Americas Gold and Silver Reports Q2‐2024 Results
TORONTO, ONTARIO – August 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 June 30, 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
- Consolidated revenue increased to $31.6 million for Q2‐2024 or 62% compared to $19.5 million for Q1‐2024 due to higher realized commodity prices and increased silver production at the Galena Complex, offset slightly by lower silver production from the Cosalá Operations.
- Positive earnings before interest, taxes, depreciation and amortization (“EBITDA”) and net income from combined Cosalá and Galena operations of $11.1 million[1] and $4.4 million, respectively, compared with negative EBITDA from those combined operations of $1.5 million and a net loss of $6.3 million in Q1‐2024.
- Decrease in consolidated net loss to $4.0 million or $0.02 per share for Q2‐2024 (Q1‐2024 consolidated net loss of $16.2 million or $0.08 per share), primarily due to higher net revenue from higher silver and zinc prices.
- As previously reported, Q2‐2024 consolidated attributable silver production of 0.51 million ounces. The Company also produced 8.9 million pounds of zinc and 4.4 million attributable pounds of lead during Q2‐2024. Significant reduction of consolidated attributable cash costs to $12.42/oz silver produced[1] and all‐in sustaining costs (“AISC”) to $19.58/oz silver produced[1] in Q2‐2024, representing decreases of approximately 40% and 35%, respectively, compared with Q1‐2024.
- Galena Complex quarterly produc�on was the highest on record since 2013 with silver produc�on of approximately 560,000 ounces on a 100% basis as the opera�on benefi�ed from produc�on from mining areas in the Upper Country Lead Zone between 2400 and 2800 levels and a strong quarter from the 52‐198 Silver Hanging Wall Vein.
- On August 14, 2024, the Company signed a $15 million secured Credit and O�ake Agreement for the capital requirements of the Board‐approved EC120 Project at its Cosalá Opera�ons with the goal of solely producing higher‐grade silver‐copper concentrates in Q3‐2025.
- The Company commenced nego�a�ons with current conver�ble debenture holders and poten�al new investors to extend the term of the exis�ng facili�es.
“Q2‐2024 was a strong quarter for the Company and an ini�al demonstra�on of what our opera�ng assets can deliver as we transi�on to over 80% silver revenue over the next year,” stated Americas President and CEO Darren Blasu�. “With the stronger commodity prices, the Company was able to significantly improve both its EBITDA and cash flow from opera�ons. I expect con�nued improvement as the Company advances its development projects at both the Galena Complex and the Cosalá Opera�ons. I am excited to partner with a world‐class metal trader such as Trafigura on advancing the EC120 Project which will begin to contribute higher‐grade silver‐copper produc�on through development over 2025, coinciding well with the recent increases in silver and copper prices.”
Consolidated Produc�on
Consolidated a�ributable silver produc�on in Q2‐2024 was approximately 506,000 ounces. Quarterly silver produc�on in Q2‐2024 remained on a steady upward trend and is expected to con�nue with increased working faces at the Galena Complex as well as the exploita�on of EC120 Project at the Cosalá Opera�ons. The EC120 Project has already started contribu�ng to produc�on with small amounts of development ore and will con�nue to ramp up through to achieving commercial produc�on in Q3‐2025. The Company also produced 8.9 million pounds of zinc and 4.4 million a�ributable pounds of lead during Q2‐2024. The Company’s goal is to generate more than 80% of its revenue from silver produc�on by the end of 2025 which would be among the silver industry leaders in percentage revenue from silver.
Consolidated a�ributable cash costs and all‐in sustaining costs for Q2‐2024 were $12.42 per silver ounce and $19.58 per silver ounce, respec�vely. Galena Complex cash costs per silver ounce benefi�ed from the significant increase in silver produc�on on a largely fixed cost base at the Galena Complex. Cash costs per silver ounce at the Cosalá Opera�ons were reduced because of increased by‐product credits from the increased zinc produc�on and prices.
