and repaid $8
million to its previous lenders. In January, the Company began
trading on the NYSE American exchange in order to provide a greater
access to future capital and liquidity to its shareholders.
“I am impressed by what our team accomplished in 2017,” said
Darren Blasutti, President and CEO. “At current metal prices, San
Rafael is expected to generate significant cash flow which will be
used to grow our silver production without equity dilution. We are
particularly pleased with the drilling results on the Zone 120
deposit in 2017 and so far in 2018. This deposit has the potential
to become the Company’s next development project with the ability
to further lever off our existing infrastructure given its
proximity to San Rafael.”
Consolidated Production and Operating
Costs
Consolidated silver production for 2017 totalled 2.1 million
silver ounces which represents a decrease of 14% compared to 2016.
Silver equivalent production totalled 4.7 million ounces which
represents an increase of 4% compared to 2016, while zinc and
copper production increased 11% and 10% year-over-year,
respectively, as a result of strong production from the Cosalá
Operations.
Despite lower annual silver production, and excluding
pre-production revenues of $8.9 million, production revenues
decreased only slightly by $4.6 million or 8% from $58.9 million
for the year ended December 31, 2016 to $54.3 million for the year
ended December 31, 2017, while net loss improved to $3.5 million
compared to a net loss $5.2 million loss during the previous year,
a $1.7 million improvement. Improvement in net loss was mainly
attributable to lower cost of sales and lower interest and
financing expense, partially offset by lower net revenue on
concentrate sales and higher corporate general and administrative
expenses related to share-based compensation and the NYSE American
listing costs. The Company also generated cash from operating
activities before non-cash working capital items of $5.5 million
during the year ended December 31, 2017.
Further information concerning the consolidated and individual
mine operations is included in the Company’s Consolidated Financial
Statements for the year ended December 31, 2017 and Management’s
Discussion and Analysis for the same period.
Consolidated Production and Cost Details
Q4 2017 Q4
2016 YTD 2017
YTD 2016 Total ore processed (tonnes milled)
168,901 168,038
690,498 671,616 Silver produced (ounces)
409,545 564,475
2,056,017 2,389,808 Zinc
produced (pounds) 4,895,670
2,671,391 11,623,138
10,488,773 Lead produced (pounds)
7,427,357 7,277,346
25,392,619 29,067,673 Copper produced (pounds)
78,541 260,018
1,167,401 1,058,250 Silver
equivalent produced (ounces) 1,358,441
1,204,477 4,746,387
4,579,373 Silver recovery (percent)
82.8 90.4 89.0
87.8 Silver grade (grams per tonne)
91 116 104
126 Silver sold (ounces)
410,518 539,872 2,056,122
2,341,319 Zinc sold (pounds)
4,413,526 2,658,194
10,919,556 10,258,081 Lead sold
(pounds) 7,074,875
7,242,694 25,144,192
29,228,720 Copper sold (pounds) 94,544
274,722 1,144,385
1,017,940 Cost of sales ($ per silver equivalent ounce)1
$10.16 $9.91
$10.13 $10.08 Silver cash cost
($ per silver ounce) 1 $8.75
$8.91 $9.45 $10.00
All-in sustaining cost ($ per silver ounce) 1
$14.20 $11.57 $13.29
$12.71
1 Cost of sales per silver equivalent ounce, cash costs per
silver ounce, and all-in sustaining costs per silver ounce in Q4,
2017 excludes pre-production of 45,344 silver ounces and 405,162
silver equivalent ounces mined from San Rafael during its
commissioning period, and for YTD 2017 excludes pre-production of
50,490 silver ounces and 435,323 silver equivalent ounces mined
from San Rafael during its commissioning period, and excludes
pre-production of 245,391 silver ounces and 360,530 silver
equivalent ounces mined from El Cajón during its commissioning
period. Pre-production revenue and cost of sales from San Rafael
and El Cajón are capitalized as an offset to development costs.
2018 Consolidated
Guidance
Consolidated guidance for 2018 is 1.6 - 2.0 million silver
ounces and 7.2 - 8.0 million silver equivalent ounces at cash costs
of negative ($10.00) to negative ($5.00) per silver ounce and
all-in sustaining costs of negative ($1.00) to $4.00 per silver
ounce including budgeted capital of $19 million. The reduction in
cash cost and all-in sustaining cost per ounce is primarily due to
the estimated by-product metal production from the San Rafael and
Galena mines, including zinc of approximately 40-45 million lbs.
and lead of 30-35 million lbs. in 2018. The Company’s consolidated
exploration budget for fiscal 2018 is $4.8 million.
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,
exploration and development plans, 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 silver, zinc, lead and copper realized 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 2017 year-end and quarterly MD&A.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180305005392/en/
Americas Silver CorporationDarren Blasutti,
416-848-9503President and CEO
Americas Gold and Silver (AMEX:USAS)
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