USA.TO · 2019-04-03 12:00:00

Americas Silver Announces Creation of a Precious Metal Growth Company

Mergers & Acquisitions

AMERICAS SILVER ANNOUNCES CREATION OF A PRECIOUS METAL GROWTH COMPANY

TORONTO, ONTARIO —April 3, 2019—Americas Silver Corporation (TSX: USA) (NYSE Ame rican: USAS)

(“Americas Silver” or the “Company”) is pleased to announce the closing of the acquisition of Pershing Gold

Corporation (“Pershing”), originally announced on September 28, 2018 (the “Transaction”), and a financing

package to fully‐fund the development of the Relief Canyon Project (the “Project”).

Highlights

● The Committee on Foreign Investment in the United States (CFIUS) completed its review of the

Transaction allowing the parties to proceed to closing

● Board of Director (“Board”) approval to commence constructing expanded mining and heap leaching

facilities at the Relief Canyon Project

● Concurrent financing signed with Sandstorm Gold Ltd. (“Sandstor m”) for gross proceeds of

approximately US$42.5 million to completely fund restarting mining and heap leaching at the Project

● The conversion of the C$5.5 million convertible debentures (iss ued in October 2018) into common

shares of the Company by Mr. Pierre Lassonde and Trinity Capital Partners Corporation (“Trinity

Capital”)

● Sale of option on San Felipe zinc/silver/lead deposit to Premier Gold for US$10.8 million

● Mr. Stephen Alfers appointed to the Board of Americas Silver

"The closing of the Pershing acquisition is a landmark event fo r Americas Silver shareholders,” said Darren

Blasutti, President & CEO of Americas Silver. “The Company can immediately begin construction at Relief

C a n y o n n o w t h a t t h e T r a n s a c t i o n h a s c l o s e d , a n d w e h a v e s e c u r e d f i n a n c i n g a n d B o a r d a p p r o v a l . W i t h

Sandstorm as our financing partner, we have raised the necessary capital to fund the Project through to

sustainable cash flow while adding an important strategic partn er as the Company’s largest shareholder. The

addition of Mr. Pierre Lassonde as a significant shareholder fu rther strengthens and enhances confidence in

the Project and the management of the Company.”

Mr. Blasutti continued, “The high‐return Relief Canyon Project is anticipated to add substantial precious metal

production and cash flow growth for the Company in 2020 and beyond. The gold production from the Project

is expected to catalyze a re‐rating of the share price and incr ease the liquidity of th e Company’s shares as a

larger, precious metal‐focused company with operations focused in North America.”

Pershing Gold Transaction

The Company received notice on April 1, 2019 that CFIUS had completed its review and determined that there

are no unresolved national security concerns with respect to th e Transaction, satisfying the final outstanding

condition to closing the Transaction following approval by the shareholders of both Americas Silver and

Pershing as previously announced on January 9, 2019 (as well as o t h e r c e r t a i n c u s t o m a r y r e q u i r e m e n t s ) .

Effective immediately, Mr. Stephen Alfers, the former CEO & President of Pershing, has been appointed to the

Americas Silver Board. Mr. Alfers has a distinguished thirty‐y ear career and is nationally and internationally

recognized for his expertise in natural resource development, p rivatization of state‐owned enterprises and

foreign investment. Mr. Alfers has extensive experience in private and public corporate finance, mergers and

acquisitions, complex international business transactions and governmental affairs.

Under the terms of the Transaction, holders of Pershing common shares (“Pershing Shares”) received 0.715

common shares of Americas Silver (“Americas Silver Shares”) for each Pershing Share (the “Exchange Ratio”).

Holders of Pershing preferred shares elected to receive either (i) new non‐voting preferred shares of Americas

Silver, adjusted in respect of conversion ratio and number based on the Exchange Ratio, or (ii) Americas Silver

Shares based on the Exchange Ratio. Americas Silver now owns 100% of the outstanding Pershing shares with

Pershing becoming a wholly‐owned subsidiary of the Company. On closing of the Transaction, Americas Silver

issued an aggregate of 24,849,270 Americas Silver common shares and 3,678,135 preferred shares to former

Pershing shareholders on an undiluted basis.

Pershing will cease trading on NASDAQ, the Frankfurt Stock Exch ange and the TSX on or about April 3, 2019.

Americas Silver will continue to trade on the TSX under the sym bol “USA”, on the NYSE American under the

symbol “USAS” and on the Frankfurt Stock Exchange under the symbol “SZ71.”

Full details of the Transaction and certain other matters are s et out in the management information circular

dated December 12, 2018 (the "Info rmation Circular"). A copy of the Information Circular filed by Americas

Silver in connection with the Transaction can be found on SEDAR a t www.sedar.com a n d o n E D G A R a t

www.sec.gov.

Pershing shareholders who have questions are advised to contact Computershare Investor Services Inc., the

depository for the Transaction at 800‐274‐1088 or [email protected].

