Americas Silver Corporation (TSX: USA) (NYSE American: USAS)
(“Americas Silver” or the “Company”) today announced production and
operating cost results for the first quarter of 2019 on a
consolidated basis and individually for its Cosalá Operations and
Galena Complex. All figures are in U.S. dollars unless otherwise
indicated.
First Quarter Highlights
- Consolidated silver production of
approximately 1.8 million silver equivalent1 ounces, an increase of
9% year-over-year, and 395,000 silver ounces consistent with prior
year.
- Consolidated cash costs2 were
approximately negative ($0.50) per silver ounce, a decrease of
144%, when compared to prior quarter. Consolidated all-in
sustaining costs2 (“AISC”) were approximately $5.54 per silver
ounce, a decrease of 53%, when compared to Q4 2018.
- Milled tonnage at the Cosalá Operations
increased by 24% year-over-year, with the San Rafael mine
sustaining an average milling rate of approximately 1,750 tonnes
per operating day. Production of approximately 1.3 million silver
equivalent ounces including approximately 170,000 silver ounces,
representing increases of 39% and 118%, respectively,
year-over-year. Cash costs were approximately negative ($30.48) per
silver ounce and AISC were approximately negative ($25.85) per
silver ounce representing decreases of 21% and 130%, respectively,
when compared to prior quarter.
- Continuing operational challenges
limited production at the Galena Complex to approximately 430,000
silver equivalent ounces including approximately 220,000 silver
ounces, representing decreases of 15% and 1%, respectively, when
compared to prior quarter. Cash costs were approximately $23.03 per
silver ounce and AISC were approximately $30.17 per silver ounce
representing increases of 8% and 2%, respectively, when compared to
prior quarter.
- Subsequent to quarter end, the
acquisition of Pershing Gold Corporation (“Pershing”) closed on
April 3, 2019 after the Committee on Foreign Investment in the
United States (“CFIUS”) completed its review. The Company announced
concurrent financing signed with Sandstorm Gold Ltd. for gross
proceeds of approximately US$42.5 million to completely fund
production at the Relief Canyon Project.
- Guidance for 2019 remains unchanged at
1.6 – 2.0 million silver ounces and 6.6 – 7.0 million silver
equivalent ounces at cash costs of $4.00 to $6.00 per silver ounce
and AISC of $10.00 to $12.00 per silver ounce. The Company expects
to release its first quarter financial results on or before May 14,
2019.
“The Cosalá Operations had an excellent quarter mining and
processing an average of approximately 1,750 tonnes per operating
day, resulting in greater silver and by-product metal production,
with lower cash costs and AISC,” said Americas Silver President and
CEO Darren Blasutti. “Construction activity at Relief Canyon is
ramping up and orders for long-lead items have been placed as the
Company advances this project towards pouring gold before the end
of the year. With the addition of this new mine, the Company
expects to increase precious metal production by over 500% by
2021.”
Consolidated First Quarter Production
Details
Consolidated silver production for the first quarter of 2019 was
393,824 ounces, which was largely consistent with both the prior
quarter and year-over-year. Silver equivalent production was
approximately 1.8 million ounces, an increase of 9% year-over-year.
Consolidated cash costs decreased 144% to negative ($0.50) per
silver ounce compared to the prior quarter and increased 82%
year-over-year, and AISC decreased 53% to $5.54 per silver ounce
compared to the prior quarter and decreased 10% year-over-year.
Consolidated zinc production increased by 10% compared to the prior
quarter and 54% year-over-year, while consolidated lead production
decreased by 10% compared to the prior quarter and increased by 8%
year-over-year.
