Americas Gold and Silver Corporation (TSX: USA) (NYSE American:
USAS) (“Americas” or the “Company”), a growing North American
precious metals producer, reports consolidated financial and
operational results for the year ended December 31, 2021.
This earnings release should be read in conjunction 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
Corporation SEDAR profile at www.sedar.com, 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
- The Company had a strong finish to the year highlighted by
improvement at the 60%-owned Galena Complex and the resumption of
mining and milling at the Cosalá Operations in Q4-2021. These
improvements have continued into Q1-2022 as the Cosalá operations
ramped up to full production.
- Silver equivalent1 production is expected to increase by
approximately 240% in 2022 and by 375% in 2024 as production
ramps-up into the higher-silver grade Upper Zone of the San Rafael
deposit at the Cosalá Operations and the Galena hoist project at
the Galena Complex is completed in the second half of 2022. These
operations are expected to generate solid margins at current silver
and zinc prices. Please see the Company’s February 22, 2022 press
release for full details regarding the multi-year outlook.
- Overall, 2021 was a challenging year for the Company with
Relief Canyon contributing to the majority of the losses which are
now largely behind the Company.
- Revenue of $44.8 million and net loss of $160.6 million for
2021 or a loss of $1.11 per share. Net loss for the year included
the Relief Canyon Q1-2021 impairment charge to property, plant and
equipment, write-downs to inventory for changes to Relief Canyon’s
expected gold recovery and production, Relief Canyon inventory
write-downs to net realizable value, care and maintenance costs at
the Cosalá Operations, and a loss on a metals contract liability.
Excluding these mostly non-cash adjustments, the adjusted net loss2
for the year was $37.0 million or an adjusted loss of $0.26 per
share2.
- The balance sheet is steadily improving with the resumption of
mining at the Cosalá Operations in Q4-2021 and return to full
production in Q1-2022, combined with current silver and zinc
prices. The Company had a cash and cash equivalents balance of $2.9
million as of December 31, 2021 and an estimated cash and cash
equivalents balance of $7.2 million as at February 28, 2022.
“The financial results for 2021 do not reflect the current state
of the Company,” stated Americas Gold and Silver President &
CEO Darren Blasutti. “The reopening of the Cosalá Operations and
return to full production combined with the increasing silver and
zinc prices have greatly improved the Company’s financial position
and will provide steady cash flow for the Company. Continued
exploration success at the Galena Complex and the Galena hoist
project are expected to increase throughput and production for the
asset over the next several years beginning in Q4-2022. While 2021
was a disappointment at Relief Canyon, the Company continues to
advance certain technical studies, including metallurgical testing,
and is hopeful for a positive solution to re-start mining
operations given the constructive gold price outlook over the next
few years.”
Cosalá Operations
The Cosalá Operations recalled all workers in September 2021 and
successfully re-started mining and milling operations after
reaching an agreement with union representatives and certain
Mexican government ministries in July 2021. Production from the San
Rafael mine increased during Q4-2021 as the normal mining cycle was
re-established. The Los Braceros processing plant was fed with a
combination of over 20,000 tonnes of existing stockpiled ore and
new production from the mine. The milling rate ramped up in tandem
with mine production, averaging approximately 1,700 tonnes per day
during December 2021 and continuing into 2022. During Q4-2021, the
Cosalá Operations produced approximately 61,000 ounces of silver,
4.2 million pounds of zinc and 1.7 million pounds of lead.
Initial production will focus on maximizing near-term cash flow
by mining high-grade zinc areas of the Main Zone which were fully
developed prior to the illegal blockade. Over the course of the
next six months, the mine will continue development and start
production from the Upper Zone, which carries silver grades
approximately 5-6 times higher than the Main Zone.
Based on the Cosalá Operations being in full production and
planned development/production from the Upper Zone, silver
production from the Cosalá Operations in 2022 is forecast to be
between 0.7 to 0.9 million ounces. The Cosalá Operations are
expected to increase silver production through 2022 benefitting
from higher-grade silver areas in the Upper Zone of the San Rafael
mine in the second half of 2022. Zinc production from the Cosalá
Operations is expected to be approximately 36 to 40 million pounds
and lead production is expected to be 13 to 15 million pounds.
