Americas Gold and Silver Reports Q1‐2024 Results
TORONTO, ONTARIO – May 15, 2024 – Americas Gold and Silver Corpora�on (TSX: USA) (NYSE American: USAS) (“Americas” or the “Company”), a growing North American precious metals producer, reports consolidated financial and opera�onal results for the quarter ended March 31, 2024.
This earnings release should be read in conjunc�on with the Company’s Management’s Discussion and Analysis, Financial Statements and Notes to Financial Statements for the corresponding period, which have been posted on the Americas Gold and Silver Corpora�on SEDAR+ profile at www.sedarplus.ca, and on its EDGAR profile at www.sec.gov, and which are also available on the Company’s website at www.americas‐ gold.com. All figures are in U.S. dollars unless otherwise noted.
Highlights
- Revenue decreased to $19.5 million for Q1‐2024 or 12% compared to $22.1 million for Q1‐2023, resulting from lower realized zinc price at the Cosalá Operations and lower silver and lead production from the Galena Complex, offset by higher silver production from the Cosalá Operations.
- A net loss of $16.2 million for Q1‐2024, or an attributable loss of $0.07 per share representing an increase in net loss of $5.7 million compared to Q1‐2023, primarily due to lower net revenue, higher cost of sales, and higher loss on non‐cash derivatives related to the convertible debenture, offset in part by lower interest and financing expense.
- As previously reported, Q1‐2024 attributable silver production was 0.48 million ounces compared with approximately 0.50 million ounces in Q1‐2023. The Company also produced approximately 8.0 million attributable pounds of zinc and 4.0 million attributable pounds of lead during Q1‐2024.
- Produc�on from the Cosalá Opera�ons was strong as the opera�on benefi�ed from above budgeted silver grades and recoveries. The Galena Complex produc�on was slightly below budget as focus during the quarter was re‐allocated to lateral development to access the new mining areas in the Upper Country Lead Zone veins between 2400 and 2800 levels. This silver‐lead area commenced ore produc�on subsequent to quarter end and will provide 4,000‐5,000 tons per month of base load silver‐lead produc�on for the next several years.
- Consolidated a�ributable cash costs of $20.53/oz silver produced[1] and all‐in sustaining costs of $29.20/oz silver produced[1] during the quarter.
- The Company expects to close on a financing with a metal trader for the an�cipated ini�al capital requirements of the 100%‐owned EC120 Project at the Cosalá Opera�ons in Q2‐2024 with the goal of producing higher‐grade silver‐copper concentrates in early 2025. The 2019 Preliminary Feasibility Study for the EC120 Project forecasted average annual metal produc�on of 2.5 million ounces of silver and 4.5 million pounds of copper with a total of over 12 million ounces of silver and 23.0 million pounds of copper over a mine life of approximately 5 years.
“I am op�mis�c about the remainder of the year despite an expected, but lower produc�on quarter. Increasing silver and base metals prices coupled with expected higher silver produc�on from the Galena Complex should greatly improve opera�ng results over the next three quarters,” stated Americas President and CEO Darren Blasu�. “Ore produc�on from the newly developed 2400 Level at the Galena Complex has commenced, providing a larger monthly base load of silver‐lead produc�on. In addi�on, development on the 3700 Level at the Galena Complex has begun into a high‐grade silver‐copper area with ini�al produc�on expected at the start of Q3‐2024.”
Cosalá Opera�ons
The Cosalá Opera�ons produced approximately 295,000 ounces of silver, 2.8 million pounds of lead and 8.0 million pounds of zinc in Q1‐2024, compared with approximately 265,000 ounces of silver, 2.7 million pounds of lead and 7.2 million pounds of zinc in Q1‐2023. Silver and zinc produc�on increased by over 10% year‐over‐year while lead produc�on was essen�ally unchanged.
With the current higher silver and copper price, the Company decided to expedite the development of its 100%‐owned EC120 Project at the Cosalá Opera�ons. Ini�al access to the Zone 120 deposit occurred in Q3‐2023 from the San Rafael Upper Zone development. In addi�on, the Company con�nues mining and processing silver‐zinc ore from the San Rafael Main and Upper Zones and is expec�ng to benefit from the increase in zinc prices experienced to date in the second quarter.
The Company expects to close in Q2‐2023 on a financing with an interna�onal metal trader to provide financing for the an�cipated ini�al capital requirements at the EC120 Project. The Company expects to complete the required development and prepara�ons to begin producing higher‐grade silver‐copper concentrates from the Project at the beginning of 2025. The 2019 Preliminary Feasibility Study for the EC120 Project forecasted average annual metal produc�on of 2.5 million ounces of silver and 4.5 million pounds of copper with a total of over 12 million ounces of silver and 23.0 million pounds of copper over the five years of the project.