Table 1Consolidated Production
Highlights
Q1 2019 Q1 2018
Change Q4 2018 Change Processed
Ore (tonnes milled) 182,029 163,875 11%
186,585 -2% Silver Production (ounces) 393,824
397,035 -1% 395,294 -1% Silver Equivalent
Production (ounces) 1,754,839 1,613,711 9%
1,799,741 -2% Silver Grade (grams per tonne)
87 95 -8% 87 0% Cost of Sales ($ per
equiv. ounce silver) $7.11 $8.14 -13%
$7.87 -10% Cash Costs ($ per ounce silver) ($0.50)
($2.73) 82% $1.14 -144% AISC ($ per
ounce silver) $5.54 $6.17 -10% $11.78
-53% Zinc Production (pounds) 11,263,623
7,332,978 54% 10,223,692 10% Lead Production
(pounds) 8,211,429 7,624,685 8%
9,088,862 -10%
Cosalá Operations Production
Details
The Cosalá Operations produced 173,169 ounces of silver during
the first quarter of 2019 and 1,322,045 ounces of silver equivalent
during the same period at cash costs of negative ($30.48) per
silver ounce and AISC of negative ($25.85) per silver ounce. Silver
production increased by 118% year-over-year and consistent with the
fourth quarter 2018, while silver equivalent production increased
by 39% year-over-year and 3% over the prior quarter. Cash costs and
AISC improved by 21% and 130%, respectively, compared to the Q4
2018.
Table 2Cosalá Operations
Highlights
Q1 2019 Q1 2018
Change Q4 2018 Change Processed
Ore (tonnes milled) 152,605 123,285 24%
149,577 2% Silver Production (ounces) 173,169
79,382 118% 172,016 1% Silver Equivalent
Production (ounces) 1,322,045 948,081 39%
1,287,657 3% Silver Grade (grams per tonne) 57
42 36% 59 -3% Cost of Sales ($ per
equiv. ounce silver) $4.35 $5.92 -27%
$4.66 -7% Cash Costs ($ per ounce silver) ($30.48)
($59.52) -49% ($25.12) 21% AISC ($ per
ounce silver) ($25.85) ($36.28) -29%
($11.26) 130% Zinc Production (pounds) 11,263,623
7,332,978 54% 10,223,692 10% Lead
Production (pounds) 4,626,233 2,679,485 73%
4,388,146 5%
Strong results were driven by sustained improvements in grade,
mill throughput and metal recovery to concentrate. Site
expenditures tracked expectations. Development of the incline ramp
toward San Rafael’s Upper Zone has resumed and is advancing ahead
of plan. Ore production from the Main Zone benefited from the
additional working headings providing operational flexibility.
Further, mined head grades exceeded budgeted head grades during the
quarter. Any potential reduction in head grades over the remainder
of the year are expected to be largely offset by further gains in
mill throughput and metal recovery as additional flotation capacity
is installed during the second quarter.
Galena Complex Production
Details
Unplanned mill downtime due to problems with the mill pinion
bearing at the Galena mine in January set the year off on a
challenging note however the underlying issues were successfully
resolved during the quarter. Performance trended back up until two
separate ground falls delayed production from two high-tonnage
stopes. The cumulative impact was the loss of nearly one month’s
production during the quarter. Performance is slowly improving and
should return to expected levels by the end of Q2 2019. Management
remains committed to returning the operation to an acceptable level
of performance.
As a result of these unexpected incidents, the Galena Complex
produced 220,655 ounces of silver during Q1 2019 and 432,794 ounces
of silver equivalent at cash costs of $23.03 per silver ounce and
AISC of $30.17 per silver ounce. Silver and silver equivalent
production decreased by 1% and 15%, respectively, compared to the
prior quarter, and 31% and 35%, respectively, year-over-year. Cash
costs and AISC increased by 8% and 2%, respectively, due to the
noted operational challenges.