Galena Complex
The Phase II drill program at the Galena Complex began in late
August 2021. The initial focus is to test the recently discovered
Silver Vein extension below the 5500 Level, the deepest level of
the mine. To date, the Silver Vein extension has been delineated to
over 350 ft below the 5500 Level. As part of the 5500 Level
drilling of the Silver Vein, the Company has successfully
intersected the high grade 185 Vein approximately 800 ft below the
5500 Level. In addition, continued definition drilling from the
4900 Level to define mineral reserves and increase mineral
resources adjacent to current production areas is part of the Phase
II plan. With the most recent update to its Mineral Reserve and
Resource statement as at June 30, 2021, the Company successfully
increased proven and probable silver reserves at the Galena Complex
by 38%, increased the measured and indicated silver resources by
72% and the inferred mineral silver resources by 36% and expects
continuing increases with the Phase II drill program which runs
through the end of 2022. The Company anticipates releasing a
fulsome exploration update for the Galena Complex in Q2-2022.
Attributable silver production to the Company from the Galena
Complex (60% owned by Americas) in 2022 is expected to be between
0.7 to 0.9 million silver ounces. Attributable lead production is
expected to be between 9 to 11 million pounds. The Company expects
to complete the Galena hoist project in Q4-2022.
Relief Canyon
The Company is committed to continuing efforts to resolve the
metallurgical challenges at Relief Canyon. An independent
metallurgical lab has been contracted to complete a metallurgical
test program to evaluate process modifications, including the use
of blinding agents, to minimize the impact of naturally occurring
carbonaceous material on gold recovery. Initial work is expected to
be completed by end of Q2-2022. Based on the success of these
initial tests, the Company is expected to initiate larger scale
testing in the second half of 2022.
About Americas Gold and Silver Corporation
Americas Gold and Silver Corporation is a high-growth precious
metals mining company with multiple assets in North America. The
Company owns and operates the Relief Canyon mine in Nevada, USA,
the Cosalá Operations in Sinaloa, Mexico and manages the 60%-owned
Galena Complex in Idaho, USA. The Company also owns the San Felipe
development project in Sonora, Mexico. For further information,
please see SEDAR or www.americas-gold.com.
Technical Information and Qualified Persons
The scientific and technical information relating to the
operation of the Company’s material operating mining properties,
its mineral resources and exploration contained herein has been
reviewed and approved by Daren Dell, P.Eng., Chief Operating
Officer of the Company. The Company’s current Annual Information
Form and the NI 43-101 Technical Reports for its other material
mineral properties, all of which are available on SEDAR at
www.sedar.com, and EDGAR at www.sec.gov contain further details
regarding mineral reserve and mineral resource estimates,
classification and reporting parameters, key assumptions and
associated risks for each of the Company’s material mineral
properties, including a breakdown by category.
All mining terms used herein have the meanings set forth in
National Instrument 43-101 – Standards of Disclosure for Mineral
Projects (“NI 43-101”), as required by Canadian securities
regulatory authorities. These standards differ significantly from
the requirements of the SEC that are applicable to domestic United
States reporting 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, information
contained in this news release may not be comparable to similar
information made public by companies subject to the SEC’s reporting
and disclosure requirements.