Cash costs per silver ounce increased in the quarter to $16.35 per ounce from $4.61 per ounce in Q1‐2023 due to higher cost of sales, lower realized Q1‐2024 zinc prices and the devalua�on of the USD rela�ve to the Mexican peso.
Galena Complex
A�ributable produc�on from the 60% owned Galena Complex was approximately 187,000 ounces of silver and 1.1 million pounds of lead in Q1‐2024, compared to approximately 235,000 ounces of silver and 2.8 million pounds of lead in Q1‐2023. During the quarter, the Company focused on horizontal development work in the Upper Country Lead Zone between the 2400 and 2800 Levels to access addi�onal working areas. The development work reduced silver and lead produc�on in the quarter but is expected to posi�vely impact overall produc�on for the remainder of the year and going forward. The mining crews have been relocated to accelerate development into a high‐grade silver copper stope accessed off of the 3700 level which will add high‐grade silver‐copper produc�on commencing in Q3‐2024.
Cash costs increased to $27.14 per silver ounce in Q1‐2024 from $18.59 per silver ounce in Q1‐2023 mainly due to lower silver and lead produc�on during the quarter. Cash costs and all‐in sustaining costs per silver ounce at the Galena Complex are an�cipated to decrease with the projected increase in produc�on and the comple�on of the Galena Hoist project as the benefits of economies of scale on the exis�ng cost base are realized.
About Americas Gold and Silver Corpora�on
Americas Gold and Silver Corpora�on is a high‐growth precious metals mining company with mul�ple assets in North America. The Company owns and operates the Cosalá Opera�ons in Sinaloa, Mexico, manages the 60%‐owned Galena Complex in Idaho, USA, and is re‐evalua�ng the Relief Canyon mine in Nevada, USA. The Company also owns the San Felipe development project in Sonora, Mexico. For further informa�on, please see SEDAR+ or www.americas‐gold.com.
For more informa�on:
Stefan Axell Darren Blasu� VP, Corporate Development & Communica�ons President and CEO Americas Gold and Silver Corpora�on Americas Gold and Silver Corpora�on 416‐874‐1708 416‐848‐9503
Technical Informa�on and Qualified Persons
The scien�fic and technical informa�on rela�ng to the Company’s material mining proper�es contained herein has been reviewed and approved by Chris McCann, P.Eng., Vice President, Technical Services of the Company. The Company’s current Annual Informa�on Form and the NI 43‐101 Technical Reports for its mineral proper�es, all of which are available on SEDAR+ at www.sedarplus.ca, and EDGAR at www.sec.gov, contain further details regarding mineral reserve and mineral resource es�mates, classifica�on and repor�ng parameters, key assump�ons and associated risks for each of the Company’s material mineral proper�es, including a breakdown by category.
All mining terms used herein have the meanings set forth in Na�onal Instrument 43‐101 – Standards of Disclosure for Mineral Projects (“NI 43‐101”), as required by Canadian securi�es regulatory authori�es. These standards differ from the requirements of the SEC that are applicable to domes�c United States repor�ng companies. Any mineral reserves and mineral resources reported by the Company in accordance with NI 43‐101 may not qualify as such under SEC standards. Accordingly, informa�on contained in this news release may not be comparable to similar informa�on made public by companies subject to the SEC’s repor�ng and disclosure requirements.
