Americas Silver Corporation (TSX: USA) (NYSE American: USAS)
(“Americas Silver” or the “Company”) today announced production and
operating cost results for fiscal 2018 on a consolidated basis and
individually for its Cosalá Operations and Galena Complex. All
figures are in U.S. dollars unless otherwise indicated.
Fiscal 2018 Highlights
- Consolidated production for the year of
approximately 6.3 million silver equivalent1 ounces and 1.4 million
silver ounces, representing an increase of 32% and a decrease of
31%, respectively, when compared to fiscal 2017.
- Consolidated cash costs2 for the year
were approximately negative ($0.59) per silver ounce, a decrease of
approximately 105% when compared to fiscal 2017, while consolidated
all-in sustaining costs2 (“AISC”) were approximately $9.82 per
silver ounce, a decrease of 26% year-over-year.
- Consolidated production for Q4, 2018 of
approximately 1.8 million silver equivalent ounces and 0.4 million
silver ounces, representing increases of 28% and 22%, respectively,
when compared to Q3, 2018.
- Consolidated cash costs for Q4, 2018
were approximately $1.27 per silver ounce, a decrease of
approximately 74% when compared to Q3, 2018, while consolidated
AISC were approximately $11.86 per silver ounce, a decrease of 26%
quarter-over-quarter.
- Cosalá Operations milled tonnage
increased by 3% over fiscal 2017 as San Rafael achieved its goal of
sustaining a milling rate of over 1,700 tonnes per operating day by
the end of the third quarter of the year. Production for the year
of approximately 4.2 million silver equivalent ounces including
approximately 450,000 silver ounces, representing an increase of
75% and decrease of 51%, respectively, when compared to fiscal
2017.
- Cosalá Operations cash costs were
approximately negative ($37.95) per silver ounce and AISC were
approximately negative ($19.66) per silver ounce, representing
significant decreases year-over-year from cash costs of negative
($0.13) per silver ounce and AISC of $0.57 per silver ounce.
- During 2018, Galena Complex production
was negatively impacted by two separate issues at its No.3 Shaft
that inhibited normal hoisting for approximately 27 days in total.
As a result, production for the year was approximately 2.1 million
silver equivalent ounces and 1.0 million silver ounces,
representing decreases of 10% and 15%, respectively, when compared
to fiscal 2017.
- Galena Complex cash costs were
approximately $16.68 per silver ounce and AISC were approximately
$23.45 per silver ounce, representing increases of 13% and 16%,
respectively, year-over-year.
- The Company had cash and cash
equivalents of $3.5 million at December 31, 2018.
“The fourth quarter of 2018 was the best production quarter and
representative of expected production going forward, with San
Rafael reaching targeted throughput levels, and improved operating
performance at Galena in 2019,” said Darren Blasutti, President
& CEO of Americas Silver. “With the votes now successfully
behind us for both Americas Silver and Pershing Gold, we are only
waiting on the CFIUS review prior to closing the transaction. We
expect to announce the transaction closing, concurrent with a mine
construction decision, and a financing announcement that we expect
to fully fund the development of the Relief Canyon Project.”
Pershing Acquisition Update and 2019
Guidance
On January 9, 2019, Americas Silver Corporation and Pershing
Gold Corporation (“Pershing Gold”) announced their respective
shareholders provided the requisite approvals for the previously
announced business combination transaction (the “Transaction”)
between the two companies. Completion of the Transaction remains
subject to satisfaction or waiver of certain customary conditions,
including the completion of review and approval by the Committee on
Foreign Investment in the United States (“CFIUS”) (discussed in
Americas Silver’s January 2, 2019 press release). All deadlines for
declarations and transactions under review by CFIUS are currently
tolled due to the lapse in appropriations attributable to the
partial U.S. government shutdown.
In anticipation of the closing of the Transaction, discussions
are proceeding well with parties interested in providing financing
for the development of the Relief Canyon Mine. As a result of the
delay in closing, the Company is assessing its 2019 guidance and
intends to update the market upon completion of the
Transaction.