Galena Complex
The Galena Complex produced approximately 560,000 ounces of silver on a 100% basis in Q2‐2024 compared to approximately 311,000 ounces of silver in Q1‐2024 (an 80% increase in silver produc�on), and 3.0 million pounds of lead in Q2‐2024, compared to 1.9 million pounds of lead in Q1‐2024 (a 60% increase in lead produc�on).
The Galena Complex benefi�ed from the recent horizontal development work in the Upper Country Lead Zone between the 2400 and 2800 Levels which allowed the opera�on to access addi�onal working areas which is expected to con�nue to benefit the opera�on in subsequent quarters and a strong contribu�on from the 52‐198 Silver Hanging Wall Vein. Development work on the 3700 Level is expected to be completed in Q3‐2024 and is expected to contribute to high‐grade silver produc�on therea�er.
Cash costs decreased to $14.78 per ounce silver in Q2‐2024 from $27.14 per ounce silver in Q1‐2024 due to increased silver produc�on, and AISC also decreased to $21.93 per ounce silver in Q2‐2024 from $40.96 per silver ounce in Q1‐2024. 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 from the 3700 Level and the comple�on of the Galena Hoist project as the benefits of economies of scale on the exis�ng cost base are realized.
Cosalá Opera�ons
The Cosalá Opera�ons decreased silver produc�on in Q2‐2024 by 43% to approximately 170,000 ounces of silver compared to approximately 297,000 ounces of silver in Q1‐2024.The Company focused on mining higher grade zinc and lower grade silver areas of the San Rafael Main and Upper Zones to maximize its revenue and cash flow genera�on by taking advantage of the Q2‐2024 increase in zinc prices. Produc�on of zinc increased to 8.9 million pounds of zinc while lead produc�on decrease slightly to 2.6 million pounds of lead in Q2‐2024, compared to 8.0 million pounds of zinc, and 2.8 million pounds of lead in Q1‐2024. Cash costs per silver ounce decreased during the quarter to $7.75 per ounce from $16.44 per ounce in Q1‐ 2024 due primarily to increased zinc prices, which is treated as a by‐product credit.
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 accessed from the San Rafael Upper Zone development with ini�al pre‐produc�on from development ore from the area between the San Rafael Upper Zone and Zone 120. The Company expects to realize an increase in silver produc�on in the near term due the higher‐grade silver areas in the Upper Zone and EC120 development ore. 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.
On August 14, 2024, the Company signed a $15 million secured Credit and O�ake Agreement for the capital requirements to provide financing for the ini�al capital requirements at the EC120 Project. The Company expects to complete the required development and prepara�ons to achieve commercial produc�on of higher‐grade silver‐copper concentrates from the Project in Q3‐2025. The Company has been and will con�nue to process Zone 120 and El Cajon development ore to produce high grade silver‐ copper concentrates through the pre‐produc�on development period. 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.
Relief Canyon
With the recent significant rise in gold prices, the Company con�nues to research possible solu�ons to increase recoveries at the project including the possibility of improvements through a Carbon‐In‐Leach (“CIL”) plant. The Company is commissioning an external study with an interna�onal engineering consultant to complete the necessary work. A CIL plant may demonstrate a path to higher gold recoveries for the deposit with the poten�al for improved economics and overall profitability.
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, the availability of advances under the credit facility, 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 ratio. The Company uses the financial measures “EBITDA”, “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 addition to conventional measures prepared in accordance with IFRS, certain investors and analysts use this information to evaluate the Company’s underlying earnings, cash costs and total costs of operations. EBITDA is net income less interest, taxes, depreciation and amortization. Cash costs are determined on a mine‐by‐mine basis and include mine site operating costs such as mining, processing, administration, production taxes and royalties which are not based on sales or taxable income calculations, while all‐in sustaining costs is the cash costs plus all development, capital expenditures, and exploration spending.
