Americas GOLD and Silver Announces Strategic Joint Venture with Mr. Eric Sprott at the Galena Complex
1
AMERICAS GOLD AND SILVER ANNOUNCES STRATEGIC JOINT VENTURE WITH MR. ERIC SPROTT AT THE
GALENA COMPLEX
TORONTO, ONTARIO—September 9, 2019—Americas Gold and Silver Corporation (TSX: U SA) (NYSE
American: USAS) (“Americas” or the “Company”), a growing North American precious metals producer,
today announces a strategic joint venture agreement (the “Agreement”) with Mr. Eric Sprott to recapitalize
the mining operations at the Galena Complex, located in the Silver Valley of Northwest Idaho.
The strategic joint venture – expected to be 60/40 Americas/Sprott respectively – will allow
Americas to increase development, modernize infrastructure, pur chase new mining equipment,
and target exploration below current operating areas with the goal of positioning the Galena
Complex to significantly increase resources, production, and re duce operating costs at the mine
over the next two years.
Effective October 1, 2019, Mr. Sprott through 2176423 Ontario L t d . , a c o r p o r a t i o n w h i c h i s
beneficially owned by him, will initially commit up to US$20 mi llion to fund capital improvements
and operations for the first year to earn a 40 percent interest in the Company’s Galena Complex.
Americas will invest an additional US$5 million to fund further capital improvements in 2020.
After the first year of operations under the Agreement, the par ties will revert to their percentage
ownership interests to fund capital projects and operations as required in proportion to those
interests.
Oversight of the joint venture will c onsi st of 2 n omi n e e s f r om Am e r i c as and 1 n om i n ee by Mr.
Sprott. Americas will continue to manage the day‐to‐day operations so long as it retains an interest
in the joint venture.
“We are thrilled to partner with Eric Sprott on this joint venture. He is already the single largest shareholder
i n A m e r i c a s ; w i t h t h i s n e w v e n t u r e , w e a r e f u r t h e r s o l i d i f y i n g our relationship with him”, said Darren
Blasutti, President and CEO of Americas Gold and Silver. “We loo k f o r w a r d t o p u t t i n g h i s s i g n i f i c a n t
investment into developing the Galena Complex to benefit all our stakeholders in the coming months and
transforming the Galena Complex into a leading US‐based, profitable silver producer.”
Due to low silver prices and limited capital available from the c a p i t a l m a r k e t s f o r s i l v e r o p e r a t i o n a l
improvements since 2012, Americas has spent minimal funds at the Galena Complex to replace worn
equipment, update aging infrastructure, stope development, and exploration. Americas is currently
allocating all its available capital to re‐start the Relief Canyon mine in Nevada, which is scheduled to begin
producing gold in late Q4, 2019. The Relief Canyon mine is targ eted to increase the Company’s precious
metal production by approximately 500% by 2021. In 2017 and 2018, the Company focused available
capital on developing the San Rafael mine in Mexico which this year became a significant free‐cash flow
generating asset.
The Galena Complex possesses significant operational optionalit y and leverage to silver prices. The mine
has between 1,250 and 1,500 tons of daily milling capacity thou gh it is currently processing only 500 tons
per day, five days a week. It produces between 0.8 M to 1.0 M s ilver ounces annually at high costs as a
result of lower throughput, reduced operational flexibility and old equipment. The current proven and
probable silver reserve include s 12.4 million ounces, a further measured and indicated silver resource of
2
27.4 million ounces and an inferred silver resource of approximately 39.0 million ounces (exclusive of lead
and copper resources). Though this operational base is a strong starting point for comparable silver mines,
a capital redevelopment of the asset is required to best exploit the existing resources, improve operational
performance, and capitalize on expected higher silver prices. Further, Americas and Mr. Sprott believe
there are substantially more silver resources to be discovered at better grades along extensions of existing
veins and at depth.
Americas believes that the significant investment and joint ven ture announced today with Mr. Sprott will
allow the parties to develop the Galena Complex into a long‐ter m, profitable mine, including to take full
advantage of the recent move in silver price. The Company needed an outside partner who not only shared
the same vision for the current upside and leverage embedded at the Galena Complex but was willing to
commit capital to systematically explore for deeper level, high‐grade targets that may transform the mine
into an important silver producer in the medium to long‐term. Further, with the only operating mine in the
Silver Valley, the joint venture will be well‐positioned to take advantage of any consolidation opportunities
which may evolve in the District.