Cau�onary Statement on Forward‐Looking Informa�on:
This news release contains “forward‐looking informa�on” within the meaning of applicable securi�es laws. Forward‐looking informa�on includes, but is not limited to, Americas’ expecta�ons, inten�ons, plans, assump�ons and beliefs with respect to, among other things, es�mated and targeted produc�on rates and results for gold, silver and other metals, the expected prices of gold, silver and other metals, as well as the related costs, expenses and capital expenditures; produc�on from the Galena Complex and Cosalá Opera�ons, including the expected number of producing stopes and produc�on levels; the expected �ming and comple�on of required development and the expected opera�onal and produc�on results therefrom, including the an�cipated improvements to produc�on rates and cash costs per silver ounce and all‐in sustaining costs per silver ounce ; and statements rela�ng to Americas’ EC120 Project, including expected approvals, prepayment financing availability, execu�on and �ming and capital expenditures required to develop such project and reach produc�on thereat, and expecta�ons regarding its ability to rely in exis�ng infrastructure, facili�es, and equipment. Guidance and outlook references contained in this press release were prepared based on current mine plan assump�ons with respect to produc�on, development, costs and capital expenditures, the metal price assump�ons disclosed herein, and assumes no further adverse impacts to the Cosalá Opera�ons from blockades or work stoppages, and comple�on of the sha� repair and sha� rehab work at the Galena Complex on its expected schedule and budget, the realiza�on of the an�cipated benefits therefrom, and is subject to the risks and uncertain�es outlined below. The ability to maintain cash flow posi�ve produc�on at the Cosalá Opera�ons, which includes the EC120 Project, through mee�ng produc�on targets and at the Galena Complex through implemen�ng the Galena Recapitaliza�on Plan, including the comple�on of the Galena sha� repair and sha� rehab work on its expected schedule and budget, allowing the Company to generate sufficient opera�ng cash flows while facing market fluctua�ons in commodity prices and infla�onary pressures, are significant judgments in the consolidated financial statements with respect to the Company’s liquidity. Should the Company experience nega�ve opera�ng cash flows in future periods, the Company may need to raise addi�onal funds through the issuance of equity or debt securi�es. O�en, but not always, forward‐looking informa�on can be iden�fied by forward‐looking words such as “an�cipate”, “believe”, “expect”, “goal”, “plan”, “intend”, “poten�al’, “es�mate”, “may”, “assume” and “will” or similar words sugges�ng future outcomes, or other expecta�ons, beliefs, plans, objec�ves, assump�ons, inten�ons, or statements about future events or performance. Forward‐looking informa�on is based on the opinions and es�mates of Americas as of the date such informa�on is provided and is subject to known and unknown risks, uncertain�es, and other factors that may cause the actual results, level of ac�vity, performance, or achievements of Americas to be materially different from those expressed or implied by such forward‐looking informa�on. With respect to the business of Americas, these risks and uncertain�es include risks rela�ng to widespread epidemics or pandemic outbreak, ac�ons that have been and may be taken by governmental authori�es to contain such epidemic or pandemic or to treat its impact and/or the availability, effec�veness and use of treatments and vaccines (including the effec�veness of boosters); interpreta�ons or reinterpreta�ons of geologic informa�on; unfavorable explora�on results; inability to obtain permits required for future explora�on, development or produc�on; general economic condi�ons and condi�ons affec�ng the industries in which the Company operates; the uncertainty of regulatory requirements and approvals; poten�al li�ga�on; fluctua�ng mineral and commodity prices; the ability to obtain necessary future financing on acceptable terms or at all; the ability to operate the Company’s projects; and risks associated with the mining industry such as economic factors (including future commodity prices, currency fluctua�ons and energy prices), ground condi�ons, illegal blockades and other factors limi�ng mine access or regular opera�ons without interrup�on, failure of plant, equipment, processes and transporta�on services to operate as an�cipated, environmental risks, government regula�on, actual results of current explora�on and produc�on ac�vi�es, possible varia�ons in ore grade or recovery rates, permi�ng �melines, capital and construc�on expenditures, reclama�on ac�vi�es, labor rela�ons or disrup�ons, social and poli�cal developments, risks associated with generally elevated infla�on and infla�onary pressures, risks related to changing global economic condi�ons, and market vola�lity, risks rela�ng to geopoli�cal instability, poli�cal unrest, war, and other global conflicts may result in adverse effects on macroeconomic condi�ons including vola�lity in financial markets, adverse changes in trade policies, infla�on, supply chain disrup�ons and other risks of the mining industry. Although the Company has a�empted to iden�fy important factors that could cause actual results to differ materially from those contained in forward‐looking informa�on, there may be other factors that cause results not to be as an�cipated, es�mated, or intended. Readers are cau�oned not to place undue reliance on such informa�on. Addi�onal informa�on regarding the factors that may cause actual results to differ materially from this forward‐looking informa�on is available in Americas’ filings with the Canadian Securi�es Administrators on SEDAR+ and with the SEC. Americas does not undertake any obliga�on to update publicly or otherwise revise any forward‐looking informa�on whether as a result of new informa�on, future events or other such factors which affect this informa�on, except as required by law. Americas does not give any assurance (1) that Americas will achieve its expecta�ons, or (2) concerning the result or �ming thereof. All subsequent wri�en and oral forward‐looking informa�on concerning Americas are expressly qualified in their en�rety by the cau�onary statements above.
1 This metric is a non‐GAAP financial measure or ra�o. The Company uses the financial measures “Cash Cost”, “Cash Cost/Ag Oz Produced”, “All‐In Sustaining Cost”, and “All‐In Sustaining Cost/Ag Oz Produced” in accordance with measures widely reported in the silver mining industry as a benchmark for performance measurement and because it understands that, in addi�on to conven�onal measures prepared in accordance with IFRS, certain investors and analysts use this informa�on to evaluate the Company’s underlying cash costs and total costs of opera�ons. Cash costs are determined on a mine‐by‐ mine basis and include mine site opera�ng costs such as mining, processing, administra�on, produc�on taxes and royal�es which are not based on sales or taxable income calcula�ons, while all‐in sustaining costs is the cash costs plus all development, capital expenditures, and explora�on spending.