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 Gold and
Silver’s expectations, intentions, plans, assumptions and beliefs
with respect to, among other things, estimated and targeted
production 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; the Phase II
drill program at and production from the Galena Complex, including
the expected production levels and potential additional mineral
resources thereat; mining and processing operations at the Cosalá
Operations continuing, including expected production levels and the
continuity of legal access for employees and contractors; and the
goal and results of test work intended to address metallurgical
challenges at Relief Canyon. Guidance and outlook contained in this
press release was prepared based on current mine plan assumptions
with respect to production, costs and capital expenditures, the
metal price assumptions disclosed herein, and assumes no adverse
impacts to operations from the COVID-19 pandemic and no further
adverse impacts to the Cosalá Operations from blockades and is
subject to the risks and uncertainties outlined below. 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 opinions and estimates of Americas Gold
and 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 Gold and Silver to be
materially different from those expressed or implied by such
forward-looking information. With respect to the business of
Americas Gold and Silver, these risks and uncertainties include
risks relating to widespread epidemics or pandemic outbreak
including the COVID-19 pandemic; the impact of COVID-19 on our
workforce, suppliers and other essential resources and what effect
those impacts, if they occur, would have on our business, including
our ability to access goods and supplies, the ability to transport
our products and impacts on employee productivity, the risks in
connection with the operations, cash flow and results of the
Company relating to the unknown duration and impact of the COVID-19
pandemic; 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 regulatory
requirements and approvals; fluctuating 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
fluctuations and energy prices), ground conditions, illegal
blockades and other factors limiting mine access or regular
operations without interruption, 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 and
construction expenditures, reclamation activities, labor relations
or disruptions, social and political developments and other risks
of the mining industry. The potential effects of the COVID-19
pandemic on our business and operations are unknown at this time,
including the Company’s ability to manage challenges and
restrictions arising from COVID-19 in the communities in which the
Company operates and our ability to continue to safely operate and
to safely return our business to normal operations. The impact of
COVID-19 on the Company is dependent on a number of factors outside
of its control and knowledge, including the effectiveness of the
measures taken by public health and governmental authorities to
combat the spread of the disease, global economic uncertainties and
outlook due to the disease, and the evolving restrictions relating
to mining activities and to travel in certain jurisdictions in
which it operates. 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. Additional information
regarding the factors that may cause actual results to differ
materially from this forward-looking information is available in
Americas Gold and Silver’s filings with the Canadian Securities
Administrators on SEDAR and with the SEC. Americas Gold and 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 Gold and Silver
does not give any assurance (1) that Americas Gold and Silver will
achieve its expectations, or (2) concerning the result or timing
thereof. All subsequent written and oral forward-looking
information concerning Americas Gold and Silver are expressly
qualified in their entirety by the cautionary statements above.
____________________ 1 Silver equivalent ounces for the 2022
guidance, and 2023 and 2024 outlook references were calculated
based on $22.00/oz silver, $1.30/lb zinc and $0.95/lb lead
throughout this press release. 2 This is a non-GAAP financial
measure or ratio. The Company uses the financial measure “adjusted
net loss” and “adjusted loss per share” 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 profitability. The presentation of adjusted
net loss is not meant to be a substitute for the net loss presented
in accordance with IFRS, but rather should be evaluated in
conjunction with such IFRS measure.
Adjusted net loss is net loss with certain non-cash items
backed-out (i.e. impairment to property, plant and equipment,
write-downs to inventory, and loss related to the fair value of
financial instruments). Adjusted loss per share is adjusted net
loss divided by the weighted average number of common shares
outstanding.
Reconciliation of Adjusted Net Loss and
Adjusted Loss per Share
2021
2020
Net Loss (‘000)
$
160,576
$
30,066
Less impairment to property, plant and
equipment from Relief Canyon (‘000)
(55,623)
-
Less Relief inventory write-downs from
lowering expected gold recoveries (‘000)
(24,780)
-
Less Relief inventory write-downs to net
realizable value (‘000)
(15,127)
-
Less loss on metal contract liability
(‘000)
(20,780)
-
Less care and maintenance costs from
Cosalá Operations (‘000)
(7,309)
(5,501)
Adjusted net loss (‘000)
$
36,957
$
24,565
Weighted average number of common shares
outstanding (‘000)
141,888
103,941
Adjusted loss per share
$
0.26
$
0.24
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220317006024/en/
Stefan Axell VP, Corporate Development & Communications
Americas Gold and Silver Corporation 416-874-1708
Darren Blasutti President and CEO Americas Gold and Silver
Corporation 416‐848‐9503
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