Relief Canyon Construction Commencement

In connection with the Transaction closing, the Company’s Board gave approval to commence construction of

the expanded mining and heap leaching facilities at the Project . The capital cost to develop the Project to

initial gold pour is estimated to be approximately US$28‐30 mil lion with up to an additional US$8 million in

working capital (primarily for pre‐commercial production operat ing costs) required prior to the Project

sustaining positive cash flow. The Company expects to achieve first gold pour from the Project in late Q4, 2019

or early Q1, 2020.

Relief Canyon is located approximately 95 miles northeast of Re no in Pershing County, Nevada. The Project

includes three historic open‐pit mines and a state‐of‐the‐art, f u l l y p e r m i t t e d a n d c o n s t r u c t e d h e a p ‐ l e a c h

processing facility. The Company’s landholdings in and around Relief Canyon cover over 11,700 hectares. This

land package provides the Company with the opportunity to expan d the Relief Canyon Mine deposit and to

explore and make new discoveries close to existing processing infrastructure.

Based on the Feasibility Study filed by Pershing on July 11, 2018, Relief Canyon is expected to have an average

life of mine production of approximately 91,000 oz of gold per year over a 5.6 year mine life with an all‐in

sustaining cost of $801/oz Au. The Project includes gold proven and probable reserves of 635,0001 ounces, a

measured and indicated resource of 789,000 ounces, and inferred resources of 45,000 ounces.

During the period prior to closing, the combined Company’s mana gement worked diligently to further

optimize the Project, including the advancement of Phase II per mitting to expand the mine and heap leach

facilities. On February 13, 2019, Pershing received notice from the U.S. Bureau of Land Management (“BLM”)

that the Relief Canyon Phase II application was deemed technica lly complete. On March 14, 2019, Pershing

provided BLM with an Environmental Assessment describing the im pacts associated with the Phase II

expansion. The BLM will prepare an Environmental Impact Study ( “EIS”) that the Company expects will take

approximately 12 months to complete once the BLM selects a thir d‐party consultant to prepare the EIS and

publishes a Notice of Intent in the Federal Register announcing the agency’s decision to prepare the EIS.

Concurrent Sandstorm Financing and Partnership Highlights

Concurrent with the closing and the Board’s construction commencement decision, the Company has entered

into financing agreements with Sandstorm to primarily fund the construction of the Project and associated

working capital. Under the terms of the US$42.5 million financing package, the Company has secured:

 a US$25 million Precious Metal Delivery and Purchase Agreement;

 a US$10 million Convertible Debenture; and

 a US$7.5 million equity placement.

“We are pleased to be partnering with Americas Silver, a rising mid‐tier, precious metals producer in

supporting the development of Relief Canyon, a gold heap leach project in a prospective area with exploration

upside,” said Nolan Watson, President and CEO of Sandstorm. “Am ericas Silver has assembled an excellent

operational team to build and operate Relief Canyon.”

Further Details of Sandstorm Financing

Precious Metals Delivery and Purchase Agreement

Americas Silver and Sandstorm have entered into a Metals Delive ry and Purchase Agreement (the “Purchase

Agreement”), pursuant to which Sandstorm has committed to fund aggregate advances of US$25 million for

the construction and development of the Project against future fixed and variable deliveries of refined gold

and silver. The fixed deliverie s will consist of 32,022 ounces of refined gold over a period of 66 months that

will commence between 12 to 18 mo nths from the date of the Purc hase Agreement (subject to extension in

certain circumstances), depending on the timing of the first go l d p o u r . B e g i n n i n g 6 0 m o n t h s a f t e r t h e

commencement of the fixed delivery period, variable deliveries will commence requiring Americas Silver to

sell and deliver refined gold and silver equivalent to 4% of th e production from the Project. For the variable

deliveries, Sandstorm will pay the Company a cash price of between 30% and 65% of the market price of gold

and silver sold and delivered depending on the area mined. No c ash price is payable by Sandstorm for the

fixed deliveries. Americas Silver may elect to reduce the varia ble delivery amount under the Purchase

1 For notes related to mineral reserves please refer to the company’s website at www.americassilvercorp.com.

Agreement from 4% to 2% of production by delivering the metal r epurchase price (initially 4,000 ounces of

refined gold, increasing at a rate of 10% compounded annually).

The US$25 million advance is conditional upon, among other thin gs, commencement of construction of the

Project and the associated development plan and operational contracts.

Americas Silver and its subsidiaries, Pershing and Gold Acquisit i o n C o r p . ( “ G A C ” ) ( t h e d i r e c t o w n e r o f t h e

Project) have provided security, in the form of first ranking pledges of the shares of Pershing and GAC,

guarantees from Pershing and GAC, and a first ranking security interest over all of the property and assets of

GAC (other than assets which do not relate to the Project), for the performance of the obligations under the

Purchase Agreement.

Equity Investment

As part of the financing package, Sandstorm has entered into a subscription agreement to purchase US$7.5

million of Americas Silver Shares based on 5‐day volume weighte d average price of Americas Silver shares.

