USA.TO · 2019-03-04 12:00:00

Americas Silver Corporation Reports Fourth Quarter and Year‐end 2018 Financial Results and Provides 2019 Guidance

Financials

AMERICAS SILVER CORPORATION REPORTS FOURTH QUARTER AND YEAR‐END 2018 FINANCIAL

RESULTS AND PROVIDES 2019 GUIDANCE

TORONTO, ONTARIO —March 4, 2019—Americas Silver Corporation (TSX: USA) (NYSE Ame rican: USAS)

(“Americas Silver” or the “Company”) today reported consolidate d financial and operational results for

the fourth quarter and year‐end of 2018.

This earnings release should be read in conjunction with the Co mpany’s Management’s Discussion and

Analysis, Financial Statements and Notes to Financial Statements for the corresponding period, which have

been posted on the Americas Silver Corporation SEDAR profile at www.sedar.com, on its EDGAR profile at

www.sec.gov, and are also available on the Company’s website at www.americassilvercorp.com. All

figures are in U.S. dollars unless otherwise noted.

Fourth Quarter and Year‐End Highlights

● Revenue of $68.4 million in 2018 compared to revenue of $54.3 m illion in 2017, an increase of

26%, despite significantly lower metal prices in the second half of 2018.

● Net cash generated from operating activities in 2018 of $9.0 mi llion compared to net cash flow

generated from operating activities of $1.6 million in 2017.

● Net loss of $10.7 million for the year or ($0.25) per share, co mpared to a net loss of $3.5 million

or ($0.09) per share in 2017, an increase in net loss of 208% and net loss per share of 178%

compared to fiscal 2017. The increase in net loss was due to lo wer metal prices and increases in

non‐cash and non‐reoccurring items, including asset write‐downs , a tax contingency, and

transaction costs.

● The Company entered into a definitive agreement with Pershing Gold Corporation (“Pershing

Gold”) to complete a business combination at the end of September 2018 (the “Transaction). The

parties to the Transaction are currently awaiting regulatory approval by the Committee of Foreign

Investment in the United States (“CFIUS”).

● Year‐end production of 6.3 million consolidated silver equivalent ounces1, an increase of 32%

year‐over‐year, including 1.4 million consolidated silver ounces.

● Fourth quarter production of 1.8 million consolidated silver equivalent ounces, an increase of 32%

year‐over‐year, including 0.4 million consolidated silver ounces.

● Year‐end consolidated zinc production of 34.2 million pounds and lead production of 30.5 million

pounds, increases of 194% and 20%, respectively.

● Cost of sales of $8.29/oz. equivalent silver, by‐product cash c ost2 of negative ($0.63/oz.) silver,

and all‐in sustaining cost 3 (“AISC”) of $9.80/oz. silver for the year, representing year‐o ver‐year

decreases of 18%, 107%, and 26%, respectively.

● Cost of sales of $7.87/oz. equi valent silver, by‐product cash c ost of $1.14/oz. silver, and AISC of

$11.78/oz. silver for the fourth quarter of 2018, representing year‐over‐year decreases of 22%,

87%, and 17%, respectively.

● The Company had a cash balance of $3.5 million and working capital balance of $6.4 million as at

December 31, 2018.

● The Company will be hosting a conference call subsequent to the closing of the Pershing Gold

acquisition to discuss the Transaction, financing for the devel opment of Relief Canyon Mine, and

year‐end 2018 financial results.

1 Silver equivalent production throughout this press release was calculated based on silver, zinc, lead and copper realized pri ces

during each respective period.

2 Cash cost per ounce and all‐in s ustaining cost per ounce are n on‐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 Company had strong cash flow growth during San Rafael’s ramp‐up to full production in 2018 despite

the significant decrease in metal prices in the second half of the year,” said Darren Blasutti, President &

CEO of Americas Silver. “With the Pershing Gold shareholder vot es behind us, we are looking forward to

closing the Transaction immediately after CFIUS approval. We ex pect a concurrent Board construction

approval and announcement of fully‐funded financing for the Relief Canyon project. The combined

company will be focused on increasing silver production and bri nging Relief Canyon to first pour before

the end of the 2019.”

Pershing Gold Acquisition Update

Respective shareholders of Americas Silver and Pershing Gold pr ovided the requisite approvals for the

previously announced Transaction between the two companies on J anuary 9, 2019. The Transaction is

c u r r e n t l y a w a i t i n g r e g u l a t o r y a p p r o v a l f r o m C F I U S . T h e C o m p a n y views discussions with CFIUS as

progressing well and expects that the necessary approvals before the end of the first quarter.