Table 3Galena Complex
Highlights
Q1 2019 Q1 2018
Change Q4 2018 Change Processed
Ore (tonnes milled) 29,424 40,590 -28%
37,008 -20% Silver Production (ounces) 220,655
317,653 -31% 223,278 -1% Silver Equivalent
Production (ounces) 432,794 665,630 -35%
512,084 -15% Silver Grade (grams per tonne)
242 256 -5% 199 22% Cost of Sales ($
per equiv. ounce silver) $15.55 $11.31 38%
$15.95 -2% Cash Costs ($ per ounce silver)
$23.03 $11.46 101% $21.36 8% AISC ($
per ounce silver) $30.17 $16.78 80%
$29.52 2% Lead Production (pounds) 3,585,196
4,945,200 -28% 4,700,716 -24%
Relief Canyon Update
On April 3, 2019, the Company announced the closing of the
Pershing acquisition after receiving notification that CFIUS
completed its review. The Company also announced a financing
package of $42.5 million secured from Sandstorm Gold Ltd. to fully
fund the development of Relief Canyon and Board approval for
construction commencement at the Project with the intention of
pouring gold before year end. Since that time, orders have been
placed for long-lead items such as the mill liners, crusher and
conveyor system and negotiations have commenced on the leach pad
construction and mining contracts. Expected start dates are mid-May
and mid-June respectively. Further information on the Relief Canyon
development will be made available periodically on the Company’s
website as construction progresses at
www.americassilvercorp.com.
Americas Silver Annual and Special
Meeting
The annual and special meeting of Americas Silver is scheduled
for 3pm (EDT) on Wednesday May 15, 2019 at Vantage Venues, 150 King
St. West, Toronto, Ontario.
Your vote is important. Please vote before the proxy vote
deadline on May 13, 2019 at 3pm (EDT).
Additional information concerning the annual and special meeting
can be found in the Management Information Circular dated April 18,
2019. An electronic copy of the Circular is available online under
the Company’s profile at www.sedar.com or at
www.americassilvercorp.com.
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. The
Company expects to begin producing gold in the fourth quarter of
2019 at its fully-funded Relief Canyon Project, in Nevada, USA
which is currently in construction. 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
expectations, intentions, plans, assumptions and beliefs with
respect to, among other things, Americas Silver’s financing
efforts; construction, production, and development plans at the
Relief Canyon Project and performance expectations for the Relief
Canyon Project and impact on Americas Silver’s financial
performance; and the estimated construction timeline and costs for
the Relief Canyon Project; the estimated timeline for environmental
approvals for the second phase of the Relief Canyon Project; and
the impact of the Transaction on the liquidity of the Company’s
shares. Often, but not always, forward-looking information can be
identified by forward-looking words such as “anticipate”,
“believe”, “expect”, “goal”, “plan”, “intend”, “potential’,
“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 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 to be
materially different from those expressed or implied by such
forward-looking information. With respect to the Sandstorm
financing, risks and uncertainties include the ability of the
Company and its subsidiaries to fulfill the conditions to drawing
all the available funds under the purchase agreement and
convertible debenture and the potential for, and consequences of,
default thereunder. With respect to the business of Americas
Silver, 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
operates; 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, complete construction and operate the Relief
Canyon Project; 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 and
construction 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. Americas Silver does not 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. Americas Silver does not give any
assurance (1) that Americas Silver will achieve its expectations,
or (2) concerning the result or timing thereof. All subsequent
written and oral forward‐looking information concerning Americas
Silver, the Transaction, the Sandstorm financing package, the
combined Company or other matters attributable to Americas Silver
or any person acting on its behalf are expressly qualified in their
entirety by the cautionary statements above.
1 Silver equivalent production throughout this press release was
calculated based on silver, zinc, and lead 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 2018 year-end and quarterly MD&A. The performance
measures for the quarter ended March 31, 2019 are preliminary
throughout this press release subject to refinement from the
Company’s first quarter financial results to be released on or
before May 14, 2019.
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version on businesswire.com: https://www.businesswire.com/news/home/20190429005681/en/
Darren BlasuttiPresident and CEOAmericas Silver
Corporation416‐848‐9503
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