The private placement is subject to standard conditions precedent, including, but not limited to, the approval

of the Toronto Stock Exchange and the NYSE American.

Royalty on Surrounding Property

A s p a r t o f t h e f i n a n c i n g p a c k a g e , P e r s h i n g a n d t w o o f i t s s u b s idiaries have granted a royalty over certain

properties owned by these entities in the area surrounding the Relief Canyon Project to a wholly‐owned

subsidiary of Sandstorm. Royalty rates vary between 1.4% and 2.8% of net smelter returns (“NSR”) depending

on existing royalty obligations on the various claims. In the event the buy‐down right described above is

exercised, the royalty obligations on all claims will be reduced to 1% NSR.

Sandstorm Convertible Debenture

Americas Silver issued a convertible debenture (the “Sandstrom Convertible Debenture”) to Sandstorm, in an

amount of up to US$10 million in aggregate. The Sandstorm Convertible Debenture bears interest at a rate of

6.0% per annum, has a maturity date of April 3, 2023 and is rep ayable by the Company at its option, prior to

maturity. The principal amount outstanding under the Sandstorm Convertible Debenture is convertible at any

time at Sandstorm’s option, into common shares of Americas Silver at a conversion price of US$2.14 per share,

being a 35% premium to the 5‐day volume weighted average price of an Americas Silver Share at the time of

i s s u a n c e , s u b j e c t t o t y p i c a l a n t i ‐ d i l u t i o n p r o v i s i o n s . T h e o b l igations of the Company under the Sandstorm

Convertible Debenture are secured by pledges of the shares of P ershing and GAC. The Company intends to

fully draw upon the Convertible Debenture on closing of the Transaction.

Conversion of Outstanding June 2019 Debentures

The Company previously issued C$5.5 million of convertible debentures to Pierre Lassonde and Trinity Capital

in October 2018 in connection wi th the Transaction (the “Debent ures”). The parties have agreed to convert

all the Debentures into common shares of the Company in accordance with the terms of the agreement. The

net proceeds of the Debentures were used by Americas Silver to fund a US$4.0 million short term secured first

lien convertible loan to Pershing Gold in connection with the A cquisition in order to address Pershing’s near‐

term working capital requirements.

Sale of San Felipe Option to Premier Gold

The Company has agreed to sell it s option on the San Felipe zin c/silver/lead project in Sonora, Mexico (“San

Felipe”) to a subsidiary of Premier Gold Mines Limited (“Premier”) for US$10.8 million. The payment schedule

from Premier consists of an initial US$7 million payable on the closing of the transaction with the remaining

US$3.8 million payable over two milestones equally triggered by (i) commencing construction at San Felipe;

and (ii) commercial production. Under the terms of the agreemen t, Premier would assume the obligations of

Americas Silver under the option with Minera Hochschild Mexico S.A. de C.V. (“Hochschild” or the “Optionor”).

Premier owns the Mercedes mine near the San Felipe project with a 2,000 tonne per day operating mill.

The proceeds of the sale would allow the Company to fully recov er its investment in San Felipe. In addition,

the funds add balance sheet strength and better position the Co mpany to execute on its near‐term growth

and optimization strategies. The sale is subject to certain st andard conditions, including the consent of the

Optionor.

Capital Structure Update

Subsequent to the Transaction closing, the Sandstorm equity pla cement, and the conversion of the

Debentures, the Company is expected to have approximately 77,789,466 basic common shares and 3,678,135

non‐voting preferred shares outstanding on a pro‐forma basis.

Conference Call

The Company will hold a conference call to discuss the Relief Canyon construction commencement and

Sandstorm financing details on April 4, 2019 at 8:30am EDT. A n ew investor presentation will be available on

the Company’s website prior to the call. The call‐in details are as follows:

Local and international: +1 (416) 981‐9004

Canada and US toll‐free: +1‐800‐954‐0584

Participant URL: https://cc.callinfo.com/r/1ltruftldam1q&eom

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 opera tes the Cosalá Operations in Sinaloa, Mexico

and the Galena Complex in Idaho, USA. The Company is building t he fully funded Relief Canyon Project, near

Reno, Nevada and expects first gold pour in the fourth quarter of 2019. 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, Am ericas 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 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 environme ntal 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”, “pl an”, “intend”, “potential’, “es timate”, “may”, “assume” and “will” or similar

words suggesting future outcomes, or other expectations, belief s, 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 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 unc ertainties 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 re gulatory 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 (i ncluding future commodity prices, currency

fluctuations and energy prices), ground conditions and other fac t o r s l i m i t i n g m i n e a c c e s s , f a i l u r e o f p l a n t ,

equipment, processes and transportation services to operate as anticipated, environmental risks, government

regulation, actual results of current exploration and productio n 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 fa c t o r s t h a t c a u s e r e s u l t s n o t t o b e a s

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 fil ings 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 no t 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 Tra nsaction, 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.

For more information:

Darren Blasutti

President and CEO

Americas Silver Corporation

416‐848‐9503

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