Americas Silver Corporation (TSX: USA) (NYSE American: USAS)
(“Americas Silver” or the “Company”) today reported consolidated
financial and operational results for the second quarter of
2018.
This earnings release should be read in conjunction with the
Company’s Second 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 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.
Second Quarter
Highlights
- Revenues of $17.3 million and net
income of $1.4 million or $0.03 cents per share in Q2, 2018,
compared with revenues of $17.2 million and net income of $0.9
million or $0.02 cents per share in Q2, 2017.
- Cash flow generated from operating
activities1 for the first half of 2018 of approximately $8.0
million, compared to cash flow generated from operating activities
of approximately $6.3 million during the same period in 2017.
- Record-low consolidated cash costs and
all-in sustaining costs2 (“AISC”) were approximately negative
($6.15) per silver ounce, a decrease of 185% year-over-year, and
approximately $5.40 per silver ounce, a decrease of 49%
year-over-year, respectively.
- Consolidated silver production for the
quarter of approximately 1.5 million silver equivalent3 ounces, an
increase of 24% when compared to Q2 2017, including approximately
300,000 silver ounces.
- Cash balance at June 30, 2018 of $7.8
million with net working capital of approximately $12.1 million;
long-term debt decreased to $8.3 million.
- Guidance for 2018 remains at 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 AISC of negative ($1.00) to $4.00 per silver
ounce. The Company expects silver and silver equivalent production
to be at the lower end of guidance, as a result of the Galena shaft
repairs in Q2, 2018.
“The Company’s operations achieved record-low consolidated cash
costs and all-in sustaining costs despite Galena’s operations being
down for nearly a month during the quarter,” said Americas Silver
President and CEO Darren Blasutti. “We expect the second half of
the year to produce more silver, zinc and lead at lower unit
operating costs as Galena returns to normal production and San
Rafael ramps up to peak milling rates.”
Consolidated Production and Operating
Costs
Consolidated Production and Cost Details Q2
2018 Q2 2017 Total ore processed (tonnes milled)
164,313 179,427 Silver produced (ounces) 301,711 557,892 Zinc
produced (pounds) 8,756,201 2,904,374 Lead produced (pounds)
6,216,592 6,435,048 Copper produced (pounds) - 273,475 Silver
equivalent produced (ounces) 1,462,170 1,175,836 Silver recovery
(percent) 74.4 90.6 Silver grade (grams per tonne) 77 107 Silver
sold (ounces) 311,671 574,479 Zinc sold (pounds) 8,504,845
2,746,948 Lead sold (pounds) 6,352,839 6,725,788 Copper sold
(pounds) - 294,278 Cost of sales ($ per silver equivalent ounce)1
$8.20 $11.00 Silver cash cost ($ per silver ounce) 1 ($6.15) $7.21
All-in sustaining cost ($ per silver ounce) 1 $5.40 $10.65
1 For Q2 2017 cost of sales per silver equivalent ounce, cash
costs per silver ounce, and all-in sustaining costs per silver
ounce excludes pre-production of 22,549 silver ounces and 32,955
silver equivalent ounces, respectively, mined from El Cajón during
its commissioning period. Pre-production revenue and cost of sales
from El Cajón are capitalized as an offset to development
costs.
Net income of $1.4 million was recorded for the quarter,
compared to net income of $0.9 million for the second quarter of
2017. The improvement in net income was primarily attributable to
higher metal production and realized metal prices, lower cost of
sales, and a gain on the disposal of an asset, partially offset by
higher care and maintenance costs associated with the temporary
shutdown. The Company also generated cash from operating activities
before non-cash working capital items of $4.3 million for the
quarter compared to $3.2 million in the second quarter of 2017.
During Q2, 2018, the Company produced 1.5 million consolidated
silver equivalent ounces including 0.3 million silver ounces,
compared to production of 1.2 million consolidated silver
equivalent ounces including 0.6 million silver ounces during Q2,
2017. Consolidated silver equivalent production increased due to
the greater output of zinc and lead by-product metals from the San
Rafael mine at the Cosalá Operations. During the first half of
2018, mining rates from San Rafael gradually increased as the mine
balanced the extraction of ore with underground development into
the main body of the deposit. Milling rates increased from 1,370
tonnes per calendar day in Q1 to 1,524 tonnes per calendar day in
Q2 and are expected to be increase above 1,700 tonnes per day in
the second half of this year.
Consolidated silver production was lower compared to prior
quarters as Galena’s production was negatively impacted by
necessary repairs to its No.3 Shaft completed by the end of Q2,
2018. As previously announced on June 14, 2018, production at the
Galena Complex was negatively impacted by two separate issues
affecting the No.3 Shaft for a combined total of 27 days during the
quarter. Those issues have been resolved and are not expected to
negatively impact production in the future.
Consolidated costs of sales were $8.20/oz. equivalent silver,
by-product cash costs were negative ($6.15/oz.) silver, and all-in
sustaining costs were $5.40/oz. silver, representing year-over-year
decreases of 25%, 185% and 49%, respectively. These improvements
were a result of the significant increase in zinc production (201%)
from the San Rafael mine compared to Q2, 2017 when the Cosalá
Operations previous mine, Nuestra Señora, was in production. The
zinc production increase combined with increased realized prices
for both zinc and lead substantially lowered these consolidated
operating metrics for both Q2, 2018 and first half of 2018, despite
the 27-day shutdown of the Galena mine.
Further information concerning the consolidated and individual
mine operations is included in the Company’s second quarter
Condensed Interim Consolidated Financial Statements for the six
months ended June 30, 2018 and Management’s Discussion and Analysis
for the three and six months ended June 30, 2018.
Q2 2018 Earnings Conference
Call
President & CEO Darren Blasutti will be hosting a Q2, 2018
earnings conference call on Tuesday, August 14, 2018 at 8:30am EDT.
A copy of the presentation will be made available on the company’s
website at www.americassilvercorp.com.
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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 holds an option on the San Felipe development
project in Sonora, Mexico. 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 exploration,
operational, production, 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 generated from
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 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.3 Silver equivalent production throughout this
press release was calculated based on silver, zinc, lead and copper
realized prices during each respective period.
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version on businesswire.com: https://www.businesswire.com/news/home/20180813005602/en/
Americas Silver CorporationDarren Blasutti,
416-848-9503President and CEO
Americas Gold and Silver (TSX:USA)
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