Other material provisions of the Agreement include (i) standard dilution if a party does not contribute its
proportionate share of costs; (ii) penalty dilution if a party defaults in contributing its share of costs; (iii) a
party’s interest in the joint ve nture is converted to a 5% net proceeds interest if that party’s percentage
interest falls below 10%; and (iv) each party has a pre‐emptive right to acquire the other party’s interest
should that party desire to sell its interest in the joint venture.
Medalist Capital Ltd acted as financial advisor to both parties with respect to the transaction.
For further technical information on the Galena Complex please see the applicable NI 43‐101 Technical
Report available at www.sedar.com and the Company’s website at www.americas‐gold.com.
About Americas Gold and Silver Corporation
Americas Gold and Silver is a high‐growth, low‐cost, precious metals mining company with multiple assets
in North America. The Company expects to begin producing gold i n the fourth quarter of 2019 at its fully
funded Relief Canyon Project in Nevada, USA, which is currently in construction. It owns and operates the
Cosalá Operations in Sinaloa, Mexico and the Galena Complex in Idaho, USA. The Company also holds an
option on the San Felipe development project in Sonora, Mexico. For further information, please see SEDAR
or www.americas‐gold.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’ expectations, intentions, plans,
assumptions and beliefs with respect to, among other things, the Company’s financing efforts and the
expected results from the Agreement and the joint venture; futur e d e v e l o p m e n t p l a n s a t t h e G a l e n a
Complex; exploration, production and cost performance at the Cosalá Operations and the Galena Complex;
construction, production, development plans and performance exp ectations at the Relief Canyon Mine,
including the anticipated timing of production. 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 opinio ns and estimates of America’s as of the
date such information is provided and is subject to known and u nknown risks, uncertainties, and other
factors that may cause the actual results, level of activity, performance, or achievements of Americas to be
3
materially different from those expressed or implied by such forward‐looking information. With respect to
the business of Americas, these risks and uncertainties include interpretations or reinterpretations of
geologic information; unfavorable exploration results; inabilit y to obtain permits required for future
exploration, development or production; general economic conditions and conditions affecting the mining
industry; the uncertainty of regulatory requirements and approv als; 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 Mine; the ability of the joint venture to further fund,
improve and operate the Galena Complex, and risks associated with the mining industry such as economic
factors (including future commodity prices, currency fluctuatio ns and energy prices), ground conditions
and other factors limiting mine access, failure of plant, equip ment, 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. Addi tional information regarding the factors
t h a t m a y c a u s e a c t u a l r e s u l t s t o d i f f e r m a t e r i a l l y f r o m t h i s f orward‐looking information is available in
America’s filings with the Canadian Securities Administrators o n SEDAR and with the SEC. Americas 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 does not give any assurance (1) that Americas will achieve its
expectations, or (2) concerning the result or timing thereof. All subsequent written and oral forward‐
looking information concerning Americas are expressly qualified in their entirety by the cautionary
statements above.
Cautionary Note to U.S. Investors:
The terms “proven and probable silver reserve”, “silver resourc e”, “measured silver resource”, “indicated
silver resource”, and “inferred silver resource” used in the pr ess release are mining terms used in
accordance with Canadian National Instrument 43‐101 ‐ Standards of Disclosure for Mineral Projects under
the guidelines set out in the Canadian Institute of Mining, Met allurgy and Petroleum Standards. Mineral
resources which are not mineral reserves do not have demonstrated economic viability.
While the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource”, and
“inferred mineral resource” are recognized and required by Canad i an r e g u l at ion s, t h e y ar e n ot d e f i ne d
terms under standards in the United States and normally are not permitted to be used in reports and
registration statements filed with the Securities & Exchange Co mmission (“SEC”). Moreover, the
definitions of proven and probable reserves used in NI 43‐101 d iffer from the definitions in the United
States Securities and Exchange Commission's Industry Guide 7. As such, information contained in the
Company's disclosure concerning descriptions of mineralization, reserves and resources under Canadian
standards may not be comparable to similar information made public by U.S companies in SEC filings. With
respect to “inferred mineral resource” there is a great amount of uncertainty as to their existence and a
great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an
“inferred mineral resource” will ever be upgraded to a higher c ategory. Investors are cautioned not to
assume that any part or all of the mineral deposits in these categories will ever be converted into reserves.
4
For more information:
Darren Blasutti
President and CEO
Americas Gold and Silver Corporation
416‐848‐9503