Consolidated Production and Operating Costs

Table 1

Consolidated Production and Cost Details

Q4 2018 Q4 2017 YTD 2018 YTD 2017

Total ore processed (tonnes milled) 186,585 168,901 685,152 690 ,498

Silver produced (ounces) 395,294 409,545 1,417,537 2,056,017

Zinc produced (pounds) 10,223,692 4,895,670 34,219,472 11,623,138

Lead produced (pounds) 9,088,862 7,427,357 30,466,799 25,392,619

Copper produced (pounds) ‐ 78,541 ‐ 1,167,401

Silver equivalent produced (ounces) 1,799,741 1,358,441 6,286,531 4,746,387

Silver recovery (percent) 75.8 82.8 76.6 89.0

Silver grade (grams per tonne) 87 91 84 104

Silver sold (ounces) 398,753 410,518 1,424,745 2,056,122

Zinc sold (pounds) 10,135,730 4,413,526 33,714,154 10,919,556

Lead sold (pounds) 9,177,876 7,074,875 30,620,153 25,144,192

Copper sold (pounds) ‐ 94,544 ‐ 1,144,385

Cost of sales ($ per silver equivalent ounce)1 $7.87 $10.16 $8.29 $10.13

Silver cash cost ($ per silver ounce) 1 $1.14 $8.75 ($0.63) $9.45

All‐in sustaining cost ($ per silver ounce) 1 $11.78 $14.20 $9.80 $13.29

1 Cost of sales per silver equiva lent ounce, cash costs per silver ounce, and all‐in sustaining costs per silver ounce in Q4, 2017

excludes pre‐production of 45,344 silver ounces and 405,162 silver equivalent ounces mined from San Rafael during its

commissioning period, and for YTD 2017 excludes pre‐production of 50,490 silver ounces and 435,323 silver equivalent

ounces mined from San Rafael dur ing its commissioning period, a nd excludes pre‐production o f 245,391 silver ounces and

360,530 silver equivalent ounces mined from El Cajón during its commissioning period. Pre‐production revenue and cost of

sales from San Rafael and El Cajón are capitalized as an offset to development costs.

During 2018, the Company produced 6.3 million consolidated silver equivalent ounces including 1.4

million silver ounces, compared to production of 4.7 million co nsolidated silver equivalent ounces

including 2.1 million silver ounces during 2017. The significan t increase in consolidated silver equivalent

production with a corresponding decrease in silver production relative to 2017 was primarily the result of

the San Rafael mine experiencing its first full year of operati on after declaring commercial production in

December 2017. San Rafael contributed over 190% greater zinc pr oduction and over 125% greater lead

production, with approximately 50% lower silver production at t he Cosalá operations due to mine

sequencing in the part of the San Rafael deposit with the lowes t silver grades. Operations at the Galena

Complex were also negatively imp acted by two separate operational issues in the first of half of 2018

involving its No.3 Shaft that inhibited normal hoisting for approximately 27 days in total as previously

disclosed that also caused reductions in silver and lead production in 2018.

As a result of the increased silver equivalent production, revenues increased by $14.1 million or 26% from

$54.3 million during 2017 to $68.4 million during 2018 despite low metal prices in the second half of the

year. Net loss increased by $7.8 million from $3.5 million during 2017 to $11.3 million during 2018, largely

due to non‐cash and non‐reoccurring items. The increase in net loss was primarily attributable to higher

cost of sales as San Rafael ramped up to full production in Q4, 2018, higher depletion and amortization

reflecting a full year of production from San Rafael, Pershing Gold Transaction costs, the write‐down of

an asset, a contingency on value added taxes, and higher income tax expense, offset by higher net revenue

from increased silver equivalent production, a gain on the disposal of assets, and gains on derivative

instruments.

Consolidated costs of sales were $8.29/oz. equivalent silver, b y‐product cash costs were negative

($0.63/oz.) silver, and AISC were $9.80/oz. silver, representin g year‐over‐year decreases of 18%, 107%,

and 26%, respectively. The improv ement in cash costs was a resu lt of the significant increase in zinc and

lead production primarily from the San Rafael mine compared to 2017 when the Company’s previous

mine, Nuestra Señora, was in production. The base metal product ion increases were offset by decreases

in the realized prices for zinc and lead during the year which negatively impacted by‐product cash costs,

and AISC.

Further information concerning the consolidated and individual mine operations is included in the

Company’s Consolidated Financial Statements for the year ended December 31, 2018 and Management’s

Discussion and Analysis for the same period.

2019 Consolidated Guidance

Table 2

Consolidated Results and Guidance

2018 Actual 2019 Guidance

Silver Production (ounces) 1.4M oz. 1.6 – 2.0M oz.

Silver Equivalent Production (ounces) 6.3M oz. 6.6 ‐ 7.0M oz.

Cost of Sales ($ per silver equiv. ounce) $8.29/oz. $8.00 ‐ $10.00/oz.

Cash Costs ($ per silver ounce) $(0.59)/oz. $4.00 ‐ $6.00/oz.

All‐in Sustaining Costs ($ per silver ounce) $9.82/oz. $10.00 ‐ $12.00/oz.

Capital Expenditures $15M $10M ‐ $11M

Consolidated guidance for 2019 is 1.6 – 2.0 million silver ounc es and 6.6 ‐ 7.0 million silver equivalent

ounces at cash costs of $4.00 to $6.00 per silver ounce and all‐in sustaining costs of $10.00 to $12.00 per

silver ounce including budgeted capital of $10 ‐ $11 million. T he increase in silver production is due to

greater expected mill throughput at San Rafael in 2019 as the initial ramp up in 2018 has been completed.