Reconciliation of Consolidated Cash Costs/Ag Oz Produced(a, b)
Q2‐2024 Q1‐2024
| Cost of sales ('000) | $19,975 | $19,675 |
| Less non‐controlling interests portion ('000) | (4,040) | (3,426) |
| Attributable cost of sales ('000) | 15,935 | 16,249 |
| Non‐cash costs ('000) | (486) | 152 |
| Direct mining costs ('000) | $15,448 | $16,401 |
| Smelting, refining and royalty expenses ('000) | 4,416 | 4,343 |
| Less by‐product credits ('000) | (13,578) | (10,790) |
| Cash costs ('000) | $6,286 | $9,954 |
| Divided by silver produced (oz) | 505,932 | 483,920 |
| Cash costs/Ag oz produced ($/oz) | $12.42 | $20.57 |
Reconciliation of Cosalá Operations Cash Costs/Ag Oz Produced(b)
Q2‐2024 Q1‐2024
| Cost of sales ('000) | $9,875 | $11,109 |
| Non‐cash costs ('000) | (227) | (278) |
| Direct mining costs ('000) | $9,648 | $10,831 |
| Smelting, refining and royalty expenses ('000) | 3,573 | 3,849 |
| Less by‐product credits ('000) | (11,905) | (9,783) |
| Cash costs ('000) | $1,316 | $4,887 |
| Divided by silver produced (oz) | 169,728 | 297,262 |
| Cash costs/Ag oz produced ($/oz) | $7.75 | $16.44 |
Reconciliation of Galena Complex Cash Costs/Ag Oz Produced
| Cost of sales ('000) | $10,100 | $8,566 | |
| Non‐cash costs ('000) | (432) | 716 | |
| Direct mining costs ('000) | $9,668 | $9,282 | |
| Smelting, refining and royalty expenses ('000) | 1,405 | 823 | |
| Less by‐product credits ('000) | (2,789) | (1,661) | |
| Cash costs ('000) | $8,284 | $8,444 | |
| Divided by silver produced (oz) | 560,340 | 311,096 | |
| Cash costs/Ag oz produced ($/oz) | $14.78 | $27.14 |
Reconciliation of Consolidated All‐In Sustaining Costs/Ag Oz Produced (a,b)
Q2‐2024(b) Q1‐2024
| Cash costs ('000) | $6,286 | $9,954 |
| Capital expenditures ('000) | 2,994 | 3,938 |
| Exploration costs ('000) | 626 | 646 |
| All‐in sustaining costs ('000) | $9,906 | $14,538 |
| Divided by silver produced (oz) | 505,932 | 483,920 |
| All‐in sustaining costs/Ag oz produced ($/oz) | $19.58 | $30.04 |
Reconciliation of Cosalá Operations All‐In Sustaining Costs/Ag Oz Produced(b)
Q2‐2024 Q1‐2024
| Cash costs ('000) | $1,316 | $4,887 | |
| Capital expenditures ('000) | 968 | 1,881 | |
| Exploration costs ('000) | 250 | 123 | |
| All‐in sustaining costs ('000) | $2,534 | $6,891 | |
| Divided by silver produced (oz) | 169,728 | 297,262 | |
| All‐in sustaining costs/Ag oz produced ($/oz) | $14.93 | $23.18 |
Reconciliation of Galena Complex All‐In Sustaining Costs/Ag Oz Produced Q2‐2024 Q1‐2024
| Cash costs ('000) | $8,284 | $8,444 |
| Capital expenditures ('000) | 3,377 | 3,428 |
| Exploration costs ('000) | 627 | 871 |
| All‐in sustaining costs ('000) | $12,288 | $12,743 |
| Divided by silver produced (oz) | 560,340 | 311,096 |
| All‐in sustaining costs/Ag oz produced ($/oz) | $21.93 | $40.96 |
Reconciliation of EBITDA from Cosalá Operations and Galena Complex
| Net income (loss) from Cosalá and Galena ('000) | $4,379 | $(6,257) | |
| Less interest and financing expense from Cosalá and Galena ('000) | 183 | 184 | |
| Less income tax expense (recovery) from Cosalá and Galena ('000) | 286 | (15) | |
| Less depletion and amortization from Cosalá and Galena ('000) | 6,278 | 4,620 | |
| EBITDA from Cosalá and Galena ('000) | $11,126 | $(1,468) |
(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).
(b) Throughout this press release, silver produc�on, silver equivalent produc�on, and cost per ounce measurements during fiscal 2024 include EC120 Project pre‐produc�on from the Cosalá Opera�ons.