Consolidated 2018 Production
Details
Consolidated silver equivalent production for fiscal 2018 was
approximately 6,286,531 ounces, an increase of 32% over fiscal
2017. Consolidated silver production for fiscal 2018 was 1,417,537
silver ounces, a decrease of 31% over fiscal 2017. The significant
increase in consolidated silver equivalent production and decrease
in silver production relative to 2017 was primarily the result of
the San Rafael mine having its first full year of operation after
declaring commercial production in December 2017. San Rafael
contributed over 190% greater zinc production and over 125% greater
lead production, though with approximately 50% lower silver
production due to mine sequencing. Similarly, consolidated cash
costs decreased over 100% to negative ($0.59) per silver ounce
compared to fiscal 2017, and AISC decreased 26% to $9.82 per silver
ounce compared to fiscal 2017.
Table 1 2018 Consolidated Production Highlights
2018
2017 Change Processed Ore
(tonnes milled) 685,152
690,498 -1% Silver Production (ounces)
1,417,537 2,056,017
-31% Silver Equivalent Production (ounces)
6,286,531 4,746,387
32% Silver Grade (grams per tonne)
84 104 -19% Cost
of Sales ($ per silver equiv. ounce)1 $8.33
$10.13 -18% Cash Costs ($
per silver ounce)1 ($0.59)
$9.45 -106% All-in Sustaining Costs ($
per silver ounce)1 $9.82
$13.29 -26% Zinc Production (pounds)
34,219,472 11,623,138
194% Lead Production (pounds)
30,466,799 25,392,619 20%
Copper Production (pounds) -
1,167,401 -100%
1 Cost of sales per silver equivalent ounce, cash costs per
silver ounce, and all-in sustaining costs per silver ounce for 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 were capitalized as an offset to
development costs.
Cosalá Operations Production
Details
The Cosalá Operations produced 448,150 ounces of silver and
4,165,326 ounces of silver equivalent during the year at cash costs
of negative ($37.95) per silver ounce and AISC of negative ($19.66)
per silver ounce. Silver equivalent production increased 75%
year-over-year and silver production decreased 51% over fiscal
2017. Cash costs and AISC were down significantly compared to the
fiscal 2017 from negative ($0.13) per silver ounce and $0.57 per
silver ounce, respectively. The improvements in silver equivalent
production and cash costs were the result of the significant
increase in zinc (194%) and lead production (129%) from the San
Rafael mine compared to fiscal 2017 when the Company was
transitioning from its previous mine, the silver-copper-zinc-lead
Nuestra Señora mine.
Table 2 2018 Cosalá Operations Highlights
2018 2017
Change Processed Ore (tonnes
milled) 544,472 526,726
3% Silver Production (ounces)
448,150 920,806
-51% Silver Equivalent Production (ounces)
4,165,326 2,386,135 75%
Silver Grade (grams per tonne) 47
66 -29% Cost of Sales ($ per
silver equiv. ounce)1 $5.66
$6.41 -12% Cash Costs ($ per silver
ounce)1 ($37.95) ($0.13)
>-100% All-in Sustaining Costs ($ per
silver ounce)1 ($19.66)
$0.57 >-100% Zinc Production (pounds)
34,219,472 11,623,138
194% Lead Production (pounds)
12,865,832 5,616,905
129% Copper Production (pounds) -
1,167,401 -100%
Galena Complex Production
Details
As previously announced, production at the Galena Complex was
negatively impacted by two issues affecting the No.3 Shaft: a
10-day suspension of hoisting in late April to allow the repair of
steel sets in the shaft, and a 17-day shutdown of the hoist in June
to address a mechanical failure in the brake mechanism. The Complex
was temporarily considered to be on care and maintenance for the
17-day shutdown as repairs were performed with certain costs
excluded from the cash costs and AISC calculations. Repairs were
completed by the end of June 2018.
As a result, the Galena Complex produced 969,387 ounces of
silver and 2,121,205 ounces of silver equivalent during the year at
cash costs of $16.68 per silver ounce and AISC of $23.45 per silver
ounce, respectively. Silver and silver equivalent production
decreased 15% and 10%, respectively, compared to fiscal 2017. Cash
costs increased by 13% compared to fiscal 2017, and AISC were up
16% year-over-year.