Reconciliation of Consolidated Cash Costs/Ag Oz Produced(a)
Q1‐2024 Q1‐2023
| Cost of sales ('000) | $19,675 | $17,479 |
| Less non‐controlling interests portion ('000) | (3,426) | (3,959) |
| Attributable cost of sales ('000) | 16,249 | 13,520 |
| Non‐cash costs ('000) | 82 | 279 |
| Direct mining costs ('000) | $16,331 | $13,799 |
| Smelting, refining and royalty expenses ('000) | 4,343 | 5,242 |
| Less by‐product credits ('000) | (10,779) | (13,457) |
| Cash costs ('000) | $9,895 | $5,584 |
| Divided by silver produced (oz) | 481,936 | 499,677 |
| Cash costs/Ag oz produced ($/oz) | $20.53 | $11.18 |
Reconciliation of Cosalá Operations Cash Costs/Ag Oz Produced Q1‐2024 Q1‐2023
| Cost of sales ('000) | $11,109 | $7,582 |
| Non‐cash costs ('000) | (348) | 292 |
| Direct mining costs ('000) | $10,761 | $7,874 |
| Smelting, refining and royalty expenses ('000) | 3,849 | 4,188 |
| Less by‐product credits ('000) | (9,782) | (10,839) |
| Cash costs ('000) | $4,828 | $1,223 |
| Divided by silver produced (oz) | 295,278 | 265,121 |
| Cash costs/Ag oz produced ($/oz) | $16.35 | $4.61 |
Reconciliation of Galena Complex Cash Costs/Ag Oz Produced Q1‐2024 Q1‐2023
| Cost of sales ('000) | $8,566 | $9,897 | |
| Non‐cash costs ('000) | 716 | (21) | |
| Direct mining costs ('000) | $9,282 | $9,876 | |
| Smelting, refining and royalty expenses ('000) | 823 | 1,757 | |
| Less by‐product credits ('000) | (1,661) | (4,364) | |
| Cash costs ('000) | $8,444 | $7,269 | |
| Divided by silver produced (oz) | 311,096 | 390,927 | |
| Cash costs/Ag oz produced ($/oz) | $27.14 | $18.59 |
Reconciliation of Consolidated All‐In Sustaining Costs/Ag Oz Produced (a)
Q1‐2024 Q1‐2023
| Cash costs ('000) | $9,895 | $5,584 |
| Capital expenditures ('000) | 3,531 | 2,419 |
| Exploration costs ('000) | 646 | 427 |
| All‐in sustaining costs ('000) | $14,072 | $8,430 |
| Divided by silver produced (oz) | 481,936 | 499,677 |
| All‐in sustaining costs/Ag oz produced ($/oz) | $29.20 | $16.87 |
Reconciliation of Cosalá Operations All‐In Sustaining Costs/Ag Oz Produced Q1‐2024 Q1‐2023
| Cash costs ('000) | $4,828 | $1,223 |
| Capital expenditures ('000) | 1,474 | 1,183 |
| Exploration costs ('000) | 123 | 119 |
| All‐in sustaining costs ('000) | $6,425 | $2,525 |
| Divided by silver produced (oz) | 295,278 | 265,121 |
| All‐in sustaining costs/Ag oz produced ($/oz) | $21.76 | $9.52 |
Reconciliation of Galena Complex All‐In Sustaining Costs/Ag Oz Produced 2023 Q1‐2023
| Cash costs ('000) | $8,444 | $7,269 |
| Capital expenditures ('000) | 3,428 | 2,060 |
| Exploration costs ('000) | 871 | 514 |
| All‐in sustaining costs ('000) | $12,743 | $9,843 |
| Galena Complex Recapitalization Plan costs ('000) | ‐ | 2,565 |
| All‐in sustaining costs with Galena Recapitalization Plan ('000) | $12,743 | $12,408 |
| Divided by silver produced (oz) | 311,096 | 390,927 |
| All‐in sustaining costs/Ag oz produced ($/oz) | $40.96 | $25.18 |
| All‐in sustaining costs with Galena Recapitalization/Ag oz produced ($/oz) | $40.96 | $31.74 |
(a) Throughout this press release, consolidated produc�on results and consolidated opera�ng metrics are based on the a�ributable ownership percentage of each opera�ng segment (100% Cosalá Opera�ons and 60% Galena Complex).