The increase in cash cost and a ll‐in sustaining cost per ounce is due to the lower assumed metal prices

affecting estimated by‐product metal revenue from the San Rafael and Galena mines. The Company

assumed $14.50 per ounce silver, $1.15 per pound zinc, $0.90 pe r pound lead, and an exchange rate of

19 Mexican pesos to US dollar for these guidance estimates. This guidance is supported by estimated zinc

production of approximately 36‐40 million lbs. and estimated lead production of 34‐38 million lbs. in 2019.

The Company’s consolidated exploration budget for fiscal 2019 is approximately $1.5 million.

This guidance excludes construction capital and exploration spending related to Pershing Gold’s Relief

Canyon Mine. The Company intends to update guidance for Relief C a n y o n a f t e r t h e c l o s e o f t h e

Transaction.

About Americas Silver Corporation

Americas Silver is a precious metal mining company focused on g rowth 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 holds a n o p t i o n o n t h e S a n F e l i p e

development project in Sonora, Me xico. For further information please see SEDAR or

americassilvercorp.com.

Daren Dell, Chief Operating Officer and a Qualified Person under Canadian Securities Administrators

guidelines, has approved the applicable contents of this news release. For further information please see

SEDAR or americassilvercorp.com.

Mineral reserve and resource estimates and exploration results from 2018 drill programs can be found on

the Company’s website at www.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 and Pershing Gold’s

expectations, intentions, plans, assumptions and beliefs with r espect to, among other things, Americas

S i l v e r ’ s f i n a n c i n g e f f o r t s ; t h e c o n s u m m a t i o n o f t h e T r a n s a c t i o n; construction, production, and

development plans at Relief Canyon Mine; the timing of the closing of the Transaction; the completion of

CFIUS review and its recommendations; and the estimated construction timeline for Relief Canyon Mine.

Often, but not always, forward‐looking information can be ident ified by forward‐looking words such as

“anticipate”, “believe”, “expect”, “goal”, “plan”, “intend”, “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. F orward‐looking information is based on

t h e o p i n i o n s a n d e s t i m a t e s o f A mericas Silver and Pershing Gold a s o f t h e d a t e s u c h i n f o r m a t i o n i s

provided and is subject to known and unknown risks, uncertainties, and other factors that may cause the

actual results, level of activit y, performance, or achievements of Americas Silver or Pershing Gold to be

materially different from those expressed or implied by such fo rward‐looking information. With respect

to the Transaction, these risks and uncertainties include the risk that Americas Silver or Pershing Gold may

be unable to obtain any regulatory approvals required for the T ransaction, including CFIUS approval, or

that regulatory approvals may delay the Transaction or cause the parties to abandon the Transaction; the

risk that other conditions to closing may not be satisfied; the length of time needed to consummate the

proposed Transaction, which may be longer than anticipated for various reasons; the risk that the

businesses will not be integrated successfully; the diversion o f management time on Transaction‐related

issues; the risk that costs asso ciated with the integration are higher than anticipated; and litigation risks

related to the Transaction. With respect to the businesses of A mericas Silver and Pershing Gold, these

risks and uncertainties include i nterpretations or reinterpreta tions of geologic information; unfavorable

exploration results; inability to obtain permits required for f uture exploration, development or

production; general economic conditions and conditions affectin g the industries in which the Company

and Pershing Gold operate; the uncertainty of regulatory requirements and approvals; fluctuating mineral

and commodity prices; the ability to obtain necessary future fi nancing on acceptable terms or at all; the

ability to develop and operate the Relief Canyon property; and risks associated with the mining industry

such as economic factors (including future commodity prices, cu rrency 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 expenditures, reclamation activities, labor relations, social and political

developments and other risks of the mining industry. Although t he Company has attempted to identify

important factors that could cause actual results to differ mat erially 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 c ause actual results to differ m aterially 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 Securi ties Administrators on SEDAR and with the

SEC, including the management information circular of Americas Silver dated December 4, 2018. Neither

Americas Silver nor Pershing Gold undertake any obligation to u pdate publicly or otherwise revise any

forward‐looking information whether as a result of new informat ion, future events or other such factors

which affect this information, except as required by law. Neither Americas Silver nor Pershing Gold gives

any assurance (1) that Americas Silver and Pershing Gold will a chieve its expectations, or (2) concerning

the result or timing thereof. All subsequent written and oral forward‐looking information concerning

Pershing Gold, Americas Silver, the proposed Transaction, the combined company or other matters

attributable to Pershing Gold or Americas Silver or any person acting on their behalf are expressly qualified

in their entirety by the cautionary statements above.

No Offer or Solicitation

This press release is for informational purposes only and does not constitute an offer to sell or the

solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in

which such offer, solicitation or sale would be unlawful prior to registration or qualification under the

securities laws of any such jurisdiction. No offer or sale of securities shall be made except pursuant to

registration under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and

any applicable state securities laws or in compliance with an exemption therefrom.

For more information:

Darren Blasutti

President and CEO

416‐848‐9503

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