Table 3 2018 Galena Complex Highlights
2018 2017
Change Processed Ore (tonnes milled)
140,680 163,772
-14% Silver Production (ounces) 969,387
1,135,211 -15% Silver
Equivalent Production (ounces) 2,121,205
2,360,252 -10% Silver
Grade (grams per tonne) 226
227 0% Cost of Sales ($ per silver
equiv. ounce) $13.56
$12.64 7% Cash Costs ($ per silver ounce)
$16.68 $14.73
13% All-in Sustaining Costs ($ per silver ounce)
$23.45 $20.30
16% Lead Production (pounds)
17,600,967 19,775,714
-11%
About Americas Silver Corporation
Americas Silver is a precious metal mining company focused on
growth 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. Americas
Silver 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, Americas Silver’s and
Pershing Gold’s expectations, intentions, plans, assumptions and
beliefs with respect to, among other things, Americas Silver’s
financing efforts; the consummation of the Transaction;
construction, production, and development plans at Relief Canyon
Mine; the timing of the closing of the Transaction; the completion
of CFIUS review and its recommendations; and the estimated
construction timeline for Relief Canyon 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”, “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 Americas Silver and Pershing
Gold 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 Americas Silver or Pershing Gold to be materially
different from those expressed or implied by such forward-looking
information. With respect to the Transaction, these risks and
uncertainties include the risk that Americas Silver or Pershing
Gold may be unable to obtain any regulatory approvals required for
the Transaction, including CFIUS approval, or that regulatory
approvals may delay the Transaction or cause the parties to abandon
the Transaction; the risk that other conditions to closing may not
be satisfied; the length of time needed to consummate the proposed
Transaction, which may be longer than anticipated for various
reasons; the risk that the businesses will not be integrated
successfully; the diversion of management time on
Transaction‐related issues; the risk that costs associated with the
integration are higher than anticipated; and litigation risks
related to the Transaction. With respect to the businesses of
Americas Silver and Pershing Gold, these risks and uncertainties
include interpretations or reinterpretations of geologic
information; unfavorable exploration results; inability to obtain
permits required for future exploration, development or production;
general economic conditions and conditions affecting the industries
in which the Company and Pershing Gold operate; the uncertainty of
regulatory requirements and approvals; fluctuating mineral and
commodity prices; the ability to obtain necessary future financing
on acceptable terms or at all; the ability to develop and operate
the Relief Canyon property; and risks associated with the mining
industry such as economic factors (including future commodity
prices, currency fluctuations and energy prices), ground conditions
and 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, labor relations,
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. Additional information regarding the factors that may
cause actual results to differ materially from this forward‐looking
information is available in Pershing Gold’s filings with the SEC,
including the Annual Report on Form 10‐K for the year ended
December 31, 2017 and the Proxy Statement of Pershing Gold dated
November 29, 2018, and in Americas Silver’s filings with the
Canadian Securities Administrators on SEDAR and with the SEC,
including the management information circular of Americas Silver
dated December 4, 2018. Neither Americas Silver nor Pershing Gold
undertake any 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. Neither Americas Silver nor Pershing
Gold gives any assurance (1) that Americas Silver and Pershing Gold
will achieve its expectations, or (2) concerning the result or
timing thereof. All subsequent written and oral forward‐looking
information concerning Pershing Gold, Americas Silver, the proposed
Transaction, the combined company or other matters attributable to
Pershing Gold or Americas Silver or any person acting on their
behalf are expressly qualified in their entirety by the cautionary
statements above.
No Offer or Solicitation
This press release is for informational purposes only and does
not constitute an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer or sale of
securities shall be made except pursuant to registration under the
United States Securities Act of 1933, as amended (the “U.S.
Securities Act”), and any applicable state securities laws or in
compliance with an exemption therefrom.
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 2017 year-end and quarterly MD&A. The performance
measures for the quarter ended December 31, 2018 are preliminary
throughout this press release subject to refinement from the
Company’s year-end financial results to be released on or before
March 7, 2019.
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version on businesswire.com: https://www.businesswire.com/news/home/20190124005758/en/
Darren BlasuttiPresident and CEO416‐848‐9503
Americas Gold and Silver (TSX:USA)
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